Marketing

UNIT-I
INTRODUCTION

Marketing is indeed an ancient art. It has been practiced in one form or the other. Since the days of
Adam & Eve. Its emergence as a management discipline however, is of relatively recent origin. And within this
relatively short period it has gained a great deal of importance and stature. In fact, today most management
thinkers & practitioners the world over regard marketing as the most important of all management functions in
any business.
Q. WHAT IS MARKET?( 2 Marks)

The term market is derived from the Latin word Mercatus, meaning to trade. It also means
merchandise, wares, traffic, or a place of business. It is because of these different meaning that the word is used
differently in different contexts. The common use of the term may imply any of the following:
1. A place where market is held.
2. An assembly of people(preferably buyers & sellers)
3. An area of operation.
4. An organization which facilitates exchange of commodities.
5. An act of buying & selling.
6. An assembly of commercial activities.
Q. DEFINE MARKET. ( 2 Marks)

1. Clark and Clark define a market as a centre about which or an area in which the forces leading to exchange
or title to a particular product operates and towards which the actual goods tend to travel.
2. According to Pyle, Market includes both place and region in which buyers and sellers are in free
competition with one another.
Q. WHAT IS MARKETING? ( 2 Marks)

The essence of marketing is an exchange or transactions, intended to satisfy human needs or wants, that
is marketing is a human activity directed at satisfying needs and wants through an exchange process. Marketing
includes all activities which are concerned with effecting changes in the ownership & possession of goods &
services.
Q. DEFINE MARKETING. ( 2 Marks)

According to Philip Kotler marketing is social & managerial process by which individual & groups
obtain what they need and want through creating, offering & exchanging products of value with others.
Marketing consists of the performance of business activities that direct the flow of goods & services
from producers/ suppliers to customers or end users.
- American Marketing Association.
Q.DISCUSS IN DETAIL THE VARIOUS CLASSIFICATIONS OF MARKETS. ( 12 Marks)

A. On the basis of geographical area

1. Family market: When exchanges are confined within a family or close member of the family, such a market
can be called as family market.
2. Local market: When the market for a product is restricted to a particular town or state, such a market is
called a local market.
Example: Kali mark a Chennai based soft-drink unit, selling certain brands of soft-drink unit like Solo and
Bovonto which are generally marketed in Tamilnadu.
3. National market:
For a certain type of commodities, a country may be regarded as a market,
through the fast development of industrialization; it is called a national market.
Examples: The soaps of Godrej (Cinthol, Fair Glow etc) and Hindustan Unilever(Liril, Lux etc) are
marketed throughout India.
4. International market: International market comes up when buyers and sellers of goods evolve on world
level i.e., involvement of buyers and sellers beyond the boundaries of a nation.
Examples: Kodak and Konica are international brands of photo films that are available in India.
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B. On the basis of commodities/goods

(i) Commodity market: Produced goods or consumption goods are bought and sold. Commodity markets are
subdivided into:
1. Agricultural goods market: It is a market for agricultural goods/perishables.
2. Consumer goods market: It is a market in which goods desired by the common man are made available.
3. Industrial goods market: It is a market in which goods used by the manufacturers as inputs in production
are sold.
4. Bullion market: It is the market for gold and silver.
(ii) Capital markets: New or going concerns need finance at every stage. As such financial needs of concerns
are met by capital markets. They are of three types.
1. Money market: It is a type of market where money is borrowed or lent. This type of market helps or guides
the public to invest their surplus fund in industrial concerns and helps people to take loans through banks.
London is the worlds biggest money market.
2. Foreign exchange market: It is an international market. In this market, the currencies of foreign countries
are bought and sold.
3. Stock exchange market: This is a market where shares, debentures, bonds etc., of companies are dealt with
purchased or sold. It is also known as security market. Stock exchanges of Calcutta, Madras etc., are examples
for this type of market.
C.On the basis of economics:
1. Perfect market:
A market is said to be a perfect market, if it satisfies the following conditions:
Large number of buyers and sellers are there.
Prices should be uniform through out the market
Buyers and sellers have a perfect knowledge of market
Goods can be moved from one place to another without restrictions
It should be remembered that such types of markets are rarely found.
2. Imperfect market:
A market is said to be imperfect when
Products are similar but not identical
Prices are not uniform
There is lack of communications
There are restrictions on the movement of goods.
D.On the basis of transaction:
1. Spot market: In such a market goods are exchanged and the physical delivery of goods takes place
immediately.
2. Future market: In such a market, contracts are made over the price for future delivery. The dealing and
settlement take place on different dates.
E.On the basis of regulation:
1. Regulated markets: These are types of markets which are organized, controlled and regulated by statutory
measures. Examples: Stock exchanges of Bombay, Madras, Calcutta etc.
2. Unregulated market: This is a free market. There is no control with regard to price, quality, commission
etc. Demand and supply determine the price of goods.
F.On the basis of time:
1. Very short period market: Markets which deal in perishable goods like fruits, milk, vegetables etc., are for
a very short period. There is no change in the supply of goods. Price is determined on the basis of demand.
2. Short period market: In certain goods, supply is adjusted to meet the demand. The demand is greater than
supply. Such markets are known as short period market.
3. Long period market: This type of market deals in durable goods.
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G.On the basis of volume of business:

1. Whole-sale market: In wholesale market goods are supplied in bulk quantity to dealers.
2. Retail market: In retail market goods are sold in small quantities directly to the users or consumersconsumers market. The consumer gets the goods for consumption and not for profit making.
H.On the basis of importance:
1. Primary market: The primary producers of farm produce sell their output or products through this type of
markets to wholesalers or consumers. Such markets can be found in villages and mostly the products arrive
from villages.
2. Secondary market: The commodities arrives from other markets. The dealings are commonly between the
wholesalers or between wholesalers and retailers.
3. Terminal market: The ultimate consumer gets the goods from such markets. Here the final disposal of
goods takes place.
Q. BRING OUT THE NEED / IMPORTANCE OF MARKET. ( 4 Marks)

It enables the sellers to sell.

It enables the buyers to buy what they want.
It makes available goods and services (which are the outcome of innovation) that raise the standard of
living of the people.
It gives the buyers access to goods that are made in different parts of the country and in difference parts
of the world.
It generates lot of employment opportunities.
It enables many like brokers, commission agents and coolies to earn their livelihood.
It generates income and thereby promotes trade and commerce.
It is essential for the economic development of any nation.

Q. BRIEFLY EXPLAIN THE NATURE/FEATURES /CHARACTERISTICS OF MARKETING. ( 4 Marks)

1.
2.
3.
4.
5.
6.

Marketing is both consumer-oriented and competitors-oriented

It starts with consumers and ends at consumers by satisfying their needs.
Marketing is the most important function of management.
The long term objective of marketing is profit maximization through customers satisfactions.
Marketing is an integrated process which is based on strategies and models.
Marketing must deliver goods and services in exchange of money.

Q. STATE THE OBJECTIVES/AIM/PURPOSE OF MARKETING. ( 4 Marks)

The broad objectives of marketing are:i.

Appreciation of marketing practices & influences in the marketing situation.
ii.
Develop policies & frame works.
iii.
To determine marketing mix that aim to satisfy the needs & wants of the customers.
iv. To satisfy the needs & wants of customers.
v. To create adequate profits for the growth of the enterprise &,
vi.
To raise the standard of living of people.
Q.BRING OUT THE IMPORTANCE OF MARKETING. ( 4 Marks/12 Marks)

Marketing is a connecting link between the consumer and the producer by bringing new and new items to retail
shops.
1. Marketing helps in increasing the living standard of people. Because of maximum production cost of
manufacturing and marketing have come down. This facilitates the fixing of cheaper rates and are a
boon to the society.
2. Marketing helps to increase the nations income by reducing cost to the minimum.
3. Marketing provides employment opportunities to many.
4. Marketing creates modern cultivators. The poor farmers gets the new and developed methods of
cultivation useful too is, fertilizers etc by eliminating outdated and obsolete products over the years.
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5. Marketing removes the imbalances of supply by transferring the surplus to deficit areas through better
transport facilities.
6. Marketing helps to maintain economic stability and rapid development in underdeveloped or developing
countries by balancing the two aspects production and consumption.
7. Marketing includes all activities in the creation of utilities form, place, time and possession.
To the individual firms:
1. Marketing generates revenue to firms. A firm fulfills its motive only through marketing.
2. Marketing section of a firm is the source of information to the top management for taking overall
decisions on production.
3. Marketing and innovations are the two basic functions of all businesses. In order to run a business
successfully one should adopt the changing preferences, changing styles, changing fashions etc. The
market informs retailers. The retailers inform manufacturers.
Marketing facilitates the development of business and creates employment opportunities for people.
Q. GIVE THE DIFFERENCE BETWEEN MARKET & MARKETING. ( 4 Marks/12 Marks)

MARKETING
MARKET
Market is a place where buyers and sellers are in free Marketing is the process by which two or more
contact with each other
parties give something in value to satisfy
themselves
Market prevails for a certain commodity at a certain It is an economic process in which goods and
point of time, throughout the market place or region
services are exchanged and their values
determined in terms of money price.
Market is not a particular place but a commodity and Marketing is the process of distribution and the
marketers who are in direct contact with one another
process before distribution
A market is the set of actual and potential purchaser Marketing deals with creation of time, place and
of a product.
procession utilities.
In economic sense market refers to a collection of Marketing includes all these activities involved
buyers and sellers who transact over a particular during the process of buying and selling the goods
product or products
and services
Q. DISTINGUISH BETWEEN MARKETING & SELLING. ( 4 Marks/12 Marks)
MARKETING
SELLING

1. Emphasis on customers wants

2. Satisfaction of customers is primary.
3. As to customers need production takes place.
4. External, market orientation.

1. Emphasis on the product.

2. Sales is primary.
3. As to the production, selling takes place.
4. Internal, company orientation.

5. Buyers need is the motive.

5. Company need is the motive.
6. Consumer determines the price-place determines 6. Cost determines price.
the cost.
7. Converts the consumers needs into products.
7. Converts the goods into cash.
8. Selling seeks the profits maximization.
8. Facilitates the growth & development of business.
9. Marketing revolves around the needs & interest of
the buyers.
10. Marketing in total means obtaining customers.
11. It involves all activities starting with the idea of
producing a product to satisfy the needs of the
customer & ends with the satisfaction of the customer.
12. Selling is a part of marketing.
13. It is a changing concept.

9. It revolves around the need & interest of the seller.

10. Selling in total means moving of products.
11. Selling refers to the activities undertaken to secure
the sales promotion of the product from place of
production or trade to the customer.
12. Marketing is not a part of selling.
13. It is static.

Q. WHAT IS MARKETING CONCEPT? ( 2 Marks)

The marketing concept is a consumers needs orientation backed by integrated marketing aimed at
generating consumer satisfaction as the key to satisfying organizational goal.
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Q.TRACE THE EVOLUTION AND DEVELOPMENT OF MARKETING. (OR) DISCUSS IN DETAIL THE
EVOLUTION OF MARKETING CONCEPT. ( 12 Marks)

The marketing concept of marketing is not the result of a sudden change in the process of thinking of the
business managers. It is the result of the changing situation, which compelled the business people to give an
important place to the consumer and his wants. The change in the live of thinking took place after passing
several stages. We shall now discuss the changes and stages in the evolution of marketing concept.
1. Production Orientation:
During the early days of business activities the emphasis was mainly on production. The then
businessmen thought that they could produce anything and sell. To a certain extent they were successful too.
The later phase of this stage witnessed mass production by industrial units. This has come to be called as
Industrial Revolution.
2. Sales Orientation:
The idea of mass production of goods as conceived in the previous stage did not work later. Mass
production must have resulted in a condition of supply exceeding the demand. Further, with the growth of
transport and communication and improvement in the lifestyles of people the attitude of business men had to
change. They realized the need for selling efforts. Thus, emphasis shifted from production to sales.
3. Marketing Orientation:
In the previous stage the strategy of the marketers was to somehow sell the goods produced. In other
words, they were making a desperate attempt to sell. When emphasis shifted from sales to marketing, the
sellers realized the need for a systematic approach towards the entire process. They decided to measure the
needs of the consumers. All marketing efforts right from production of goods, fixing the price, packing, sales
promotion to making sale would be in turn with the needs of the buyers.
4. Customer Orientation:
It is an extension of the previous stage and not something different altogether. The marketers felt that
measurement of consumers needs alone is not enough. Their needs must be fulfilled. They decided to give all
that the buyers expect in the goods and services marketed. This is mainly due to competitive pressures. As
there are many alternatives available in the market the consumer is not dependent on any one seller. He can
select the alternative that best fulfils his needs. Therefore, every marketer now strives hard to satisfy the
customers needs.
5. Management Orientation:
Management is the art of getting things done by others. The techniques of management are being
applied in several functional areas of business like production, finance and marketing. The application of
management techniques would call for the performance of certain functions like planning, organizing staffing,
co-ordination and control. The present day marketers are well versed in management and they adopt a
systematic approach. The task of customer satisfaction is being achieved by planning, organizing, coordinating
and controlling all marketing activities.
Q.DISCUSS THE FEATURES OF MODERN MARKETING. (OR) MARKETING BEGINS BEFORE
PRODUCTION AND ENDS AFTER PRODUCTION. DISCUSS. (12 Marks)

. The modern marketing emphasizes the need for integrated and well-coordinated marketing programme. It
aims to attract the customers. The features of modern marketing are discussed next:
1. Consumer orientation:
Modern marketing recognizes consumers supremacy in marketing. The managerial attention was
focused on the market and the consumer. The management becomes consumer-orientation or market
orientation may be defined as the managerial state of mind concerned with consumer satisfaction and profit, and
not sales volume alone. Consumer becomes the pivot of all business decisions. Creation of satisfied
customers is the main goal of modern marketing, profit can be earned only by serving the consumers need.
2. Modern marketing begins with the customers:
The production of the last century had little care for the consumers. The consumer, who comes in the
last stage, accepts the goods, there is no alternative. But the situation has changed. Market has developed from
national to international competition is the order of the day.
Businessmen have started realizing it. Earning profit is possible only through the consumers
satisfaction. To satisfy, a consumer, his needs are to be known. Under consumer-oriented marketing, it
becomes essential to know what the consumer needs. This is possible only when information is collected from
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the consumers. Modern marketing begins with the consumers and ends with the consumers. Marketing
research starts at this stage. Through market research, information of current consumer needs can be known.
3. Modern marketing begins before production:
In early periods, there were less competitions and as such sales were easily made. But now this stage
has changed. The consumer looks for the usefulness and acceptability of a product. As such it has become
essential to find out the needs and desires of consumers, through marketing research. The information from the
market or the consumer will decide the future of the product. Thus, product planning and development is
undertaken before the actual production takes place. The pricing, distribution etc are secondary. These enable
a marketer to face the customer, who is the king.
4. Modern marketing is a guiding element:
At present competition is more acute, because many entrepreneurs produce similar commodities en
masse. Marketing has also become a still competition. The ability of the marketer depends on the ability of
finding a consumer and to satisfy him. Businessman has to understand the economic development of a country
and must aim to raise the standard of living. People may choose one among the products. They decide what
product to purchase and what product not to purchase. Reasons may be the advantages; a purchaser looks for or
may not be found in the product.
Q. DISCUSS THE FACTORS INFLUENCING MODERN MARKETING CONCEPT? (12 Marks)

There are several factors responsible for the thought of The modern concept of marketing. A firm
operating under the concept, receives direction from the market i.e., information regarding the customers
wants, needs and desires through market. The factors in brief are:
1. Population growth:
The increase in production, naturally increase the demand too. Markets are made up of people. Increase
in population causes increasing the markets, increasing the consumers who have increased demand for goods, in
kinds, varieties, preferences etc. Thus the producers have to meet the changing demands of people.
2. Increasing households:
The growth of demand for household products is more than it is to the population at any time. Join
family system has become unpopular because of many reasons. Most of the families are sub divided and this
increases the number of families and their demands.
Example: Automobiles, Refrigerators, Electrical appliances, television sets etc.
3. Disposal of income:
Automation in industries, births of many new firms etc., open the door of employment. Thus people
have increased their income and in turn aim for more satisfaction and more comforts.
When the income continues to increase, the purchasing power also increases.
4. Surplus income (discretionary income):
The people have surplus income left after meeting the expenses on essential items. This surplus amount
will be spent on non- necessary products or luxury goods. Such items are selected by people, if they can give
satisfaction to their needs and desires.
5. Technological development:
Science and technology improves day by day. New inventions of products take place often. None will
have the guarantee that these products will always possess good demand in the market. Some technological
advancement may outmode the existing products; in turn the whole industry may come to a standstill. People
always prefer to have the latest model. Therefore, consumer-oriented marketing system is essential.
6. Mass communication media:
The growth of mass communication media newspapers, magazines, radio, television etc., facilitates
the buyers to learn about the new products available for sale. The buyer gets information about the new
products, faster and more effectively before the products come to the market.
7. Credit purchases:
Credit purchases through hire purchase scheme and installments schemes are common today. A credit
purchase pushes sales. The customers can enjoy the facilities and this widens the market.
All the factors mentioned above have changed the traditional thinking of business managers and
have dragged the producers to change their idea of marketing to the modern concept of marketing.
Q.WHAT ARE THE BENEFITS OF MODERN CONCEPT OF MARKETING? ( 4 Marks/12 Marks)

The acceptance of the modern marketing concept can improve the sales of the firm and as well as their
public image besides satisfying the consumer needs. The various benefits worth mentioning and listed as
follows:
1. Understanding of the consumer:
The first advantage is that the management recognizes and
appreciates the customer needs which are of basic importance. The products are designed and produced to suit
the needs of the customer.
2. Innovation and New opportunities: This concept enables the producer to identify new opportunities and
effect broad improvements in his products and services.
3. Creation of Prestige and Image: By understanding the customer and satisfying his wants effectively, the
businessman can add his prestige and acquire a better image in his live of business.
4. Cordial relationship with the consumer: By accepting the modern concept of marketing, the firm gives due
consideration to satisfy the consumers along with its goal of profit making. This ensures a cordial relationship
between the producer and the consumer.
5. Elimination of Dead stock: Since the business firm constantly reviews its operation and produces only those
goods required by the consumer, the question of slow moving item or dead stock and the consequent losses do
not arise.
6. Consumer advertising and repeated sales: The satisfied customer is the best advertiser. He advertises the
utility of the product to his neighbours. The consumer advertising is more effective than the other forms of
advertising by the producer.