Notes

Marketing Management- BBA Sem II

a) What is marketing? Discuss Nature, Scope and Functions of marketing.

Answer:
Continuous exposure to advertising and personal selling leads many people to link marketing
and selling, or to think that marketing activities start once goods and services have been
produced.

While marketing certainly includes selling and advertising, it encompasses much more.
Marketing also involves analyzing consumer needs, securing information needed to design and
produce goods or services that match buyer expectations and creating and maintaining
relationships with customers and suppliers.

Definition of Marketing
The American Marketing Association, the official organization for academic and professional
marketers, defines 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”
According to Kotler (2000) – “A societal process by which individuals and groups obtain what
they need and want through creating, offering, and freely exchanging products and services of
value with others.”

Another definition goes as: “process by which individuals and groups obtain what they need and
want through creating and exchanging products and value with others’.

Simply put: Marketing is the delivery of customer satisfaction at a profit to the seller.

Nature of Marketing:

1. Marketing is an Economic Function

Marketing embraces all the business activities involved in getting goods and services, from the
hands of producers into the hands of final consumers. The business steps through which goods
progress on their way to final consumers is the concern of marketing.

2. Marketing is a Legal Process by which Ownership Transfers

In the process of marketing the ownership of goods transfers from seller to the purchaser or
from producer to the end user.

3. Marketing is a System of Interacting Business Activities

Marketing is that process through which a business enterprise, institution, or organisation
interacts with the customers and stakeholders with the objective to earn profit, satisfy
customers, and manage relationship. It is the performance of business activities that direct the
flow of goods and services from producer to consumer or user.

4. Marketing is a Managerial function

According to managerial or systems approach – ―Marketing is the combination of activities
designed to produce profit through ascertaining, creating, stimulating, and satisfying the needs
and/or wants of a selected segment of the market.‖
According to this approach the emphasis is on how the individual organisation processes
marketing and develops the strategic dimensions of marketing activities.

5. Marketing is a social process

Marketing is the delivery of a standard of living to society. According to Cunningham and
Cunningham (1981) societal marketing performs three essential functions:-
 Knowing and understanding the consumer‘s changing needs and wants;

 Efficiently and effectively managing the supply and demand of products and services;
and
 Efficient provision of distribution and payment processing systems.

6. Marketing is a philosophy based on consumer orientation and satisfaction

7. Marketing had dual objectives – profit making and consumer satisfaction

Scope of Marketing

1. Study of Consumer Wants and Needs

Goods are produced to satisfy consumer wants. Therefore study is done to identify consumer
needs and wants. These needs and wants motivates consumer to purchase.

2. Study of Consumer behavior

Marketers perform study of consumer behavior. Analysis of buyer behavior helps marketer in
market segmentation and targeting.

3. Production planning and development

Product planning and development starts with the generation of product idea and ends with
the product development and commercialization. Product planning includes everything from
branding and packaging to product line expansion and contraction.

4. Pricing Policies
Marketer has to determine pricing policies for their products. Pricing policies differs form
product to product. It depends on the level of competition, product life cycle, marketing goals
and objectives, etc.

5. Distribution
Study of distribution channel is important in marketing. For maximum sales and profit goods
are required to be distributed to the maximum consumers at minimum cost.

6. Promotion
Promotion includes personal selling, sales promotion, and advertising. Right promotion mix is
crucial in accomplishment of marketing goals.

7. Consumer Satisfaction
The product or service offered must satisfy consumer. Consumer satisfaction is the major
objective of marketing.

8. Marketing Control
Marketing audit is done to control the marketing activities.

Functions of Marketing:
Marketing is a very broad term and cannot be explained in a few words. Marketing is an
essential business function that helps in making the customers aware of the products or
services that are offered by a business.

Functions of marketing are those aspects that define the practice of marketing and are being
discussed in detail in this article.

The following are the functions of marketing:

1. Identify needs of the consumer: The first steps in marketing function is to identify the needs
and wants of the consumer that are present in the market. Companies or businesses must
therefore gather information on the customer and perform analysis on the collected
information.

 What do the consumers want?

 In what quantity?
 At what price?
 When do they want (it)?
 What kind of advertisement do they like?
 Where do they want (it)?

By doing this they can present the product or service that matches closely with the customer
needs and wants.
2. Planning: The next step in marketing function is planning. It is considered very important for
a business to have a plan. The management should be very clear about the company objectives
and what it wishes to achieve from the created plan.

The company should then chalk out a timeline that is essential for achieving the objectives. For
example, a company has a 25% market share of a particular product. The company wants to
raise it to 40%.

In order to achieve this objective the marketer has to prepare a plan in respect of the level of
production and promotion efforts. It will also be decided as to who will do what, when and
how. To do this is known as marketing planning.

3. Product Development: After the details are received from the consumer research, the
product is developed for use by the consumers. There are many factors that are essential for a
product to be accepted by the customer, a few factors among the many are product design,
durability and cost.

4. Standardisation and Grading: Standardisation refers to the process of ensuring uniformity in

the product which means that a product developed by a business shall be standard for every
consumer with the same quality and design and this is one of the key aspects that needs to be
maintained by the business. It refers to determining of standard regarding size, quality, design,
weight, colour, raw material to be used, etc., in respect of a particular product. By doing so, it is
ascertained that the given product will have some peculiarities.

Grading is referred to as the process of classifying products that are similar in quality and
characteristics. Grading helps in making the customer know about the quality of the product
offered. It helps in making customers understand that the products conform to highest quality
standards.

This way, sale is made possible on the basis of samples. Mostly, it is the practice that the
traders look at the samples and place purchase order for a large quantity of the product
concerned. The basis of it is that goods supplied conform to the same standard as shown in the
sample. Products having the same characteristics (or standard) are placed in a given category or
grade. This placing is called grading. For example, a company produces commodity – X, having
three grades, namely A’. ‘B’ and ‘C’, representing three levels of quality; best, medium and
ordinary respectively.
Customers who want best quality will be shown ‘A’ grade product. This way, the customer will
have no doubt in his mind that a low grade product has been palmed off to him. Grading,
therefore, makes sale-purchase easy. Grading process is mostly used in case of agricultural
products like food grains, cotton, tobacco, apples, mangoes, etc.

5. Packing and Labelling: The first impressions of a product are its packaging and the label
attached to it. Therefore, packaging and labelling should be looked after very well. Packaging
aims at avoiding breakage, damage, destruction, etc., of the goods during transit and storage.
Packaging facilitates handling, lifting, conveying of the goods. Many a time, customers demand
goods in different quantities. It necessitates special packaging. Packing material includes
bottles, canister, plastic bags, tin or wooden boxes, jute bags etc.

Label is a slip which is found on the product itself or on the package providing all the
information regarding the product and its producer. This can either be in the form of a cover or
a seal.

For example, the name of the medicine on its bottle along with the manufacturer’s name, the
formula used for making the medicine, date of manufacturing, expiry date, batch no., price etc.,
are printed on the slip thereby giving all the information regarding the medicine to the
consumer. The slip carrying all these is details called Label and the process of preparing it as
Labelling.

6. Branding: Branding is referred to as the process of identifying the name of the producer with
the product. Certain brands are there in the market which have a lot of goodwill and any
product coming from the same brand will be accepted more warmly by the consumers.
Although, having a separate identity for the product can be helpful.

7. Customer Service: A company has to set-up various kinds of customer service based on their
product. It can be pre-sales, technical support, customer support, maintenance services, etc.

8. Pricing: It can be regarded as one of the most important parts of marketing function. It is the
price of a product that determines whether it will be successful or a failure. Some other factors
are market demand, competition, price of competitors.

The company or business should understand clearly that bringing about frequent changes in the
price of a product can lead to confusion in the minds of consumers.

9. Promotion: Promotion is the process of making the customers aware of the product by
presenting it to customers across various channels of promotion and entice them to buy the
product.

The major channels of promotion are: advertising, media, personal selling and promotion
(publicity). An ideal promotion mix will be a combination of all or some methods.

10. Distribution and Transportation: Distribution refers to the movement of consumer goods
to the point of consumption. A company must ensure that the correct channel of distribution is
selected for the product.

The mode of distribution is dependent on the factors such as shelf life, market concentration
and capital requirements. Proper management of inventory is also essential.
Transportation is defined as the physical movement of goods from one place to another. In
other words, it is the movement of goods from the place of production to the place of
consumption.

Also, the correct mode of transportation can be selected based on the geographical boundaries
of the market.

11. Warehousing: Warehousing of products creates time utility. It is often seen that there is a
gap between the time a product is produced and the time when it is consumed. Companies like
to maintain the smooth flow of goods even when the products are of seasonal nature.
Warehousing and storing provides the opportunity to provide goods during off season also.

12. Customer Service: Customer is the king of market. Therefore, it is one of the chief functions
of marketer to offer every possible help to the customers. A good customer service will
effectively assist and empower your customers through the entire purchasing process. From
pre-purchase, through their purchase and all the way to their post-purchase experience.

A marketer offers primarily the following services to the customers:

(i) After-sales-services

(ii) Handling customers’ complaints

(iii) Technical services

(iv) Credit facilities

(v) Maintenance services

Today customers have become very cautious about services. Many consumers are using
customer reviews to get their views heard by the brand and their peers. Reviews can have a
direct impact on sales because they can help consumers make purchase decisions, while also
providing insight that helps brands improve the product or service on offer.

b) What is the difference between Marketing and Selling?

Answer:
1. Selling: Selling refers to creating products and selling them to customers. It revolves
around the needs and interest of the seller. It is a only an integrated part of the
marketing process as its only focus is to manufacture product first and then selling
them to customer and it is sales volume oriented not much concern about customer’s
 satisfaction. It views customer as the last link in business. Selling seeks to convert
product into cash. In selling sell is the primary motive and it is more internal company
oriented. It is based on inside-out perspective.
2. Marketing: Marketing refers to finding wants of people/customer and fill them. It
revolves around the needs and interest of the consumer. It is a wider term consisting
of number of activities like identifying the market first, customer’s needs, product
development to meet customer’s need, fixing price and then selling the product to the
customer. It views the customer as the very purpose in business. Marketing seeks to
convert customer needs into products. In marketing customer satisfaction is the
primary motive and it is more external market oriented. It is based on outside-in
perspective.

Difference between Selling and Marketing:

Point.No SELLING MARKETING

01. Selling refers to creating Marketing refers to finding wants of

products and selling them to people/customer and fill them.
customers.

02. Selling revolves around the Whereas Marketing revolves around the needs and
needs and interest of the seller. interest of the consumer.

03. It emphasis more on product or It emphasis more on consumer needs and wants.
service.

04. Selling is a only an integrated While marketing is a wider term consisting of

part of the marketing process. number of activities.

05. Selling is based on short term Marketing is based on long term business planning.
business planning.

06. It manufactures the product first. It identifies the market first.

07. It is sales volume oriented. It is customer satisfaction with profit oriented.

08. It views business as a goods It views business as a consumer satisfying process.

producing and selling process.

09. Here seller is considered as king Here consumer is considered as king pin of market.
pin of market.
Q. c) Elaborate various stages of Product life cycle.

Answer:
Everything has a shelf life. Whether it’s a car, your phone, exercise equipment, or any number
of products — eventually its use and sales potential will run dry. That’s because anytime that a
product enters the market it follows a specific life cycle that every product follows.

A life cycle that takes it from being introduced as the next big thing, to something that
everyone has and eventually everyone has forgotten about. This process is constant, meaning
that every business needs to be aware of how it works and how it can affect their products.

Meaning of Product Life Cycle (PLC): The Product Life Cycle (PLC) defines the stages that a
product moves through in the marketplace as it enters, becomes established, and exits the
marketplace. In other words, the product life cycle describes the stages that a product is likely
to experience. It is a useful tool for managers to help them analyze and develop strategies for
their products as they enter and exit each stage. The life cycle of a product is typically used to
determine when it’s appropriate to increase advertising, adjust pricing, explore new markets,
redesign packaging and even adjust your messaging.

Stages in Product Life Cycle:

Each stage has its costs, opportunities, and risks, and individual products differ in how long they
remain at any of the life cycle stages. While there are differing opinions regarding if there are
four, five, or six stages of the product life cycle, each option includes the following steps.
 Before the life cycle starts:

PRE LAUNCH

Development of the Product

The product development stage is the research phase before a product launch. Technically, this
falls outside the definition of the product life cycle, but it’s a vital step to be aware of. In short,
it’s used to determine the viability of a product, confirm when it should go to market and how
to approach your official launch.

At this stage, costs are accumulating with no corresponding revenue. Some products require
years and large capital investment to develop and then test their effectiveness. Since risk is
high, outside funding sources are limited. Existing companies often fund research and
development from revenue generated by current products. For startup businesses, this stage is
typically funded by the entrepreneur from their own personal resources. For those developing a
new product, it may be wise to land on a minimum viable product (MVP) as early as possible.

POST LAUNCH

1. Introduction Stage

When a product first launches, sales will typically be low and grow slowly. In this stage,
company profit is small (if any) as the product is new and untested. The introduction stage
requires significant marketing efforts, as customers may be unwilling or unlikely to test the
product. There are no benefits from economies of scale, as production capacity is not
maximized.

The underlying goal in the introduction stage is to gain widespread product recognition and
stimulate trials of the product by consumers. Marketing efforts should be focused on the
customer base of innovators – those most likely to buy a new product. There are two price-
setting strategies in the introduction stage:

 Price skimming: Charging an initially high price and gradually reducing (“skimming”) the
price as the market grows.

 Price penetration: Establishing a low price to quickly enter the marketplace and capture
market share, before increasing prices relative to market growth.

2. Growth Stage

In the growth stage, the product has been accepted by customers, and the marketers will be
striving to increase market share. If the product continues to thrive and meet market needs, the
product will be in the growth stage. Sales revenue usually grows exponentially from the take-off
point. Economies of scale are realized as sales revenues increase faster than costs and
production reaches capacity.

Competition in the growth stage is often fierce, as competitors introduce similar products. In
the growth stage, the market grows, competition intensifies, sales rise, and the number of
customers increases. Price undercutting in the growth stage tends to be rare, as companies in
this stage can increase their sales by attracting new customers to their product offerings.

3. Maturity and Saturation Stage

Eventually, the market grows to capacity, and sales growth of the product declines. In this
stage, price undercutting and increased promotional efforts are common as companies try to
capture customers from competitors. Due to fierce competition, weaker competitors will
eventually exit the marketplace – the shake-out. The strongest players in the market remain to
saturate and dominate the stable market.

The biggest challenge in the maturity stage is trying to maintain profitability and prevent sales
from declining. Retaining customer brand loyalty is key in the maturity stage. In addition, to re-
innovate itself, companies typically employ strategies such as market development, product
development, or marketing innovation to ensure that the product remains successful and stays
in the maturity stage. This is when any adjustments to advance your product or the services
that accompany it, should be made. If you’ve hit the point where any real adjustments simply
aren’t possible, then your messaging, services, and add-ons should take full focus. You may only
be able to make incremental changes but can still look to market it as a refresh accompanied by
new features or benefits.

E.g Video game consoles with the new Nintendo Switch OLED edition offering slightly larger,
and crisper screen.

4. Decline Stage

Eventually, as competition continues to rise, with other companies seeking to emulate your
success with additional product features or lower prices, so the life cycle will go into decline.
Decline can also be caused by new innovations that supersede your existing product, such as
horse-drawn carriages going out of fashion as the automobile took over.

Many companies will begin to move onto different ventures as market saturation means there
is no longer any profit to be gained. Of course, some companies will survive the decline and
may continue to offer the product but production is likely to be on a smaller scale and prices
and profit margins may become depressed. Consumers may also turn away from a product in
favour of a new alternative, although this can be reversed in some instances with styles and
fashions coming back into play to revive interest in an older product.
In the decline stage, sales of the product start to fall and profitability decreases. This is primarily
due to the market entry of other innovative or substitute products that satisfy customer needs
better than the current product. There are several strategies that can be employed in the
decline stage, for example:

 Reduce marketing efforts and attempt to maximize the life of the product for as long as
possible (called milking or harvesting).

 Slowly reducing distribution channels and pulling the product from underperforming
geographic areas. Such a strategy allows the company to pull the product out and
attempt to introduce a replacement product.

 Selling the product to a niche operator or subcontractor. This allows the company to
dispose of a low-profit product while retaining loyal customers.

 Find new uses for the product

 Tap into new markets

Q.d) What do you understand by Marketing Environment? Discuss Micro and

Macro Environment.

Answer:
A number of internal and external factors affect marketing activities and business as a whole.
While some of the factors are in the control of the organisation, many factors are
uncontrollable and the organizations have to adapt themselves to avoid being affected by
changes in these factors. These external and internal factors group together to form a
marketing environment in which the business operates.

Meaning of marketing Environment:

A marketing environment is a combination of internal and external environmental forces and

factors that influences the business operation of a business and its ability to serve its
customers. It is essential to know both internal as well as external environmental factors.

Components of Marketing Environment:

A) Internal environment

The internal environment is formed of all the internal factors and forces of an organization. The
internal environment of an organization is within the control of the marketer, and he can
change or modify the environment as per the demand in the market and requirement of the
business.
The following are the five factors that form the internal environment of an organization. These
factors are also referred to as five Ms of a business.

 Money
 Men
 Markets
 Materials
 Machinery

All the components of the internal environment are as important as that of the components of
an external environment. However, the internal environment factors are changed according to
the change in the external marketing components. For example, an organization is required to
upgrade its technology if new technology in the market is introduced.

The internal environment of an organization also includes the marketing department, the sales
department, the human resource department, and the manufacturing department.

B) External Marketing environment

The external marketing environment consists of all the external marketing factors that exist
outside the organization, and the marketer has little or no control over the external marketing
environment factors.

The external marketing environment can be divided into two categories, such as
microenvironment and the macro environment.

Let us learn about both macro and micro environments one by one.

a) Micro Environment

The microenvironment of a business consists of all the factors and forces that are directly
associated with the company. The micro components of the external environment are also
known as task environments.

The following are the various components of the micro external environment.

1. Suppliers

Suppliers are an essential part of every organization. Suppliers supplies material and all other
types of resources required for the production of products. A company can run its business
successfully only if its suppliers supply material of good quality and on time.

2. Market intermediaries

Market intermediaries are the intermediary parties that help a business to distribute its
products in the market. The market intermediaries can be wholesalers, retailers, and
distributors. All of these market intermediaries are an essential part of the business as they are
the face of the company in the market and represent the products of the company in the
market.

3. Partners

Business partners are the business entities that conduct business with the organization. For
example, advertising agencies, banking and insurance companies, market research organization
s, brokers, and transportation companies, etc. A company is required to partner with several
other companies to run a successful business.

4. Customers

Customers are the most crucial component of the business. Customers are the target audience
of the product, and the preference of customers influences all the marketing and business
efforts of a company.

5. Public

The public is people other than the target audience of the organization. The public plays a vital
role in the success of the business as it can build or destroy the image of a company in the
market. The public has the power to influence the purchasing decision of the target audience.
Especially in the times of the internet, the ability to control the public has increased as they can
share their views about your products and services on the internet freely.

6. Competitors

The last but not least component of the microenvironment is the competitors of a business. The
competitors are the other businesses that sell similar products as your products or are part of
the same strategic group in the industry.

b) Macro Environment

Macro components of a marketing environment consist of all external forces and factors that
impact the whole industry rather than just changing an organization directly. Therefore, the
macro marketing environment is also referred to as a large environment.

The following are the six components of the macro environment. Let us learn about them one
by one.

1. Technological environment

Technology is one of the elements that have great potential to influence the business of an
organization. It is dynamic, as it changes rapidly. Technology provides several threats and
opportunities to the business environment.
The technological environment consists of research and development in technology,
innovation, inducement of technology, and technical alternatives, etc.

2. Demographic environment

The demographic environment component of the macro marketing environment consists of

people that form a market. The population of the demographic environment can be
characterized based on various factors such as age, gender, density, size, location, race, and
occupation, etc.

The demographic environment is a crucial component for business as the company design and
builds its products based on the characteristics of the demographic environment.

3. Social-cultural environment

Socio-cultural environment comprises forces, such as society’s basic values, attitudes,

perception, and behavior. These forces help in determining that what type of products
customers prefer, what influences the purchase attitude or decision, which brand they prefer,
and at what time they buy the products. The socio-cultural environment explains the
characteristics of the society in which the organization exists. The analysis of socio-cultural
environment helps an organization in identifying the threats and opportunities in an
organization. For example, the lifestyles of people are changing day-by-day. Now, the women
are perceived as an active earning member of the family. If all the members of a family are
working then the family has less time to spend for shopping. This has led to the development of
shopping malls and super markets, where individuals could get everything under one roof to
save their time.

4. Economic environment

The economic environment component is a type of component that influences all industries.
The economic environment affects the purchasing power and spending patterns of the buyers.

The following are the different factors that form an economic environment.

 Interest Rates.
 Gross Domestic Products (GDP).
 Gross National Product (GNP).
 Inflation.
 Subsidies.
 Income distribution.
 Government funding.
 Other significant economic variables.
5. Political-legal environment:

The political-legal environment is a combination of a lot of factors such as the current political
party in power, the degree of politicization of trade and industry, the efficiency of the current
government, government policies, current legal framework, the public attitude towards the
economy, etc.

All these factors have a huge impact on business organizations in terms of pricing, promotions,
selling and other business strategies.

The main influencers are:

a) Government: You must have often heard that an election year is an extremely
important factor for the economy. This is why the type of government governing at
the centre and the state has a huge impact on the businesses. The government
decides all the fiscal policies, monetary policies, and taxation modules as well.

So the type of government in power has a huge impact on the economy and the firms that
operate and compete in the economy. Like for example, the current government has the Make
in India initiative which is good for the manufacturing sector.

b) Legal

A sound legal system is essential to the success of any business. So a country must have a sound
and functioning legal system with laws that equally protect both consumers and manufacturers.
There are several ways that legal factors affect businesses. From business contracts, getting
licenses, hiring employees, to managing taxation, selling of goods, import and ex[port of certain
material etc are highly influenced by a number of legislations in a country.

Certain Legal acts mentioned below have a direct impact on organizations and their businesses.

 Sale of Goods Act

 Contract Act
 Consumer Protection Act
 Income Tax (Direct and Indirect) Act
 GST
 Monopolies and Restrictive Trade Practices Act

E.g: ASCI (Advertising Standards Council of India) According to clause 6 of the ASCI Code,
tobacco products, alcohol and gambling are prohibited from being advertised.
Advertisements for these products are made indirectly sometimes by purporting to be
advertisements for other products. Indirect advertisement for these products and services is
prohibited.
 c) Political

Political stability in a country is essential for a stable economy and stock market. Also, various
political groups also hold a lot of influence on businesses and unions. So the political
environment of a country is a major factor in the success of a firm.

6. Natural environment:

Natural environment consists of natural resources, which are needed as raw materials to
manufacture products by the organization. The marketing activities affect these natural
resources, such as depletion of ozone layer due to the use of chemicals. The corrosion of the
natural environment is increasing day-by-day and is becoming a global problem.

Following natural factors affect the marketing activities of an organizations at large:

a) Natural Resources: It serves as raw material for manufacturing various products. Every
organization consumes natural resources for the production of its products.
Organizations are realizing the problem of depletion of resources and trying best to use
these resources judiciously. Thus, some organizations have indulged in de-marketing
their products.P

For example, Indian Oil Corporation (IOC) tries to reduce the demand for its products by
promoting advertisements, such as Save Oil, Save India.

b) Weather:

It leads to opportunities or threats for the organizations. For example, in summer, demand for
water coolers, air conditioners, cotton clothes, and water increases while in winter, the demand
for woolen clothes and room heaters rises. The marketing environment is greatly influenced by
the weather conditions of a country.

c) Pollution:

It includes air, water, and noise pollution, which lead to environmental degradation. Now-a-
days, organizations tend to promote environment friendly products through its marketing
activities. For example, the organizations promote the usage of jute and paper bags instead of
plastic bags.

The COVID-19 Pandemic has changed the dynamics of entire world in terms of business,
personal life and health and nation as a a whole.
Q.5 Explain three extended P’s of Service Marketing Mix.

Answer:
The 7 Ps are a set of recognised marketing tactics for products (tangible) as well as services
(intangible), which you can use in any combination to satisfy customers in your target market.
The 7 Ps are controllable, but subject to your internal and external marketing environments.
Combining these different marketing tactics to meet your customers' needs and wants is known
as using a 'tactical marketing mix'.

But Services are quite different from products due to their characteristics such as intangibility,
inseparability, inventory and inconsistency.

Take a restaurant for example. The food is the product, but everything else involved in the
experience is a service: the quality of the possessing and serving staff (people), how quickly the
food is served (process), and the restaurant’s ambiance (physical environment).

Therefore out of the 7 Ps, 3Ps are dedicated to Services to tackle their uniqueness:

1. People

A company’s people are at the forefront when interacting with customers, taking and
processing their enquiries, orders and complaints in person, through online chat, on social
media, or via the call centre. They interact with customers throughout their journey and
become the ‘face’ of the organisation for the customer. Their knowledge of the company’s
products and services and how to use them, their ability to access relevant information and
their everyday approach and attitude needs to be optimised. People can be inconsistent but
with the right training, empowerment and motivation by a company, they can also represent an
opportunity to differentiate an offering in a crowded market and to build valuable relationships
with customers.

2. Process

All companies want to create a smooth, efficient and customer-friendly journey – and this can’t
be achieved without the right processes behind the scenes to make that happen.
Understanding the steps of the customer journey – from making an enquiry online to
requesting information and making a purchase – helps us to consider what processes need to
be in place to ensure the customer has a positive experience. When a customer makes an
enquiry, how long will they have to wait before receiving a response? How long do they wait
between booking a meeting with the sales team to the meeting taking place? What happens
once they make an order? How do we make sure reviews are generated after a purchase? How
can we use technology to make our processes more efficient? All of these considerations help
build a positive customer experience.
E.g: Few decades back, the banks in India were operating with very traditional approach. There
was a time consuming process to open an account or even withdram money.

But today, the banks have become highly professional. They have a service executive in the
bank who assists customers. Opening an account, transferring of funds, deposits and
withdrawals of money have become extremely easy. Further, the new age banking has been
digitalized and every banking service is available on just one click.

3. Physical Evidence

Physical evidence provides tangible cues of the quality of experience that a company is offering.
It can be particularly useful when a customer has not bought from the organisation before and
needs some reassurance, or is expected to pay for a service before it is delivered.

For a restaurant, physical evidence could be in the form of the surroundings, staff uniform,
menus and online reviews to indicate the experience that could be expected. For an agency, the
website itself holds valuable physical evidence – from testimonials to case studies, as well as
the contracts that companies are given to represent the services they can expect to be
delivered.

Short Notes:

1. E Commerce:
E-commerce is the short name for ‘electronic commerce’. It is the buying and selling of
goods and services, or the transmitting of funds or data, over an electronic network,
primarily the internet. It means doing business transactions through the internet,
telephone, credit card, etc. without the help of cheque or physical payment of money
on the part of the buyer. The money is paid by the bank or company. It is the most
modern method of transaction and is in practice in the developed countries of the
world. E-commerce is in turn driven by the technological advances of the semiconductor
industry and is the largest sector of the electronics industry. Any information regarding
the price, availability, and quality of the goods is transmitted through the internet and
telephone.

Types of e-commerce

 Business-to-business (B2B): This refers to the electronic exchange of products,

services or information between businesses rather than between businesses and
consumers. Examples include online directories and product and supply
exchange websites that allow businesses to search for products, services and
information and to initiate transactions through e-procurement interfaces.
  Business-to-consumer (B2C): This is the retail part of e-commerce on the
internet. It is when businesses sell products, services or information directly to
consumers. The term was popular during the dot-com boom of the late 1990s,
when online retailers and sellers of goods were a novelty.

Today, there are innumerable virtual stores and malls on the internet selling all types of
consumer goods. The most recognized example of these sites is Amazon, which
dominates the B2C market.

 Consumer-to-consumer (C2C): This is a type of e-commerce in which consumers

trade products, services and information with each other online. These
transactions are generally conducted through a third party that provides an
online platform on which the transactions are carried out.

Online auctions and classified advertisements are two examples of C2C platforms, with
eBay and Craigslist being two of the most popular of these platforms. Because eBay is a
business, this form of e-commerce could also be called C2B2C -- consumer-to-business-
to-consumer.

 Consumer-to-business (C2B): In this type of e-commerce, consumers make their

products and services available online for companies to bid on and purchase.
This is the opposite of the traditional commerce model of B2C.

A popular example of a C2B platform is a market that sells royalty-free photographs,

images, media and design elements, such as iStock. Another example would be a job
board.

 Business-to-administration (B2A): This refers to transactions conducted online

between companies and public administration or government bodies. Many
branches of government are dependent on e-services or products in one way or
another, especially when it comes to legal documents, registers, social security,
fiscals and employment. Businesses can supply these electronically. B2A services
have grown considerably in recent years as investments have been made in e-
government capabilities.

 Consumer-to-administration (C2A): This refers to transactions conducted online

between individual consumers and public administration or government bodies.
The government rarely buys products or services from citizens, but individuals
frequently use electronic means in the following areas:

 Education, Disseminating information, distance learning/online lectures, etc.

 Social security. Distributing information, making payments, etc.

 Taxes. filing tax returns, making payments, etc.

 Health. Making appointments, providing information about illnesses, making health

services payments, etc.

Advantages and disadvantages of e-commerce

Benefits of e-commerce include its around-the-clock availability, the speed of access,

the wide availability of goods and services for the consumer, easy accessibility and
international reach.

Availability. Aside from outages or scheduled maintenance, e-commerce sites are

available 24x7, allowing visitors to browse and shop at any time. Brick-and-mortar
businesses tend to open for a fixed number of hours and may even close entirely on
certain days.

Speed of access. While shoppers in a physical store can be slowed by crowds, e-

commerce sites run quickly, which is determined by compute and bandwidth
considerations on both consumer device and e-commerce site. Product pages and
shopping cart pages load in a few seconds or less. An e-commerce transaction can
comprise a few clicks and take less than five minutes.

Wide availability. Amazon's first slogan was "Earth's Biggest Bookstore." They could
make this claim because they were an e-commerce site and not a physical store that
had to stock each book on its shelves. E-commerce enables brands to make a wide array
of products available, which are then shipped from a warehouse after a purchase is
made. Customers will likely have more success finding what they want.

Easy accessibility. Customers shopping a physical store may have a hard time
determining which aisle a particular product is in. In e-commerce, visitors can browse
product category pages and use the site search feature the find the product
immediately.

International reach. Brick-and-mortar businesses sell to customers who physically visit

their stores. With e-commerce, businesses can sell to any customer who can access the
web. E-commerce has the potential to extend a business' customer base

Lower cost. E-commerce businesses avoid the cost associated with physical stores, such
as rent, inventory and cashiers, although they may incur shipping and warehouse costs.

Personalization and product recommendations. E-commerce sites can track visitors'

browse, search and purchase history. They can use this data to present useful and
personalized product recommendations, and obtain valuable insights about target
 markets. Examples include the sections of Amazon product pages labeled "Frequently
bought together" and "Customers who viewed this item also viewed."

E-commerce also has disadvantages such as:

 Limited customer service. If a customer has a question or issue in a physical

store, he or she can see a clerk, cashier or store manager for help. In an e-
commerce store, customer service may be limited: The site may only provide
support during certain hours of the day, or a call to a customer service phone
number may keep the customer on hold.

 No Physical Examination of products: While images on a webpage can provide a

good sense about a product, it's different from experiencing it "directly," such as
playing music on speakers, assessing the picture quality of a television or trying
on a shirt or dress. E-commerce can lead consumers to receive products that
differ from their expectations, which leads to returns. In some scenarios, the
customer bears the burden for the cost of shipping the returned item to the
retailer.

 Wait time. If a customer sees an item that he or she likes in a store, the
customer pays for it and then goes home with it. With e-commerce, there is a
wait time for the product to be shipped to the customer's address. Although
shipping windows are decreasing as next day delivery is now quite common, it's
not instantaneous.

 Security. The biggest disadvantage of e commerce today is about security of

funds / money. Skilled hackers can create authentic-looking websites that claim
to sell well-known products. Instead, the site sends customers forfeit or
imitation versions of those products -- or, simply collects customers' credit card
information. Legitimate e-commerce sites also carry risk, especially when
customers store their credit card information with the retailer to make future
purchases easier. If the retailer's site is hacked, hackers may come into the
possession of customers' credit card information.

_____________________________________________________________________________

2. Green Marketing:
The green marketing term was first introduced in the late 1980s and early 1990s when
industries started showing concern towards the environment in order to attract customers.

The current situation of environment has made green marketing as an inevitable method of
marketing because of the degrading condition of environment and climate change.
Green Marketing is defined as the marketing of eco-friendly products which are not harmful to
the environment and are also produced using eco-friendly production process.

Green marketing is not only limited to advertising, but it consists of various things such as the
production of eco-friendly products, using sustainable business practices, using eco-friendly
packaging, and creating marketing campaign that talks about the environment-friendly features
of the products. Making all of these changes makes green marketing an expensive type of
marketing.

Some of the benefits of Green marketing are:

 Improves credibility

The first and most important benefit is the improved credibility of the organization. An
organization needs to have an excellent image to draw profits in the long run.

A company with a positive vision in the market will not only attract more customers but also
attract business partners who value its credibility. If you, as an organization looking for methods
to improve the credibility of your organization, then using green marketing is the best option
for you.

 An opportunity to enter a new market

It opens a new market segment for the organization. In order to produce and sell green
products, companies are required to make changes in their production process, replace the
material used in production with eco-friendly material, and are required to opt for
environmental-friendly packaging for the products.

The green market is quite a new market with less competition. You get an opportunity to enter
a new market by adopting green marketing methods.

 Long-term growth
Opting eco-friendly methods might be expensive initially, but it is worth for long term growth.
Green marketing is a good option for long term growth. Because in the present times, more and
more people prefer eco-friendly products, and their number is going to increase in the future.

 Offers a Competitive edge

Not every company can offer to turn into an eco-friendly company and change their processes
into eco-friendly processes. Your organization will get a competitive advantage over all those
organizations if you decide to opt for the methods.

 More room for innovation

When you choose to adopt green marketing, then you are required to recreate your production
process and change your raw material with eco-friendly raw material. This provides you an
opportunity to innovate your product.

Moreover, along with delivering eco-friendly benefits, you can also offer other benefits to your
customers, which will be cherry on the top of a cake.

 More profit

Eco-friendly methods are expensive, and thus it is ok for you to increase the price of your
products. People don’t mind to pay a little extra as long as they are getting the right quality
product and the satisfaction of doing their part to protect the environment.

Your initial cost of adopting green methods can be recovered in the initial few years. You will
generate more profit than your competitors as people now prefer to buy environment-friendly
products.

 Good for the environment

Last but not the least, we owe to the environment as our very existence is dependent on a
healthy environment.

There is an element above money. The ‘satisfaction’ we would get by saving your environment
is divine. We will be leaving a better place for our coming generations to live. Our small effort
can do huge. Therefore, if you haven’t yet adopted green methods, then it is still not too late to
do so.

Examples of Green marketing

Here are some organisations practicing green marketing and setting example of sustainability to
others.

 The sustainability practices of Suzlon (Pune): Suzlon Energy Limited is an Indian

multinational wind turbine manufacturer based in Pune, India. Sixteen of its facilities do
composting, some have bio- digesters turning waste into kitchen fuel. Today Suzlon is
one of India’s Top 10 Eco- Friendly Companies.

 ITC Ltd: Adopting a Low Carbon Growth Path and a Cleaner Environment Approach ITC
strengthened their commitment to green technologies by introducing ‘ozone-treated
elemental chlorine free’ bleaching technology for the first time in India. The result is an
entire new range of top green products and solutions: the environmentally friendly
multi-purpose paper that is less polluting than its traditional counterpart.

 Starbuck’s marketing campaign

Starbucks is one of the few companies which not only adopted but also remained committed to
using environment-friendly methods to conduct their business and to attract consumers.
Starbucks uses solar energy in its stores to minimize the use of electricity.

In addition to this, they have been committed to using responsible building material in their
stores to reduce carbon footprint. One of their most popular Facebook campaigns was to urge
people to join their campaign to plant trees and paint streets for the sake of the streets.

INDIAN ENTREPRENEURS IN GREEN PRODUCTS

ArEco Shashank Manufactures and exports biodegradable

Green Agarwal, CEO products such as palm leaf dinnerware,
Bamboo straws, Coir pots, Edible spoons etc.

Dinearth Harsh Mehta, A provider of natural plant fiber, green

Partner packaging products and recyclable tableware.

Greenport Arun Kumar Uses jute, cotton and juco fabric to design
Fashion Ghosh, Founder different type of bags including basic
Export promotional bags to bags for shopping, wine,
and conference.

Grenove Girish A , Supplies natural, organic, biodegradable, green

Services Director home/household and industrial/commercial
solutions.

Innovative Praveen Sahu, Creates and promotes Natural Tableware that

EWE Co-Founder produces products made up of sustainable
Solutions resources like plant leaf, palm leaf, and organic
leaves.
 Just Green Sunitha Rani, Facilitates eco-friendly Jute bags made from
Leaf Founder vegetable fiber with customized print patterns
and styles.

MKV Kamal Supplies eco-friendly dining cutleries like Areca

Enterprise Venugopal , Leaf plates, and nonplastic bags made of
Founder calico, cotton, recycled PET, hemp and jute.

Senanye Bio Shraddha Rai , Key manufacturer of dinnerware sets made

Products Co-Founder from natural raw materials without any chemical
add-on, while focusing on solar power issue in
the south Karnataka.

Signature Murugesh Guru A manufacturer and supplier of non woven

Roses Mohan, CEO shopping bags, designer dangler and gift
wrapping papers.

Sri Lakshmi I Durga Prasad, Provides biodegradable paper cups that are
Polypack Founder designed to hold several types of beverage.

3. Price Skimming:
Pricing strategies ‘make’ or ‘break’ businesses. A product’s pricing reflects what the company
aims to achieve, albeit in an indirect way. Pricing affects the way in which the business is
perceived.

Pricing decisions are decisions to be made about the price of a product or service. It is an
important element of the marketing mix and is determined by taking into account multiple
factors such as production costs, competitor price, and customer’s willingness to pay, market
conditions, brand image, and product quality.

Price skimming is a pricing strategy where businesses tend to markup the initial price of the
product to a much higher rate and slowly decrease it as time goes on.

In simple terms, the business charges the highest price when the offering is launched and is
new in the market, and then reduces the price over time.

Price skimming is used by businesses in case they meet either or all of the following situations –

 The business has a well-established brand and user base

 The product or service is new or revolutionary to the market

 No competitors exist

 The high number of prospective customers for the product

Price skimming suits well for certain industries more than the others.

For example, tech companies usually use price skimming. This is because the newly launched
products usually have no competition or the brand is well-established in the minds of its users
in order to warrant a lot of potential buyers for it.

New edition of iPhone is always priced high at introduction. Thereafter the price may be
lowered when the further edition is on the move to be launched.

4. Wholesaler:
A wholesaler refers to any person who buys products in large scales and sells such products
to the retailer in bulk quantities. They give the retailers a chance to purchase goods in bulk
with a lower price compared to when they would have bought them as single items.

The word ‘Wholesaler’ has been derived from the word ‘Wholesale’ which means to sell
goods in relatively large quantities or in bulk.

Wholesalers source their products direct from the various manufacturer where they take
advantage of large economies of scale. On the other hand, they would also source their
products from multiple resellers who deal with various forms of products.

Most consumer goods in the market would always start from the manufacturer who
ensures the designs are made and packaged well. The wholesaler will source these products
and sell to the various retailers due to the existing relationships in the market. Often the
chain would start from the Manufacturers to Wholesaler to Retailers, and finally
Consumers.

Characteristics of a Wholesaler:

 He buys in bulk quantities from producers and resells them to retailers in small
quantities.

 He usually deals in a few types of products.

 He operates in a specific area determined by producers.

 He does not display his goods but keeps them in godowns. Only samples are shown to
intending buyers.

Functions of a Wholesaler:

A wholesaler performs the following functions:

(i) Assembling:
A wholesaler buys goods from producers who are scattered far and wide and assembles them
in his warehouse for the purpose of the retailers.

(ii) Storage and Warehousing

After arranging and assembling the products from producers, wholesaler stores them in his
warehouse and releases them in proper and required quantities as and when they are required
by retailers. Since there is always a time-lag between production and consumption, therefore,
the manufactured goods are to be stored carefully till they are demanded by retailers. Thus, a
wholesaler performs the storage function in order to save the goods from deterioration and
also to make these goods available when they are demanded.

(iii) Transportation:

Wholesalers buy goods in bulk from the producers and transport them to their own godowns.
Also, they provide transportation facility to retailers’ by transporting the goods from their
warehouses to the retailers’ shops. Some wholesalers purchase in bulk, therefore, they can
avail the economies of freight on bulk purchases.

(iv) Financing:

A wholesaler provides credit facility to retailers who are in need of financial assistance.

(v) Grading and Packing:

A wholesaler sorts out the goods according to their quality and then packs them in appropriate

containers. Thus, he performs the marketing function of grading and packing also.

(vi) Providing Marketing Information:

Wholesalers provide valuable market information to retailers and manufacturers. The retailers
are informed about the quality and type of goods available in the market for sale, whereas the
manufacturers are informed about the changes in tastes and fashions of consumers so that
they may produce the goods of the desired level of taste and fashion.

(vii) Facilitating Disbursement and Sale:

Wholesalers sell their goods to retailers who are scattered far and wide. Retailers approach
them when their stocks are exhausted from further replenishment. Thus, wholesalers help in
the dispersion process of marketing.

Types of Wholesalers

1) Merchant Wholesalers
These are the most common type of wholesalers used in the FMCG industry, agriculture
industry or Private label industry. Quite simply, Merchant wholesalers are the ones who buy
directly from the manufacturer, store the product and then sell it to the customer. They might
sell in any channel and they are not restricted to selling to retail only or to online only.

If there is any loss between the buying and selling of the product, it must be borne by the
merchant wholesaler.

Example – A vegetable wholesaler buys produce directly from the farm and stocks it at his own
warehouse. He then sells these products to the local retail outlets or even to end customers. He
may also sell to restaurants. However, any loss of the produce due to spillage or any other
reason is a cost to the merchant wholesalers.

Even in FMCG, companies like Britannia or P&G use merchant wholesalers. These wholesalers
have a greater control in the region they operate. They benefit because they buy in bulk from
the company and take charge of the risk they are facing. Plus, they are responsible for the sales
targets, however, they achieve it.

2) Full-service Wholesalers – Retail Wholesalers

They are most commonly observed in Consumer Durables or Engineering products. The full-
service type of wholesalers is, as the name suggests, giving full service to the end retailer. These
wholesalers mainly operate in the retail market and sell products to a reseller (a retailer in this
case) Everything except service of the product is the responsibility of the full-service
wholesaler.

Example – Samsung wants to expand its operation in region A but it does not have a sales office
in that region. So it appoints a distributor in region A. This distributor is solely responsible for
order picking, delivery, training sales associates, promotions and everything for the Samsung
brand. He is now a full-service wholesaler. However, for service of the product, there is a
different service franchise opened in the same region.

In real life scenario, Many full-service wholesalers also start a second services related business
and start giving services for the products they are wholesaling. Example – A Samsung
wholesaler also starting a service center of Samsung.

As a result, they might get both – sales and service orders. However, for theoretical purposes,
Servicing and maintenance of the product is not a part of a full-service wholesaler. He is mainly
for sales, deliveries, and financing. These are the second most common types of wholesalers in
the market.

3) Limited Service Wholesalers

A limited service wholesaler is someone who stocks the products of the company and sells it in
a limited channel. He does not have a large turnover or does not cover all channels of the
company.

Example – Company X wants to sell its products online but it knows that if it allows local
distributors to sell online, there will be a huge price war. As a result, Company X appoints an
exclusive online wholesaler. This online wholesaler has only one job – To purchase the product
and stock it and sell it online. So whenever an order comes from Amazon or eBay, this
wholesaler gives the machine to Amazon or eBay. That’s his only job.

The same way – there are other limited-service wholesalers. 2 are mentioned below.

Cash and Carry wholesalers – Strong FMCG products are sold as cash and carry. Immediate
payment is demanded on a delivery of material.

Logistics wholesalers – A milk wholesaler who delivers whole trucks of milk across the market.
His only work is to deliver the milk and not to get orders for the company.

4) Brokers and Agents

Most commonly observed in the real estate industry or in the chemical markets. A broker
assumes no risk. He has the producer or the manufacturer on one side and he has the buyer on
the other side. The work of the broker is to get the deal done and he gets a commission on the
deal.

Example – A small lab has regular requirement of litmus paper. There is a litmus paper
wholesaler in their area who is a broker for several companies and who arranges any lab
material in bulk. The lab approaches the broker and wants to purchase huge quantity. The
broker then talks to multiple manufacturers and finally, a deal is struck with one manufacturer.
The manufacturer pays 2% commission to the broker for his work and for bringing the enquiry.
Similarly, this broker can pick an order of Beakers, Petri dishes or any other equipment. He will
keep arranging meetings with the right supplier and keep earning commissions.

A similar example like above is also observed in the retail industry wherein the broker earns a
commission to sell an apartment.

The difference between a broker and agent is that a Broker is short-term and he will be there
for a couple of orders. However, an Agent is long-term and specialized in repeated purchase so
that he stays for a longer time with the company and specifically works for the betterment of
the company. Example – Insurance has Agents (repeated buying) whereas real estate has
brokers (single buying)

5) Specialized wholesalers
These are wholesalers who do wholesale of specialized items only. Example – A used car
wholesaler who sells directly to customers or to other used car dealers. He is specialized in used
cars and knows the ins and outs of selling a used car to consumers or refurbishing the used
cars.

Similarly, there are other specialized wholesalers who are known for the specific product that
they sell.

_____________________________________________________________________________