Basics of Marketing Management

A-Basics of marketing management
Understanding market

Before we understand the meaning of marketing, we should know what a market is.
Market is a place where buyers and sellers meet each other to enter into
transactions. The transactions involve transactions of ideas, goods, services and
information. The exchange of goods or services for money is a transaction.

Market comprises not only the actual buyers but also the potential buyers of a
product or service. The potential buyers are those people who profess some
level of interest in a good / service/ information and who can afford it. For
example, a mill produces a cotton cloth. The mill (manufacturer & seller) and all the
potential and actual buyers of the cloths will constitute the market.

The presence of sellers and actual & potential buyers of a products or services over
the Internet is known as "Online market" or "web market".

In a broadest sense: A market is any one of a variety of different systems,
institutions, procedures, social relations and infrastructures whereby persons trade,
and goods and services are exchanged, forming part of the economy. It is an
arrangement that allows buyers and sellers to exchange things"

Can Two Persons make a Market?
Two persons can trade. However to create a market it takes at least three persons
to have a market, so that there is competition on at least one of its two sides.

The offerings may include physical products, Services, Ideas and information. These
offerings have values for their customers.

"Exchange" is central to marketing. Exchange in which two or more parties give
something of value to each other to satisfy felt needs is the core of the market
place. Exchanges may include tangible goods for money or also intangible services.

Features of Markets:
As mentioned above, two people can trade but cannot create a market. In markets, the
buyers outnumber sellers.
An individual buyer is weaker than any individual seller is economically, but the total
economic power of even a fraction of the buyers is enough to assure the survival or
death of most businesses.

The sellers compete to sway the largest number of buyers they can to their, rather than
another sellers (competitors) offerings and attempt to meet competition and attract the
largest number of buyers, are influenced as well, regularly modifying their behaviors so
they will have more success, with more buyers, over time.

Definition of market

After understanding the Market in the last chapter, now let us understand
what the marketing is. In market, the sellers and buyers exchange ideas,
goods, services and information for money. The ideas, goods, services and
information possess a value for the customer. Every organization or firm has
to create a value for its product or service and this is very much essential for
its survival.

The economists call this value utility. Utility is the want-satisfying power of
a good or service. The utility is of four kinds- form utility, time utility, place
utility and ownership utility.

Form utility is created when the firm converts raw materials and component
inputs into finished goods and services. Any firms production function is
responsible for creating form utility and marketing provides important inputs
that specify consumer preference. Marketing creates the other three utilities,
time utility, place utility and ownership utility. Time and place utility occur
when consumers find goods and services available when and where they want
to purchase them. EBay and other online retailers have a 24X7 format. This
format emphasizes the time utility. Cola vending machines at malls and
complexes focus on providing place utility for people buying snacks and soft
drinks. Similarly, dial a pizza creates place utility. ATMs in banks also create
the place utility. The transfer of title to goods or services at the time of
purchase creates ownership utility.

Utility is created by marketing. The firms determine what products or services
may be of interest to customers. In simple words, the strategy to use in
sales, communications and business development is called marketing.
Marketing is an integrated process through which a firm creates value for
customers and builds strong customer relationships in order to capture value
from customers in return.

Just like transaction is central to a market, customer is central to marketing.
Marketing involves identifying, retaining and satisfying the customer.

Marketing is not an isolated process. it is an integrated process which

involves the planning, execution, pricing, distribution, promotion and after
sales service. The American Marketing Association as has defined the
marketing as:

"Marketing is 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
objectives"

The latest definition of Marketing by AMA in October 2007 was revised as:
"Marketing is the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large."
The Chartered Institute of Marketing defines marketing as "the management process
responsible for identifying, anticipating and satisfying customer requirements
profitably"
Difference between marketing and selling
The market is a place for economic transactions. The buying and selling are
two sides of the same "coin" that is "transaction'. Selling is different from
marketing. While selling means offering to exchange something (intangible
or tangible) of value for something else, marketing means much
more. Selling is a part or component of marketing. Marketing may start even
before production of goods and services. Marketing involves analyzing
consumer needs, securing information needed to design and produce goods
or services that match buyer expectations, creating, and maintaining
relationships with customers and suppliers.

The selling starts from the factory in case of tangible goods, while
marketing starts in the market place. The focus of selling is "product or
service" which exists, while the focus of marketing is "customer needs".
The means of selling is a sale and to conclude a sale depends upon the
"Persuading art" of the sales person, means of marketing is a complex,
integrated and interdependent factors.

The ultimate end of selling is profit while the ultimate end of the marketing
is "Customer satisfaction".

A common person, due to continuous exposure to advertising and personal
selling links marketing and selling. There are some misconceptions or
myths regarding the selling and marketing, biggest of which is "Marketing
and selling are synonymous". The other myths are:
1. Marketing job is to create good advertising campaign

2. Marketing means to push the product to customer.
3. Marketing is transaction oriented.
4. Marketing is short term strategy
5. Marketing is an independent function.
6. Marketing is part of selling.
Who is customer
A customer, also known as a client is a
good or service. The firm or organization is seller. A potential customer is also
known as prospective customer or client. A customer may view, check, experience
the service but not purchase.
The word "customer" has derived from custom, wh
frequently to a shop). In today's cutthroat competition, "the Customer is a King".
Marketing professionals ironically say Customer is always right".

The biggest challenge is for an organization is
Creating a customer means identifying needs in the marketplace, finding out which
needs the organization can profitably serve and developing an offering to convert
potential buyers into customers. (Guiltinan and Paul)
The marketing professionals are most
activities, which are necessary to create customers, are as follows:
To identify the customer needs.
To design the goods and services that meet those identified needs
To communicate the information about those goods
To make goods and services available at times and places that meet customers needs
To price goods and services to reflect costs, competition and customers ability to buy
To provide necessary service and follow
purchase
Evolution of Marketing
2. Marketing means to push the product to customer.
3. Marketing is transaction oriented.
4. Marketing is short term strategy
. Marketing is an independent function.
6. Marketing is part of selling.
Who is customer
A customer, also known as a client is a current or potentialbuyer
the service but not purchase.

The word "customer" has derived from custom, which means a habit (of going to
Marketing professionals ironically say Customer is always right".
The biggest challenge is for an organization is - how to create a customer
potential buyers into customers. (Guiltinan and Paul)
The marketing professionals are mostly responsible to create customers. The
activities, which are necessary to create customers, are as follows:
To identify the customer needs.
To design the goods and services that meet those identified needs
To communicate the information about those goods and services to prospective buyers
To provide necessary service and follow-up to ensure customer satisfaction after the
buyer of a product -
ich means a habit (of going to
how to create a customer?
ly responsible to create customers. The

and services to prospective buyers
ensure customer satisfaction after the

Marketing has changed over the centuries, decades and years. The production
centered system systematically changed into relationship era of today and over the
period; the specializations have emerged such as sales versus marketing and
advertising versus retailing. The overall evolution of marketing has given rise to the
concept of business development. Marketing has taken the modern shape after
going through various stages since last the end of 19th century. The Production
oriented practice of marketing prior to the twentieth century was conservative and
hidebound by rules-of-thumb and lack of information. Science & technology
developments and specially the development of information technology have now
changed the way people live, the way people do business and the way people sell
and purchase. Following is a short summary of the various stages of evolution of
marketing.

Production Orientation Era: The prevailing attitude and approach of the production
orientation era was -"consumers favor products that are available and highly affordable"
. The mantra for marketing success was to Improve production and distribution". The
rule was "availability and affordability is what the customer wants". The era was marked
by narrow product-lines; pricing system based on the costs of production and
distribution, limited research, primary aim of the packaging was to protect the product,
minimum promotion. Advertising meant, "Promoting products with a lesser quality".
Product Orientation Era: The attitude changed slowly and approach shifted from
production to product and from the quantity to quality. The prevailing attitude of this
period was that consumers favor products that offer the most quality, performance and
innovative features and the mantra for marketers was A good product will sell itself, so
does not need promotion.
Sales Orientation Era: The increased competition and variety of choices / options
available to customers changed the marketing approach and now the attitude was
"Consumers will buy products only if the company promotes/ sells these products". This

era indicates rise of advertising and the mantra for marketers was Creative advertising
and selling will overcome consumers resistance and convince them to buy".
Marketing Orientation Era: The shift from production to product and from product to
customers later manifested in the Marketing Era which focused on the "needs and wants
of the customers and the mantra of marketers was " The consumer is king! Find a need
and fill it. The approach is shifted to delivering satisfaction better than competitors are.
Relationship Marketing Orientation Era: This is the modern approach of marketing.
Today's marketer focuses on needs/ wants of target markets and aims at delivering
superior value. The mantra of a successful marketer is Long-term relationships with
customers and other partners lead to successes
The following sentences summarize the above evolution of marketing.
1. Production era: Cut costs. Profits will take care of themselves
2. Product era: A good product will sell itself
3. Sales era: Selling is laying the bait for the customer
4. Marketing era: The customer is King!
5. Relationship marketing era: Relationship with customers determine our firms
future
Features of Marketing
The marketing Management refers to planning, organizing, directing, control of the
activates which facilitate the exchange of goods and services between the producers
to end consumers. Firms today need to spend money to create time, place and
ownership utilities .The main features of modern marketing are as follows:
1. Marketing is a science as well as art: Marketing has evolved from the economics but
it has a closer relationships with social and behavioral sciences. Marketing is closely
associated with streams of science as well humanities and subject lines such as
Economics, Law, Psychology, Anthropology, Sociology, Information Technology etc.
Marketing heavily depends upon the demographic features of the target market, political
environment, philosophy, mathematics, statistics etc.
2. Exchange is essence of marketing: Marketing revolves around commercial exchange.
This also involves exchange of technology, exchange of information and exchange of
ideas.
3. Marketing is Goal Oriented: The ultimate goal of marketing is to generate profits
through the satisfaction of the customer.
4. Marketing is a continuous process: marketing is not an isolated, static process but is
a complex, continuous and interrelated process. It involves continuous planning,
implementation and control. It is an important functional area of the management.

5. Marketing is Consumer Oriented:
the human needs, wants and dema
what the consumer wants and how to fulfill consumer need. This leads to production of
the goods and services as per the needs of the customer.
6. Marketing starts with consumer and ends with consumer:
oriented and it is very important to know what the consumer wants.
Functions of Marketing
The ultimate aim of marketing is exchange of goods and services fr
consumers in a way that maximizes the satisfaction of customers needs. Marketing
functions start from identifying the consumer needs and end with satisfying the
consumer needs. The universal functions of marketing involve buying, selling,
transporting, storing, standardizing and grading, financing, risk taking and securing
marketing information. However, modern marketing has some other functions such
as gathering the market info and analyzing that info. Market planning and strategy
formation. To assist in product designing and development also comes under the
marketing functions. The marketing functions have been discussed here briefly:

1. Market Information: To identify the needs, wants and demands of the consumers and
then analyzing the identified information to arrive at various decisions for the successful
marketing of a firms products and services is one of the most important functions of
marketing. The analysis involves judging the internal weaknesses and strengths of the
Marketing is Consumer Oriented: All firms exist because of their business to satisfy
the human needs, wants and demands. The ultimate objective of marketing is to find out
the goods and services as per the needs of the customer.
Marketing starts with consumer and ends with consumer:Marketing is consumer
oriented and it is very important to know what the consumer wants.
The ultimate aim of marketing is exchange of goods and services from producers to
n. To assist in product designing and development also comes under the

To identify the needs, wants and demands of the consumers and
nalysis involves judging the internal weaknesses and strengths of the
All firms exist because of their business to satisfy
nds. The ultimate objective of marketing is to find out
Marketing is consumer
om producers to
n. To assist in product designing and development also comes under the
To identify the needs, wants and demands of the consumers and
nalysis involves judging the internal weaknesses and strengths of the

organization as well politico-legal, social and demographic data of the target market.
This information is further used in market segmentations.
2. Market Planning: Market-planning aims at achieving a firms marketing objectives.
These objectives may involve increasing market presence, dominate the market or
increase market share. The market planning function covers aspects of production levels,
promotions and other action programmes.
3. Exchange Functions: The buying and selling are the exchange functions of marketing.
They ensure that a firm's offerings are available in sufficient quantities to meet customer
demands. The exchange functions are supported by advertising, personal selling and
sales promotions.
4. Product Designing and development: The product design helps in making the
prodyct attractive to the target market. In todays competitive market environment not
only cost matters but also the product design, suitability, shape, style etc. matter a lot in
taking production decisions.
5. Physical Distribution: The physical distribution functions of marketing involve
transporting and storing. The transporting function involve moving products from their
points of production to locations convenient for purchasers and storing function involve
the warehousing products until needed for sale.
6. Standardization and Grading: Standardization involves producing goods at
predetermined specifications. Standardization ensures that product offerings meet
established quality and quantity. It helps in achieving uniformity and consistency in the
output product. Grading is classification of goods in various groups based upon certain
predetermined characteristics. It involves the control standards of size, weight etc.
Grading helps in pricing decisions also. The higher quality goods and services attract
higher prices.
7. Financing : The financing functions of marketing involve providing credit for channel
members or consumers.
8. Risk Taking: Risk taking is one of the important marketing functions. Risk taking in
marketing refers to uncertainty about consumer purchases resulting from creation and
marketing of goods and services that consumers may purchase in future.
9. Packaging, labeling and branding: packaging involves designing package for the
products, labeling means putting information required / specified on a products
covering. Packaging and labeling serve as promotional tools now a days, Branding
distinguishes the generic commodity name to a brand name. For example, Wheat Flour
is a generic name of a commodity while Ashirvad Aata is a brand name. In service
industry, also branding matters a lot.

10. Customer Support: Customer support is a very important function of marketing. It
involves pre sales counseling, after sales service, handling the customer complaints and
adjustments, credit services, maintenance services, technical services and consumer
information. For example, water purifier comes with an onsite service warranty of 7
years helps in marketing and is an important marketing function as well.
11. Importance of Marketing
12. Whether a firm is a profit making organization or a nonprofit making
organization, marketing has to play a very important role in the firms
business, society and country. While raising the standard of living by
designing products suitable to needs and wants of the customers, marketing
also helps in development of the national economy. Producing goods and
services for the society according to the needs and create demand for them
and thus improving the standard of living of the people is one of the most
important role played by marketing. For a firm, marketing helps in reducing
the cost of business by reducing market distribution cost. Marketing also
helps in increase in the employment opportunities. The successful marketing
channel involves services of wholesalers, retailers, transporters; storage
functionaries finance professionals, insurance services and so on. By creating,
maintaining and increasing the demand marketing indirectly adds to the
national income. Marketing also helps to build a cushion against slack
business and recession.
13.
Meaning & Functions of Marketing Management

Management is the processes of planning, organizing directing motivating and
coordinating and controlling of various activities of a firm. Marketing is the process
of satisfying the needs and wants of the consumers. Management of marketing
activities is Marketing Management.
Management Guru Philip Kotler defines marketing as Marketing Management is the
analysis, planning, implementation anc control of programmes designed to bring
about the desired exchanges with target audiences for the purpose of personal and
mutual gain. It relies heavily on adoption and coordination of the product, price,
promotion and place for achieving response:
In other words, a business discipline, which is focused on the practical application of
marketing techniques and the management of a firms marketing resources and
activities, is Marketing Management.
Marketing Management focuses upon the psychological and physical factors of
Marketing. The Marketing managers are responsible for influencing the level, timing,
and composition of customer demand accepted definition of the term. While the
psychological factors focus upon discovering the needs and wants of the consumer
and the changing patterns of buying behavior, habit etc. the physical factors focus
upon fulfilling those needs and demands buy better product design, channel of
distribution and other functions.
In summary, Marketing in action is marketing Management.
Marketing Management has the responsibility of to perform many functions in the
field of marketing such as planning, organizing, directing, motivating, coordinating
and controlling. All these function aim to achiven the marketing goals.
Following is a brief summary of functions of Marketing

1. Marketing Objectives: marketing management determines the marketing objectives.
The marketing objectives may be short term or long term and need a clear approach.
They have to be in coherence with the aims and objectives of the organization.
2. Planning: After objectively determining the marketing Objectives, the important
function of the marketing Management is to plan how to achieve those objectives. This
includes sales forecast, marketing programmes formulation, marketing strategies.

3. Organization: A plan once formulated needs implementation. Organizing functions of
marketing management involves the collection and coordination of required means to
implement a plan and to achieved pre determined objectives. The organization involves
structure of marketing organization, duties, responsibilities and powers of various
members of the marketing organization.
4. Coordination: Coordination refers to harmonious adjustment of the activities of the
marketing organization. It involves coordination among various activities such as sales
forecasting, product planning, product development, transportation, warehousing etc.
5. Direction: Direction in marketing management refers to development of new markets,
leadership of employees, motivation, inspiration, guiding and supervision of the
employees.
6. Control: Control refers to the effectiveness with which a marketing plan is implemented.
It involves the determination of standards, evaluation of actual performance, adoption of
corrective measures,
7. Staffing: Employment of right and able employees is very crucial to success of a market
plan. The market manager coordinates with the Human Resource Manager of an
organization to be able to hire the staff with desired capability.
8. Analysis and Evaluation: The marketing management involves the analysis and
evaluation of the productivity and performs mace of individual employees.
Basic Marketing Concepts
Anything that has a value can be marketed. A product, a service, a place, a
person, an idea, information , an event, an organization, property or even
experiences. However, there are some basic concepts of marketing, which are
interrelated, and one building on one before it. These concepts are summarized in
the following figure.

Here is a brief Description of the fundamental marketing concepts:
1. Needs, wants and demands:
being deprived of something.
marketing. Need is a part of human nature. There are many kinds of needs such as
physical needs, social needs, spiritual needs, etc. Needs are shaped up by culture,
personality and religion and they becom
fulfill that need. Wants depend upon the internal as well as external factors.
defined in terms of an object that will define the need.
cola drink, or a fruit juice may be the w
chapatti is a want. There may be more than one object that may fulfill a need and this is
called a want-list. People have choices to choose a desired object or service from the
want-list to fulfill a particular need. However due to limited resources, people want best
value of their money. When a want is backed by buying power, it becomes a
demand. So if no buying power, no demand. Money is required to create as well as
fulfill a demand. This is the most funda
to know the potential want list of his target market and make them available the best
value for their money.
2. Product: Anything tangible or intangible that is offered to satisfy a need or want is a
product. They are called goods (tangible) and services (intangible). The tangible
products are physical products, which can be touched or felt or tested, while the
intangible products cane only be experienced. For example, a service of a hotel can be
experienced (intangible) while food in the restaurant in the same hotel can be tested
(tangible). Cars, groceries, computers, places, persons , ideas and informations
everything are objects that have the capability of fulfilling the needs and wants. When

Here is a brief Description of the fundamental marketing concepts:
Needs, wants and demands: A need is a state of felt deprivation or feeling of
being deprived of something. Human need is the most basic concept underlying the
personality and religion and they become wants when the need indicate an object to
fulfill that need. Wants depend upon the internal as well as external factors.
defined in terms of an object that will define the need. If thirst is need, water, a
cola drink, or a fruit juice may be the want. If hunger is need, pizza, burger, bread, or
list. People have choices to choose a desired object or service from the
lar need. However due to limited resources, people want best
When a want is backed by buying power, it becomes a
. So if no buying power, no demand. Money is required to create as well as
fulfill a demand. This is the most fundamental concept of marketing. The marketer has
Anything tangible or intangible that is offered to satisfy a need or want is a
oducts cane only be experienced. For example, a service of a hotel can be
(tangible). Cars, groceries, computers, places, persons , ideas and informations
objects that have the capability of fulfilling the needs and wants. When

state of felt deprivation or feeling of
Human need is the most basic concept underlying the
e wants when the need indicate an object to
fulfill that need. Wants depend upon the internal as well as external factors.Want is
If thirst is need, water, a
ant. If hunger is need, pizza, burger, bread, or
list. People have choices to choose a desired object or service from the
lar need. However due to limited resources, people want best
When a want is backed by buying power, it becomes a
. So if no buying power, no demand. Money is required to create as well as
mental concept of marketing. The marketer has
Anything tangible or intangible that is offered to satisfy a need or want is a
oducts cane only be experienced. For example, a service of a hotel can be
(tangible). Cars, groceries, computers, places, persons , ideas and informations -
objects that have the capability of fulfilling the needs and wants. When

products are offered in the markets they are called market offering. A good market
offering has to have a good value for money.
3. Value & Satisfaction: The potential want list may have many products, which may
fulfill the need and want of a customer. However, a customer chooses what gives him or
her best value for money. There are market offerings for the objects in their potential
want list. The market offerings have to provide the best value of the money and
satisfaction of fulfilling a want. This is the fundamental concept of marketing, that when
there are so many offerings in the market, the customer buys a product on his / her
perception. Based upon their own perception the customers estimate the product value
and judge whether, it has the capacity of fulfilling their need.
Customer value is a guiding principle. The customer may rank the products
as per his / her estimate of a products capability to satisfy a need. The price
attached to the product may also affect this ranking. Ultimately, the
customer chooses a product, which gives him / her best value of his / her
money.
4. Exchange, Transactions and Relationships: As mentioned above, the wants backed
by buying power create demand. The demand is fulfilled through exchange. Exchange
is the act of obtaining a desired object from someone by offering something in
return. Barter is also an exchange. One person cannot make exchange happen. To
make exchange happen, two people are required at least. However, the transaction
between two people can be a trade. Two people cannot create a market.Three people
are at least required to create a market, so that there is competition from at least one
side. For exchange to take place, two people are needed. Both of them must have
something to offer each other and both of them should have a value to offer each other.
Each of them must be free to accept or reject the offer. Both of them must be able to
communicate with each other and must be able to deliver what they offering to each
other. These are some basic conditions to make exchange happen.
Exchange cannot be forced. Both the people must be independent and able to accept or
reject one anothers offer. Exchange may be for profit or also for no profit. Whether for
profit or no profit , an exchange must give some value to the exchange partners. A
successful exchange is a transaction. The transaction is the unit of measurement in
marketing. The value associated with transactions is the trade values. A monetary
transaction involves money for goods / services and a barter transaction involves good/
service for good / service.
A marketer does not want a single transaction. His aim is to continuously make market
offerings and the continuous exchanges / transactions create relationships. Todays
marketing is relationship marketing. The focus of marketing is not to get maximum profit

from a single transaction but to get long running relationship with the customers. If
there are good relationships, the transactions will follow and run long term.
5. Markets: As we have discussed, an exchange may take place between two people, but
three people are required to create a market. There are always many potential buyers
and many potential sellers and the set of these potential buyers and sellers is market. A
market essentially needs competition (except in absolute monopoly). A market may be a
physical market with few shops to a large complexes and shopping malls. A market also
may be virtual and today virtual markets are no inferior to the physical markets, thanks
to greater access to information technology.
Basics of Marketing Process
The predetermined objectives of marketing are to maximize the profits and
maximize the share in the market. To achieve these objects, a well-formulated
marketing plan is needed. Marketing plan involves the important decisions and route
map to achieve enterprise goals. A plan is implemented and reviewed through
marketing process. A well designed marketing process achieves the marketing goals
due to effective decision making, while a faulty process may lead to wrong decisions
which further lead to marketing failure.
The overall process of marketing has been divided into various steps by various
marketing philosophers. To understand the marketing in simple way, we have
divided the marketing process in following 6 steps.
1. Strategy Formulation
2. Marketing Planning
3. Marketing Programming, Allocating And Budgeting
4. Marketing Implementation
5. Monitoring And Auditing
6. Analysis And Research
Each step is interrelated with other steps, as marketing is a complex and continuous
process. The relationships are shown as below in the figure. There are only vague
and unclear dividing lines between any two parts of the process as precise
boundaries are not as important as the general concept.

Following is a brief Description about each of the above steps:
1. Strategy Formulation: Marketing strategy formation involves the development of the
broadest marketing/business strategies with the longest
marketing strategy, the organization is allowed to concentrate its limited resources on
the greatest opportunities to increase sales and achieve a sustainable competitive
advantage. A marketing strategy should be centered on the key concept that customer
satisfaction is the main goal. Marketing strategy also defines the principles on which
competition is faced successfully. At the strategy formulation stage, complex integration
with other corporate functions is required. A marketing strategy has to be in rhythm with
other functional strategies and overall corporate strategy. In fact, marketing strategy
and overall corporate strategy are meld into a unified strategy. The overall target of
strategy formulation is to achieve a sold positioning of the product or service of the firm.
2. Market Planning: Market Planning is the base of the marketing. It involves objectives
and plans with a 2-5 year time horizon and is thus further from day
implementation with an objective to make the best possible utilization of all the human &
physical resources of a firm. A well
effective coordination among various activities / departments of a
plans are broad in nature and have a long term impact. Plans have to be developed by a
combination of the specialists as well as the line managers who are responsible for
carrying out a plan.
3. Programming, Allocating & Budgeting:
Budgeting involves detail and focuses relatively on a shorter duration generally.
Programming is like creating functional implementation programme keeping in view one
or more elements of the marketing mix. Programming
firm, its organizational structure.

Following is a brief Description about each of the above steps:
Marketing strategy formation involves the development of the
est marketing/business strategies with the longest-term impact. Through
marketing strategy should be centered on the key concept that customer
er corporate functions is required. A marketing strategy has to be in rhythm with
Market Planning is the base of the marketing. It involves objectives
5 year time horizon and is thus further from day-to-
physical resources of a firm. A well-formulated marketing plan helps in establishing the
effective coordination among various activities / departments of a firm. Most marketing
Programming, Allocating & Budgeting: Marketing Programming, Allocating and
or more elements of the marketing mix. Programming depends upon the nature of the
firm, its organizational structure.
Marketing strategy formation involves the development of the
term impact. Through
marketing strategy should be centered on the key concept that customer
er corporate functions is required. A marketing strategy has to be in rhythm with
Market Planning is the base of the marketing. It involves objectives
-day activity of
formulated marketing plan helps in establishing the
firm. Most marketing
Marketing Programming, Allocating and
depends upon the nature of the

Allocating means allocation of the resources of the firm on various elements of the
marketing programme such as advertising or distribution etc. Through allocation, the
firm decides what to do and what not to do and also how much and how long to do.
Allocation is not based upon optimism of the marketer but involves hard decisions within
the limits of firms priority and market environment.
Budgeting involves the quantitative forecasts and estimates of each marketing function.
It involves forecast cash flows and needs, sales forecasts etc.
4. Market Implementation:
This is the most functional stage of marketing process. Strategy formulation, market
planning programming, allocating and budgeting lead to marketing implementation.
Marketing implementation is the execution phase. This phase produces the actual
results. The best strategies carved out by the best marketing specialists may get busted
if the implementation is poor.
Implementation depends upon the human resources of the organization very much. For
different personnel the meaning of implementation is different and set within his/ her
work area. For example, for a sales person , the implementation means to go through
effectively all the sales steps. While for a sales manager, the implementation is to
organize the sales team/ force. Marketing implementation is people oriented and focuses
on prospects, customers, distributors, retailers, and wholesalers. Marketing
implementation needs support, coordination, and a well-developed network for
successful results.
5. Monitoring & Auditing:
In general, audit is evaluation of a person, organization, system, process, enterprise,
project or product and monitoring is act of supervising. In marketing, the monitoring and
auditing involve to identify those existing (external and internal) factors, which will have
a significant impact on the performance of firm. Therefore, it involves the assessment of
performance against quantitative goals. The comprehensive audit also involves review of
the processes as well qualitative and non-quantifiable aspects of marketing operation.
The audit has to be done on a certain occasions while the monitoring refers to the day-
to-day supervision and review activity.
6. Analysis and Research:
Analysis and Research is the end and beginning of marketing process. The marketing
decisions need to be based upon the careful analysis and research. This may be
quantitative based upon mathematics, statistics, and other quantitative disciplines and
qualitative based upon psychology, behavioral science, moral science, anthropology and
other disciplines.

All the above activities are interrelated to each and other. The marketing is the front end
of a corporate while bearing the lateral connections with all the other functional
departments.
Marketing Process: The Basic Schematic
Marketing process is a complex & complicated set of various activities. The given
graphic makes you understand the basic schematic of the marketing process.

Every marketer has to understand some basic questions before making a marketing
plan. The first set of areas of analysis is 5Cs of the market viz. Customers,
Company, Competitors, Collaborators & Context.
1. Customers: Customer is the king and ultimate goal of marketing process is to derive
profit as well as satisfy the customer needs. The marketer has to find out what are the
needs and demands of the customers and how the firm would seek to satisfy those
demands. Customer is central to marketing as well as business and existence of a firm.
2. Company: Todays markets are competitive and here goes the principle survival of the
fittest. The company has to have some competencies and abilities to survive and
flourish. The marketer has to judge, analyze and make marketing plans and strategies
within the limits of the competencies and capabilities of the firm.
3. Competition: Market essentially has competition. Competition makes choices & options
available to customers as well as provides the best value for money to the end
consumers. The marketer has to find out who competitors are and how to meet that

competition. There is always competition in the market offerings and unless the
competition taken into account, the marketer may lead the firm in wrong direction.
4. Collaborators: Someone who assists in a programme is a collaborator. The collaborator
term in marketing involves all the people whose help required meeting the marketing
goals. The personnel of the company as well as external collaboration such as
advertising agencies, direct sales agents etc. need to be discussed.
5. Context: Context deals with the external and internal environment of the firms and
markets. The efficient marketer has to judge the political, legal, social, cultural and
technological environment of the market and decide upon the factors, which may affect
the course of marketing process.
The above specification leads to analyze the market prerequisites. It is followed by
specification of the target market.
A target market is a set of customers that the firm decides to aim its
marketing efforts.
A well-defined target market is the first element to a marketing strategy. The
selected market needs to be segmented on the basis several of geographic,
demographic/socio-economic, psychographic, behavioral & product-related criteria
and this is called market segmentation. Apart from this, the firms need to create an
image or identity in the minds of the target market for its product/ service, brand or
organization.
Next comes the Marketing Mix.
Neil Borden first used the term market mix in 1953. Neil Borden used this
term in his American Marketing Association presidential address.
Marketing Mix refers to Product, Price, Place and Promotion. Place here means the
channel of distribution. Most important is the pricing decision.
The 4Ps altogether creates value for the customer and creates value for the firm
too. This leads to Customer acquisition and customer retention for a long-term profit
for the firm.

B-basics of marketing environment and consumer behaviour
Understanding Marketing Environment
Marketing Environment refers to the forces or variables of the outer and inner
environment of a firm that affects the marketing managements ability to
build and maintain the successful relationships with the customer. The
marketing environment framework consists of macro environment and micro
environment.
Microenvironment variables are close to the firm and include the suppliers,
marketing intermediaries, customer markets, competition & publics.
Microenvironment also refers to the internal environment of the company and affects

not only marketing but also all the departments such as management, finance,
research and development, Human resources, purchasing, operations and
accounting.
Macro-environment deals with the Demographic, economic, Technological, Natural,
socio-cultural and politico-legal environment of the markets.
The following graphic shows the environmental framework.

1. Customers: Customers are the core of the marketing environment. There are different
types of customers such as end consumers, business customers, government customers,
international customers and retailer customers.
2. Suppliers: A slightest delay in receiving the supplies may result in dissatisfaction of the
customers. The marketers have to watch the supply availability and other trends related
to the suppliers
3. Marketing intermediaries: The resellers, physical distribution firms, marketing
services agencies, and financial intermediaries all make marketing intermediaries. They
help in promotion of the company and sales and distribution of the companys products.
Stores and warehouses are the physical distribution firms that store and transport the
companys product from its origin to its destination. Other intermediaries are marketing
services agencies, which are responsible for conducting marketing research, advertising,
and consulting. Financial intermediaries are institutions such as banks, credit companies
and insurance companies.
4. Publics: Publics is any group that has interest or impact on firms ability to meet its
goals. This includes the financial publics, media publics, government publics, local
publics such as NGO and citizen action organizations. While the financial publics can

hinder a companys ability to obtain funds affecting the level of credit a company, the
media publics can publish articles of interest regarding the company and editorials that
may influence customers opinions. Similarly, government publics is capable of affecting
the company by passing legislation and laws that put restrictions on the companys
actions and citizen-action publics (eg. environmental groups and minority groups ) can
question the actions of a company and put them in the public spotlight.
5. Competitors: Competitors are the companies with similar offerings for goods and
services. To remain competitive a company must consider who their biggest competitors
are while considering its own size and position in the industry. The company should
develop a strategic advantage over their competitors.
6. Politico-legal factors: Political factors include how and to what degree a government
intervenes in the economy. This includes monetary and tax policies of the government,
labour laws, environmental laws, various trade restrictions, tariffs. Political stability is
one of the main factors. This also includes the merit goods and demerit goods as per the
provisions of the local government. Legal factors deal with the discrimination law,
consumer law, antitrust law, employment law, and health and safety law.
7. Economic factors: Economic factors are general economic growth, interest rates,
exchange rates , balance of payments, monetary policies, inflation rate etc. These
factors play a very important role in business operations. These factors have the
capability to alter the cost of operations, cost of capital and returns ultimately. There is a
major impact of the exchange rates on exports and imports of the country.
8. Social factors: Social factors are the social and cultural aspects, which include health
consciousness, population growth rate, age distribution, career attitudes and emphasis
on safety.They, have a major impact on demand of a firms products and services.
9. Technological factors: Technological factors include the research and development,
automation, expansion of internet and other communication technologies, technology
incentives and technological barriers. They affect the efficiency of the production.
Outsourcing decisions mainly depend upon technological environments.
10. Natural Environment Factors: These factors include the weather, climate, and climate
change, availability of water, availability of raw products etc.
Understanding Consumer Behavior
Consumer is King and Consumer is always right are the buzzwords in modern
marketing. The activities of the marketer revolve around the consumer behavior.
The firms have to provide what their consumers want and for this purpose they
adopt various types of marketing strategies to reach and alter the consumers
buying behavior in favor of their products and services.

Consumer behavior is a dynamic, multidisciplinary and multidimensional process and
studies when, why, how, and where people do or do not buy. Marketing has
borrowed the elements from psychology, sociology, social anthropology and
economics to explain the consumer behavior. The consudmer behavior is now a
distinct discipline of marketing which attempts to understand the buyer decision
making process, both individually and in groups
Kurt Lewin, a German-American psychologist who is also known as of the the
pioneers of modern social, organizational, and applied psychology provides a very
useful classification of Buyer's behavior. this is known as Lewin's Proposition. The
Lewin's proposition says:
B= (P,E)
The above proposition says that Buyers behavior (B) is a function of Personal
Influences (P) and Outside or External environmental forces (E).
The most generic model of understanding the buyer behavior is stimulus-response
pattern, which say that response of the consumer is a result of different types of
stimuli. These stimuli are applied to the consumer and consumer in return comes up
with a response. The stimuli can be marketing or environmental stimuli. The
marketing stimuli are subject to manipulation by the marketer while the
environmental stimuli like economy, culture etc are subject to consumers
environment. The response is to buy and not to buy, what to buy, which brand,
which dealer, which location and so on
The above simple model is shown in following graphic:

The above graphic shows that there is a complex and continuous interaction of
stimuli, consumer characteristics, and decision process and consumer responses.
The different determinants of the Consumer behavior are discussed briefly in the
following pages:
Cultural & Social Factors Affecting Buyer's Behavior
Personal Factors Affecting Buyer's Behavior
Economical Factors Affecting Buyer's Behavior
Cultural & Social Factors Affecting Buyer Behavior
What is culture? The values, beliefs preferences and tastes passed on from
one generation to another generation in the society are called culture. Culture
is one of the broadest determinants of Buyers behavior. A marketer needs to

understand the culture to be able to do successful marketing. Culture keeps
changing and so do the values, beliefs, preferences and tastes of the people.
The successful marketer needs to monitors these changes and inculcates
them in the marketing strategy of the firm.
Culture is very important in Global marketing. To market a product overseas,
one needs to understand the cultural taboos, social customs, preferences,
religious outlook and other things.
Social Factors: Man is a social animal. Every person belongs to social group or
groups. Group imparts a major influence on a consumers buying decisions.
These influences may be informational or normative.
In psychology, it is referred to as conformity. Conformity is a process by
which an individual's attitudes, beliefs, and behaviors are conditioned by what
is conceived to be what other people might perceive. Solomon Eliot Asch, an
American Psychologist, first explained this and it was known as Asch
Phenomenon. The group influences may be the result of subtle unconscious
influences, or direct and overt social pressures.
Informational social influence occurs when a person turns to the members of
his/ her group to obtain accurate information. Normative social influence
occurs when a person conforms to be liked or accepted by the members of
the group. It usually results in public compliance, doing or saying something
without believing in it.
The impact can be easily seen in children. The decisions of children are often
based upon their groups what the other children are wearing, eating and
doing. The people who affect a group like the brand ambassadors are known
as Opinion Leaders who have the capability to act as trendsetters and affect
the buyers behavior.
Family Influences: Family is a group and one of the most dominant factor
affecting the purchase decisions of person. Family often has a set of norms
and has different role and status for its members. Household decision-making
depends upon the role of the family members.

Personal Factors Affecting Buyers Behavior
Consumer behavior is also affected by internal factors such as personal & inter-
personal factors. Each individual has his own set of unique needs, motives,
perceptions, attitudes, learning and self concepts, to buying decisions. Individual
purchase decisions are driven by the needs, motives, perceptions, attitudes,
learnings and self-concept. They have been discussed here:
Needs and Motives: A need is necessary for a person to live a healthy life. need is
different than want, a deficiency of need is a dysfunction or death. Needs can be physical
needs or psychological needs. Physical needs involve water, food and shelter while the
examples of social need are self -esteem. Want is something that is desired. Every
person has unlimited wants, but his/ her resources are limited. Thus, people cannot have
everything they want and must look for the most affordable alternatives.

A need is an imbalance between the consumer's actual and desired states. This
imbalance needs to be corrected A marketer does the job of creating an imbalance.
Marketing makes the need felt and motivates the person to correct this imbalance. The
action taken to bring the condition in equilibrium the ultimate goal of a marketer. This
action leads to person's buying decision.
Perceptions: The word "perception" is derived from Latin wordsperceptio, percipio,
which mean "receiving, collecting, action of taking possession. Perceptions is what a

person attributes the incoming stimuli gathered through five sense of hearing, sight,
touch, smell, and taste. Perception is the process of attaining awareness and is
dependent on the senses. Perception also involves a person's understanding which
depends upon his / her Psyche; i.e. imagination, conscience, intellect, memory.
Perception is widely used in management science. In consumer behavior, perception
plays a very important role in driving the purchasing decisions at personal level.
Attitudes: An attitude is a hypothetical construct. Attitude represents the degree of like
or dislike of a person for an item/ idea/ information/event. Attitudes may be positive or
negative views of a person, place, thing, or event. Attitudes affect the perception. The
purchasing decisions are strongly based upon the current attitude about a product/
service / brand/ shop/ sales person. The marker's job is to create favorable attitude,
which positively affect the brand preferences. Marketers need to determine the
consumer attitude towards their products.
Learning: Consumer learning is a process by which the consumer acquire the purchase
and consumption knowledge and this experience affects the future purchases.
Self Concept: A persons multifaceted picture about himself or herself plays a very
important role in the consumer behavior. The self-concept is an outcome of personal and
interpersonal influences and they affect the buying behavior of a person.

Economical Factors Affecting Buyers Behavior:
A need when identifies an object to fulfill that need becomes a want. A want backed
by a buying power becomes a demand. A demand leads the person to make a
purchasing decision, which is duly affected by the economic factors such as personal
income, family income, consumer credit, govt. policies, etc.
Personal Income: Income of a consumer is most important factor affecting the demand
and subsequently the purchase decisions. Every person has unlimited wants but limited

resources so higher the income higher is want backed by the buying power i.e. demand.
The demands may increase or decrease depending upon the persons expectations about
the future income. A persons deposable income is what is left after fulfilling the basic
needs and the disposable income increases the purchasing power of the consumers.
Family Income: The low-income families have lesser demands and happy and
prosperous family income have more demands.
Consumer Credit: The facility of credit available to the consumer increases the
demand.
Government Policies: Tax rates and other government policies have a great impact on
the consumers buying behavior.

C-basics of market segmentation

Understanding Market Segmentation
A market segment is a subset that fits with other subsets to constitute a whole
market. A market is composed of people, consumers, institutions, firms with needs
& wants backed by sufficient purchasing power and willingness to buy. Markets are
heterogeneous and consist of elements that are not of the same kind or nature.
However, the heterogeneous market can be divided into many homogenous
customer segments using several variables. This division of the whole market into
relatively homogenous groups is called market segmentation.

A market segment consists of people or organizations sharing with one or
more characteristics that cause them to demand similar product and/or
services based on qualities of those products such as price or function.

A true market segment is distinct from other segments as different segments have
different needs. A market segment is homogeneous within the segment and exhibits
common need, wants and demands. A true market segment responds similarly to a
marketing stimulus.
Market segmentation is based upon the assumption that markets of all commodities
are heterogeneous. Two groups of people are never common in all characteristics
and all products seldom succeed by appealing to everybody. The marketers with
clear marketing communications target the identified homogenous segments.
Marketing Guru Philip Kotler defines market segmentation as the subdivision of a
market into homogenous subsets of customers where any subject may conceivably
be selected on a market target to be reached with a distinct marketing mix.
Market segmentation helps the marketing decision in following ways:
1. By helping the marketer to identify the groups of customers to whom he can more
effectively target marketing efforts.
2. By helping the marketer to avoid trial and error methods of strategy formulation.
3. By helping the marketer in addressing the customer needs and satisfying them.
4. By providing important data to the marketer on which long term plans can be
formulated.
5. By helping, the marketers to stay focused rather than scattering their marketing
resources.
Features of a Market Segment:
The market segment must be internally homogenous because consumers within the
segment would be more similar to each other in characteristics.
The market segment must be identifiable so that the individuals can be placed within or
outside the segment.
The market segment must be accessible to that it can be reached by an advertising
media and distribution channels
The market segment must represent an effective demand.

List of Topics :Marketing Aptitude for Banking Examina
A Marketers Questions on Segmentation Analysis
Market segmentation makes it possible for a firm to best utilize its available
resources. It needs intensive marketing research. Once it is decided to go for market
segmentation, there are lists of questions, which must be answered. The examples
of the questions are given as under. These are just general steps, which make you
aware of the market segmentation, and each firm may have its own set of
questions.

1. What is the marketing objective of the firm?
2. Is marketing looking for new segments?
3. If yes, what about the research, shall the firm use the existing data or will invest money
in research?
4. If no, how to better satisfy the existing market segments?
5. What is the size of the total market and its various segments?
6. What are the users and non users of the products / services
7. What are the factors that distinguish between users and non-users?
8. Who are the competitors and what are their market / niche segments?
9. What is the firms position in the competition in the market?
10. How the firm can differentiate the consumers?
11. What are the possible segment profiles?
12. Does this segment profile makes internally homogenous groups?
13. Is the number of segments needs to be reduced or increased?
14. Which segments represent the best competencies and market opportunities?
15. What are the target segments characteristics and market behavior?
16. Who are the competitors in the target segment?
17. What kind of market mix will be suitable to this segment?
18. Does the firm have the necessary resources to carry out a segment strategy?
19. How flexible is this segment strategy? Can this be broadened in future?
20. Does this segment strategy fits the corporate strategy?
Variables of Segmentation: Consumer Markets

There are two types of the markets- consumer markets and industrial market.
Consumer markets are those markets where the ultimate consumers for their
personal use purchase the products. In Industrial markets, the goods and services
are purchased for use directly or indirectly in the production of other goods and
services for resale.
Marketers use different variables for market segmentation.
The variables of dividing the consumer markets can be placed in two broad
categories. One is Consumer background characteristics, which include
Geographical, Demographical, Psychographical & General Life-style variables.
Another is consumers market history, which includes product usage, product benefit
and Decision process.
Here is a brief discussion about them:
Consumer background characteristics:
1. Geographical variables: The geographic segmentation is the oldest, most basic and
most conventional way of segmenting the markets. The variables included in
geographical segmentation are Region of product distribution, Cultural differences,
languages, accessibility to the target market, mobility of the consumers and so son
2. Demographic Variables: Demographic features of the markets are also basic variables
of market segmentation. Demographic variables include the Age, Sex, Income,
Educational level, Social status etc.
3. Psychographic Variables: The psychographic variables include the personality traits,
perception, and attitudes, Reference Groups like family and friend circles, and Social
roles of the consumers.
4. General Lifestyle Variables: General lifestyle provides a multidimensional profile of
the consumers and deal with the general way of life of the consumers. The represent a
correlation of demographic, geographic and psychographic variables.
Consumer's Market History:
1. Product Usage: The market can be segmented based upon the product usage. For
example, the market can be divided into heavy, medium, light and non-users of a
particular product or service. The variables can be use, Brand loyalty and attitude of the
consumer towards a product. It also involves the durability and no durability of a
product.
2. Product benefit: Product benefit variables are used in product positioning as well. This
variable includes expectations of product performance, the needs which are fulfilled by
the product, brand perception, brand satisfaction etc.
3. Consumer decision process: This variable segment the markets based upon sensitivity
to the markets, shopping patterns, Product information searches etc.
Variables of Segmentation: Industrial Markets

Industrial marketing involves the marketing of goods and services from one business
to another. The industrial gods are used in the industry for producing different end
products. The segmentation of the Industrial markets takes into account the Size of
Industry, Size of company, Location, Infrastructure, purchasing criteria and so on.
These variables have been divided into 5 broad categories viz. Demographic
variables, Operating Variables, Purchasing approaches, Situational Factors and
Personal characteristics. Here is a brief discussion:
1. Demographical Variables: The demographic variables of Industrial market
segmentation include the type of industry, type of the target company, its location.
Some marketers target a specific type of industry while some marketers seek a group of
industries to target. For example, a company, which produces clutch wires for
motorcycles, may target a motorcycle company. On the other hand, a company which
deals with multiple products such as Spoilers, GRP Components, GRP Panels, Car Styling
Kits, Rear Parcel Shelves, Door Trim Panels, Injection Molding, Azdel Components,
Tractor Body Parts etc. will look for a portfolio of target companies such as Automobiles,
Trucks and Buses manufacturers, tractors and construction equipment manufacturers,
Locomotives and Railways, Defense, Airport furniture manufactures, medical equipment,
windmills and so on.........
2. Operating Variables: Operating variables deal with the customer technologies, user
and no user or heavy user status, and the customer capabilities.
3. Purchasing Approaches: Some companies have centralized purchasing while others
have decentralized purchasing. Industrial marketing often involves competitive
tendering. In this process, the purchasing organization undertakes to procure goods and
services from suitable suppliers. This is normally done for high value of some purchases
and the purchasing organization shall seek a number of bids from competing suppliers
and choose the best offering. This is called strategic procurement. Organizational
structure or power structure is also important criteria. This gives an insight into the
general purchase policy of the buying organization.
4. Situational Variables: These variables include the urgency, quick delivery or scheduled
delivery of the goods and services. The other criteria may be specific application and size
of the order.
5. Personal Characteristics: Personal selling is very important & effective in industrial
marketing because many products need to be customized to suit the requirements of the
individual customer. Other criteria are buyer-seller similarity, attitude towards risk and
loyalty of a industrial customer.
Understanding Targeting Approaches: Differentiated, Undifferentiated, Niche &
Micromarketing

Identification of the market segment leads a firm to decide how to approach the
selected markets. However, there are many firms, which do not segment the market
and would work for the aggregate market. This is called market aggregation which
exactly opposite to segmentation. There are different kinds of targeting approaches
and each marketing firm has its own unique way of targeting its customers. These
targeting approaches are simply divided into four kinds viz. undifferentiated
marketing, differentiated marketing, concentrated marketing and Micro marketing.

Here is a brief discussion:
1. Undifferentiated marketing: Undifferentiated marketing refers to an approach when a
firm produces only one product or product line and targets all of its customers with a
single marketing mix. The other term used for this approach is mass marketing. In Mass
Marketing, the market coverage strategy essentially ignores the market segment
differences and goes after the whole market with one offer. This marketing approach
attempts to sell through persuading a wide audience. Usually the idea is to broadcast the
message with an aim to reach the largest number of people possible. Mass marketing
focuses on media coverage such as radio, television and newspapers. The idea is to
maximize the exposure to the product. Examples of mass marketing products are
toothpastes, which are not made especially for one consumer group or segment and are
sold in huge quantities. Other examples are furniture, artwork, automobiles, residential
communities, cola drinks and personal computers.
2. Differentiated Marketing: The differentiated marketing refers to the approach of the
firms, which produce numerous products with different marketing mixes. These products

are designed to satisfy the smaller segments. In this approach, instead of marketing one
product with a single marketing program the firm approaches the different consumer
groups with products customized for each group. Most companies do this for
specialization and to remain competitive. The differentiated marketing essentially
requires market segmentation and incurs a higher production cost, inventory cost and
marketing costs.
3. Concentrated marketing: The popular term for concentrated marketing is niche
marketing. Another term for the same is Focused Market. A niche market is a subset of
the market on which a specific product is focusing. Each niche market essentially defines
specific product features such as product design, price range, production quality and the
demographics that is intended to impact. In niche marketing, the firm essentially
focuses. Niche marketing chooses a small segment provided its a profitable segment.
This approach is most suitable to smaller firms, which have lesser resources.
4. Micromarketing: This is the narrowest approach of targeting. It is most effective
technique for small business users to sustain, build and grow their own brand. It targets
the potential customer at the very basic and personal level.

D-basics of marketing mix
Understanding Marketing Mix : 4P's and 4C's
The selection of a target market leads the marketers to focus their activities towards profitability
of the target segment. For this purpose, they need to manipulate many variables. Such variables
were named marketing mix. The term marketing mix was first of all used by Neil Borden, in his
American Marketing Association presidential address in 1953. However, E. Jerome McCarthy
proposed a classification of marketing mix in four areas viz. Product, Price, Place & Promotion.
The marketing mix is the blending of these four elements as per the needs
and
preferences of the specific target market.
Each element of marketing mix has its own set of sub elements. For service industry, an
extended version of Marketing Mix with 7Ps has been proposed. Here is a brief Discussion
about the 4Ps of marketing mix.
Product : A product may be a tangible product or an intangible product. A product is produced with a
specific volume of units with an aim to satisfy the needs of the customers.. The sub elements of
product are Product design, positioning, branding, packaging & labeling, Product line, customer
service, warranties & guarantees, new product development, and product life cycle.

Price: Amount a customer pays for the product is its price. Price is determined by a lot of factors such
as demand, supply of raw components. Market share, competition, material cost and operational cost
(production cost), and customer's perceived value of the product. The sub elements of Price include
Manufacture, Wholesaler and retailer prices, terms and conditions of pricing, bidding tactics. Discount
policies, Price differentiation and Skim vs. Penetrating prices.
Promotion: Promotion refers to all of the communications that a marketer may use in the
marketplace. The supplements are Advertising, Sales force polices, direct marketing, Public
relationships, Price promotions, Trade shows and special events. The four distinct factors of
promotion are advertising, public relations, word of mouth and point of sale. Promotion may be paid or
unpaid. Paid promotions include advertising through various media, sponsorship deals, exhibitions,
conferences, seminars, paid participation in trade fairs and events and unpaid promotion include the
press releases, word of mouth etc.
Place: Place refers to the location where a product can be purchased. It represents the distribution
channel. The Distribution channel may be direct or indirect. Channel length and channel breadth
matter a lot. Some other sub elements are sublets, franchisees, direct sales agents, wholesalers,
retailers etc.
The above marketing mix is product focussed. There is a customer-focused marketing mix
which is known as 4C model. The elements are 4 C model of marketing mix are Commodity,
Cost, Channel and Communication.
List of Topics :Marketing Aptitude for Banking Examinations

The Extended Marketing Mix for Service Industry: Additional 3 Ps
The marketing mix of product marketing consists of 4Ps, the services marketing
takes in 3 more Ps making the extending market mix for service industry: 7Ps
The additional 3Ps are People, Process and Physical Evidence.
Why additional Ps?
These additional 3P are required because of the special characteristics of the Service
Industry. The product of a service industry is not tangible. The Service cannot be
manufactured and inventoried but are often produced & delivered simultaneously.
The service cannot be touched or felt but has to be experienced. The quality of the
service is perceived quality and depends upon who is providing, when is providing
and how is providing. The services are perishable and depend upon the people who
are providing, the ambience where it is being provided and the way it is being
provided. Because of certain characteristics like intangibility, inseparability,
heterogeneity, perishability etc. Service industry needs additional marketing mix
elements.
Summary Notes -1

Q.1What is Utility in reference to marketing?
Utility is the want-satisfying power of a good or service. There are four basic kinds of utility
1. Form Utility :
2. Time Utility
3. Place Utility
4. Ownership Utility.
Form utility is created when the firm converts raw materials and component inputs into finished
goods and services. Although marketing provides important inputs that specify consumer
preference, the organizations production function is responsible for the actual creation of form
utility. Marketing function creates time, place and ownership utilities.
Time and place utility occur when consumers find goods and services available when and where
they want to purchase them. Online retailers with 24*7 format emphasize time utility.
Vending machines focus on providing place utility for people buying snacks and soft drinks.
The transfer of title to goods or services at the time of purchase createsownership utility.

Q 2. If you are a Marketing Manager of a Firm, How you will "Create a
Customer"?
creating a customer means identifying needs in the marketplace, finding out which needs the
organization can profitably serve and developing an offering to convert potential buyers into
customers. Marketing managers are responsible for most of the activities necessary to create the
customers the organization wants, These activities include:
1. Identifying customer needs
2. Designing goods and services that meet those needs
3. Communication information about those goods and services to prospective buyers
4. Making the goods and services available at times and places that meet customers needs
5. Pricing goods and services to reflect costs, competition and customers ability to buy
6. Providing for the necessary service and follow-up to ensure customer satisfaction after the purchase

Q 3. What is the meaning of " Relationship Marketing" ?
Relationship Marketing focuses on needs/ wants of target markets and delivering superior value.
Besides it also means to develop 'Long-term relationships with customers and other partners lead
to success

Q 4. Which are the eras of Evolution of Marketing ?
There are five eras in the history of marketing the production era, theproduct era, the sales era,
the marketing era and the relationship marketing era.

Q 5. What was the focus of marketing in production Era?
In the production era, the production orientation dominated business philosophy. Indeed business
success was often defined solely in terms of production victories. The focus was on production and
distribution efficiency. The drive to achieve economies of scale was dominant. The goal was to
make the product affordable and available to the buyers.

Q 6. What was the focus of Marketing in Product Era?
In the product era, the goal was to build a better mouse trap and it was assumed that buyers will
flock the seller who does it. However, a better mousetrap is no guarantee of success and
marketing history is full of miserable failures despite better mousetrap designs. Inventing the
greatest new product is not enough. That product must also solve a perceived marketplace need.
Otherwise, even the best-engineered. Highest quality product will fail.

Q 7. What did the firms attempt in Sales Era?
In the sales era, firms attempted to match their output to the potential number of customers who
would want it. Firms assumed that customers will resist purchasing goods and services not
deemed essential and that the task of selling and advertising is to convince them to buy. But
selling is only one component of marketing.

Q 8. Describe the marketing Era of Marketing History:
During marketing era the company focus shifted from products and sales to customers needs. It
can be explained best by the shift from a sellers to a buyers market one with an abundance of
goods and services.
The advent of a strong buyers market created the need for a customer orientation. Companies
had to market goods and services, not just produce them. This realization has been identified as
the emergence of the marketing concept.
The keyword is customer orientation. All facets of the organization must contribute first to
assessing and then to satisfying customer needs and wants.
Q 9. What is the meaning of Relationship Marketing?
Organizations carried the marketing eras customer orientation one step further by focusing on
establishing and maintaining relationships with both customers and suppliers. This effort
represented a major shift from the traditional concept of marketing as a simple exchange between
buyer and seller.
Relationship marketing, by contrast, involves long-term, value-added relationships developed over
time with customers and suppliers.

Q 10. The statement " Customer is King" comes from which era of
marketing History ?
Marketing Era

Q 11. Today Marketing is Customer Oriented or Product Oriented or profit
oriented?
Customer oriented

Q 12. What is the center Point of Marketing Concept?
Customer

Q 13. Which will you keep in modern marketing concept? "Make & Sell" or "Sense &

Respond" ?
Sense & Respond

The Process industrializes and standardizes the services, Physical evidence
tangibilizes the services and people (personnel) are the essential parts of
the service.

The sub elements of these 3Ps are discussed here:
Process: The sub elements of process are flow of activities, service steps, and
involvement of the customers.
Physical evidence: The sub elements of physical evidence are Ambience, facility
design, Equipment, signage, Employee attire, Displays etc.
People: The sub elements of people are Employees and customers.
Marketing Aptitude Summary Notes 2
Q.1 What are the marketing Functions?
There are 8 universal functions of Marketing, categorized into 3 broad categories:
1. Buying,
2. Selling,
3. Transporting,
4. Storing,
5. Standardizing and grading,
6. Financing,
7. Risk taking
8. Securing marketing information.
Q.2 What are Concepts of Marketing ?
The 5 concepts of marketing are as follows:
1. Needs, wants and demands
2. Products
3. Value and satisfaction
4. Exchange, transactions and relationships
5. Markets
Q.3 Internet has empowered the customer. Write a Brief note
In the connected world, the customers empowered by Internet can
1. Get objective information for multiple suppliers without relying on the manufacturer or
the retailer(http://www.alibaba.com/ )
2. Initiate requests for information and advertising from manufacturers
(e.g., http://www.dealtime.com/)

3. Design and configure customized offerings e.g.,http://www.hp.com/
4. Use buying agents to pit sellers against each otherhttp://www.indiamart.com/
5. Unbundle offerings and arbitrage across channelshttp://www.naaptol.com/
6. Payby the minute, by the month, by the milehttp://www.paypal.com/
7. Communicate with peers and experts for feedback on products and
brands http://www.amazon.com/ andhttp://www.epinions.com/

Q.4 What are Different Steps in marketing Process?
Different Steps in Marketing Process are as follows:
1. Strategy formulation the development of the broadest marketing/business strategies
with the longest term impact
2. Marketing planning the development of longer-term plans which have generally
stronger impact than the short-term programs
3. Marketing programming, allocating and budgeting the development of short-
term programs which generally focus on integrated approaches for agiven product and
on the allocation of scarce resources such as sales effort orproduct development time
across various products and functions
4. Marketing implementation the actual task of getting the marketing job done5.
Monitoring and auditing the review and analysis of programs, plans and strategies to
assess their success and to determine what changes must be made
5. Analysis and research the deliberate and careful acquisition and examination of
qualitative and quantitative data to improve decision making
Q.5 What are 5 C's of Marketing Decision Making?
Following are five major areas of analysis (5 Cs) that underlie marketing decision
making :
1. Customer needs - What needs do we seek to satisfy?
2. Company skills - What special competencies do we possess to meet those needs
3. Competition - Who competes with us in meeting these needs?
4. Collaborators - Who should we enlist to help us and how do we motivate them?
5. Context - What environmental (say, cultural, technological or legal) factors limit what is
possible?

Q 6. Write a brief note on Nature of Marketing
1. Marketing is a universal activity
2. Marketing is an art as well as science
3. Marketing is a human activity

4. Marketing is a socio economical activity
5. Product or service is the subject matter of marketing
6. For marketing presence of market is a must
7. The basis of marketing is exchange
8. Marketing is consumer oriented and not product oriented
Marketing Aptitude - Summary Notes 3
Two exams are coming very shortly: one is Union bank of India Marketing Officers
exam (September 6) and another SBI management Executive Exam (September
13). Its not possible to frame enough quizzes which can help my readers. so I am
here by writing some compendiums each with 10 points with absolutely objective
info. They might be useful for the readers. We devote next 2 days for this
compilation.

1.There are four types of Utilities : Form, Place, Time & Ownerships
2.There are some myths about marketing and selling:
1. Marketing and selling are synonymous
2. The job of marketing is to develop good advertisements
3. Marketing is pushing the product to the customers
4. Marketing is transaction-oriented than relationship-oriented
5. Marketing is a short-term business strategy
6. Marketing is an independent function of a business
7. Marketing is part of selling
There are 5 Eras of Evolution & Marketing:
1. Production Era : Cut costs. Profits will take care of themselves
2. Product Era: A good product will sell itself
3. Sales Era : Selling is laying the bait for the customer
4. Marketing Era : The customer is King!
5. Relationship Marketing Era : Relationship with customers determine our firms future
4.There are 4 Ps of Marketing
Product, Place, Price and promotion
5.There are a few types of marketing :
1. Product marketing,
2. Service marketing,
3. Consumer marketing,
4. Industrial marketing,
5. International marketing,
6. Non-profit marketing
6.There are three types of Marketing Functions:

1. Exchange Functions (Buying & selling),
2. Physical Distribution Functions (Transporting & Storing) and
3. Facilitating Functions (Standardizing and grading, Financing, Risk taking)
7.There are 5 types of Marketing Concepts
1. Needs wants and demands,
2. Products
3. Value & satisfaction
4. Exchange, Transactions and Relationships
5. Markets
8.Marketing Process: The Marketing Process involves 6 step process as follows:
1. Strategy formulation the development of the broadest marketing/business strategies
with the longest term impact
2. Marketing planning the development of longer-term plans which have generally
stronger impact than the short-term programs
3. Marketing programming, allocating and budgeting the development of short-term
programs which generally focus on integrated approaches for a given product and on the
allocation of scarce resources such as sales effort or product development time across
various products and functions
4. Marketing implementation the actual task of getting the marketing job done
5. Monitoring and auditing the review and analysis of programs, plans and strategies to
assess their success and to determine what changes must be made
6. Analysis and research the deliberate and careful acquisition and examination of
qualitative and quantitative data to improve decision making

9.Nature of Marketing:
1. Marketing is a Human Activity
2. Its a socio economic activity
3. The subject matter of marketing is products and services
4. Certain Type of market is a must for marketing to happen
5. Its a consumer oriented process and not a product oriented process
6. Marketer performs the marketing and consumer is required to do marketing
7. The base of marketing is Exchange
8. Its an art as well science
9. It is a universal activity
10. There are five major areas of analysis (5 Cs) for marketing decision making:
1. customers,
2. company,

3. competitors,
4. collaborators
5. context.
Summary Notes 4

1. The 5 C's of analysis of marketing Decision making are as follows:
1. Customer needs - What needs do we seek to satisfy?
2. Company skills - What special competencies do we possess to meet those needs?
3. Competition - Who competes with us in meeting these needs?
4. Collaborators - Who should we enlist to help us and how do we motivate them?
5. Context - What environmental (say, cultural, technological or legal) factors limit what is
possible?
2. The external Environment of Marketing comprises:
1. Competitive environment
2. Political-legal environment
3. Economic environment
4. Technological environment
5. Social-cultural environment
3. Competitive Environment:
In involves direct competition and indirect competition , Monopoly, Monopolistic
Competition Oligopoly etc.

4. Political-legal Environment:
Rules of the game must be understood before a new marketer starts marketing. The
politico-legal environment involves:
1. Laws and their interpretations : Ignorance of laws, ordinances and regulations or failure
to comply with them can result in fines, embarrassing negative publicity and possibly
expensive civil damage suits.
2. Designing, labeling, packaging, distributing, advertising and promoting goods and
services.
3. The national foreign policy can dominate the international business decisions of the local
firms
4. The political ideology of the Government can affect the international brands wanting to
enter a market
5. The competitors who work closely with the government can help erect trade barriers for
a firm

6. Global trade organizations can enforce trade barriers when their regulations and
guidelines are not observed
7. A host nation may levy anti-dumping duties on a foreign firm and such a decision may
be dominated by the local businesses lobbying with the government
8. Copyright infringements, trademark and intellectual property rights violations
9. Direct comparative advertisements may not be allowed in few countries
10. Use of children is advertising and advertising to children are banned in certain countries
11. Price regulations preempt any pricing strategy of a firm
12. A detailed displaying of the ingredients in product labels is mandatory in most countries
13. The channel members are given the additional responsibility of verifying the eligibility of
the prospective buyers for certain products
14. Use of certain raw materials or methods of manufacturing are prohibited in certain
countries
15. Industry watch dogs and consumer groups are always on the prowl for any unethical
trade practices
16. Each one of the above issues has serious implications for the marketer in his marketing
decision making. Ignorance of the law is no excuse and breaking of the law is an offence.

5. The Economic Environment
The overall health of the economy influences how much consumers spend and what
they buy.This relationship affects marketing. All marketing activity is directed toward
satisfying consumer wants and needs, marketers must understand how economic
conditions influence consumer buying decisions.

Economic environment consists of forces that influence consumer buying power and
marketing strategies. They include
1. The stage of the business cycle,
2. Inflation,
3. Unemployment,
4. Resource availability
5. Income.
6. Technological Environment
It represents the application to marketing of discoveries in science, inventions and
innovations. New technology results in new goods and services for consumers; it
also improves existing products, strengthens customer service and often reduces
prices through new, cost-efficient production and distribution methods. Technology
can quickly make products obsolete, but it can just as quickly open up new
marketing opportunities.

7. The Social-Cultural Environment
It involves the relationship between marketing and society and its culture. Marketers
must cultivate sensitivity to societys changing values and to demographic shifts
such as population growth and age distribution changes.
It involves demography, cultural aspects, Psychographic aspects and Consumer
behavior.

8. Consumerism:
Changing social values have led to the consumerism movement which is a social
force within the environment designed to aid and protect buyers by exerting legal,
moral and economic pressures on business. Consumerism also advocates the rights
of the consumers such as:
1. The right to choose freely consumers should be able to choose among a range
of goods and services
2. The right to be informed consumers should have access to enough education
and product information to make responsible buying decisions
3. The right to be heard consumers should be able to express legitimate
complaints to appropriate parties be it manufacturers, sellers, consumer
assistance groups and consumer courts.
4. The right to be safe consumers should feel assured that the goods and services
they purchase will not cause injuries in normal use. Product designs should allow
average consumers to use them safely.
9. Stimuli of buying Behavior
The 4 ps and 4 types of Marketing environment given as above function as stimuli of
Consumer Behavior which ultimately lead to buyer's response.
10. Importance of Marketing
1. To obtain physical distribution function
2. Maximise the profit of the Firm & Minimise the cost (per unit)
3. Innovation
4. Maximise sales
5. Reach the Target Consumer
6. Goodwill creation
7. Market Information and Research
8. Employment
9. Social Values
10. Corporate Social Resposiblity (CSR) :
11. Optimum Use of Resources
12. Increase in Income of nation
Summary Notes 5

1. Factors affecting Buyer behavior
Consumer behavior is affected by many internal, personal factors, as well as
interpersonal ones. Each individual brings unique needs, motives, perceptions,
attitudes learning and self-concepts to buying decisions.

2. What is Market Segmentation?
The market place is heterogeneous with differing wants and varying purchase
power. The heterogeneous marketplace can be divided into many homogeneous
customer segments along several segmentation variable. The division of the total
market into smaller relatively homogeneous groups is called market segmentation.

3. Roles Market Segmentation Plays
1. Segmentation helps the marketer by identifying groups of customers to whom he could
more effectively target marketing efforts for the product or service
2. Segmentation helps the marketer avoid trial-and-error methods of strategy formulation
by providing an understanding of these customers upon which he can tailor the strategy
3. In helping the marketer to address and satisfy customer needs more effectively,
4. segmentation aids in the implementation of the marketing concept
5. On-going customer analysis and market segmentation provides important data on which
long-range planning (for market growth or product development) can be based.

4. Characteristics of a market Segment ?
1. Segments must be internally homogeneous --- consumers within the segment will be
more similar to each other in characteristics and behavior than they are to consumers in
other segments.
2. Segments must be identifiable --- individuals can be placed within or outside each
segment based on a measurable and meaningful factor
3. Segments must be accessible --- can be reached by advertising media as well as
distribution channels. Only then, the segments can be acted upon.
4. Segments must have an effective demand --- the segment consists of a large group of
consumers and they have the necessary disposable income and ability to purchase the
good or service.
5. Variables of Market Segmentation:
1. Geographic Segmentation
2. Demographic Segmentation
3. Psychographic Segmentation
4. General Life style
5. Product Usage

6. Product Benefit
7. Decision process
6. Geographic Segmentation :
Geographic segmentation is one of the oldest and most basic of market descriptors.
In most cases, it alone is note sufficient for a meaningful consumer segmentation. It
involves
1. Region of product distribution
2. Cultural differences
3. Mobility of consumers
7. Demographic Segmentation:
Also basic and included as a variable in most segmentation analyses. Demographic
profiles of segments are important especially when making later advertising media
decisions. It Involves :
1. Age
2. Sex
3. Income
4. Educational level
5. Social status
8. Psychographic Segmentation:
Psychographic variables are more useful because there is often no direct link
between demographic and market behavior variables. These consumer profiles are
often tied more directly to purchase motivation and product usage. It involves:
1. Personality traits
2. Perceptual styles
3. Attitudes
4. Reference groups
5. Social roles

9. Segmentation on General Life Style :
Provides a rich, multi-dimensional profile of consumers that integrates individual
variables into clearer pattern that describes the consumers routines and general
way of life It Involves:
1. Correlation of demographic and psychographic variables
2. Activities and interests
10. Segmentation on Product Usage
Segmenting the market into heavy, medium, light and non-users gives good
understanding of present situation in market. It involves
1. Frequency of brand/product use
2. Brand loyalty

3. Attitudes toward product
11. Segmentation on Product Benefit:
Very useful if product can be positioned in a number of ways. Primary use of this
variable segments the market into groups that look for different product
benefits. Involves:
1. Expectations of product performance
2. Needs product must fill
3. Perceptions of brands
4. Satisfaction ( and dissatisfaction measures)
12. Segmentation on Decision process : Use of this variable segments the
market into price/non-price sensitive, shoppers/impulse buyers and other segments
which characterize the market behaviour of each group. Must be used in conjunction
with analysis of consumer characteristics to allow identification of the individuals
involved. It involves :
1. Shopping patterns
2. Media-use patterns
3. Product information searches
4. Sensitivities to price,
5. to promotion and to place (channel)
13. Positioning:
The concept of positioning seeks to place a product in a certain position in the
minds of the prospective buyers. Positioning is the act of designing the companys
offer so that it occupies a distinct and valued place in the target customers minds.

AMIT MISHRA

Basics of Marketing Management

Uploaded by

Copyright:

Available Formats

Basics of Marketing Management

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Basics of Marketing Management

Uploaded by

Copyright:

Available Formats

A-Basics of marketing management

You might also like