Unit1 Introduction To Marketing Management

Marketing Management
Unit 1
INTRODUCTION TO MARKETING
Marketing: We use a large variety of goods and services in our daily life. These include
items like toothpaste, toothbrush, soap, oil, clothes, food items, telephone, electricity and many
more. How do all these goods and services reach our home? Obviously the business houses who
produce the goods and services have to ensure that these are to be sold, and so they have to
make the consumers/users aware of their products and place them at points convenient to the
consumers. This involves a number of activities such as product planning, pricing, promotion,
use of middlemen (wholesalers, retailer etc.) for sale, warehousing, transportation etc. All these
activities taken together are termed as Marketing.
We know that the businessman produces goods and services for our use. These are not
necessarily produced at the places where they are consumed or used. Even in villages, now-a-
days you find the products
manufactured all over India
and in other countries. This
implies
that the manufacturers must
be making efforts to ensure
that their products are in
demand and reach the
ultimate consumers all over
the globe. So, when you go to
the market to buy a
readymade shirt you find that there are several options available to you in terms of quality of
cloth used, design, colour, price etc. and you can buy what suits you most. This also implies
that the manufactures assess the needs of the consumers, their tastes and preferences and plan
the products accordingly. Not only that, they also ensure that people are aware about the
product and its features. All these activities are said to be part of marketing function of any
organisation. Thus, marketing refers to the process of ascertaining consumers’ needs and
supplying various goods and services to the final consumers or users to satisfy those needs.
Basically, marketing is the performance of business activities that direct the flow of goods
and services from producers to consumers or users.
The American Marketing Association defines marketing as an organisational function
and set of processes for creating, communicating and delivering value to customers and for
managing customer relationships in ways that benefit the organisation and its stakeholders.
TRADITIONAL CONCEPT OF MARKETING

According to the traditional concept, marketing means selling goods and services that
have been produced. Thus, all those activities which are concerned with persuasion and sale
of goods and services, are called marketing. This concept of marketing emphasises on
promotion and sale of goods and services and little attention is paid to consumer satisfaction.
This concept has the following implications:
(a) The main focus of this concept is on product, i.e., we have a product and it has to be
sold. So, we have to persuade the consumers to buy our product.
Prof.Venkatesh Babu B.R, BGSIMS Page 1

(b) All efforts of the marketing people are concentrated on selling the product. They
adopt all means like personal selling and sales promotion to boost the sales.
(c) The ultimate goal of all marketing activity is to earn profit through maximisation of
sales.
Traditional Concept of Marketing
Focus on Product
Means Selling
Ends
Profits through maximization of sales
MODERN CONCEPT OF MARKETING

The modern concept of marketing considers the consumers’ wants and needs as the
guiding spirit and focuses on the delivery of such goods and services that can satisfy those
needs most effectively. Thus, marketing starts with identifying consumer needs, then plan the
production of goods and services accordingly to provide him the maximum satisfaction. In
other words, the products and services are planned according to the needs of the customers
rather than according to the availability of materials and machinery. Not only that, all
activities (manufacturing, research and development, quality control, distribution, selling etc.)
are directed to satisfy the consumers. Thus, the main implications of the modern concepts are:
(a) The focus of this concept is on customer orientation. The marketing activity starts with an
assessment of the customers needs and plan the production of items that satisfy these
needs most effectively. This also applies to all other marketing activities like pricing,
packaging, distribution and sales promotion.
(b) All marketing activities like product planning, pricing, packaging, distribution and sales
promotion are combined into one as coordinated marketing efforts. This is called
integrating marketing. It implies:
(i) developing a product that can satisfy the needs of the consumers;
(ii) taking promotional measures so that consumers come to know about the products, its
features, quality, availability etc.;
(iii) pricing the product keeping in mind the target consumers’ purchasing power and
willingness to pay;
(iv) packaging and grading the product to make it more attractive and undertaking sales
promotion measures to motivate consumers to buy the product; and
(v) taking various other measures (e.g., after sales service) to satisfy the consumers’
needs.
(c) The main aim of all effort is to earn profit through maximisation of customer satisfaction. This
implies that, if the customers are satisfied, they will continue to buy, and many new

customers will be added. This will lead to increased sales and so also the profits.
Modern Concept of Marketing
Focus on Customers’ need

Means
Coordinated marketing efforts
Ends
Profits through customers’ satisfaction
It may be noted that with growing awareness of the social relevance of business, marketing has to
take into account the social needs and ensure that while enhancing consumer satisfaction, it
also aims at society’s long-term interest.
Importance of Marketing
Marketing is important to the business, consumer as well as the society. This is evident
from the following points.
(a) Marketing helps business to keep pace with the changing tastes, fashions, preferences of
the customers. It works out primarily because ascertaining consumer needs and wants
is a regular phenomenon and improvement in existing products and introduction of new
product keeps on taking place. Marketing thus, contributes to providing better products
and services to the consumers and improve their standard of living.
(b) Marketing helps in making products available at all places and throughout the year.
We are able to get Kashmir shawls and Assam Tea all over India and get seasonal
fruits like apple and oranges round the year due to proper warehousing or proper
packaging. Thus, marketing creates time and place utilities.
(c) Marketing plays an important role in the development of the economy. Various functions
and sub-functions of marketing like advertising, personal selling, packaging,
transportation, etc. generate employment for a large number of people, and accelerate
growth of business.
(d) Marketing helps the business in increasing its sales volume, generating revenue and
ensuring its success in the long run.
(e) Marketing also helps the business in meeting competition most effectively.
Objectives of Marketing
After knowing the points of importance of marketing let us discuss on the basic objectives of
marketing.
(a) Provide satisfaction to customers
All marketing activities are directed towards customer satisfaction. Marketing starts with
ascertaining consumer needs and produce goods that satisfy those needs most effectively. Not
only that the pricing and distribution functions of marketing are also planned accordingly.
(b) Increase in demand
Through advertising and other sales promotional efforts, marketing aims at creating
additional demand for their products. Satisfied customers also help in creating new
customers. For example, if you buy a ‘gel pen’ and feel satisfied, next time also you will buy
the same pen and obviously when you tell others about it they will also feel like giving it a
try.
(c) Provide better quality product to the customers
This is a basic objective of marketing. The business houses try to update and upgrade their
knowledge and technology to continuously provide better products. If they do not do so, they
will be phased out through competition.
(d) Create goodwill for the organisation
Another objective of marketing is to build a good public image and create goodwill for the
organisation. This helps in maintaining loyalty to the product and accepting new products of
the same company.
(e) Generate profitable sales volume
The ultimate objective of all marketing efforts is to generate profitable sales volumes for the
business. Taking care of customer needs and wants by providing the required goods and
services at prices they can afford, and at places and timing that are convenient to them
ultimately lead to increased sales and profits.
Functions of Marketing:
You have learnt that marketing is the performance of those business activities that direct
the flow of goods and services from producers to consumers or users. Let us now learn
what those activities are? These are briefly discussed hereunder.
1. Marketing Research
Marketing research
involves collection and
analysis of facts relevant
to various aspects of
marketing. It is a process
of collecting and
analysing information
regarding customer
needs and buying
habits, the nature of
competition in the market, prevailing prices, distribution network, effectiveness of
advertising media, etc. Marketing research gathers, records and analyses facts for
arriving at rational decisions and developing suitable marketing strategies.
2. Product Planning and Development
As you know marketing starts much before the actual production. The marketeers
gather information regarding what are the needs of the consumers and then decide
upon what to produce. So, the task of marketing begins with planning and designing a
product for the consumers. It can also be done while modifying and improving an
already existing product. For example, now-a-days we find much better soaps and
detergent powders than we used to get earlier. Similarly, we have many new products
introduced almost on a regular basis.
3. Buying and Assembling
Buying and assembling activities as a part of marketing refer to buying and collection
of required goods for resale. This function of marketing is primarily relevant to those
business organisations that are engaged in trading activities. In the context of
manufacturing organisations, buying and assembling involves buying raw materials and
components required for production of finished goods.
4. Packaging
Packaging involves putting the goods in attractive packets according to the convenience of
consumers. Important considerations to be kept in view in this connection are the size of
the package and the type of packaging material used. Goods may be packaged in bottles
(plastic or glass), boxes (made of tin, glass, paper, plastic), cans or bags. The size of the
package generally varies from a few grams to a few kilograms, one piece to a number of
pieces of a product, or in any other suitable quantity in terms of weight, count, length etc.
Packaging is also used as a promotional tool as suitable and attractive packages influences
the demand of the products. It may be noted that packaging is different from packing, which
refers to putting goods in suitable containers for transportation purposes.
5. Standardisation and Grading
Standardisation refers to development of standards for production of goods with respect to
shape, design, colour and other characteristics. If products are standardised, customers
are able to identify a product and its characteristics very well. So goods can be sold by
sample or description. Standardisation helps in promoting the sale of the product by
increasing consumers’ confidence in the product quality.
Grading involves separating products into different classes on the basis of certain
predetermined standards relating to size and quality. Grading is required in case of
agricultural, forest and mineral products such as cotton, sugar cane, iron ore, coal, timber,
etc.
6. Branding
Branding means giving an attractive name, symbol or identity mark to the product to make
a product different from others so that it is known by that name or symbol or mark. For
example, Surf is the brand name of a detergent powder produced by Hindustan Unilever
Limited (HUL). Similarly, you must be familiar with brands like Colgate for toothpaste, Lux
for soap and so on.
7. Pricing the Product

Pricing involves decisions regarding fixation of product prices, keeping in view the product
costs, the capacity of customers to pay, and the prices of the competitive products. It is an
important decision as it influences the sales and so also the profits. So pricing has to be
done very carefully.
8. Promotion of the Product
Promotional activities include advertising, personal selling, sales promotion and publicity. All
promotional activities involve communication with the existing and prospective customers
whereby they are made aware of the product, its distinctive features, price, availability etc.
The objective of promotional activities is to motivate the customers to buy the product.
9. Distribution
Distribution refers to those activities that are undertaken for sale of products to the
customers and the physical transfer thereof. The first aspect i.e., sale of product involves use
of middlemen such as wholesalers and retailers whose services are used for making the
products available at convenient points and helping in their sale to the ultimate
consumers. The second aspect i.e., physical transfer involves warehousing and
transportation of goods from the point of production to the point of sale or the consumer.
The objective of distribution activities is to ensure that consumers get the goods and
services at the place and time most convenient to them and in the desired quantity.
10. Selling
Selling is an important function of marketing whereby the ownership of goods and

services is transferred from the seller to the buyer for a consideration known as price. To
initiate and complete the process of selling, the seller has to inform the prospective buyer
about availability of goods, the nature and uses of products, their prices and the needs of
the customers that may be effectively satisfied by the product. In the process, he arouses
customers’ interest in the product and persuades them to buy it.
11. Storage and Warehousing

Storage refers to holding and preserving goods from the time of their procurement or
production till the time of their sale. In other words storage involves making suitable
arrangements for preserving the goods till they are bought by the consumers and
delivered to them. Warehousing is synonymous to storage but is normally used for large-
scale storage facility for goods and commodities. You must have seen cold storage where
vegetables like tomato, cabbage, potato etc. are stored to be consumed throughout the
year. In marketing it is essential to store raw material and finished goods to be used later
by the company for production or for resale.
12. Transportation

Transportation refers to the physical movement of goods from one place to another. In
marketing, transport as an activity refers to physical movement of raw materials as well as
finished goods from the place of production to place of consumption. Goods are transported
through various means like railways, roadways, waterways and airways. For heavy and
bulky goods, the railways and waterways are the best. For other goods, it depends upon the
demand, cost involved, urgency, nature of the goods etc. to decide about a suitable means of
transportation.
Concepts of Marketing
The marketing concept is the strategy that firms implement to satisfy customers needs,
increase sales, maximize profit and beat the competition. There are 5 marketing concepts that
organizations adopt and execute.
Marketing is a department of management that tries to design strategies that will build
profitable relationships with target consumers.
But what philosophy is the best for a company in setting marketing strategies?
There are five alternative concepts under which organizations design and carry out their
marketing strategies.
5 Marketing Concepts are;
1. Production Concept,
2. Product Concept,
3. Selling Concept,
4. Marketing Concept,
5. Societal Marketing Concept.
These concepts are described below;

Production Concept
The idea of production concept – “Consumers will favor products that are available and
highly affordable”. This concept is one of the oldest Marketing management orientations that
guide sellers.
Companies adopting this orientation run a major risk of focusing too narrowly on their own
operations and losing sight of the real objective. Management focuses on improving
production and distribution efficiency.
Although;
in some situations; the production concept is still a useful philosophy.
Product Concept
The product concept holds that the consumers will favor products that offer the most in
quality, performance and innovative features. Here; under this concept, Marketing strategies
are focused on making continuous product improvements.
Product quality and improvement are important parts of marketing strategies, sometimes the
only part. Targeting only on the company’s products could also lead to marketing myopia.
Selling Concept
The selling concept holds the idea- “consumers will not buy enough of the firm’s products
unless it undertakes a large-scale selling and promotion effort”.
Here the management focuses on creating sales transactions rather than on building long-
term, profitable customer relationships. In other words; The aim is to sell what the company
makes rather than making what the market wants. Such aggressive selling program carries
very high risks.
In selling concept the marketer assumes that customers will be coaxed into buying the
product will like it, if they don’t like it, they will possibly forget their disappointment and buy
it again later. This is usually very poor and costly assumption.
Typically the selling concept is practiced with unsought goods. Unsought goods are that
buyers do not normally think of buying, such as insurance or blood donations.
These industries must be good at tracking down prospects and selling them on a product’s
benefits.
Marketing Concept
The marketing concept holds- “achieving organizational goals depends on knowing the needs
and wants of target markets and delivering the desired satisfactions better than competitors
do”.
Here marketing management takes a “customer first” approach. Under the marketing concept,

customer focus and value are the routes to achieve sales and profits.
The marketing concept is a customer-centered “sense and responds” philosophy. The job is
not to find the right customers for your product but to find the right products for your
customers.
The marketing concept and the selling concepts are two extreme concepts and totally
different from each other.
Difference between Selling Concept and Marketing Concept
Difference between Marketing and Selling

The terms ‘marketing’ and ‘selling’ are related but not synonymous. ‘Marketing’ as stated
earlier, emphasises on earning profits through customer satisfaction. In marketing, the focus is
on the consumer’s needs and their satisfaction. ‘Selling’on the other hand focuses on product and
emphasises on selling what has been produced. In fact it is a small part of the wide process of
marketing wherein emphasis is initially on promotion of goods and services and eventually on
increase in sales volume.
Marketing has long term perspective of winning over consumer loyalty to the product by
providing him maximum satisfaction. However, selling has short-term prospective of only
increasing the sales volume.
In marketing, the consumer is the on king whose needs must be satisfied. In selling, the
product is supreme and the entire focus is its sale. Marketing starts before production and
continues even after the exchange of goods and services has taken place. It is so because

provision of after sale service is an important component of marketing process. Selling starts
after the production and ends as soon as the exchange of goods and services has taken place.
Marketing Selling
Marketing includes selling and other activities Selling is confined to persuasion of

like various promotional measures, consumers to buy firm’s goods and
marketing research, after sales service, etc. services.
It starts with research on consumer needs, Selling starts after the production process is
wants, preference, likes, dislike etc., and over and ends with the handing over the
continues even after the sales have taken money to the seller by the buyer.
place.
Focus is on earning profit through Focus is on earning profit through

maximisation of customers’ satisfaction. maximisation of sales.
Customer’s need is the central point around Fragmented approach to achieve short-
whom all marketing activities revolve. term gain.
It is an integrated approach to achieve long All activities revolve around the product that
term goals like creating, maintaining and has been produced.
retaining the customers.
Stresses on needs of buyer. Stresses on needs of the seller.
Societal Marketing Concept
The societal marketing concept

holds “marketing strategy should
deliver value to customers in a way
that maintains or improves both the
consumer’s and society’s well-
being”.
It calls for sustainable marketing,

socially and environmentally
responsible marketing that meets the
present needs of consumers and
businesses while also preserving or
enhancing the ability of future
generations to meet their needs.

The Societal Marketing Concept puts Human welfare on top before profits and satisfying the
wants.
Approaches to study Marketing

The study of marketing has been approached in more than one way. To some it has meant to
sell something at a shop or market place; to some it has meant the study of individual product
and its movement in the market; to some it has meant the study of persons-wholesalers,
retailers, agents etc., who move the products and to some it has meant the study of behaviour
of commodity movement and the way the persons involved to move them. The approach to
the study of marketing has passed through several stages before reaching the present stage.
There is a process of evolution in the development of these approaches.
To facilitate the study, these different approaches may be broadly classified as follows:
1. Commodity approach
2. institutional approach
3. Functional approach
4. Management approach
5. System approach
6. Societal approach
7. Legal approach
8. Economic approach
Commodity approach:
Under the commodity approach the focus is placed on the product or it is an approach on the
marketing on commodity wise basis. In other words, the study relates to the flow of a certain
commodity and its movement from the original producer right up to the ultimate customer.
The subject-matter, under this study, is commodity.
When one studies the marketing on this basis—commodity approach, one must begin to study
and analyses the problems relating to a commodity i.e., sources and conditions of supply,
nature and extent of demand, mode of transporting, storage, standardization, packing etc.
Again, take an example of a commodity, say rice.
One has to study the sources of rice, location, people involved in buying and selling, means
of transport, problems of selling the product, financing, storage, packing etc. Thus, we get a
full picture of the marketing from the original producer to the ultimate consumer. The method
of study is repeated for each item.
The system claims that it is simple and gives good result over the marketing of each product;
description study is possible. But at the same time this approach is time-consuming and
repetitive process which is a drawback.

Institutional approach:
In the institutional approach, the focus is on the study of institutions- middlemen,
wholesalers, retailers, importers, exporters, agencies, warehousing etc., engaged in the
marketing during the movement of goods. The approach is also known as middlemen
approach. Here, emphasis is given to understand and analyses the functions of institutions,
who are discharging their marketing functions.
The activities of each institution form a part of marketing and collectively complete the
marketing functions. In the process of moving the goods from the producer to the final
consumers, a large number of persons are engaged. This system pays attention to the
problems and functions of marketing institutions-transporting, banks and other financial
institutions, warehousing, advertising, insurance etc. This method does not give adequate
knowledge of the entire marketing functions and also’ fails to explain the interrelations of
different institutions.
Functional approach:
The functional approach gives importance on the various functions of marketing. In other
words, one concentrates attention on the specialized services or functions performed by
marketers. In this approach, marketing splits into many functions-buying, selling, pricing,
standardization, storage, transportation, advertising, packing etc. This may be studied one
after another. Here each function is studied in detail in order to understand it and analyses the
nature, need and importance of each function.
In this approach, marketing is regarded as “business of buying and selling and as including
those business activities involved in the flow of goods and services between producers and
customers.” This system gives too much importance to various marketing functions and fails
to explain how such functions are applied to the specific business operations.
Management approach:
This approach is the latest and scientific. It concentrates upon the activities or marketing
functions and focuses on the role of decision-making at the level of firm. This approach is
mainly concerned with how managers handle specific problems and situations. It aims
through evaluation of current market practices to achieve specific marketing objectives.
Generally there are two factors-controllable and uncontrollable, which are more concerned
with the decision-making. Controllable include price adjustment, advertisement etc.
Uncontrollable-economical, sociological, psychological, political etc. are the basic causes for
market changes. And these changes cannot be controlled by any firm.
But controllable can be controlled by the firm. The uncontrollable limit the marketing
opportunities. As such, managerial approach is concerned with the study of uncontrollable
and then taking decisions for controllable within the scope set by uncontrollable. Managerial

or decision-making approach emphasizes on the practical aspects of marketing, but ignores

the theoretical aspects of marketing. At the same time, this approach, provides an overall
information of the entire business.
System approach:
The system approach can be defined as “a set of objects together with the relationships
among them and their attributes.” Systems focus on interrelations and interconnections
among the functions of marketing. The system examines marketing connections (linkage)
inside as well as outside the firm. Inside the firm there is a co-ordination of business
activities-engineering, production, marketing, price etc.
On the basis of feedback information proper control is exercised to modify or alter in the
producing process, so that the desired output can be produced. Here, the aim is to secure
profit through customer-satisfaction. Markets can be understood only through the study of
marketing information. For instance, business is composed of many functions, which are
composed of sub functions. Each function or sub-function is independent, but interrelated and
enables the other to achieve marketing objectives.
Societal Approach:
This approach has been originated recently. The marketing process is regarded as a means by
which society meets its own consumption needs. This system gives no importance as to how
the business meets the consumer’s needs. Therefore, attention is paid to ecological factors
(sociological, cultural, legal etc.) and marketing decisions and their impact on the society’s
well-being.
Economic approach:
This approach deals with only the problems of supply, demand and price. These are important
from the economic point of view, but fail to give a clear idea of marketing.
Recent trends in Marketing
1. More Emphasis on Quality, Value, and Customer Satisfaction:

Today’s customers place a greater weight to direct motivations (convenience, status, style,
features, services and qualities) to buy product. Today’s marketers give more emphasis on the
notion, “offer more for less.”
2. More Emphasis on Relationship Building and Customer Retention:

Today’s marketers are focusing on lifelong customers. They are shifting from transaction
thinking to relationship building. Large companies create, maintain and update large
customer database containing demographic, life-style, past experience, buying habits, degree
of responsiveness to different stimuli, etc., and design their offerings to create, please, or

delight customers who remain loyal to them. Similarly more emphasis is given to retain them
throughout life. Marketers strongly believe: “Customer retention is easier than customer
creation.”
3. More Emphasis on Managing Business Processes and Integrated

Business Functions:
Today’s companies are shifting their thinking from managing a set of semi independent
departments, each with its own logic, to managing a set of fundamental business processes,
each of which impact customer service and satisfaction. Companies are assigning cross-
disciplinary personnel to manage each process.
Marketing personnel are increasingly working on cross- disciplinary terms rather than only in
the marketing department. This is the positive development, which broadens marketers’
perspectives on business and also leads to broaden perspective of employees from other
department.
4. More Emphasis on Global Thinking and Local Market Planning:

As stated earlier, today’s customers are global, or cosmopolitan. They exhibit international
characteristics. This is due to information technology, rapid means of transportation,
liberalization, and mobility of people across the world. Companies are pursuing markets
beyond their borders. They have to drop their traditions, customs, and assumptions regarding
customers.
They have to adapt to their offering as per the cultural prerequisites. Decisions are taken by
local representatives, who are much aware of the global economic, political, legal, and social
realities. Companies must think globally, but act locally. Today’s marketers believe: “Act
locally, but think globally.”
5. More Emphasis on Strategic Alliances and Networks:

A company cannot satisfy customers without help of others. It lacks adequate resources and
requirements to succeed. Company needs to involve in partnering with other organisations,
local as well as global partners who supply different requirements for success.
Senior manager at top-level management spends an increasing amount of time for designing
strategic alliance and network that create competitive advantages for the partnering firms.
Merger, acquisition, and partnering are result of a strong thirst for strategic alliance and
networks.
6. More Emphasis on Direct and Online Marketing:

Information technology and communication revolution promise to change the nature of
buying and selling. Companies follow direct channel in term hiring salesmen, setting own
distribution network, designing network marketing, applying online marketing, and
contracting with giant shopping/retailing malls.

People anywhere in the world can access the Internet and companies’ home pages to scan
offers and order goods. Via online service, they can give and get advice on products and
services by chatting with other users, determine the best values, place orders, and get next-
day delivery.
As a result of advances in database technology, companies can do more direct marketing and
rely less on wholesale and retail intermediaries. Beyond this, much company buying is now
done automatically through electronic data interchange link among companies. All these
trends portend a greater buying and selling efficiency.
7. More Emphasis on Services Marketing:

As per general survey, about 70% people are, either directly or indirectly, involved in service
marketing. Because services are intangible and perishable, variable and inseparable, they
pose additional challenges compared to tangible good marketing. Marketers are increasingly
developing strategies for service firms that sell insurance, software, consulting services,
banking, insurance, and other services.
8. More Emphasis on High-tech Industries:

Due to rapid economic growth, high-tech firms emerged, which differ from traditional firms.
High-tech firms face higher risk, slower product acceptance, shorter product life cycles, and
faster technological obsolescence. High-tech firms must master the art of marketing their
venture to the financial community and convincing enough customers to adopt their new
products.
9. More Emphasis on Ethical Marketing Behaviour:

The market place is highly susceptible to abuse by those who lack scruples and are willing to
prosper at the expense of others. Marketers must practice their craft with high standards.
Even, governments have imposed a number of restrictions to refrain them from malpractices.
Marketers are trying to sell their products by obeying and observing moral standards or
business ethics.
10. Other issues:

i. Craze for international standards and emphasis on quality, value and customer satisfaction.
Application of TQM (even, Six Sigma) in every aspect of marketing management.
ii. Changed attitude toward competition. They compete not for maximum gains but for
maximum offers to customers.
iii. Relationship marketing at both levels at internal functions of organisation and at outside
with service providers, to satisfy customers.
iv. Concept of global and complex customers.
v. Marketing department is placed in the center of management. It enjoys unique and
dominant status in organisation.
vi. Use of latest technology for survey and research.
vii. More emphasis on after-sales services.
viii. Entertaining value in advertising, etc.
E-Business
E-business has made shopping easy for us. We don’t need to go anywhere physically, we can
shop from home and get great deals too.
Introduction to e-Business:
E-business or Online business means business
transactions that take place online with the help
of the internet. The term e-business came into
existence in the year 1996. E-business is an
abbreviation for electronic business. So the buyer
and the seller don’t meet personally.
In today’s world, we are exposed to various

forms of e-Business. Since its emergence, it has grown by leaps and bounds. Some predict
that it may very soon overtake brick and mortar stores completely. While that remains to be
seen, we cannot ignore the immense role it plays in the current global economy.
Features of Online Business
Some of the features of Online Business are as follows :
 It is easy to set up
 There are no geographical boundaries
 Much cheaper than traditional business
 There are flexible business hours
 Marketing strategies cost less
 Online business receive subsidies from the government
 There are a few security and integrity issues
 There is no personal touch
 Buyer and seller don’t meet
 Delivery of products takes time
 There is a transaction risk
 Anyone can buy anything from anywhere at anytime
 The transaction risk is higher than traditional business
Types of e-Commerce
Now there are actually many types of e-Businesses. It all depends on who the final consumer
is. Some of the types of e-commerce are as follows :

Business-to-Business (B2B)
Transactions that take place between two organizations come under Business to business.
Producers and traditional commerce wholesalers typically operate with this type of electronic
commerce. Also. it greatly improves the efficiency of companies.
Business-to-Consumer (B2C)
When a consumer buys products from a seller then it is business to consumer transaction.
People shopping from Flipkart, Amazon, etc is an example of business to consumer
transaction. In such a transaction the final consumer himself is directly buying from the seller.
Consumer-to-Consumer (C2C)
A consumer selling product or service to another consumer is a consumer to consumer

transaction. For example, people put up ads on OLX of the products that they want to sell.
C2C type of transactions generally occurs for second-hand products. The website is only the
facilitator not the provider of the goods or the service.
Consumer-to-Business (C2B)
In C2B there is a complete reversal of the traditional sense of exchanging goods. This type of
e-commerce is very common in crowdsourcing based projects. A large number of individuals
make their services or products available for purchase for companies seeking precisely these
types of services or products.
Consumer-to-Administration (C2A)
The Consumer-to-Administration model encompasses all electronic transactions conducted
between individuals and public administration. Some examples of applications include
Education – disseminating information, distance learning, etc.

Social Security – through the distribution of information, making payments, etc.
Taxes – filing tax returns, payments, etc.
Health – appointments, information about illnesses, payment of health services, etc.
Business-to-Administration (B2A) (B2G)

This part of e-commerce encompasses all transactions conducted online by companies and
public administration or the government and its varies agencies. Also, these types of services
have increased considerably in recent years with investments made in e-government.
Telemarketing:
Definition:
Telemarketing is the act of selling, soliciting, or promoting a product or service over the

telephone; the telephone is the most cost-efficient, flexible, and statistically accountable
medium available. At the same time, the telephone is still very intimate and personal. It is
individual to individual.
Meaning:
Telemarketing is the process of using the telephone to generate leads, make sales, or gather
marketing information. Telemarketing can be a particularly valuable tool for small
businesses, in that it saves time and money as compared with personal selling, but offers
many of the same benefits in terms of direct contact with the customers.
Telemarketing is especially useful when the customers for a small business products or
services are located in hard-to-reach places, or when many prospects must be contacted in
order to find one interested in making a purchase.
Although some small businesses operate exclusively by telephone, telemarketing is most

often used as part of an overall marketing programme to tie together advertising and personal
selling efforts. For example, a company might send introductory information through the
mail, then follow-up with a telemarketing call to assess the prospect’s interest, and finally
send a salesperson to visit.
Types of Telemarketing
Telemarketing can be either inbound or outbound in scope.
Inbound Telemarketing:
It consists of handling incoming telephone calls—often generated by broadcast advertising,
direct mail, or catalogues—and taking orders for a wide range of products. The
representatives working in this type of telemarketing programme normally do not need as
much training as the outbound representatives.
Outbound Telemarketing:
It can be aimed directly at the end consumer; for example, a home repair business may call
people to search for prospects and customers. Representatives working on this side of the
industry generally require more training and product knowledge, as more actual selling is
involved in comparison to the inbound operations.
Advantages of Telemarketing:
1. Human interaction: One of the advantages telemarketing has over other direct marketing
methods is that it involves human interaction.
2. Small businesses: Telemarketing can be a particularly valuable tool for small businesses,
in that it saves time and money as compared to personal selling, but offers many of the same
benefits in terms of direct contact with customers.
3. Customer service: Building a loyal client base is a fundamental factor in establishing a

long- term business success and increasing the value of the company. Telemarketing customer
services can gain repeat orders and increase the penetration of the customer base.

Telemarketing has the advantages of delivering excellent customer service.
4. Reduces cost:
As the costs of field sales continue to escalate, businesses are using telemarketing as a way to
reduce the cost of selling. It is also easier to communicate with customers. Most of the
marketing efforts are directed towards select markets, so the cost per person contacted is less.
5. Flexibility:
It is the most flexible form of direct marketing. It helps in knowing and understanding what
customers want, and are prepared to buy. Survey can be conducted with the advantages of
telemarketing, knowing what customers are looking for, the product or service, the brand,
etc.; one can constantly update the client data base.
6. Response measurement:
Response measurement is possible by knowing the effectiveness of advertising. The results
can be compared with the ones previously established, and the future plans can be based on
such results.
Disadvantages of Telemarketing:
1. An increasing number of people have become averse to telemarketing.
2. No visual contact with the customer is possible.
3. More people are using technology to screen out unwanted callers, particularly
telemarketers.
4. Government is implementing tougher measures to curb unscrupulous telemarketers.
5. If hiring an outside firm to do telemarketing, there is lesser control in the process, given
that the people doing the calls are not your employees.
6. A telephone conversation has very short memory.
7. Pre-purchase inspection of goods not possible.
8. It can be extremely expensive, particularly if telemarketing is outsourced to an outside
firm.
M-Business/M-Commerce
Mobile commerce popularly known as m-commerce is actually just a subset of e-commerce.

The term itself was coined in 1997 by Kevin Duffy. It is essentially a way of carrying
thousands and millions of retail shops in your pocket. Let us study a bit more about mobile
commerce.

Mobile Commerce (M-Commerce)

Very simply put M-commerce entails
the e-commerce transactions done
with a mobile phone. So M-
commerce is the use of mobile phones
to conduct any type of business
transaction. It takes the help of the e-
commerce background and WAP
technology.
The use of wireless technology
(WAP) to conduct sales of goods, provide services, make payments and other financial
transactions, the exchange of information etc. is the basis of mobile commerce.
M-commerce is actually a rapidly growing sector of e-commerce. Nearly 70% of the online
transactions that occur in India happen from mobile phones. Globally it is a 700 billion dollar
industry.
M-commerce is about exploiting new opportunities made available to us thanks to e-

commerce. So it involves the advent of new technologies, services, business models and
marketing strategies. It differentiates itself in many ways from e-commerce. This is because
mobile phones have very different characteristics than desktop computers. And it opens so
many windows of opportunities for businesses to exploit.
Applications of M-commerce:
Other than the straightforward m-commerce transactions of buying and selling of goods and
services, they have so many applications. Let us take a look at a few examples,
 Mobile Banking: Using a mobile website or application to perform all your banking
functions. It is one step ahead of online banking and has become commonplace these
days. For example, in Nigeria, the majority of banking transactions happen on mobile
phones.
 Mobile Ticketing and Booking: Making bookings and receiving your tickets on the
mobile. The digital ticket or boarding pass is sent directly to your phone after you
make the payment from it. Even in India now IRTC and other services provide m-
ticketing services.
 E-bills: This includes mobile vouchers, mobile coupons to be redeemed and even
loyalty points or cards system.
 Auctions: Online auctions having now been developed to be made available via
mobile phones as well.
 Stock Market Reports and even stock market trading over mobile applications.
Advantages of M-commerce
 It provides a very convenient and easy to use the system to conduct business
transactions.

 Mobile commerce has a very wide reach. A huge part of the world’s population has a
mobile phone in their pocket. So the sheer size of the market is tremendous.
 M-commerce also helps businesses target customers according to their location,
service provider, the type of device they use and various other criteria. This can be a
good marketing tool.
 The costs of the company also reduced. This is due to the streamlined processes, now
transaction cost, low carrying cost and low order processing cost as well.
Disadvantages of M-commerce
 The existing technology to set up an m-commerce business is very expensive. It has
great start-up costs and many complications arise.
 In developing countries, the networks and service providers are not reliable. It is not
most suitable for data transfer.
 Then there is the issue of security. There are many concerns about the safety of the
customer’s private information. And the possibility of a data leak is very daunting.
Green Marketing:
Green marketing refers to the process of selling products and/or services based on their
environmental benefits. Such a product or service may be environmentally friendly in itself or
produced in an environmentally friendly way, such as:
 Being manufactured in a sustainable fashion
 Not containing toxic materials or ozone-depleting substances
 Able to be recycled and/or is produced from recycled materials
 Being made from renewable materials (such as bamboo, etc.)
 Not making use of excessive packaging
 Being designed to be repairable and not "throwaway"
Examples of Green Marketing

 Grocers that advertise organic
produce. The organic food
industry has grown in leaps and
bounds as consumers express an
increased preference for non
genetically modified foods that
are free of pesticides.
 Restaurants that promote "locally
sourced" meats, vegetables, fish,
wines, etc. Local sourcing is
attractive to consumers as it
projects an image of sustainability
and willingness to invest in the
community.
 Toyota's marketing of the Prius
hybrid. (The Prius outsells all other hybrid vehicles, mostly because its unique styling

reflects the typical owner's passion for sustainability.)

 Volkswagen/Mercedes-Benz' marketing of its vehicles as "clean diesel" "Earth
Friendly" vehicles. As truthinadvertising.org pointed out in its roundup of companies
accused of greenwashing on Earth Day 2016, "there’s nothing clean about diesel
engines that spew pollutants at levels way over the legal limit."
 Making claims that are not as impressive as they look. Some companies try to look
green by making environmentally friendly claims that are essentially meaningless. For
instance, Worldwatch shows an example of a Coopertone sunscreen with a "no CFCs"
label. Being a chlorofluorocarbon-free product sounds great (you can help save the
ozone layer), until you realize that CFC production in the United States has been
banned since 1995.
Impacts or Importance of Green Marketing:
Green marketing affects positively the health of people and the ecological environment.
People are aware of pure products and pure methods of producing, using, and disposing the
products. It encourages integrated efforts for purity in production and consumption as well.
We can witness following impacts of green marketing:

1. Now, people are insisting pure products – edible items, fruits, and vegetables based on
organic farming. The number of people seeking vegetarian food is on rise.
2. Reducing use of plastics and plastic-based products.
3. Increased consumption of herbal products instead of processed products.
4. Recommending use of leaves instead of plastic pieces; jute and cloth bags instead of plastic
carrying bags.
5. Increasing use of bio-fertilizers (made of agro-wastes and wormy-composed) instead of
chemical fertilizers (i.e. organic farming), and minimum use of pesticides.
6. Worldwide efforts to recycle wastes of consumer and industrial products.
7. Increased use of herbal medicines, natural therapy, and Yoga.
8. Strict provisions to protect forests, flora and fauna, protection of the rivers, lakes and seas
from pollutions.
9. Global restrictions on production and use of harmful weapons, atomic tests, etc. Various
organisations of several countries have formulated provisions for protecting ecological
balance.
10. More emphasis on social and environmental accountability of producers.
11. Imposing strict norms for pollution control. Consideration of pollution control efforts and
eco-technology in awarding IS), ISO 9000, or ISO 14000 certificates and other awards.
12. Declaration of 5th June as the World Environment Day.
13. Strict legal provisions for restricting duplication or adulteration.
14. Establishing several national and international agencies to monitor efforts and activities of
business firms in relation pollution control and production of eco-friendly products.
ADVANTAGES OF GREEN MARKETING:

 A company can enter new markets when it brings attention to positive environmental
impact.
 Gain more profit from green marketing

 Green marketing brings a competitive advantage

 Raise awareness on important environmental or social issues
 It makes the company out the line, which help them to gain profit in a long time.
DISADVANTAGES OF GREEN MARKETING:
 Change leads to costs
 It is hard and costly to get Green Certifications.
 Companies may intentionally or unintentionally make false claims regarding the
environmental friendliness of their products, a process known as “greenwashing.
 Sometimes customers don’t accept natural products because it is costly as a
comparison to normal products.
CHARACTERISTICS OF GREEN MARKETING

 Recyclable packaging of the product
 Sustainable manufacturing or design
 implementation of marketing strategies.
 Security of the ecological environment.
RELATIONSHIP MARKETING:
Relationship marketing refers to those marketing activities that are aimed at developing and
managing long-term relationships with the customers. The details about the customer, his
buying patterns, contacts, etc. are maintained in a sales database and an account executive is
assigned to fulfill the needs of the customers and maintain the relationships successfully.
Relationship marketing recognizes the value of a customer and the significance of keeping
good relations with him. Improvement in communication technology has created newer
methods of maintaining interactive relations with the existing and potential customers.
Nowadays, many firms store the birthdays and anniversaries of the customers in their
database and contact to wish them on those days.
Marketers attempt to build goodwill and confidence in the consumer’s mind by showing that
they care. Relationship marketing is a wide concept; it covers not just the customers, but also
the other stakeholders who are vital to the company.
Strong ties are forged with the regular suppliers, shareholders and the employees of the
organization. The scope of relationship marketing extends far beyond the scope of traditional
marketing—it is basically a long-term concept which leads to sustainability and growth of the
business over the years.
Relationship marketing has been receiving increasing attention in recent years as more and
more organizations focus their attention on retaining existing customers rather than attracting
new ones.
Although the origins of relationship marketing are to be found in an industrial context, it is

with the increasing importance of the services sector during the last decade that relationship

marketing has emerged as an important topic in helping marketers focus on maintaining and
enhancing customer relationship.
When it comes to marketing, many service firms devote most of their resource, to attracting
new customers. Efforts to retain existing customers are minimal, at least in so far as formal
marketing programming is concerned. This view of marketing is needlessly restrictive and
potentially wasteful.
Relationship marketing is attracting, maintaining and enhancing customer relationships.
Servicing and selling existing customers is viewed to be just as important to long-term
marketing success as acquiring new customers. Good service is necessary to retain the
relationship. Good selling is necessary to enhance it.
The term relationship marketing was first coined in America in the early 1980s. Although it
has no single, agreed meaning, most definitions have common factors defined in the
dictionary of marketing terms of American Marketing Association (1995), “Relationship
Marketing is marketing with the conscious aim to develop and manage long term and/or
trusting relationship with customers, distributors, suppliers, or other parties in the
marketing environment”.
The building and management of relationship with customers has always been a key
approach to marketing practices and some companies habitually market on a relationship
basis without consciously calling it that. However use of term relationship marketing
suggests that deliberate efforts are being made to retain customers and provide effective
communication with them and use different approaches to marketing that is –
i. Based on development of two way communication between suppliers and customers.
ii. Affordable by technology
iii. Usually guided by highly technical analysis of customers purchasing and profitability.
The building of good personal relationship with customer is usually integral to small business
management and example of owner of small corner shop is often used to illustrate the essence
of relationship marketing. The small shopkeeper has direct knowledge of all regular
customers and becomes familiar with their needs and their likes and dislikes. This enables the
shopkeeper to provide services tailored to individual needs, planned on the basis of known
customer requirements. Overtime, a bond of loyalty is likely to develop between shopkeeper
and the regular customer.
Attracting new customers to a business is only the beginning. The best companies view new
customer attraction as the launching point for developing and enhancing a long-term
relationship.
Companies can expand market share in three ways:

(i) Attracting new customers,

(ii) Increasing business with existing customers, and
(iii) Retaining existing customer.
Many companies have created marketing strategies to keep their customers coming back,
buying more and staying loyal. It is, therefore, essential to maintain long standing
relationship with customers. It is a known fact that cost of serving existing customers is less
expensive than attracting new ones.
Relationship marketing is defined as “a strategy that aims at developing and managing long-
term relations with customers, suppliers and distributors in order to earn and retain the
business of the enterprise”. Marketers accomplish this by promising and delivering high-
quality products and services at fair prices to the other parties involved in the distribution
process.
The ultimate outcome of relationship marketing is building a strong marketing network. A
marketing network consists of the company and its supporting stake holders- customers,
employees, suppliers, distributors, retailers, ad agencies and others- with whom it has built
mutually profitable business relationships. In fact, competition is not between companies but
between marketing networks. The operating principle is simple- Build an effective network of
relationships with key stakeholders, and profits will follow.
Relationship management begins with clear understanding of:
(i) Who your customers are

(ii) What are their values
(iii) What they want to buy
(iv) How they prefer to interact with you and
(v) How they expect you to serve them.
The internet is an effective tool for generating relationships with customer because of its
ability to interact with the customer. With the internet, companies can use e-mail for fast
customer service and database tracking of buying habits for customizing products.
Difference between Transactional and Relationship Marketing:

Customer Relationship Management:

Customer relationship management (CRM) is a technology for managing all your company’s
relationships and interactions with customers and potential customers. The goal is simple:
Improve business relationships. A CRM system helps companies stay connected to
customers, streamline processes, and improve profitability.
When people talk about CRM, they are usually referring to a CRM system, a tool that helps
with contact management, sales management, productivity, and more.
A CRM solution helps you focus on your organization’s relationships with individual people
— including customers, service users, colleagues, or suppliers — throughout your lifecycle
with them, including finding new customers, winning their business, and providing support
and additional services throughout the relationship.
Definition of CRM:
Customer Relationship Management (CRM) is a comprehensive strategy and process of

acquiring, retaining and partnering with selective customers to create superior value and
strong relationship with customers.
A commonly cited definition of CRM is that of CRM (UK) Ltd (2002), as follows:
“Customer Relationship Management is the establishment, development, maintenance and

optimisation of long-term mutually valuable relationships between consumers and
organizations”.
CRM is neither a product, nor service but a business strategy to learn more about customer
behaviour and requirements in order to create long term relationship with them. CRM
involves use of technology in attracting new and profitable customers while forming tighter
bonds with existing one.

Needs / objectives of CRM:
1. Enable the company to identify, contact attract and acquire new customers:
CRM allows the company to focus its limited marketing resources on the most promising
target markets with the highest potential value. This is typically done using the information
generated by CRM application which
a) Automatically generates customer and market profiles
b) Identify and target market with high revenues
c) Generates, leads, tracks marketing campaigns across a variety of media
d) Selects appropriate contact media, plans promotions and incentives
e) Manages the proposal process through negotiations to close.
2. Obtains a better understanding of the customers- their wants and needs:

CRM applications, often used in combination with data warehousing, e-commerce
applications and call centers, allow companies to gather and access information about
customers buying behavior, wants in terms of products or services provided by the company.
The information is used in planning and execution go marketing campaigns. It enables
customers to seek products and reveal their preferences in an interactive manner.
3. Defines the appropriate product and service offering and match it to the unique needs
of the customer:
CRM provides customization and personalization capabilities that gives customers the power
to view the enterprise in a way that they can relate to, there by making it easier for them to do
business with it. This includes configuration, pricing, quotation, catalog and personal
generation capabilities that harness the power of Internet while ensuring the flexibility to
respond quickly to changing technical and business conditions.
4. Manages and optimizes company’s sales cycle:

The productivity of the sale process is increased by accurating the contracting process and
improving revenue velocity. This is accompanied to capabilities such as online order entry,
credit card processing, tax calculations, auctions, billing, order status and payment
processing. CRM solutions also include tools, which provide the ability to communicate
important information from supply chain modules to the customer interface in real time.
These tools can help in determining feasibility, profitability and delivery dates, while
understanding the constraints of the entire supply production and logistics chain across
multiple channels and enterprises.
5. Increases retention of existing customers through improved sales, service and

support:
CRM applications document all post –close service and support related interaction with
customers, record customer requests and collect feedback from variety of communication
channels and use the information to anticipate the demand for service and technical assistance
and maximize customer satisfaction and retention while maximizing customer service staff.
The goal is to ensure greater customer loyalty. CRM provides capabilities for providing
online support information, online product registration to an electronic help desk, self service
support logging and tracking and integration with call centers.
6. Identifies Cross selling and up selling opportunities:

CRM can help in identifying opportunities for cross selling and up selling of higher value

added services to the existing customers, based on their past purchasing behaviour.
Advantages and disadvantages of CRM:
Pros Cons
 It allows for the consolidation of

customer data and the basis for  Customer experience may
deep insights. disimprove due to staff over-
reliance on system.
 It speeds-up the sales conversion
process.  Security and data protection
issues with centralised data.
 It increases staff productivity,
lowering time-cost.  Time and initial productivity cost
of implementation.
 It allows geographically dispersed
teams to collaborate effectively.  Requires a process-driven sales
organisation.
 Improves customer experience by
allowing personalisation and  CRM may not suit all businesses.
improved query resolution.
Retailing:
A conclusive set of activities or steps used to sell a product or a service to consumers for their
personal or family use. It is responsible for matching individual demands of the consumer
with the supplies of all the manufacturers.
The term Retailing derived from French word ‘retaillier’ meaning ‘to cut a piece off’ or ‘to
break the bulk’.
Retailer: A retailer is a person, agent, agency, company, or organization which is
instrumental in reaching the goods, merchandise, or services to the ultimate consumer.
Retail industry in India - Facts:
 2nd largest employer (8%).
 About 14 million retail outlets in India (only 4% outlets are more than 500 sq ft
operational area).
 They are predominantly small, independent, and owner managed shops.
 Boom in retail industry is due to increase in the disposable income of the middleclass
households.
 India has occupied a remarkable position in global retail rankings; the country has
high market potential, low economic risk and moderate political risk.
 India is expected to become the world's third-largest consumer economy, reaching

US$ 400 billion in consumption by 2025, according to a study by Boston Consulting

Group
 India is ranked first in the Global Retail Development Index 2017, backed by rising
middle class and rapidly growing consumer spending.
 India’s retail market witnessed investments worth US$800 million by Private Equity
(PE) firms and wealth funds in 2017.
Classification of Retailers:
Retail Formats can be classified into the following categories:
Store Based: Store based formats can be further classified into two formats based on the basis
of Ownership or Merchandise offered.
Non Store Based Classification: Non Store retail organizations focus on establishing direct
contact with the consumer. This may be both personal (direct personal selling) and nonpersonal
TV, the Internet, mail, catalog or phone).
Service Based Classification: Such retailers specialize in providing different kinds of services
to the end consumer. The services can be classified as Banking Services, Rentals, Electricity,
cooking gas, etc. Various factors like quality of service, how much customization can be
provided for meeting the client specific requirements, the uniqueness of the service and
delivery within the timelines, usage of innovative technology, etc, are given importance for
determining the success of service.
Classification of Retailers on the Basis of Ownership

 Sole Proprietorship: This constitutes the majority as many small business ventures
start on a sole proprietorship basis only. In the case of sole proprietorship, the
ownership of the business exists with a single person, usually the one who is
responsible for the day to day affairs of running the business.
 Partnership: This is also one of the most common business formats in India. In
Partnership form of business, the ownership is shared between two or more people for
running the business.
 Joint Venture: A Joint venture involves the creation of a third or a new entity due to
collaboration between two or more than two parties, with an agreement to manage the
business operations in a particular area by combining their resources and sharing their
profits as per the well-defined terms and conditions of the contract.
Key Features of Chain Stores: When 4 or more than four stores manage the same
merchandise under the central ownership and usually receive their supplies from a central
warehouse. The Chain stores in Europe are equally called as Multiple Shops, unlike America
where it is regarded as Chain Stores. The main objective of Chain Store system is to approach
the maximum number of customers by expanding operations across a larger territory, but with
a concentration on selling the same merchandise.
In Indian context organizations such as BATA and Usha Lexus operate chain stores across the
country. These organizations offer varieties or various model variants of a single product, and
the buying is centralized, but selling is decentralized.
Salient Features are given below

 A retail system to be considered as a Chain store should have more than 1 retail store
engaged in the same merchandise and being operated with a moderate degree of
centralization.
 The focus is on horizontal expansion by establishing multiple stores for reaching
maximum customers across various geographies.
Advantages of Chain Stores
 Chain Stores enjoy cost advantages due to the economy in purchase operations, low
advertisement expenditures and low selling prices of the products.
 The risks are distributed as a result of which the possibility of losses is minimized.
 Delinquency, bad debts and the complexities in the processes of accounting can be
avoided since the chain stores operate on the basis of cash.
 Chain stores need not be established in costly or prime locations and enjoy flexibility
in their style of operation.
Limitations of Chain Stores
 The claim that the products in chain stores are sold at lower prices is false.
 Practically chain stores are inflexible as the chain stores specialize in offering
standardized products only.
 Chain stores face a lot of personnel issues due to the complexities of a large-scale
business operation.
 Chain stores run a perennial risk of losing the brand image because various customer-
centric initiatives are not being given that much importance. But the customers in the

present scenario look for several other benefits regarding services.

 Chain Stores enjoy cost advantages due to the economy in purchase operations, low
advertisement expenditures and low selling prices of the products.
 The risks are distributed as a result of which the possibility of losses is minimized.
 Delinquency, bad debts and the complexities in the processes of accounting can be
avoided since the chain stores operate on the basis of cash.
 Chain stores need not be established in costly or prime locations and enjoy flexibility
in their style of operation.
Features of Departmental Stores
Departmental Stores can be either classified on the ownership basis or income groups. The
key features of Departmental Stores are given below:
 Departmental stores perform operations in an integrated manner all under the single
roof.
 Departmental stores are multi leveled retail outlets operating on a large scale at the
international level, national level and locally as well, offering a variety in their
merchandise. In India, the major national players operating departmental stores are
Westside, Shoppers Stop, Lifestyle, etc. While the local players Meena Bazaar of
Hyderabad and Ebony in Delhi.
 The key criterion which determines the success of a departmental store is the location
in which it operates and also other factors like store size, space availability, the area
which is being targeted and crucial issues such as the potential of the store in
attracting the customers.
Advantages of Departmental Stores
 Departmental stores enjoy the benefits of economies of scale and also cost advantages
due to its large scale operation. Usually, the purchases are done in bulk or large
quantities as a result of which special concessions can be availed on the purchases.
 Departmental stores usually have ready availability of cash in liquid form, which
provides an advantage of procuring quality goods at affordable prices along with
special discounts/concessions and keeping a reserved stock for meeting the growing
demands of the customers and enjoying a business advantage.
 Customers usually get attracted towards the departmental stores for their buying
requirements due to the availability of a variety of products under a single roof.
Disadvantages of Departmental Stores
 The overall costs and expenses involved in the operation of the departmental stores
are very high.
 The element of personal involvement or maintaining client relationship is found to be
lacking in the case of departmental stores.
 The departmental stores always run the perennial risk of incurring heavy losses or
damages.
 The staff members are usually poor qualified and lack the requisite competencies or
the training for dealing with the day to day business affairs or addressing the
challenges involved in the business.
Features of Super Markets

 Supermarkets operate on a large scale basis and are the self-service kind of stores
which may be entirely operated by the owner or may lease some of the departments
on concessional rates.
 These stores are usually located in prime shopping locations where facilities for the
parking are available.
 The key hallmarks of supermarkets are the availability of a variety of merchandise
and branded products, affordable prices and availability of parking facility.
Advantages of Super Markets
 Supermarkets offer convenience in shopping, and the customers enjoy the benefit of
buying their preferred products by selecting from a variety.
 The supermarkets sell products at affordable prices.
 The customer’s shopping time is considerably reduced.
Disadvantages of Super Markets
 Supermarkets incur heavily on administrative and maintenance expenses.
 Service aspects are usually ignored in this model of retail.
 The store operation costs are very high.
Advantages of Direct Selling

 Direct selling also called as home selling involve an element of a personal touch as
the customers can establish a contact with the sales representative and discuss their
buying requirements or clarify their queries.
 The consumers enjoy the benefit of purchasing the products as per their convenience
either at home or any other location of their choice.
 The role of the seller is very crucial in case of direct selling as the seller can
personally demonstrate the products before the consumer and influence them for the
purchase by trying out persuasive skills.
Limitations of Direct Selling
 Managing the administrative requirements, determining the sales commissions for the
sales agents, determining the terms and conditions of work (part time or full time)
may involve heavy costs.
 Departmental Stores: It is a retail organization that carries a wide range of product
lines. Ex: clothing, furniture, home furnishing, daily needs, etc. Each line is operated
as a separate department managed by specialists.
 Super Market: It is the most frequently shopped type of retail store. It caters a large
number of buyers. In this type of retailing, the buyers can avail low cost, low margin,
high volume, self-service system of transactions.
 Speciality store: It is a retail store that carries a narrow product line with a deep
assortment within that line. Ex: apparel stores, sports houses, furniture shop, etc.
 Convenience stores: It is a small store located in or near a residential area, that is
open long hours and carries a limited line of high turnover convenience goods.
 Factory outlet: It is an outlet owned and operated by a manufacturer to keep and sell
his product or services.
 Franchise: It is a contractual association between a manufacturer, wholesaler or
service organisation (a franchiser) and independent business people (franchisee) who
buy the right to own and operate one or more units in the Franchise system.
What are the Functions of a Retailer?

1. Buying: A retailer buys a wide variety of goods from different wholesalers after
estimating customer demand. He selects the best merchandise from each wholesaler
and brings all the goods under one roof. In this way, he performs the twin functions of
buying and assembling of goods.
2. Storage: A retailer maintains a ready stock of goods and displays them in his shop.
3. Selling: The retailer sells goods in small quantities according to the demand and
choice of consumers. He employs efficient methods of selling to increase his sales
turnover.
4. Grading and Packing: The retailer grades the goods which are not graded by
manufacturers and wholesalers. He packs goods in small lots for the convenience of
consumers.
5. Risk-bearing:
A retailer always keeps stock of goods in anticipation of demand. He bears the risk of
loss due to fire, theft, spoilage, price fluctuations, etc.
6. Transportation: Retailers often carry goods from wholesalers and manufacturers

to their shops.
7. Financing: Some retailers grant credit to customers and provide the facility of
return or exchange of goods. In some cases, home delivery and after sale service are
provided by retailers.
8. Sales promotion: A retailer displays goods. He carries out publicity through shop
decoration, window display, etc. He maintains direct and personal contacts with
consumers. He persuades consumers to buy goods through personal selling.
9. Information: Retailers provide knowledge to consumers about new products and

uses of old products. They advise and guide consumers in better choice of goods.
They also provide market information to wholesalers and manufacturers.
10. Breaking the bulk: Retailers buy products in large quantity from a manufacturer
or wholesaler, in turn, they break this into small quantity as required by consumers.
'Concept Marketing' and 'Virtual Marketing'

Concept marketing involves the creation of concepts and brands, and thereby building
brand image for a product or service. The sale of products is largely attributed to the

concept devised rather than product itself.
Virtual Marketing is also known as Electronic Marketing, refers to online trading and
auctions. Here transactions are taken place virtually through some media, mainly
internet.

Unit1 Introduction To Marketing Management

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Unit1 Introduction To Marketing Management

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Marketing Management

TRADITIONAL CONCEPT OF MARKETING

Prof.Venkatesh Babu B.R, BGSIMS Page 1

Traditional Concept of Marketing

MODERN CONCEPT OF MARKETING

Prof.Venkatesh Babu B.R, BGSIMS Page 2

Modern Concept of Marketing

Focus on Customers’ need

2. Product Planning and Development

3. Buying and Assembling

for soap and so on.

7. Pricing the Product

8. Promotion of the Product

Selling is an important function of marketing whereby the ownership of goods and

11. Storage and Warehousing

Prof.Venkatesh Babu B.R, BGSIMS Page 6

5 Marketing Concepts are;

5. Societal Marketing Concept.

These concepts are described below;

Prof.Venkatesh Babu B.R, BGSIMS Page 8

Difference between Selling Concept and Marketing Concept

Difference between Marketing and Selling

Prof.Venkatesh Babu B.R, BGSIMS Page 9

Marketing includes selling and other activities Selling is confined to persuasion of

Focus is on earning profit through Focus is on earning profit through

Stresses on needs of buyer. Stresses on needs of the seller.

Societal Marketing Concept

The societal marketing concept

It calls for sustainable marketing,

Prof.Venkatesh Babu B.R, BGSIMS Page 10

Approaches to study Marketing

Prof.Venkatesh Babu B.R, BGSIMS Page 11

Prof.Venkatesh Babu B.R, BGSIMS Page 12

or decision-making approach emphasizes on the practical aspects of marketing, but ignores

Recent trends in Marketing

1. More Emphasis on Quality, Value, and Customer Satisfaction:

2. More Emphasis on Relationship Building and Customer Retention:

Prof.Venkatesh Babu B.R, BGSIMS Page 13

3. More Emphasis on Managing Business Processes and Integrated

4. More Emphasis on Global Thinking and Local Market Planning:

5. More Emphasis on Strategic Alliances and Networks:

6. More Emphasis on Direct and Online Marketing:

Prof.Venkatesh Babu B.R, BGSIMS Page 14

7. More Emphasis on Services Marketing:

8. More Emphasis on High-tech Industries:

9. More Emphasis on Ethical Marketing Behaviour:

10. Other issues:

viii. Entertaining value in advertising, etc.

In today’s world, we are exposed to various

Prof.Venkatesh Babu B.R, BGSIMS Page 16

A consumer selling product or service to another consumer is a consumer to consumer

Education – disseminating information, distance learning, etc.

Business-to-Administration (B2A) (B2G)

Prof.Venkatesh Babu B.R, BGSIMS Page 17

Although some small businesses operate exclusively by telephone, telemarketing is most

3. Customer service: Building a loyal client base is a fundamental factor in establishing a

Prof.Venkatesh Babu B.R, BGSIMS Page 18

Telemarketing has the advantages of delivering excellent customer service.

Mobile commerce popularly known as m-commerce is actually just a subset of e-commerce.

Prof.Venkatesh Babu B.R, BGSIMS Page 19

Mobile Commerce (M-Commerce)

M-commerce is about exploiting new opportunities made available to us thanks to e-

Prof.Venkatesh Babu B.R, BGSIMS Page 20