MARKETING MANAGEMENT

Marketing

Marketing has been referred to as performance of business activities that direct the flow of goods
and services from producers to consumers.To move the goods and services from producers to
consumers,number of activities such as product designing or merchandising, packaging,
warehousing, transportation, branding, selling, advertising and pricing are required. All these
activities are referred to as marketing activities.

Marketing consists of four general activities:-

1. Identifying and selecting the type of customer, understanding their needs and desires;

2. Designing product or services that suits the customers' desires;

3. Persuading customers to buy at the firm's offerings; and

4. Storing, moving, and displaying goods after they leave the production site.

Marketing management

Marketing management means management of the marketing function. In other words,

marketing management refers to planning, organising, directing and control of the activities
which facilitate exchange of goods and services between producers and consumers or users of
products and services.

Marketing management involves performance of various functions such as analysing and

planning the marketing activities, implementing marketing plans and setting control mechanism.
These functions are to be performed in such a way that organisation’s objectives are achieved at
the minimum cost.

Definition

According to Philip Kotler, "Marketing Management is the analysis, planning,

implementation and control of programmes designed to bring about desired exchanges with
target audiences for the purpose of personal and of mutual gain. It relies heavily on the adoption
and coordination of product, price, promotion and place for achieving responses."

According to American Management Association the term marketing Management has been
defined as ‘ the process of planning, and executing the conception, pricing, promotion and
distribution of ideas , goods and services to create exchanges that satisfy individual and
organizational goals’

Objectives of Marketing Management

1. Generate customer base

2. Customer Satisfaction
3. Market Share
4. Profit Maximization
5. Earn goodwill for the business
6. Increases living standard among people

 Generate customer base

The responsibility of the marketing manager is to attract new customers and retain old customers
for the business enterprise. Thus, to create product awareness among people many promotional
activities viz. advertisement, distribution of samples, display of goods, etc. are carried out, which
in turn increase sell of goods and services and generate profit for the firm.
 Customer Satisfaction
The basic priority of the modern marketing is the satisfaction of the customer (or consumer).
Thus, the marketing manager scientifically studies the needs and demands of the customers
before offering them any goods or services. Here, satisfying customers does not simply mean
matching products with customers’ needs. It also requires regular supply of goods and services
of reasonable quality at fair prices.
 Market Share
The purpose of business activity is to increase its market share i.e. the ratio of its sales to the
total sales in the economy. For this, companies may adopt all means of sales promotion viz.
discounts, sales promotion, gifts, gift coupons, etc. to create awareness of its product in the
market.
 Profit Maximization
Without earning profit, no firm can survive in the market. Thus, profits are also needed for the
growth and diversification of the firm. Hence, for maximization of profit, the marketing manager
tries to satisfy the needs and wants of customer and maintains the regular supply of goods and
services at fair prices.
 Earn goodwill for the business
To build up the public image of the firm, the marketing management provides good quality
products to the customers at reasonable rates and thus creates its positive image among the
customers. The role of marketing manager is to sustain and raise the goodwill of the business
through sales promotion, publicity, advertisement, high quality and reasonable prices of
products, convenient distribution outlets, etc. If a firm enjoys goodwill in the market, it would
increase the morale of its’ sales-force, which in turn increases profit.
 Increases living standard among people
The marketing management attempts to increase the quality of life of the people by providing
them better goods and services at reasonable rates. It facilitates production and distribution of a
wide variety of goods and services for use by the customer.

MARKETING AND SELLING

Many people confuse ‘selling’ for ‘marketing’. They consider these two terms as one and the
same. Marketing refers to a large set of activities of which selling is just one part. For example, a
marketer of televisions, before making the sale, does a lot of other activities such as planning the
type and model of televisions to be produced, the price at which it would be sold and selecting
the distribution outlets at which the same would be available, etc. In short, marketing involves
whole range of activities relating to planning, pricing, promoting and distributing the products
that satisfy customer’s needs.

The function of selling, on the other hand, is restricted to promotion of goods and services
through salesmanship, advertising, publicity and short-term incentives so that title of the product
is transferred from seller to buyer or in other words product is converted into cash.
The major differences between selling and marketing are listed as below:

Marketing Selling

Marketing focuses on the need of the Selling focuses on the need of the seller
customer

Marketing begins before actual production Selling takes place after the production
takes place

Customer oriented- Customer is treated as a Producer and product oriented- product

king. He is given supreme importance enjoys supreme importance

Marketing aims at profit maximization Selling aims profit maximization through

through customer satisfaction increased sales volume

The principle of caveat Vender ( let the seller The principle of Caveat Emptor( Let the
beware) is followed buyer beware) is followed

An integrated approach is followed in Fragmented approach to selling is followed.

marketing. For eg: product planning, Attempt is made to sell whatever is produced
development, advertising, selling etc.

Marketing aims at long term profit Selling aims at short term profit maximization
maximization through growth and stability.

Marketing is a wider term- which includes Selling is only a part of marketing

selling

MARKETING FUNCTIONS

The movement of goods from the producers to the ultimate consumers involves a number of
activities. These activities are known as marketing functions. They are:

1. Functions of Exchange

2. Functions of Physical Distribution

3. Standardization
4. Grading

5. Branding

6. Packaging and Labelling

7. Transportation

8. Storage and Warehousing

9. Promotion

10. Customer support service

 Functions of Exchange: Exchange refers to transfer of goods and services from money’s
worth. This process can be divided into (a) Buying and assembling and (b) selling

Buying and Assembling: Buying is the first step in the ladder of marketing functions. A
Manufacturer has to buy raw materials for production, wholesaler has to buy finished
goods for the purpose of sale to the retailers, a retailer has to buy goods for resale to the
consumers. Efficient buying is essential for successful selling. Large sized business
concerns maintain a separate department namely purchasing department for the purpose
of buying.Assembling begins after the goods have been purchased. It refers to gathering
of goods already purchased from different places at one central place. Assembling
facilitates transportation and storage. It is significant in cases of seasonal goods and
agricultural products.

Selling: The ultimate aim of every business is to earn profits and in realizing this aim
selling plays an important role. Nothing really happens until somebody sells something.
Selling enables a firm to satisfy the needs of consumers. It is the process through which
ownership of goods id transferred from the seller to the buyer. Sales are the source of
income for the manufacturers, wholesalers and retailers.

 Functions of Physical Distribution: Managing physical distribution is another

veryimportant function in the marketingof goods and services. The two majordecision
areas under this functioninclude (a) decision regardingchannels of distribution or the
 marketing intermediaries (like wholesalers, retailers) to be used and (b)physical
movement of the productfrom where it is produced to a placewhere it is required by the
customersfor their consumption or use. Theimportant decision areas underphysical
distribution includemanaging inventory (levels of stock ofgoods), storage and
warehousing andtransportation of goods from one placeto the other.
 Standardization: Standardization means establishment of certain standards based on
intrinsic qualities of a commodity. The quality may be determined on the basis of various
factors like size, colors, taste, appearance etc. It is helpful to the consumers as they safely
rely on the quality of the standardized products.
 Grading: Grading means classifications of standardized products in to certain well
defined classes. In the words of Clark and Clark “It involves the division of products into
classes made up of units possessing similar characteristics of size and quality”. Grading is
very important for agricultural products like wheat, cotton etc.
Grading is of two types, fixed and variable. Fixed grading refers to the grading of goods
according to fixed standards whereas variable grading refers to the application of varying
standards.
 Branding: Branding means giving a name or symbol to a product in order to differentiate
it from competitive products. It helps the consumers in identifying their products.
Branding may be done by selecting symbols and marks such as charminar cigarettes,
camel inks, binny textiles or by using the name of manufactures such as Ford cars,
Godrej street furniture. A Good brand should be brief, simple, and easy to spell and
remember.
 Packaging and Labelling:Packaging refers to designing the package for the products.
Labelling refers to designing the label to be put on the package. Label may vary from a
simple tag to complex graphics. Packaging and labelling havebecome so important in
modern daymarketing that these are consideredas the pillars of marketing. Packagingis
important not only for protection ofthe products but also serves as apromotional tool.
Sometimes, thequality of the product is assessed bythe buyers form packaging. We
haveseen that in the success of many ofthe consumer brands in recent timessuch as Lays
or Uncle Chips potatowafers Clinic Plus shampoos, andColgate Toothpaste, etc.,
packaginghas played an important role.
 Transportation: Transport means carrying of goods, materials and men from one place
to another. It plays an important role in the marketing. It creates place utility by moving
goods from the place where they are available in plenty, to places where they are needed.
Both assembling and distribution of goods from the places of production to the places of
consumption but it also enables consumers to go to marketing areas where there is wide
choice of goods than in the places where they like, Transportation is also useful in
stabilizing the prices of various commodities by moving them from the areas where they
are in surplus to the areas where they are scarce. Various types of transport are used for
carrying goods like (a) Land transport, (b) Water transport and (c) Air transport.

 Storage and Ware Housing: Storage is another function of marketing process and it
involves the holding and preservation of goods from the time they are produced to the
time they are consumed. Generally, there is a time gap between the production and
consumption of goods. Therefore, there is need for storing so as to make the goods
available to the consumers and when they are required. By bridging the gap between
production and consumption, storage creates time utility; it also creates place utility by
holding goods at different places.

 Promotion: Promotion of products and services involves informing the customers about
the firm’s product, its features, etc. and persuading them to purchase these products. The
four important methods of promotion include advertising, Personal Selling, Publicity and
Sales Promotion. A marketer has to take several crucial, decisions in respect of
promotion of the products and services such as deciding the promotion budget, the
promotion mix, i.e., the combination of the promotional tools that will be use, the
promotion budget, etc.

 Customer support service:A veryimportant function of the marketingmanagement

relates to developingcustomer support services such as aftersales services, handling
customercomplaints and adjustments,procuring credit services, maintenanceservices,
technical services andconsumer information. All theseservices aim at providing
maximumsatisfaction to the customers, which isthe key to marketing success inmodern
days. Customer supportservices prove very effective in bringingrepeat sales from the
customers and developing brand loyalty for a product.
MARKETING MIX

Modern Marketing is consumer oriented. Every marketer is trying to satisfy the needs
andexpectation of consumer’s.But this is a difficult task as the marketing activities are influenced
by several activities. Factors influencing the marketing activities are of two types – Controllable
factors and uncontrollable factors.

Controllable factors are internal factors which can be controlled by an organization. They are
four groups-product, price, promotion and place or distribution.. Uncontrollable factors are
external which cannot be controlled by an organization. They are of four groups- consumers’
behavior, competitors’ behavior, traders’ behaviour and government’s behavior. The harmonious
blending of the four controllable factors into a marketing program is called marketing mix.

The term marketing mix is used to describe a combination of four elements – the product, price,
physical distribution and promotion,These are popularly known as ‘Four P’s’ of marketing.
Marketing mix developed to satisfy the anticipated needs of the identified markets.

Elements of Marketing Mix

The marketing mix consists of various variables, which have broadly been classified into four
categories, popularly known as four Ps of marketing. These are: (i) Product, (ii) Price, (iii) Place,
and (iv) Promotion.

Product: Product means goods or services or ‘anything of value’, which is offered to the market
for exchange. For example, Hindustan Lever Company offers number of consumer products like
toiletries (Close-Up Toothpaste, Lifebuoy Soap, etc.),detergent powder (Surf, Wheel), food
products (Refined Vegetable Oil); etc.The concept of product relates to not only the physical
product as mentioned in the above examples but also the benefits offered by it from customer’s
view point (for example toothpaste is bought for whitening teeth, strengthening gums, etc.). The
concept of product also include the extended product or what is offered to the customers by way
of after sales services, handling complaints, availability of spare parts etc. These aspects are very
important, particularly in the marketing of consumer durable products (like Automobiles,
Refrigerators, etc.). The important product decisions include deciding about the features, quality,
packaging, labelling and branding ofthe products.
Price: Price is the amount of money customers have to pay to obtain the product. In case of most
of the products, level of price affects the level of their demand. The marketers have not only to
decide about the objectives of price setting but to analyse the factors determining the price and
fix a price for the firm’s products. Decisions have also to be taken in respect of discounts to
customers, traders and credit terms, etc. so thatcustomers perceive the price to be in line with the
value of the product.

Place: Place or Physical Distribution include activities that make firm’s products available to the
target customers. Important decision areas in this respect include selection of dealers or
intermediaries to reach the customers, providing support to the intermediaries (by way of
discounts, promotional campaigns, etc.). The intermediaries in turn keep inventory of the firm’s
products, demonstrate them to potential buyers, negotiate price with buyers, close sales and also
service the products after the sale. The other decision areas relate to managing inventory, storage
and warehousing and transportation of goods from the place it is produced to the place it is
required by the buyers.

Promotion: Promotion of products and services include activities that communicate availability,
features, merits, etc. of the products to the target customers and persuade them to buy it. Most
marketing organisations, undertake various promotional activities and spend substantial amount
of money on the promotion of their goods through using number of tools such as advertising,
personal selling and sales promotion techniques (like price discounts, free samples, etc.). A large
number of decisions are to be taken in each of the area specified above. For example, in the
respect of advertising it is important to decide about the message, the media to be used (example
print-media–newspaper,magazines, etc. the objections of customers, etc.).

The success of a market offer will depend on how well these ingredients are mixed to create
superior value for the customers and simultaneously achieve their sale and profit objectives. Let
us say a firm would like to achieve necessary volume of sale at a cost that will permit a desired
level of profit. But so many alternative mixes can be adopted by a firm to achieve this objectives.
The issue before a firm then is to decide what would be the most effective combination of
elements to achieve the given objectives.