XI-Entrepreneurship

Ch.05- MARKETS
By Henna Punjabi
 CONTENTS
• Concept of market and its evolution.
• Concept E-Business and E-Commerce
• Market Environment at Micro and Macro Level.
• Techniques of Market Research and the instruments
used in the same.
• Role of Market Survey
• Market expansion and development.
• Elements of trade and commerce
• Marketing mix
• Role and importance of Price.
Types of markets
• Traditional
• 70s-80s
• E-commerce
• E-business vs. e-commerce
 Traditional Markets
• There was a general scarcity of manufactured goods in the market.
• Agriculture-cum-handicraft economy
• No elaborate distribution system.
• The agriculturist, whether he produced corn or cotton, meat or butter disposed of the surplus in his
immediate neighborhood.
• According to the American Market Association:-
• "At every point where a specific commodity is concentrated for sale a market is found".
• The definition gives the traditional meaning of market. The emphasis is on:
• (1) Place: The goods available for sale are bought to a specific place and the buyers of those goods
reach those places for buying them.
• (2) Different markets for different commodities such as vegetable market, food grains market etc.
Traditional concept focuses that market means ―a place" only, where actual buying and selling
takes place.
 Traditional Markets
• After the Second World War, especially in the fifties and sixties, the size and character of the
markets in many countries of the world changed enormously. With the passage of time, the
industrial activity has intensified in terms of:
• • Quantity
• • Quality
• • Variety of the products
• • Competition
• • Awareness on the part of consumers
• • Emergence of laws and enactments to protect consumer‘s interest.
 Market of Seventies / Eighties –Modernized Version
• According to Peter Drucker ―the purpose of business is to create customer" and customers do not have
geographical boundaries‖.
• Thus, according to modern thinkers "market" further expanded. They stopped treating it as a place and
believed strongly that the coming together of buyers and sellers living anywhere and transacting
purchase and sale of goods is said to be a market'.
• To support the wider view of market, Clark and Clark defined a market as: ―In fact, for most
commodities, the market must not be thought as a geographical meeting place but as any getting together
of buyers and sellers in person by mail, telephone, telegraph or by any other means of communication."
• Analysis of the definition:-
• The market is not taken as a geographical place but a meeting of:
• (i) Buyers and sellers
• (ii) For a given commodity
• (iii) Who remains in close contact format with each other through any means personally, by mail, phone
etc.
• (iv) Buyers and sellers are in competition with one another.
• (v) The place or area can be regional, national or international.
• 'A market is the atmosphere of a region in which the forces of demand and supply operate directly or by
means of any kind of communication that are sufficient to bring about transfer in the title of the goods
and it does not necessarily mean only a place where actual buying and selling is conducted‘.
 MODERN CONCEPT : E-COMMERCE
• “Markets are people with money to spend and desire to spend it“
• "Market means people“
• Though this definition absolutely ignores 'the place of activity' it seems to
be more practical in today's scenario. The people, a business serves are its
market.
• E-Business: This refers to "carrying on business activities, both industrial
and commercial through computer network i.e. Internet. Wherever the of
internets, can reach that place has become the probable 'Market'.
• Thus 'Market‘ is emerging as any form where the transaction between the
buyer and seller is because of interacting electronically using
telecommunication network the world over - so whole world is a potential
Market, with no requirement of physical presence of a buyer or seller.
• Internet - commerce has thus broadened the definition, scope and range of
markets.
 E-BUSINESS
Business is a wider term including both as range of activities:
(i) Industry, i.e., production and related activities
(ii) Commerce, i.e. trade and aids to trade. Trade means buying
and selling
E-Business vs. E-Commerce
 Role of E-Business
1. Quick Solution to Doubts
2. Updated Information
3. Extending Markets
4. Shortening of distribution channel
5. Saving of time and cost
6. Less risk in payments
7. Easy to launch new products
8. Lower personnel cost
MICRO MARKETING ENVIRONMENT
MACRO MARKETING ENVIRONMENT
 Market Research
Market Research is referred as the systematic study and
evaluation of all factors bearing on any business operations
which involves the transfer of goods from a producer to a
consumer.
PROCESS OF RESEARCH
 MARKET SURVEY
To complete the present market scenario, the day to day
information is essential for the organization and its long term
survival. Market survey is one of the most widely used market
research techniques and at times, viewed as synonymous with
Market research.
• The company's internal records, or
• The external published resources.
Importance of Market Survey
(i) Customer is the King
(ii) Risk reduction
(iii) Helps attaining objectives
(iv) Market Overview
(v) Forecast
 Market Survey Methods
• (i) Personal interviews
• (ii) Telephonic interviews
• (iii) Direct mail interviews
• (iv) Fax/E-mail interviews
• (v) Online interviews
• (vi) Questionnaire Development
• (vii) Field work
STEPS IN MARKET SURVEY
• A practical question related to market survey may be asked.
Marketing mix
• According to Philip Kotler, "A Marketing mix is the mixture of
controllable marketing variables that the firm uses to pursue the
sought level of sales in the target market.“

• WJ Stanton : Marketing mix is a term used to describe the

combination of 4 Ps as inputs which constitute the core of a
company’s marketing system.

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 MARKETING MIX – 4PS
• All are = imp.

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Match the columns
i. PRODUCT - (a) Communication

ii. PRICE - (b) Customer needs & wants

iii. PLACE - (c) Cost to satisfy

iv. PROMOTION - (d) Convenience

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Benefits of Marketing Mix
Product Oriented:
• (i) According to needs of the customers
• (ii) Saleable quality
• (iii) Improving the quality
• (iv) Attractive designing and packaging
• (v) After sales services
 Benefits of Marketing Mix
Price Oriented :
• (i) Determination of price according to the
paying capacity of customers
• (ii) Fair pricing of the product
• (iii) Credit facility
• (iv) Discount and allowance
Benefits of Marketing Mix
Promotion Oriented:
• (i) Advertising
• (ii) Sales promotion
• (iii) Personal selling.
 Benefits of Marketing Mix
Distribution Oriented:
• (i) Availability at the right place
• (ii) Availability through convenient outlets.
PRODUCT MIX
 PRODUCT MIX
• 1. Volume of output, sales growth potential
• 2. Shape, size, weight, colour, features
• 3. Quality and standard of the product
• 4. Design and range
• 5. Brand name
• 6. Packaging and labelling
• 7. Product testing
• 8. After sale service
Successful Products (just for reference)

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PRODUCT FAILURES (just for reference)

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Product can be classified on the basis of:
• (a) Durability - perishable, non-durable, durable
services
• (b) Utility– capital/producer goods, consumer goods,
intermediary goods
• (c) Weight wise - heavy and bulky goods, voluminous
goods.
• (d) Standard quality products satisfy the society
Place or Physical Distribution
Place or Physical Distribution
• (a) Channels of distribution
• (b) Modes of distribution
 Place mix - distribution
• Producer → Customer (Zero level)

• Producer → Retailer → Consumer (One Level)

• Producer → Wholesaler → Retailer → Consumer (Two Level)

• Producer → Agent → Wholesaler → Retailer → Consumer (Three Level)

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 Modes of Transport
(1) Railways
(2) Roadways
(3) Waterways
(4) Airways
(5) Pipelines
Factors to be considered before selecting
distribution channel
• Cost
• Flexibility
• Availability
• Nature of Commodity
• Requirement of customer
• Duration involved
• Speed and safety parameters
Promotion Mix
 Promotion Mix
• (1) Do image building of product.
• (2) Create product identity
• (3) Educate consumers
• (4) Boost sales and profits
• (5) Ensure consumer's satisfaction
• (6) Keep memory alive for a product in economy.
• (7) Encourage innovation
Tools/elements of Promotion Mix:
• 1. Personal Selling:
• 2. Advertising:
• 3. Publicity:
• 4. Exhibitions and Demonstration:
• 5. Public Relations:
• 4. Sales Promotion:
Ways of Using Magazine Space
OUTDOOR ADVERTISING /
OUT OF HOME (OOH) ADVERTISING
Transit advertising
 TRANSIT
ADVERTISING
INFLIGHT ADVERTISEMENT
(transit advertising)
POINT OF PURCHASE (POP)
AMBIENT ADVERTISING
AMBIENT ADVERTISING

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AMBIENT ADVERTISING
 YELLOW PAGES
•-
CINEMA ADVERTISING
PROMOTION MIX

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ONLINE ADVERTISEMENT
Factors affecting Promotion decision
• Cost
• Effectiveness
• Objective
• Coverage
• Market trend
• Competitors tool
• Nature of the product
• Consumer targeted
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 What is price ?
It refers to the value that is put on a product. It represents the
sum of values that consumers are willing to exchange for the
benefit of having or using the product.

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The factors that influence the pricing decisions of any
enterprise can be categorized into two

• (i) Internal Factors

(ii) External Factors
 INTERNAL FACTORS AFFECTING PRICING DECISIONS

(i) Corporate and marketing objectives of the firm

(ii) The image sought by the firm through pricing
(iii) Cost of manufacturing and marketing
(iv) The uniqueness' & utility of the product i.e. the extent of distinctiveness
of the product and extent of product difference practiced by the firm.
(v) Price elasticity of demand of the product.
(vi) Other elements of the marketing mix of the firm and their interaction
with pricing.
(vii) Use pattern and turn around rate of the product.
(viii) Composition of the product line of the firm.
EXTERNAL FACTORS AFFECTING PRICING DECISIONS

• (i) Market characteristics

• (ii) Nature of economy
• (iii) Nature of competition
• (iv) Bargaining power of major consumers
• (v) Bargaining power of major suppliers
• (vi) Competitors pricing policy
• (vii) Government controls/regulations on pricing
• (viii) Societal or social considerations
OTHER FACTORS TO CONSIDER BEFORE
FINALISING PRICE OF PRODUCT
• a) Cost of the product
• b) Demand for the product
• c) Competition in the market
• d) Government regulations related to pricing
• e) Consumer behaviour
• f) Objectives of the enterprise
• g) Terms of credit
Types of pricing strategies

• a) Cost Plus Pricing Method

• b) Variable Price Method
• c) Base Price and Discounts Method
• d) Market Rate Method
• e) Skimming Price Method
• f) Penetrating Pricing Method

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Factors Affecting Marketing Mix:
• Consumers' buying Behaviour
• Dealers' Behaviour
• Competitors Behaviour
• Government Behaviour
THANK YOU