INTRODUCTION TO MARKETING-MEANING,DEFINITION

AND TYPES OF MARKETS

INTRODUCTION
All the organizations involved in production rely highly on the marketing of their products.
The main aim of marketing is to create a demand for products and services that accounts to the profits
of the organization.
Therefore, it is obvious that the financial success of organization often depends on the marketing
ability of the organization.
Marketing involves the major decisions of
1) Innovation-related decisions what features to design into a new product to make it
successful in the market? Analysis of the taste preferences of the customer.
2) Location-related decisions-where to sell the products? Analysis of the demands of the
product in the local markets.
3) Price-fixing related decisions- (i) what prices to offer to customers? Analysis of the income
groups and their affordability
(ii)How much to spend on advertising and sales? Analysis of sales promotion techniques.
Marketing deals with identifying & meeting human and social needs. Hence,
In short

marketing is meeting needs profitably.

Definition of Marketing, as given by the American marketing Association

Marketing is an organizational function and a set of processes for creating, communicating and
delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders.
SOCIAL AND MANAGERIAL DEFINITIONS OF MARKETING
In addition to the formal definition, the social definition shows the role marketing plays in society.
According to it Marketing is a social process by which individuals and groups obtain what they need
and want through creating, offering and freely exchanging products& services of value with others.
The managerial definition is the art of selling products.
Marketing is the process through which the organizations make profits by meeting customer needs.
It is a process through which organizations make products with a difference (innovate), make the
customers aware of the benefits of the product and the advantages of it over the other products
(communicate) and deliver it to them.
In addition to this they also maintain their relationships with their stakeholders by giving profits and
also their customers by satisfying their needs.

MARKETING MANAGEMENT

Marketing management is the art and science of choosing target markets and getting, keeping and
growing customers through creating, delivering and communicating superior customer value.
A marketer is a person who is responsible for market management and reaching out to customers in
the frontline.
He is someone who seeks a response (attention, a purchase, a vote or a donation) from another party
called the prospect.
He is skilled in stimulating the demand for the companys products and is responsible for demand for
management.
The marketers seek to influence the level, timing, and composition of demand to meet the
organizations objectives.
Accordingly, eight demand states are possible. They are,
1. Negative demand-consumers dislike the product and may even pay a price for avoiding it.
For ex- A high brand imaged product may have a relatively high price when compared to a low
brand imaged product. And a consumer willingly pays for the high brand imaged product in order
to avoid the low brand imaged product.
2. Non-existent demand-Consumers may be unaware or uninterested about the product
For ex- services offered (dental checkups)
3. Latent demand- consumers sharing a strong need that cannot be satisfied by the existing
product.
For ex- low calorie products.
4. Declining demand-consumers buy the product less frequently or not at all.
For ex-cassettes, Audio cds.
5. Irregular demand- Consumers purchase vary on a seasonal, monthly, weekly or daily or
even hourly basis. The pattern of consumers purchase behaviour has fluctuations and cannot
be predicted.
For ex- watermelon, cucumber etc.,
6. Full demand- Consumers adequately buying all the products put into the marketplace.
For ex- grocery items.
7. Overfull demand- More consumers would like to buy the product that can be satisfied.
This leads to the producers keeping stocks of the product.
For ex- Rice, wheat.
8. Unwholesome demand-the demand for products that have undesirable social effects or
consequences. For ex- Drugs
MARKETS

A market is a physical place where buyers and sellers meet to buy and sell products. It is a collection
of buyers and sellers.
In short, it is an arena for buyers and sellers.

Here from the industry the details of the product will be communicated to the consumers (market) and
the feedback about the demand for the product, expected innovation, market share value of product
will be informed to the producers
CLASSIFICATION OF MARKETS
Markets are classified on the basis of different categories. They are as follows

1) Classification on the basis of Geographical area:

i) Local market:
Market limited to a certain place of a country is called local market.
This type of markets locates in certain place of city or any area and supplies needs and wants of the
local people.
E.g.: Perishable consumer products such as milk, fruits, etc.,
ii)Regional market:
The market which is expanded in regional level.
E.g.: food grains such as wheat, paddy, maize, millet, sugar, oil etc.,
iii) National market:
Buying and selling of some products is done in the whole nation.
Eg: Clothes, steel, cement, coffee, tea, soap.
iv) International or global market:
Market cannot be limited to any geographical border of any country. Goods sold in one country
are sold in different countries of the world.
Here not any country of the world is self dependent.
E.g.: Machines and machineries, medicines
2. Classification of Market On The Basis Of time
On the basis of time, market can be divided in very short-term, short-term, long term and very longterm market.
i) Very Short-term Market
The market where shortly perishable goods are sold is called very short-term market. The market of
milk, fish, meat, fruits and other perishable goods is called very short-term market. The price of short
goods is determined according to the pressure of demand. When the demand for such goods is high,
price rises and when demand declines, the price falls down. If the supply is low and the demand is
high, the price rises higher. In such market supply cannot be increased.
ii) Short-term Market
In the short term market, supply of products can be increased using the maximum capacity of installed
machines of the firm. The goods cannot be produced according to the demand for adjustment of
supply by expanding or changing the existing machines and equipment. In short-term market, price of
the goods is determined on the basis of interaction between demand and supply. But, as the supply
cannot meet the demand, demand affects price determination in short-term market.
iii) Long-term Market
In long-term market, adequate time can be found for supply of products according to demand. New
machines and equipment can be installed for additional production to meet demand. As supply can be
decreased or increased according to demand situation, price is determined by interaction between
demand and supply in long-term market. Market of durable products is long-term market.

iv) Very Long-term Market Or Secular Market

In secular market, produces can get adequate time to use new technology in production process and
bring new changes in products. They become able to produce and supply goods according to changed
needs, interest, fashion etc. of customers. Market research becomes helpful in doing so.
3. Classification of Market On The Basis Of Volume of Business
On the basis of volume of business, type and size, market can be classified in wholesale market and
retail market.
i) Wholesale Market
If a large quantity of products are purchased from producers and sold to different retailers, this is
called wholesale market. In wholesale market, the products are not sold directly to ultimate
consumers. But, if consumers want to buy in large quantity, they can buy from wholesaler.
ii) Retail Market
The market that sells small quantity of products directly to ultimate consumers is called retail market.
4. Classification of Market On The Basis Of Nature Of Product
On the basis of nature of product, market can be classified in two types as follows:
i) Commodity Market
The market where consumer and industrial commodities like clothes, rice, machines, equipment, tea,
soap, fruits, vegetables etc. are bought or sold is called commodity market. In some market only
certain special commodities are bought and sold and in some other different consumer commodities
are bought and sold.
ii) Financial Market
The market and financial instruments is called financial market. In such market, money, shares,
debentures, treasury bills, commercial papers, security exchanges, loan giving or taking etc are dealt.
Dealing of short term fund is called money market and dealing of long-term fund is called capital
market.
5. Classification of Market On The Basis Of Consumption
On the basis of consumption of products, market can be divided as follows:
i) Consumer Market
The market of products, which the people buy for consumption, is called consumer market. The
customers buy consumer goods, luxury goods etc. for daily consumption or meeting their daily needs
from such market.

ii) Industrial Market

Generally, raw materials, machines and equipment, machine parts are dealt in industrial market.
Domestic consumer goods are produced using them.
6. Classification of Market On The Basis Of Competition
On the basis of competition, market can be classified into monopoly market, perfect market and
imperfect market.
i) Monopoly Market
If there is full control of producer over market, then such market is called monopoly market. In such
market, the producer determines price of his products in his own will. In such market, only one
producer or seller controls market. In practice, the producer or seller can supply products or achieve
monopoly on price only in small or limited area, but in wide area it becomes impossible.
ii) Perfect Market
The market where the number of buyers and sellers is large, homogeneous of products are bought and
sold, same price of similar type products is determined from free interaction between demand and
supply is called perfect market. Perfect competition takes between consumers and producers or buyers
and sellers, but in practice perfect market can be rarely found.

iii) Imperfect Market

The market where there is no perfect competition between buyers and seller is called imperfect
market. In this type of market, customers are affected by product discrimination. Post-sale services,
packaging, price, nearness of market, credit facility, discount etc make product discrimination.
Customers can buy same types of products from different sellers according to their desires and
comfort. In practice, mostly products are bought and sold in imperfect market.
7. Classification of Market On The Basis Of Seller's Position
On the basis of seller's position, market can be divided into primary market, secondary market and
terminal market.
i) Primary Market
In primary market, primary goods are bought and sold. Producers sell primary goods such as
agricultural products, food grains, livestock, raw materials etc. to wholesalers or commission agents in
such market.

ii) Secondary Market

Primary goods are bought from producers and sold to retailers in secondary market. Generally,
wholesalers buy secondary products and sell them to retailers.
iii) Terminal Market
In this type of market, retailers sell products to final consumers.
8. Classification of Market On The Basis Of Nature Of Transaction
On the basis of nature of transaction, market can be classified into spot market and future market.
i) Spot Market
The market where delivery or handling over of the good is made immediately after sales is called spot
market. In such market, price of product is paid immediately at the spot and ownership of the product
is transferred to buyer at the same time.
ii) Future Market
In this type of market contract is signed for sale of products in future, but no delivery of product is
made. In this market, buyer and seller sign a contract for buying and selling products at certain rate of
price or on condition to determine the price in future.
9. Classification Of Market On The Basis Of Control
On the basis of control, law, rules and regulations, market can be classified into regulated market and
Non-regulated market.
i) Regulated Market
If trade association, municipality or government controls buying, selling, price of products etc. it is
called regulated market. Such market must follow the established rules, regulations and legal process
and provisions. Otherwise, the businessmen are fined or punished.
ii) Non-regulated Market
If a market is freely functioning and is not under control of any government body or any organization,
it is called non-regulated market. In such market, price is determined through interaction between
demand and supply of products and buying and selling takes place. This market has not to follow any
rules, regulations and legal provisions.

BASIC TYPES OF MARKETS

a)Resource market
-includes input resources used for production
-manufacturers buy resources
b) Intermediary markets
-finished goods and services are sent here to be sold to customers
c) Government markets
-collects revenues and taxes from intermediary and resource markets
-produces goods and services to provide public services
d) Key Customer markets
i.

Consumer markets

ii.

Business markets

iii.

Global markets

i) Consumer markets
-tries to establish a brand image
-depends upon developing superior product and packaging, ensuring its availability
backing it with engaging communications and reliable service
ii)Business markets
-companies selling business goods and services
-profit-based
-marketers must demonstrate their products worth.
-stronger role played by sales price and companys reputation for reliability and
quality
iii) Global markets
-marketers face additional challenges
-different culture, language, legal and political systems and a currency that might
fluctuate plays an influential role.
e) Non-profit and governmental markets
-includes churches, universities, charitable organizations
-pricing should be made carefully

-have limited purchasing power

All the market types are interconnected and contribute to the economy.
STRUCTURE OF FLOWS IN MODERN EXCHANGE ECONOMY

NATURE OF MARKETING
Marketing as a science:
Marketing involves practice of certain rules,principles & scientific methods.
For example:
Before manufacturing a product, the producer collects various data
regarding the feasibility of introducing the product in the market by conducting a
market research, purchaser-behaviour research, estimation of sales at different
price levels,etc. These can be done by performing certain calculations using
formulae.
So, we can say that marketing is a science.
Marketing as an Art:

Using a special qualification & ability if a work is done, then it

is known as art.
Marketing a product is an art because requires special skills which are acquired
by studies, ability & proper training. Marketing requires perfection to solve the
problems. Hence marketing is an art.
Marketing starts with consumers & ends at consumers by satisfying their needs.
It is both consumer-oriented & competitor-oriented.
Delivery of goods & services in exchange of money can be done through
marketing.
Marketing begins before production.
Marketer has to prepare himself to face the customer by product
planning, development, pricing, distribution, etc.
SCOPE OF MARKETING
There are 10 types of entities in marketing. They are,
Goods:
Marketing is done on the products which will boost the economy & growth
of country & its people.
In developed nations, marketing mainly deals with products like
Automobiles, Infrastructure, electronic goods & other luxurious items.
In developing nations, goods like food, commodity, clothing & housing are
mostly considered.
Services:
As economy of a country advances, people move their concentration from
goods to services. Services include hospitality, airlines,hotels,etc.
So, marketing also deals with service-oriented business.
Experiences:

Marketing can be applied for providing better facilities for the comfort of
the customers to feel good by getting goods and services. For example, there is
a difference in experience between travelling in a public transport & private
transport vehicles. E.g. Volvo buses, flights operated by public & private firms.
Events:
Marketing promote Time-based events like Olympics, trade-shows, sports
events for publicity.
Persons:
Marketing a product of a firm in the market (among people) can be done
through celebrity people like film stars, politicians, sports persons,etc.
Properties:
Properties are assets which are bought & sold in the market. Properties
include real estate, shares, bonds,etc. Real estate agents do marketing by
convincing both sellers & buyers. Similarly, bank executives are involved in
marketing the banking products among customers.
Organizations:
Organizations strive hard in getting good brand image for their products
among people (consumers) through marketing.
Information:
Information can be produced & marketed as a product. For example,
Books, Magazines,etc.
Places:
Countries & states market themselves to attract tourists. E.g.
India-Incredible India, Malaysia-Truly asia.
Ideas:
Could be seen embedded in any marketing offers. E.g. Apples Iphone,
etc.

IMPORTANCE OF MARKETING

Marketing is a guiding element.

Promotes product awareness to the public.
Boost product sales.
Builds company reputation.
It is a guiding element for doing the business.
To perform better & to sustain in the tough competitive market, producer
has to use marketing

techniques.

Connecting link between producer & consumer.

Brings new products to the market for consumers.
Helps to increase nations income by selling more products at cheaper

price.
Increases employment opportunities.
For continuous production, continuous marketing is required. Marketing
involves many activities & hence many people are required.

Marketing removes imbalances in supply of goods by transferring the surplus to

the deficit areas through better transport facilities.
Helps to maintain economic stability & rapid development in under-developed
(or) developing countries.