MBA - 202 MARKETING MANAGEMENT UNIT -1

MBA - 202                                            Marketing Management

             UNIT -1

Q1. What do you mean by marketing? Discuss the need and scope of marketing.

Ans. Marketing :  the action or business of promoting and selling products or services,             including market research and advertising.

The activities of a company associated with buying and selling a product or services. It includes advertising, selling and delivering products to people. People who work in marketing departments of companies try to get attention of target audiences by using slogans, packaging design, celebrity endorsements and general media exposure. Basically Marketing is all about product, place, price and promotion (4P’s of Marketing)

Marketing is a process by which companies create customer interest in products or services. It generates the strategy that underlies sales, techniques, business communication and development. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves.

SCOPE OF MARKETING :-

(1)  Study of Consumer wants and needs –

Good are produced to satisfy consumer needs and wants therefore study is done to identify consumer needs and wants. These needs and wants motivates consumers to purchase.

(2)  Study of Consumer Behaviour –

Marketers performs study of consumer behaviour. Analysis of buyer behaviour helps Marketer in Market Segmentation and Targeting.

(3)  Product Planning and Development –

It includes the activities of Product Research, Market Segmentation, Product Development, Determination of the attributes, Quality and Quantity of Product.

(4)  Branding –

Branding of product is adopted by man y reputed enterprises to make their products popular among their customers and for many other benefits.

(5)  Packaging –

Packaging is to provide a container and wrapper to the product for safety, attraction and ease of use and transportation of the product.

(6)  Channels of  Distribution –

Decision regarding selection of most appropriate channels of distribution like wholesaling, distribution and retailing is taken by the Marketing Manager and Sales Manager.

(7)  Pricing Policies –

Marketer has to determine pricing policies for their products. Pricing policies differ from product to product. It depends on the level of competition product life cycle,

Marketing goals and objectives, etc.

(8)  Sales Management –

Selling is a part of  Marketing. Marketing is concerned about all the selling activities like customer identification, finding customer needs, persuading customer to buy products, customer service, etc.

(9)  Promotion –

Promotion includes personal selling, sales promotion and advertisement, right promotion mix is crusial in accomplishment of marketing goals.

 Finance –

Marketing is also concerned about the finance as for every marketing activity be it packaging, advertising, sales force budget is fixed and all the activities have to be completed within the limit of the budget.

After sales service –

Marketing covers after sales services given to customers, maintaining good relationships with customers, attending their queries and solving their problems.

Q2. What are the various functions of Marketing Management?

Ans:- The Marketing process performs certain activities as the goods and services move from producer to consumer. All these activities and jobs are not performed by every firm. However, the must be carried out by any company that wants to operate its marketing system successfully.

Some of the major functions of Marketing Management are as follows :-

1-    Selling :-

It is the core of marketing. It is concerned with the prospective buyers to actually complete the purchase of an article. It involves transfer of ownership of goods to the buyers. Selling plays an important part in realizing the ultimate aim earning profit. Selling is enhanced by means of personal selling, advertising, publicity and sales promotion. Effectiveness and efficiency in selling determines the volume of company’s profit and profitability.

2-    Buying and Assembling :-

It involves what to buy, of what quantity, how much from whom, when and at what price. People in business buy to increase sales or to decrease costs. Purchasing agents are much influenced by quality, service and price.

Assembling means to purchase necessary components parts and to fit them together to make a product. “Assembly lines” indicates a production line made up of purely assembly operations. The assembly operation involves the arrival of individual components parts at the work place and issuing of these parts to be fastened together in the form of an assembly or sub-assembly.

3-    Transportation :-

Transportation is the physical means by which goods are moved from the places where they are produced to those places where they needed for consumption. It creates place, utility. Transportation is essential from the procurement of raw material to the delivery of finished products to the customer’s place. Marketing relies mainly on rail roads, trucks, waterways, pipelines and air transport.

4-    Storage :-

It involves holding of goods in proper condition from the time they are produced until they are needed by customers (in case of finished products) -

or by the production department (in case of raw materials and stores); storing protects the goods from deterioration and helps in carrying over surplus for future consumption or use of/in production.

5-    Standardization and Grading :-

The other activities that facilitate marketing are standardization and grading. Standardization means establishment of certain standards or specification for products based on intrinsic physical qualities of any product.

Grading means classification of standardized products into certain well defined classes or groups. It involves the division of products into classes made of units possessing similar characteristics of size and quality.

6-    Financing :-

It involves the use of capital to meet financing/financial requirements of agencies dealing with various activities of marketing. The services provide the credit and money needed, the costs of getting merchandise into the hands of th final user is commonly referred to as finance function in marketing.

7-    Risk taking :-

Risk means loss due to some unforeseen circumstances in  future. Risk bearing in marketing refers to the financial risk interest in the ownership of goods held for an anticipated demand including the possible losses due to a fall in prices and the losses from spoilage, depreciation, obsolescence, fire and floods or any other loss that may occur with the passage of time.

8-    Market information :-

The importance of this facilitating function of marketing has been recognised only recently. The only sound foundation on which marketing decisions may be based is correct and timely market information reduce the aforesaid risks and thereby result in cost reduction.

  

Q3. Discuss the different philosophies of Marketing Management. Justify the significance or utility of these philosophies in present business environment.

Ans :- Philosophies refers to the orientation, approaches or concepts that a company focuses and follows the decisions.

Under the Marketing Management philosophies , we shall study the following concepts :-

a.      Production Concept :-

Those companies who believes in this philosophy thinks that if the goods/services are cheap and they can be made available at many places, there cannot be any problem regarding sale.

Keeping in mind the same philosophy these companies put in all their marketing efforts in reducing the cost of production and strengthening their distribution system. In  order to reduce the cost of production and to bring it down to the minimum level, these companies indulge in large scale production. This helps them in effecting the economies of the large scale production. Consequently, the cost of production per unit is reduced. The utility of this philosophy is apparent only when demand exceeds supply. Its greatest drawback is that it is not always necessary that the customer everytime purchases the cheap and easily available goods and services.

b.     Product concept :-

Those companies who believe in this philosophy are of the opinion that if the quality of goods or services is of good standard, the customer can be easily attracted. The basis of this thinking is that the customers get attracted towards the products of good quality. On the basis of this philosophy or idea these companies direct their marketing efforts to increase the quality of their product.

It is a firm belief of the followers of the product concept that the customers get attracted to the products of good quality. This is not the absolute truth because it is not the only basis of buying goods. The customers do take care of the price of the products, its availability, etc. A good quality product and high price can upset the budget of a customer. Therefore, it can be said that only the quality of the product is not only way to the success of marketing.

c.      Selling Concept :-

Those companies who believe in this concept think that leaving alone the customers will not help. Instead there is a need to attract the customers towards them. They think that goods are not bought but they have to be sold.

The basis of this thinking is that the customers can be attracted. Keeping in view this concept, these companies concentrate their marketing efforts towards educating and attracting the customers. In such a case their main thinking is “selling what you have”.

This concept offers the idea that by repeated efforts one can sell anything to the customers. This may be right for sometime, but you cannot do it for a long time. If you succeed in enticing the customer once, he cannot be won over every time.

On the contrary, it will work for damaging the reputation. Therefore, it can be asserted that this philosophy offers only a short term advantage and is not for long term gains.

d.     Marketing Concept :-

Those companies who believe in this concept are of the opinion that success can be achieved only through consumer satisfaction. The basis of this thinking is that only those goods/services should be made available which the consumer want or desire and not the things which you can do.

In other words, they don’t sell what they can make but they make what they can sell. Keeping in mind this idea, these companies direct their marketing efforts to achieve consumer satisfaction.

In short, it can be said that it is a modern concept and by adopting it profit can be earned on the long term basis. The drawback of this concept is that no attention is paid to social welfare.

e.      Societal Marketing Concept :-

This concept stresses not only the customer satisfaction but also gives importance to consumer welfare/societal welfare. This concept is almost a step further than the marketing concept. Under this concept, it is believed that mere satisfaction  of consumers would not help and the welfare of the whole society has to be kept in mind.

For example; if a company produces a vehicle which consumes less petrol but spread pollution, it will result in only consumer satisfaction and not the social welfare. Primarily two elements are included under social welfare high level of human life and pollution free atmosphere. Therefore, the companies believing in this concept direct all their marketing efforts towards the achievement of consumer satisfaction and social welfare.

In short, it can be said that this is the latest concept of marketing. The companies adopting this concept can achieve long term profit.

Q4. What do you mean by Marketing Environment? Explain the different components of marketing environment.

Ans:- MARKETING  ENVIRONMENT  :--

·        Businesses do not operate in isolation in the market place.

·        There are various factors/forces, that directly or indirectly influence the organisation’s business activities.

·        All these factors/forces form the marketing environment of an organisation.

·        The company operates in a complex marketing environment, consisting of uncontrollable forces, to which the company must adapt.

·        Marketing is the sum total of trading forces operating in a market place, over which a business has no control but which shapes the manner in which the business functions and is able to satisfy its customers.

·        A marketing environment is what surrounds and creates impact on business organisations.

·        Marketing environment is uncontrollable and ever changing.

The key elements of Marketing Environment are as follows :-

(1)  Internal Environment :-

o    The internal environment refers to the forces and actions that are within the organisation and affects its ability to serve its customers.

o   A company’s marketing system is influenced by its capabilities regarding production, financial and other factors. Hence, the marketing

management/manager must take into consideration these departments before finalizing marketing decisions.

o   It includes marketing managers, sales representatives, marketing budget, marketing plans, procedures, inventory, logistics and anything within the organisation which affects marketing decisions and its relationships with its customers.

o   The research and development department, the personnel department, the accounting department also have an impact on the marketing department.

o   It is the responsibility of a manger to company ordinate all departments by setting up unified objectives.

       

      

(2)  Micro Environment :-

o   The Micro Environment refers to the forces that are close to the marketing organisation  and direct impact the customer experiences.

o   It includes the organisation itself, its suppliers, marketing intermediaries, customer markets or segments, competitors and public.

o   Happening in micro environment is relatively controllable for the marketing organisation.

              SOME  FACTORS  IN MICRO  ENVIRONMENT :-

·        Suppliers :-  Suppliers are the people who provide necessary resources needed to produce goods and services. Policies of the suppliers have a significant influence over the marketing manager’s decisions. A company must build cordial and long term relationships with suppliers.

·         Marketing Intermediaries :-  Marketing intermediaries are the people who assist the flow of products from the producers to the customers; they include wholesalers, retailers, agents,etc. These people create place and time utility. A company must select an effective chain of middlemen, so as to make the goods reach the market in time.

·        Consumers :- Consumers are the centre point of all marketing activities. The main aim of production is to meet the demand of the consumers. Each type of

consumer has a unique feature which have to be considered by the marketers before taking the decisions.

·        Competitors :-  A prudent marketing manager has to be in constant touch regarding the information relating to the competitor’s strategies.

·        Public :- A company’s obligations are not only meet the requirements of its customers but also to satisfy the various groups. A public is defined as “any group that has an actual or potential ability to achieve its objectives”.\

(3)  Macro Environment :-

o   Macro Environment refers to the forces that are part of the larger society and affects the micro environment.

o   It includes demography, economy, politics, culture, technology and natural forces.

o   These are the factors/forces on which the company has no control. Hence, it has to frame its policies within the limits set by these factors.

SOME  FACTORS  IN MACRO ENVIRONMENT :-

·          Demography :- Demography is defined as the statistical study of the human population and its distribution that forms the market. A company should study the population, its distribution, age composition, status, etc. before deciding the market strategies.

·        Economic Environment :- it affects a consumer’s purchasing behaviour either by increasing his/her disposal income or by reducing it.

·        Technological Factor :- Every new invention builds a new market and a new group of customers. A new technology improves our life style and at the same time creates many problems.

·        Physical Environment or Natural forces :-  A company has to adopt its policies within the limits set by nature. A man can improve the nature but cannot find an alternative for it. Nature offers resources but in a limited manner.

·        Social and cultural factor :-  Most of us purchase because of the influence of social and cultural factors. The life style, values, beliefs, etc. are determined among other things by the society in  which we live.

Q5. Differentiate  between :- marketing and selling; Industrial Marketing v/s Consumer Marketing ; needs vs wants; customer vs consumer and Goods v/s Services :

(a)   Marketing and Selling Concept :

Marketing concept	Selling Concept
Converting customers need into product	Converting product into cash
Emphasis on product planning and development	Emphasis on sale of the product already used
Integrated approach to marketing	Fragmented approach to selling
Seller beware principle followed	Buyer beware principle followed
Customer determine price, price determine cost	Cost determine price

(b)  Industrial Marketing v/s Consumer Marketing :

Basis	Industrial Marketing	Consumer Marketing
Market        characteristics	Geographically           Concentrated	Geographically             disbursed
Customer size	Relatively fewer buyers	Mass market
Product specification                                 and              variant	Technically complex           Products Tailor made products	Standard              Products
Service	Prompt and competent       Service required	Some what            important
Buyer behaviour	Involvement of various functional areas in both buyer and the supplier’s firm	Merely involvement of family members or the peer group
Purchase decision	Based on rational and requirement	Based on social, culture, psychological needs

(c)  Needs v/s Wants :

NEEDS :- A need is generally referred to, as something that is extremely necessary for a person to survive. If a need is not met, it would lead to the onset of disease, the inability to function effectively and efficiently in society, and even death. Needs are categorised into two groups. These are the “objective needs” and “subjective needs”.

Objective needs are those that that are met through tangible things or things that could be measured. Eg. Of these includes food, shelter, air, etc.

Subjective needs are those that are often seen to ensure our mental health. Eg. Of these includes self esteem, a sense of security and approval.

WANTS :- A want is something that a person desires, either immediately or in the future. Unlike needs, wants are those that differ from one person to another. For eg. – one person may want to own a car while other may want to travel to an exotic country. Each person has his/her own lists of wants, each with a varying level of importance. Furthermore, wants can change over a period of time. This is in contrast to needs, which remains constant throughout the life time of the person.

(d)  Consumer v/s Customer :

A consumer refers to individuals who buy for themselves or their family whereas a customer can also mean the retailer or person who buys from the manufacturers, etc. for ultimate sale to others.

The person who buys the product is called customer and the one who uses the product is called a consumer.

A consumer is anyone who typically engages in anyone or all the activities mentioned in the definition.

Traditionally, consumers have been defined very strictly in terms of economic goods and services wherein a monetary exchange is involved. This concept over a period of time has been broadened. Some scholars also include goods and services where a

monetary transaction is not involved and thus the users of the services of voluntary organisations are also thought of as consumers. This means that organisations such as UNICEF, CRY or political groups can view their public as “consumers”.

(e)   Goods v/s Services :

GOODS	SERVICES
Tangible	Intangible
Homogeneous	Heterogeneous
Production and distribution are        separated from consumption	Production, distribution and consumption      are simultaneously processess
A thing	An activity or process
Core value processed in factory	Core value produced in the           buyer-seller interactions
Customers don’t participate in            the production process	Consumer participate in production
Can be kept in stock	Cant be kept in stock

Q6. Define the following concepts :-

1.     NEED :-  Need exist in the individual. They describe basic human requirements. They indicate a state of felt deprivation. Marketing doesn’t create needs. They exist in the individual automatically with the time.

2.     WANTS :-  They are specific satisfiers of needs. Specific products satisfy wants. Marketing influences wants by offering various products. Wants are unlimited but resources are limited. Customers want high value and satisfaction of money.

3.     DEMAND :-  They are wants for specific products. They are backed up ability and willingness to buy. Wants backed by money and willingness to spend the money become demand.

4.     PRODUCT :-  A product is the item offered for sale. A product can be service or a good. It can be physical or in virtual or cyber form.

5.     MARKET :-  Market is a set of  actual and potential buyers where they meet with the sellers.

6.      EXCHANGE :-  It is a transaction in which atleast two parties are involved and both must be willing to place the transaction and have something valuable to give in return to each other.

7.     SATISFACTION :-  Customer level of approval when comparing a product’s perceived performance with his/her expectations. Also could refer to discharge, extinguisher or retirement of an obligation to the acceptance of the obligatory or fulfillment of a claim while satisfaction is sometimes equated with performance, it implies compensation or substitution whereas performance denotes doing what was actually promised.

8.     VALUE :-  Value is the customer’s estimate of the product’s capacity to satisfy a set of goals. Value is the ratio between what the customers get and what he/she gives.

9.     RELATIONSHIP MARKETING :-  It is a facet of customer relationship management that focuses on customer loyalty and long term customer engagement rather than shorter term goals like customers acquisition and individuals sales. The goal of it is to create strong even emotional customer connections to a brand that can lead to ongoing business, free word of mouth promotion and information from customers that can generate leads.

10.                      DE-MARKETING :-  Efforts aimed at discouraging (not destroying) the demand for a product which a firm cannot supply in large enough quantities or doesn’t want to supply in a certain region where the high costs of distribution or promotion allow only a too little profit margin. Common de-marketing strategies includes higher prices, scaled down advertising and product redesign.

11.                      MARKETING MANAGEMENT :-  It is the organisational discipline which focuses on the practical application of marketing orientation, techniques and methods inside enterprises or organisation and on the management of a firm’s marketing resources and activities.