CHAPTER 1

INTRODUCTION TO MARKETING

DEFINITIONS OF MARKET AND MARKETING

MARKET:
A market is a physical place where buyers and sellers gather to buy and sell goods.
Markets are also defined as a collection of buyers and sellers who transact over a
particular product or product class in a particular time. eg. money markets.
Traditionally a market is a physical location or place, like a bazaar or a shopping mall. The
kind of market is depending on a lot of factors. Some of the ways in which we can
characterize markets are,

 According to the products being sold. Example: cotton market, iron market, share market

 Based on geographical locations, like a local market or international market

 By the types of buyers involved, example: consumer market, industrial market etc

 The quantity of goods transacted between parties like a wholesale market or a retail
market

TYPES OF MARKET
The Various types of market are given below:
1. CONSUMER MARKET: Consumer markets are the markets for products and
services bought by individuals for their own of family use. Goods bought in
consumer markets can be categorized in several ways.
a) Fast-moving consumer goods(“FMCG’s): These are high volume, low unit
value, fast repurchase. Ex: Ready meals, Baked Beans and Newspapers etc.
b) Consumer durables: These have low volume but high unit value. Consumer
durables are often further divided into i) White goods (Examples: Fridge-
freezers, cookers, dish washers and microwaves etc. ii) Brown Goods:
(Examples: DVD Players, games consoles and personal computers etc.
c) Soft goods: Soft goods are similar to consumer durables, except that they
wear out more quickly and therefore have shorter replacement cycle.
Examples: clothes and shoes
d) Services: (Examples: hairdressing, dentists and child care etc.)
2. INDUSTRIAL MARKET:
Industrial markets involve the sale of goods between businesses. There are goods
that are not aimed directly at consumers. Industrial market includes
 a) Selling finished gods: Examples -office furniture, computer systems etc.
b) Selling raw materials and components: Examples-steel, coal, gas and timber
etc.
c) Selling services to businesses: Examples-waste disposal, security,
accounting and legal services etc.
3. GOVERNMENT MARKET: In most of the countries central/federal, state or local
governing bodies the largest buyers requiring and number of products and
services. Government is also the biggest provider of services to the people,
especially in a developing country like India where army, railways, post and
telegraph etc. Services are provided by the central government and state
government. Local municipality provides services like roadways, sewage, disposal
and water supply respectively
4. GLOBAL MARKET: The world is rapidly moving towards borderless society takes
to information revolution and the efforts of WTO to lower the tariff and non-tariff
barriers. The

MARKETING
Marketing is a “social process” by which individuals and groups obtain what they need
and want through creating and exchanging products and values with others. People
interact with each other to exchange goods and services they require in exchange for
money. There is no force, people will choose these products. - Philip Kotler

Marketing is a very wide term. It includes all the activities involved right from the production
of the goods, until their consumption. Every activity in between, like designing, pricing,
promotion, distribution, transportation, etc. are activities of marketing.
Market Marketing
Market is the narrower concept Marketing is a much wider than market
Market is the point of interaction Marketing is the social process by which
between buyers and sellers human needs are identified and
eventually satisfied
Market is a set-up, or a place, or a point Marketing is a process involving roughly
of interaction 12 activities
Market can be of many types based on Marketing philosophy is generally
the goods traded, quantity traded, uniform for any type of goods or
geographical location etc services.
 CUSTOMER ORIENTATION
The purpose of a business is to create and maintain satisfied, profitable customers.
Customers are attracted and retained when their needs are met. Many companies today
have a customer focus (or market orientation). This implies that the company focuses on
its activities and products on consumer demands.
There are 4 basic stages for customer orientation
1) Develop
 Development has to be done keeping customer needs into mind.
 Products should be customer oriented.
 The development cycle time should be minimal
2) Manufacture
 As per the product, the manufacturing should be such that it gives the best
products to the customer
 Quality should not be compromised
 Manufacturing cycle time should be reduced
3) Market
 Identifying and targeting the right customer
 Processing the demand as early as possible
 Customization of the products for the market
4) Deliver
 Deliver to the target customer
 Reduce delivery time
 Value for money products
CORE MARKETING CONCEPTS

Marketing is a dynamic field that revolves around various core concepts essential for
understanding and strategizing in the business world. Let's explore these core marketing
concepts in depth:
1. Needs

Needs refer to the basic human requirements for survival and well-being. These can include
necessities like food, shelter, clothing, and healthcare. In a marketing context, identifying and
understanding customer needs is crucial for creating products or services that fulfill those
requirements.

2. Wants

Wants are desires or preferences for specific products or services that go beyond basic
needs. While needs are essential, wants are driven by individual preferences and can vary
widely from person to person. Successful marketers tap into these wants to create appealing
offers.

3. Demands

Demands arise when wants are supported by the ability and willingness to pay for a product
or service. In other words, demand is the combination of desire and purchasing power.
Marketers strive to stimulate and meet customer demands through effective strategies.

4. Products

Products refer to tangible items or intangible services that fulfil customer needs or wants.
They are at the core of marketing efforts. Understanding the features, benefits, and unique
selling propositions of products is vital for marketing success.
5. Utility, Costs & Satisfaction

 Utility represents the value that consumers derive from a product or service. It can be
categorized into four types: form (physical characteristics), time (availability when
needed), place (availability where needed), and possession (ease of ownership).

 Costs encompass the monetary and non-monetary sacrifices made to acquire a product
or service. These can include the purchase price, time spent, and effort expended.
Effective marketing aims to maximize utility while minimizing costs.

 Satisfaction reflects the level of contentment or pleasure a customer experiences after

using a product or service. Satisfied customers are more likely to become loyal and
engage in repeat business.

6. Exchange, Transaction & Transfer

 Exchange is the act of obtaining a desired product or service by offering something of

value in return. This mutual benefit is at the core of all marketing activities.

 Transaction refers to the actual process of exchanging products or services for money
or something of value. Transactions can be one-time purchases or part of an ongoing
relationship.

 Transfer involves the transfer of ownership or rights related to a product or service from
the seller to the buyer. This transfer is a key element of any transaction.

7. Relationship & Network

 Relationship Marketing emphasizes building and maintaining long-term relationships

with customers. It recognizes that repeat customers often contribute more to a
company's revenue than new ones.

 Networks represent the connections between individuals, organizations, and entities

within the business environment. Strong networks can provide valuable resources,
information, and opportunities.

8. Market, Marketing & Marketer

 market is a group of potential buyers who share common needs or wants and have the
ability and willingness to make purchases. Markets can be segmented based on various
criteria such as demographics, psychographics, or behaviour. Effective marketing
involves identifying target markets and tailoring strategies to meet their specific needs.
 Marketing is the process of planning, executing, and managing activities that create,
communicate, deliver, and exchange value to fulfill customer needs and achieve
organizational goals. It encompasses a wide range of activities, from market research
and product development to advertising and customer relationship management.

 Marketer refers to the entity (individual or organization) responsible for creating,

promoting, and selling products or services. Marketers play a crucial role in
understanding customer needs and delivering value.

9. Prospect

Prospect represents a potential customer who has shown interest in a product or service but
has not yet made a purchase. Marketers engage with prospects through various marketing
channels to convert them into customers.

Understanding these core marketing concepts is essential for businesses and marketers to
navigate the complex landscape of consumer behaviour, competition, and market dynamics.
Successful marketing strategies are built on a foundation of meeting customer needs and
creating value.

COMPANY ORIENTATION TOWARDS THE MARKETPLACE

As the market has changed, so has the way the company deals with the marketplace. The
company orientation towards the marketplace deals with the concepts which a company may
apply while targeting a market. There are basically five different orientations which a
company takes towards the marketplace.

Production Concept – In this concept the company mainly tries to increase production
irrespective of demands of the customer. The production concept is almost extinct now
withcompanies paying more and more attention to the customer.
The concept is mainly based on the principle that, “as the productivity levels increase, cost of
production decreases, and as a result, customer will be able to purchase a product at a cheaper
rate, which in turn accelerates the sales of the company.”

Product Concept: The product concept says that customers will always buy products which
are better in terms of quality performance and features. The concept is especially applicable
in terms of electronics and other techno gadgets now a days.

For a product to be successful under this concept, it should stand apart from the rest of the
crowd. Let’s take Apple and Google for example. The end products of these companies are
not only of the best quality, but are also very exclusive. Hence, companies willing to adapt
‘product concept’ marketing strategy should not only keep themselves updated with the ever-
changing technical trends, but also the needs of their customers.

Selling concept – The selling concept believes that customers will not purchase products
unless motivated to do so. As we know, this is still true for certain items, such as insurance.
The customer should use it, but they never do
Marketing Concept – Just like selling is a necessity, similarly branding and marketing are a
necessity in some products. The marketing concept says that the success of a company is
dependent on its marketing efforts to create an offer that is valuable.
A strong marketing plan, combined with effective branding, is critical for a company to meet
its sales targets. The marketing concept indicates that in order for a company and its product
to be successful, it must approach customers with a value proposition and consistently
deliver on it.

Societal Marketing Concept – Societal marketing concept is a marketing strategy that

considers social responsibility, environmental values and sustainable development. It
involves balancing the needs of customers, the company, and society as a whole. This
concept holds that the company profits because of society, and hence it should take steps to
ensure that society benefits as well as the company. If a company has profited from society,
it should return the favour by working to benefit society.
Examples of societal marketing
 Dove Beauty: Dove’s “Real Beauty” campaign challenged conventional beauty
standards and promoted a more inclusive definition of beauty.
 Ben & Jerry’s: Ben & Jerry’s aligns with social, economic, and racial justice
 Adidas: Adidas makes products using recycled plastic waste
 SBI: Promotes the use of electric vehicles as a clean and green mode of
transportation
 HOLISTIC MARKETING CONCEPTS

What is Holistic Marketing? How it works?

Holistic marketing is a business strategy that considers all aspects of a company and its
marketing efforts. It aims to create a consistent brand experience for customers across all
touchpoints.
It brings together all parts of marketing such as relationship marketing, integrated
marketing, internal marketing, and socially responsible marketing to create a smooth
and unified brand experience.
The objective of holistic marketing is to ensure that all marketing efforts work together
simultaneously, hence increasing the overall effectiveness and impact of the marketing
strategy. The Holistic marketing works on the following aspects

Holistic marketing is an approach that considers the broader marketing environment
and interconnections between different marketing elements. Here are some holistic
marketing concepts with examples:

1. Integrated Marketing Communication (IMC)

IMC involves coordinating all marketing communication efforts to create a unified message.

Example: Coca-Cola's "Share a Coke" campaign, which used a consistent message

across TV, social media, and in-store promotions.

2. Relationship Marketing

Relationship marketing focuses on building long-term relationships with customers.

Example: Amazon's loyalty program, Amazon Prime, which offers benefits like free
shipping and streaming services to loyal customers.

3. Internal Marketing

Internal marketing involves engaging and motivating employees to deliver

exceptional customer experiences.

Example: Southwest Airlines' employee-centric culture, which encourages employees

to provide excellent customer service.

4. Performance Metrics

Performance metrics involve tracking key indicators to measure marketing effectiveness.

Example: Google Analytics, which provides insights into website traffic, engagement,
and conversion rates.

5. Customer Experience Management

Customer experience management involves designing and delivering seamless,

omnichannel experiences.
Example: Starbucks' mobile app, which allows customers to order and pay ahead,
skip lines, and earn rewards.

6. Sustainability and Social Responsibility

Sustainability and social responsibility involve incorporating environmentally

friendly and socially responsible practices into marketing strategies.

Example: Patagonia's environmental responsibility initiatives, such as using

recycle materials and promoting sustainable manufacturing practices.

7. Digital Transformation

Digital transformation involves leveraging digital technologies to create new

marketing opportunities.

Example: Domino's Pizza's digital transformation, which includes online ordering,

mobile apps, and social media engagement.

8. Data-Driven Marketing

Data-driven marketing involves using data analytics to inform marketing decisions.

Example: Netflix's data-driven approach to content recommendation, which uses

algorithms to suggest personalized content to users.

9. Content Marketing

Content marketing involves creating valuable, relevant content to attract and engage
target audiences.

Example: Red Bull's content marketing strategy, which includes sponsoring events ,
creating engaging videos, and publishing content on social media.

10. Omni-Channel Marketing

Omni-channel marketing involves providing seamless, integrated experiences

across multiple channels.

Example: Disney's omni-channel approach, which includes theme parks, movies,

TV shows, merchandise, and digital experiences.

By adopting a holistic marketing approach, businesses can create a cohesive

and effective marketing strategy that drives long-term success.
 KEY CONCEPTS (COMPONENTS) OF HOLISTIC MARKETING

1. RELATIONSHIP MARKETING
Relationship marketing is a strategy that focuses on building long-term relationships with
customers. It's a part of customer relationship management (CRM).
The goal of relationship marketing is to create strong, emotional connections with customers
so they remain loyal to the brand.
Benefits
Relationship marketing can lead to:
 Repeat business: Customers are more likely to buy from a brand they have a positive
relationship with

 Positive word-of-mouth: Customers are more likely to recommend the brand to others

 Feedback: Customers are more likely to provide feedback that can help the brand improve
its products and services

2. INTERNAL MARKETING:
Internal marketing is a company's strategy to communicate its vision, culture, products, and
services to its employees. The goal is to create a positive company culture and brand loyalty,
and to increase employee engagement.
How does internal marketing work?
 Communicate the company's vision: Inform employees about the company's
mission, values, and goals.

 Build trust: Keep employees updated on company news and brand strategy.

 Provide training: Invest in employee development through paid training and

  Reward performance: Recognize employees for their achievements to boost morale.

 Create a positive culture: Foster a shared understanding of the brand's goals among
all team members.

3. INTEGRATED MARKETING
Integrated marketing is a strategy that uses multiple marketing channels to create a
consistent brand experience for customers. It's also known as integrated marketing
communications (IMC). This integrated strategy improves the brand message and increases
the effectiveness of advertisements.
 Integrated marketing uses a variety of marketing channels, such as social media, email, and
digital advertising.

 It ensures that the message and experience is consistent across all channels.

 It aims to build trust and familiarity with the brand through repeated engagement.

 It focuses on customer needs at every stage of their journey.

Examples of Successful Integrated Marketing Campaigns:

 Coca-Cola’s “Share a Coke” Campaign: This campaign used personalized labels

and social media engagement to create a unified and interactive customer experience.
 Apple’s Product Launches: Apple’s integrated marketing efforts ensure that its
product launches are consistently promoted across online and offline channels,
generating significant buzz and maintaining brand identity.

4. SOCIALLY RESPONSIBLE MARKETING

Definition and Relevance in Today’s Market: Socially responsible marketing (SRM) is a
business strategy that involves incorporating ethical and social values into a company's
products and services. It's a way for companies to connect with consumers who want to
make a positive impact with their purchases.

Importance of SRM

 Builds trust: SRM can help businesses build trust with consumers by being
transparent and honest about their social and environmental efforts.

 Attracts customers: SRM can help businesses attract socially conscious consumers
who are looking for brands that align with their values.
  Improves reputation: SRM can help businesses build a strong brand image and
maintain positive public relations.
How do companies implement SRM?
 Create social campaigns: Companies can create social campaigns that support
popular causes, such as recycling, reducing emissions, or donating to local
environmental groups.

 Communicate their efforts: Companies can communicate their social responsibility

efforts through online content, such as blogs and employee- created videos.

 Be transparent: Companies can be open about their social responsibility initiatives,

including successes and challenges.

MARKETING MANAGEMENT TASKS

Marketing management involves a wide range of tasks and activities that
help organizations to achieve their marketing objectives. Here are some common
marketing management tasks, along with examples:

1. Market Research:
- Conducting customer surveys to understand their needs and preferences.
- Analyzing industry trends and competitor activity.
- Example: A company like Nike conducts market research to understand the
latest fashion trends and consumer preferences in the athletic wear market.
2. Market Segmentation:
- Identifying and categorizing customers based on demographics, behavior, or
firmographic characteristics.
- Example: A company like Amazon segments its customers based on their
purchase history and browsing behavior to offer personalized product
recommendations.
3. Target Market Selection:
- Selecting the most profitable and viable market segments to target.
- Example: A company like Tesla targets affluent and environmentally
conscious consumers who are interested in electric vehicles.
4. Positioning:
- Creating a unique and compelling value proposition that differentiates the
brand from competitors.
- Example: A company like Apple positions itself as a premium and innovative
technology brand that offers high-quality and user-friendly products.
5. Product Development:
- Creating new products or services that meet the needs of the target market.
- Example: A company like Procter & Gamble develops new products like Tide
Pods and Febreze to meet the changing needs of consumers.
P&G is one of the largest and most successful consumer goods companies in the
world, with a portfolio of well-known brands, including:
1. Tide
2. Pampers
3. Gillette
4. Oral-B
5. Head & Shoulders
6. Pantene
7. Olay
8. SK-II
9. Febreze
10. Dawn

6. Pricing:
- Setting prices that balance profitability with customer affordability and
perceived value.
- Example: A company like Uber uses dynamic pricing to adjust fares based on
demand and supply in real-time.
7. Promotion:
- Creating and executing marketing campaigns to build awareness, drive
engagement, and generate sales.
- Example: A company like Coca-Cola launches a promotional campaign like
"Share a Coke" to increase brand awareness and drive sales.
8. Distribution:
- Managing the flow of products or services from the manufacturer to the end
customer.
- Example: A company like Walmart uses a combination of physical stores, e-
commerce, and logistics to distribute its products to customers.
9. Brand Management:
- Building and maintaining a strong brand identity and reputation.
- Example: A company like McDonald's invests in brand management activities
like advertising, sponsorships, and customer service to maintain its brand
reputation.
10. Performance Measurement:
- Tracking and analyzing key performance indicators (KPIs) to evaluate the
effectiveness of marketing strategies.
- Example: A company like Google uses metrics like website traffic, conversion
rates, and customer acquisition costs to measure the performance of its
marketing campaigns.

Examples of companies that excel in marketing management include:

- Apple (product development and positioning)

- Amazon (market segmentation and targeting)
 - Nike (brand management and promotion)
- Coca-Cola (promotion and distribution)
- Tesla (target market selection and positioning)

These companies have demonstrated a deep understanding of their customers'

needs and preferences, and have developed effective marketing strategies to
achieve their business objectives.

MARKETING ENVIRONMENT:

The marketing environment refers to the external and internal factors that affect a company's
marketing efforts and performance. Here are some examples of the marketing environment:

Internal Environment:

1. Company Culture: A company's culture can influence its marketing efforts. For example, a
company like Patagonia has a strong environmental focus, which is reflected in its
marketing campaigns.

2. Organizational Structure: A company's organizational structure can impact its marketing

efforts. For example, a company like Apple has a centralized marketing team that controls all
marketing efforts.

3. Marketing Budget: A company's marketing budget can limit or enable its marketing efforts.
For example, a company like Coca-Cola has a large marketing budget, which allows it to
launch extensive advertising campaigns

4. Product Development: A company's product development process can influence its

marketing efforts. For example, a company like Tesla has a strong focus on innovation, which
is reflected in its marketing campaigns.

External Environment:

1. Social and Cultural Trends: Social and cultural trends can impact consumer behavior and
influence marketing efforts. For example, the growing awareness of environmental issues
has led to an increase in eco-friendly marketing campaigns

2. Economic Conditions: Economic conditions, such as recession or inflation, can impact

consumer spending and influence marketing efforts. For example, during a recession,
companies may focus on value-based marketing campaigns.

3. Technological Advancements: Technological advancements, such as social media or e-

commerce, can impact marketing efforts. For example, a company like Amazon has
leveraged technological advancements to create a seamless online shopping experience.

4. Competitive Landscape: The competitive landscape can impact marketing efforts. For
example, a company like Pepsi may launch marketing campaigns to compete with Coca-Cola.

Micro environment:

1. Customers: Customer needs and preferences can impact marketing efforts. For example, a
company like Nike has launched marketing campaigns to appeal to specific customer
segments, such as runners or basketball players.
2. Competitors: Competitors can impact marketing efforts. For example, a company like
McDonald's may launch marketing campaigns to compete with Burger King.

3. Suppliers: Suppliers can impact marketing efforts. For example, a company like Apple may
launch marketing campaigns to promote its suppliers, such as Intel.

4. Intermediaries: Intermediaries, such as distributors or retailers, can impact marketing

efforts.

For example, a company like Procter & Gamble may launch marketing campaigns to
promote its products through retailers.

Macro environment:

1. Demographic Changes: Demographic changes, such as population growth or aging, can

impact marketing efforts. For example, a company like AARP may launch marketing
campaigns to appeal to older adults.

2. Economic Conditions: Economic conditions, such as recession or inflation, can impact

marketing efforts. For example, during a recession, companies may focus on value-based
marketing campaigns.

3 Technological Advancements: Technological advancements, such as social media or e-

commerce, can impact marketing efforts. For example, a company like Facebook has
leveraged technological advancements to create a seamless online advertising experience.

4. Political and Regulatory Changes: Political and regulatory changes, such as laws or taxes,
can impact marketing efforts. For example, a company like Philip Morris may launch marketing
campaigns to comply with tobacco regulations.

Examples of companies that have successfully adapted to changes in the marketing

environment include:

- Coca-Cola, which has responded to changing consumer preferences by introducing new

products and packaging options

- Amazon, which has leveraged technological advancements to create a seamless online

shopping experience

- Nike, which has used social media to engage with customers and promote its brand

- Tesla, which has used innovative marketing campaigns to promote its electric vehicles

- Patagonia, which has used environmental focus to promote its brand and products.

By understanding the marketing environment, companies can develop effective marketing

strategies that take into account the internal and external factors that affect their marketing
efforts.
COMPONENTS OF MARKETING ENVIRONMENT

What is Micro Environment?

The micro environment refers to the immediate and specific factors directly influencing a
business’s operations, performance, and decision-making. These are the internal factors that

are usually within the control or influence of the organization. It is the collection of all

forces that are close to the company. Its elements include customers, suppliers,

competitors, distributors, employees, shareholders, etc.

What is Macro Environment?

The macro environment refers to the larger external forces and conditions influencing a
business or industry rather than specific to a particular organization. These factors are
generally beyond the business’s control and can significantly impact its operations and
strategies. The Macro environment study is also referred to as PESTEL analysis. Its
elements include economic, technological, social, political, legal, environmental and
competitive factors.
Difference between Micro Environment and Macro Environment
1. The micro environment focuses on internal operations and stakeholders, while the macro
environment focuses on external forces beyond the organization’s control.
2. The micro environment includes factors like customers, suppliers, competitors, and
employees, while the macro environment includes economic, technological, social,
political, and environmental influences.

3. The micro environment indirectly influences the business, and the macro environment
directly and immediately impacts the business.

4. The micro environment can be managed or influenced by the organization, whereas the
macro environment cannot be easily manipulated. Businesses must adapt and respond.

5. The micro environment needs regular monitoring of customer preferences, competitor

strategies, and supplier performance, whereas the macro environment needs periodic
access to economic trends, regulatory developments, and technological advancements.

Comparative Table: Micro Environment and Macro Environment

Aspect Micro-Environment Macro-Environment

The immediate environment of a The broader external environment of
Definition
business a business
Scope Small-scale and specific Large-scale and general
Influence Direct influence on the business Indirect influence on the business
Economic, technological, social, and
Elements Customers, suppliers, competitors
political factors
Some level of control can be
Control Little or no control
exercised
Relatively easier to adapt to
Adaptability Challenging to adapt to changes
changes
Response
Quick response time to changes Slower response time to changes
Time
Impact Immediate impact on the business Gradual impact on the business
Monitoring Regular monitoring is necessary Periodic monitoring is sufficient

Individual customers, local Economic trends, government

Examples regulations
suppliers