Unit 1 - Market And Marketing (Marketing Management)

Unit 1 - Introduction to Marketing:
a. Markets & Classifications of Markets
b. Marketing – Definitions of Marketing, Marketing Process, Marketing Functions
c. Approaches to Marketing
d. Selling vs Marketing

1. KAUSHIK JAISWAL
7276888855 [email protected]

2. MARKET
“A set up where two or more parties engage in
exchange of goods, services and information is
called a market.”
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3. MARKET
“The system through which the buyers and sellers
get in contact with each other directly or indirectly
for the sale or purchase of goods or services is
called market.”
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4. MARKET
❑According to professor Samuel,
“Market is the functional system where
the buyers and sellers contact each other
to decide the price and the quantity of goods or services.”
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5. ELEMENTS OF A MARKET
❑Market has its own particular characteristics as follows:
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1.Numerous Sellers and Buyers
2.Goods and Services
3.Contact
4.One price for a product or service at a given time
5.Information about the Market Situation

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1.Numerous Sellers and
Buyers:
•Itismandatorytohave
buyersandsellersofgoods
andservicesinamarket.
Thepurposefulexchangeof
goodsandservicesmade
throughthem.
•Thisprocessallowsthesellers
togainmaximumprofitand
the buyers togain
satisfactionfrom the
productorservices.
2.Goods and Services:
•Itisnecessarythatthereare
goods and services
availableaccordingtothe
demandandnecessity.
•Togainmaximumprofit,the
producers and sellers
providetheproductsand
servicesinvarioustypesand
formsandtrytoattractthe
buyerstowardsthem.While
fortheirsatisfactionthe
buyerstrytobuyanideal
setofproductsandservices.

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3.Contact:
•Thebuyersandsellerscome
incontactviavarious
means.Thecontactmade
canbeeitherdirector
indirect.Inmoderntime,the
buyersandsellerscomein
contactviatheindirect
means.
4.One price for a product or
service at a given time:
•Atagiventime,thepriceof
theproductorservicemust
bedecidedinthemarket.
Thepriceisdecided
accordingtothedemand
andthefactorsofsupply.
•Thepriceofproductsand
servicesdependsonthe
demand made bythe
buyersandtheabilityofthe
producersandsellersto
supplythem.

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5.Information about the
Market Situation:
•Itisimportantthatthebuyers
and sellershave enough
informationaboutthecurrent
marketsituation.
•Sothatdecisionsrelatedto
production,distributionand
purchasecanbetakenduring
thetimesofrecession,inflation,
natural and man-made
calamities.

9. CLASSIFICATION OF MARKET
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(i)
Location
(ii)
Quantity
(iii)
Competition
(iv)
Time Period
(v)
Nature of
Transactions
(vi)
Regulation

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11. MONOPOLY
According to Prof. Chamberlain, ”When the product supply is controlled
only by single enterprise, it is Monopoly.”
According to Prof. Stigler, “Only one enterprise is the seller of the goods or
products.”
❑There are two types of monopoly competition market:
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•This is a market structure where the monopolist charges a uniform
price from all consumers of the commodity.
1. Simple Monopoly:
•This is a market structure where the monopolist charges different
prices from different consumers for the same commodity at the
same time.
2. Discriminating Monopoly:

12. CHARACTERISTICS OF MONOPOLY MARKET
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(1) Only One Producer or Seller
(2) Absence of Close Substitute goods
(3) Restriction over the entry of New firms
(4) Control over the price or sale to gain Maximum profits
(5) Super Normal Profit in a Monopoly market
(6) Price discrimination due to absence of any competition

13. MONOPOLISTIC COMPETITION
❑In the real world, neither the firms exist which are producing the same
products at very large amountnor a firm which control the whole
market like monopoly.
❑According to Prof. Chamberlin,
“Perfect competition and perfect monopoly coexist in a market, known as
Monopolistic Market.”
❑According to Prof. Robinson,
“lf each firm establishes monopoly and also competes at the same time,
the market is calledImperfect Competition.”
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14. CHARACTERISTICS OF MONOPOLISTIC
MARKET
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1. Large Number of Sellers and Numerous Buyers
2. Product differentiation
3. Free Entry and Exit of Firms
4. Competition other than Price
5. Imperfect Knowledge regarding the Market

15. OLIGOPOLY MARKET
❑The word “Oligopoly” derived from the Greek words ‘Oligos’ means
‘Few’ and ‘Pollein’ means ‘Sellers’.
Oligopoly means the market having few producers which sell identical or
substitute products and there is a extreme competition among the few
firms.
❑According to Prof. Stigler,
“Oligopoly is the market in which the firm bases its market policy, in part, on
the expected behavior of a few close rivals.”
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16. CHARACTERISTICS OF OLIGOPOLY MARKET
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1. Few Sellers and Numerous Buyers
2. Similar or Substitutable Products
3. Free Entry and Exit of Firms
4. Selling Cost (Non-Price Competition)
5. Strategic Interdependence

17. GOODS CLASSIFICATION
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Goods
Consumer Goods
Convenience
Goods
Shopping Goods
Specialty Goods
Industrial Goods
Raw Materials
Equipment's
Fabricated
Items
Operating
Supplies

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19. MARKETING
“Marketing is a management process through which products and services
move from concept to the customer. “
❑Itincludes:
❑Italsoincludes:
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identification
of a product
determining
demand
deciding on
its price
selecting
distribution
channels
developing and implementing a promotional
strategy.

20. MARKETING
“Marketing is a socialprocess
by which individuals and groups obtain
what they need and want
through creating and exchanging
products and value with others.”
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-PHILIP KOTLER

21. MARKETING
❑TheUK-basedCharteredInstituteofMarketing(CIM)definesMarketingas
follows:
“Marketing is the management process responsible for
identifying, anticipating and satisfying customer requirements profitably.”
❑BelowistheAmericanMarketingAssociation’sdefinition:
“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.”
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22. MARKET VS MARKETING
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•A state of feeling deprivation of
some basic satisfaction (food,
clothing, shelter, etc.)
Needs
•Wants are desires for satisfying
deeper needs.
•Needs are few, wants are many!
Wants
•Demands are backed by ability to
buy and willingness to buy.Demands

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24. MARKETING -PROCESS
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1. Situation Analysis
2. Marketing Strategy
3. Marketing Mix Decisions
4. Implementation and Control
See : Marketing Process

25. SITUATIONAL ANALYSIS
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•Theseanalysesrunthroughtheinternalandexternalstrengths,
weaknesses,opportunitiesandthreatsthatyourorganization
faces.
A SWOT analysis.
•The5C’sanalysesfocusonthecompany,collaborators,
customers,competitors,andclimateofyourmarketing.
The 5C’s analysis.
•ThePESTanalysisfocusesonmoreenvironmentalfactorslike
politics,theeconomicalenvironment,socialclimate,and
technology.
A PEST Analysis.

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29. MARKETING FUNCTIONS
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1. Gathering and
Analyzing Market
Information
2. Marketing
Planning
3. Product
Designing and
Development
4.
Standardisation
and Grading
5. Packaging
and Labelling
6. Branding
7. Customer
Support Service
8. Pricing of
Products
9. Promotion
10.Physical
Distribution
11.Transportation
12.Storage or
Warehousing
See : Marketing Functions

30. APPROACHES TO MARKETING
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Product or
Commodity
Approach
Institutional
Approach
Functional
Approach
Management
Approach
System Approach Societal Approach
Legal Approach
Economic
Approach
See : Approaches to Marketing
1 2 3
4 5 6
7 8

31. APPROACHES TO MARKETING
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•Under the commodity approach the focus is placed on the product.
•In other words, the study relates to the flow of a certain commodity and its
movement from the original producer right up to the ultimate customer.
The subject-matter, under this study, is commodity.
•Here we study and analyze the problems relating to a commodity i.e.,
sources and conditions of supply, nature and extent of demand, mode of
transporting, storage, standardization, packing etc.
•The system claims that it is simple and gives good resultover the
marketing of each product; description study is possible.
•But at the same time this approach is time-consuming and repetitive
process which is a drawback.
Product or Commodity Approach1

32. APPROACHES TO MARKETING
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•The focus is on the study of institutions-middlemen, wholesalers, retailers,
importers, exporters, agencies, warehousing etc., engaged in the
marketing during the movement of goods.
•Emphasis is given to understand and analyses the functions of institutions,
who are discharging their marketing functions.
•This system pays attention to the problems and functions of marketing
institutions-transporting, banks and other financial institutions,
warehousing, advertising, insurance etc.
•This method does not give adequate knowledge of the entire marketing
functionsand also fails to explain the interrelations of different institutions.
Institutional Approach2

33. APPROACHES TO MARKETING
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•The functional approach gives importance on the various functions of
marketing.
•In this approach, marketing splits into many functions-buying, selling,
pricing, standardization, storage, transportation, advertising, packing etc.
This may be studied one after another.
•Each function is studied in detail in order to understand it and analyses
the nature, need and importance of each function.
•This system gives too much importance to various marketing functions and
fails to explain how such functions are applied to the specific business
operations.
Functional Approach3

34. APPROACHES TO MARKETING
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•This approach is the latest and scientific. It concentrates upon the
activities or marketing functionsand focuses on the role of decision-
making at the level of firm.
•This approach is mainly concerned with how managers handle specific
problems and situations.
•There are two factors-controllable and uncontrollable, which are more
concerned with the decision-making.Controllable include price
adjustment, advertisement etc. Uncontrollable-economical, sociological,
psychological, political etc.
•Managerial approach is concerned with the study of uncontrollable and
then taking decisions for controllable within the scope set by
uncontrollable.
Management Approach4

35. APPROACHES TO MARKETING
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•The system approach can be defined as “a set of objects together with
the relationships among them and their attributes.”
•Systems focus on interrelations and interconnections among the functions
of marketing.
•Here, the aim is to secure profit through customer-satisfaction.
•Markets can be understood only through the study of marketing
information.
•For instance, business is composed of many functions, which are
composed of sub functions.
•Each function or sub-function is independent, but interrelated and
enables the other to achieve marketing objectives.
System Approach5

36. APPROACHES TO MARKETING
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•This approach has been originated recently.
•The marketing process is regarded as a means by which society meets its
own consumption needs.
•This system gives no importance as to how the business meets the
consumer’s needs.
•Therefore, attention is paid to ecological factors (sociological, cultural,
legal etc.) and marketing decisions and their impact on the society’s well-
being.
Societal Approach6

37. APPROACHES TO MARKETING
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•This approach emphasizes only one aspect i.e., transfer of ownership to
buyer.
•It explains the regulatory aspect of marketing.
•In India, the marketing activities are largely controlled by Sales of Goods
Act, Carrier Act etc.
•The study is concentrated only on legal aspects, leaving other important
aspects. This does not give an idea of marketing.
Legal Approach7
•This approach deals with only the problems of supply, demand and price.
•These are important from the economic point of view, but fail to give a
clear idea of marketing.
Economic Approach8

38. MARKETING CATEGORY BREAKDOWNS
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See : Marketing Breakdown
B2B vs. B2C
Local vs. International
Inbound vs. Outbound
Products vs. Services
Direct vs. Indirect
Cheap vs. Expensive
Small vs. Large Org
In-house vs. Outsourced

39. MARKET VS MARKETING
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•Market is an arrangement to
provide an opportunity to
exchange goods or services.
Market
•Marketing is a sum total of all
those activities that are related
to flow of goods or services from
production to consumption.
Marketing

40. MARKETING, SELLING & MERCHANDIZING
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•Marketing is a broader concept which is
driven from customer’s demand.
Marketing
•Selling is a part of marketing which deals
with persuading customers to buy
products that are available with seller.
Selling
•Merchandizing refers to the process
offering a variety of products to consumer
in a manner which stimulates demand.
Merchandizing

41. SALES VS MARKETING
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BASIS SALES MARKETING
Meaning Sales refers to the process of selling,
whereby product is offered for sale
to the customer at a certain price
and at a given period of time.
Marketing is understanding the requirements
of the customers in such a way that
whenever any new product is introduced, it
sells itself.
OrientationProduct-oriented Customer-oriented
Approach Fragmented approach Integrated approach
Focus Company needs Market needs
Related toRelated to flow of goods to
customers.
Related to all the activities which facilitates
flow of goods to customers.
Duration Short-term Long-term
Objective To instigate shoppers in such a way
that they turn out as buyers.
To identify the needs of customers and
create products to satisfy those needs.
RelationshipOne-to-One One-to-Many
Target Individual or small group General Public

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BASIS SALES MARKETING
Meaning Sales refers to the process of selling,
whereby product is offered for sale
to the customer at a certain price
and at a given period of time.
Marketing is understanding the requirements
of the customers in such a way that
whenever any new product is introduced, it
sells itself.
OrientationProduct-oriented Customer-oriented
Approach Fragmented approach Integrated approach
Focus Company needs Market needs
Related toRelated to flow of goods to
customers.
Related to all the activities which facilitates
flow of goods to customers.
Duration Short-term Long-term
Objective To instigate shoppers in such a way
that they turn out as buyers.
To identify the needs of customers and
create products to satisfy those needs.
RelationshipOne-to-One One-to-Many
Target Individual or small group General Public

43. SALES VS MARKETING
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BASIS SALES MARKETING
Scope Selling of the product. Advertisement, Sales, Research, Customer
satisfaction, After sales services etc.
Activity Customer driven Media driven
Strategy usedPush Strategy Pull Strategy
Process Involves exchange of goods for
adequate consideration.
Entails identifying and satisfying customer's
needs.
Rule Caveat Emptor Caveat Vendor
Technique Price promotion, Discounts and
Special offers.
Customer relationship through integration of
organization with the needs of customers.
Skills requiredSelling and Conversational skillsAnalytical skills
Aims at Profit maximization through sales
maximization.
Profit maximization through increased
consumer satisfaction and market share.

44. SALES VS MARKETING
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BASIS SALES MARKETING
Scope Selling of the product. Advertisement, Sales, Research, Customer
satisfaction, After sales services etc.
Activity Customer driven Media driven
Strategy usedPush Strategy Pull Strategy
Process Involves exchange of goods for
adequate consideration.
Entails identifying and satisfying customer's
needs.
Rule Caveat Emptor Caveat Vendor
Technique Price promotion, Discounts and
Special offers.
Customer relationship through integration of
organization with the needs of customers.
Skills requiredSelling and Conversational skillsAnalytical skills
Aims at Profit maximization through sales
maximization.
Profit maximization through increased
consumer satisfaction and market share.

45. SALES VS MARKETING
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Salescanbeunderstoodastheprocessofsellingthegoodstocustomersata
definitepriceandatagivenperiodoftime.Inthisthetransferofownershipofa
productfromonepersontoanotherforsomevaluetakesplace.
Onthecontrary,Marketingistheactofanalyzingthemarketandunderstandingthe
needsofthecustomersinsuchawaythatwheneveranewproductislaunched,it
sellsitself.Inshort,itistheprocessofcreatingareadymarketfortheproductand
services.
Salesisproduct-oriented,asthesalespersonsemphasizeonincreasingthesalesof
theproduct.
Incontrast,Marketingiscustomer-oriented,asallpromotionalactivitiesare
performed,keepingthetargetcustomersinmind.
Saleshaveafragmentedapproach,whichstressesonsellingallthatisproduced.
Incontrast,marketinghasanintegratedapproachwhichstressesonascertainingthe
customerrequirementsandprovidingthemwiththeproductoftheirneed.
Marketingstressesontheneedsofthemarket.
Onthecontrary,salesfocusonthecompanyneeds.

46. SALES VS MARKETING
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Salesisconcernedwiththeflowofproductorservicetothecustomer.
However,marketingisconcernedwithalltheactivitieswhichfacilitatetheflowof
goodstocustomers.
Salesisashort-termprocess,asitistransaction-basedandaimsatmaximizingit,
whichisforalimitedperiodonly.
Conversely,marketingisalongtermprocessasitfocusesoncustomermanagement
andalltheeffortsaremadetowinningandretainingthecustomers.
Theobjectiveofsalesistoinstigateshoppersinsuchawaythattheyturnoutas
buyers,
whereastheobjectiveofmarketingistoidentifytheneedsofcustomersandcreate
productstosatisfythoseneeds.
Thereisaone-to-onerelationshipincaseofsalesi.e.oneproductissoldtoone
customer,bythesalespersonatatime.
Asagainstone-to-manyrelationshipsisthereincaseofmarketing,asan
advertisementreachesmillionsofcustomersatatime.

47. SALES VS MARKETING
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Salesfocusontheindividual,i.e.directinteractionwiththecustomerandpersuading
himtopurchasetheproduct,
butmarketingconcentratesonthegeneralpublic,i.e.creatingthevalueofa
producttoincreasesales.
Insales,thecustomerisviewedasthelastlink,i.e.theproductiscreatedfirstand
thensoldtocustomers.
Ontheotherhand,inmarketing,thecustomerisgivenpriority,asfirstofallthe
needsareidentifiedandafterthateffortsismadetomeetthoseneeds.
Salesisapeople-drivenactivityontheotherhand;
marketingisamedia-drivenactivity.
Salesusepushstrategy(wheretheproductisforcedontoacustomer)
whilemarketingusesthepullstrategy(wherethecustomercomestoaproduct
byhimself).

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Thesellingprocessinvolvesanexchangeofgoodsformonetaryconsideration.
Ontheflipside,marketinginvolvesidentifyingtheneedsofcustomersandsatisfying
them.
Insales,caveatemptorruleapplies,i.e.letthebuyerbeware.
Unlike,marketingwhereincaveatvendorruleisapplicable,whichstateslettheseller
beware.
Varioustechniquesusedforincreasingsalesincludespricepromotion,discount,
festiveseasonoffers,specialoffers,buyonegetoneoffers,etc.
Asopposed,marketinginvolvesbuildingarelationshipwiththecustomerthroughthe
integrationoftheorganizationwiththeneedsofcustomers.
Salesrequiregoodcommunication,convincingandsellingskills,
whereasmarketingrequiresgoodanalyticalskillsandforesightedness.
Salesaimatprofitmaximizationthroughsalesmaximization.
Ontheotherhand,profitmaximizationthroughincreasedconsumersatisfactionand
marketshareistheaimofmarketing.

49. THANK YOU..!
KAUSHIK JAISWAL
7276888855 [email protected]
See : Marketing Process
See : Marketing Functions