Chapter 11 Marketing class 12th Commerce

1

Person who play Active part

Marketer refers to any person who takes more active part in the process of exchange.

2

Normally Sellers

Normally it is the seller who is more active in the exchange process as he or she analyses the needs of the potential buyers, develops and market offering and persuades the buyers to buy the product.

3

Even buyers

However, there may be certain situation where the buyer may be taking more active roles in the exchange process.

4

Situation of rare supply

Situation of rare supply, the byer may be taking extra efforts in persuading the seller to sell the product.

Oxygen in case of emergency.  

5

Sensitive issue

Sensitive issue may be happening in defense deals or take a situation where a country having installed a nuclear plant needs the supply of nuclear fuel.

Physical Products :

Car, building, Motor cycle, ipods, Cell phone, Footwear, Television, refrigerator all products are marketed. Rather in today world each and every thing is marketed.

Services

Insurance, Health Care, Business Process Outsourcing, Security, easy Bill service, Financial Services (Investment), Computer education, Online Trading.

BANKS COMMERCIAL

ideas    

Polio Vaccination, Helpage, Family Planning, Donation of Blood (red cross), Donation of money on Flag Day (National Foundation for Communal Harmony). POLIO ADDS

Persons :

CMCA Towards: CRICKTER, FILM STAR, POLITICIAN.

Place     :

Niagra fall – see this is naigra fall.

Then bihar and Nepal 

Visit Agra – ‘City of Love’, ‘Udaipur – ‘The City of Lakes’, ‘Mysore – The City of Gardens’, ‘When Orisa celebrates, eleven the God Join In’.

Experience:

Unique experience to carry and keep in heart forever .such as lunch with Philips Kotler.

Customised experiences as Dinner with a cricketer (say Dhoni); Lunch with a celebrity (say Bill Gates or Aishwarya roy) or experience of Baloon riding, mountaineering, etc.

Properties

Building, Shares, Debenture.

Events 

music concert, film festival, elephant race (kerala Tourism).

Sports events (say Olympics, Cricket series), diwali mela, fashion show,

Information               

Production packaging and distribution of information by organisations such as by universities, research organisation, providing information as market information (marketing research agencies), technology information.

Organisations

Aditya birla

For boosting their public image organisations such as Hindustan Lever, Dabur, Proctor and Gamble, communicate with people. example, Phillips says, Let’s make Things Better’.

1

Needing instant attention with humanitarian perspective

The issues such as the

(i)nutrition of children,

(ii)child care,

(iii)old-age homes,

(iV) Amelioration of hunger,

(V) Offering aid to those affected by natural calamities, etc.

TATA HELPS

2

The issues that contribute to making society a pleasant place to live in the long run

The issues that contribute to making society a pleasant place to live in the long run, may be grouped under the second category. The issues which come under this category are

Health awareness and aid,

Education,

Environmental protection,

women’s employment and empowerment,

Preventing unjust discriminations (on the basis of caste, community, religion, ethnicity, race, and sex),

Eradication of poverty through employment,

Preservation of culture, values, and ethics,

Contribution to research, etc.

Procter and Gamble’s (P&G) philosophy is that it should lead the industry in implementing a global environmental programme. P&G is one of the first companies in the world to actively study the influence of consumer products on the environment and introduce concentrated products, recycled plastic bottles, and refill packages to the industry. P&G contributes to sustainable development and addresses environmental and social issues connected with its products and services.

1N

Needs and Wants:

2C

Creating a Market Offering

3C

Customer value:

4E

Exchange Mechanism:

1N

Needs and Wants:

WBT

A need is something that is needed to survive. A want is something that an individual desires, but would be able to live without.

Needs are basic to human beings. Wants, on the other hand, are culturally defined objects that are potential satisfiers of needs. In other words, human needs shaped by factors as culture, personality, religion etc

CAR IN MIDDLES CLASS IS NEED NOT WANTS. CREATE SCENE

Oil in Mcdonlad  

A basic need for food, for example, may take  various forms such as:

Want for dosa and rice for a South Indian and

chapatti and vegetables for a North Indian person.

A marketer’s job in an organisation is to identify needs of the target customers and develop products and services that satisfy such needs.

The process of marketing helps individuals and groups in obtaining what they need and want.

Thus, the primary reason or motivation for people to engage in the process of marketing is to satisfy some of their needs or wants.

 In other words, the focus of the marketing process is on satisfaction of the needs and wants of individuals and organisations.

A need is a state of felt deprivation or feeling of being deprived of something. If unsatisfied, it leaves a person unhappy and uncomfortable. For example, on getting hungry, we become uncomfortable and start looking for objects that are capable of satisfying our hunger.

2C

creating a Market Offering:

0ne year package , 9 month package IN ATC

On the part of the marketers, the effort involves creation of a ‘market offering. Market offering refers to a complete offer for a product or service, having given features like size, quality, taste, etc; at a certain price; available at a given outlet or location and so on.

Let us say the offer is for a cell phone, available in four different versions, on the basis of certain features such as size of memory, television viewing, internet, camera, etc., for a given price, say between 5,000 and 20,000 (depending on the model selected), available for sale at say firm’s exclusive shops in and around all metropolitan cities in the country. A good ‘market offer’ is the one which is developed After Analysing the needs and preferences of the potential buyers.

3C

customer value:

The process of marketing facilitates exchange of products and services between the buyers and the sellers. The buyers, however, make buying decisions on their perceptions of the value of the product or service in satisfying their need, in relation to its cost.  A product will be purchased only if it is perceived to be giving greatest benefit or value for the money.  The job of a marketer, therefore, is to add to the value of the product so that the customers prefer it in relation to the competing products and decide to purchase it.

4E

exchange Mechanism:

The process of marketing involves exchange of products and services for money or something considered valuable by the people.

Exchange refers to the process through which two or more parties come together to obtain the desired product or service from someone, offering the same by giving something in return.

For example, a person feeling hungry may get food by offering to give money or some other product or service in return to someone who is willing to accept the same for food.

In the modern world, goods are produced at different places and are distributed over a wide geographical area through various middlemen, involving exchanges at different levels of distribution. exchange is, therefore, referred to as the essence of marketing. For any exchange to take place, it is important that the following conditions

are satisfied:

I

Two persons

Involvement of at least two parties viz., the buyer and the seller.

Ii

Something is offered

Each party should be capable of offering something of value to the other. For example, the seller offers a product and the buyer, money.

Iii

Communcated

Each party should have the ability to communicate and deliver the product or service. No exchange can take place if the buyers and sellers are not able to communicate with each other or if they can not deliver something of value to the other.

iv

Freedom

Each party should have freedom to accept or reject other party’s offer.

v

Willingness

The parties should be willing to enter into transaction with each other. Thus, the acceptance or rejection of the offer takes place on voluntary basis rather than on the bases of any compulsion.

I

Target

Choosing a target market, say a manufacturer may choose to make readymade garments for children up to the age of 5 years;

II

Focus

In respect of the target market chosen, the focus of the process of management is on getting, keeping as well as growing the customers. That means the marketer has to create  demand  for  his products so that the target customers purchase the product, keep them satisfied with the firm’s products and also attract more customers to the firm’s products so that the firm can grow; and

III

Communication

Superior values

Mercedz vs club Mahindra

The mechanism for achieving the objective is through creating, developing and communicating superior values for the customers. That means, the primary job of a marketing manager is to create superior values so that the customers are attracted to the products and services and communicate these values to the prospective buyers and persuade them to buy these products.

G

Gathering and  Analysing Market Information:

P

Planning  ( Marketing Planning)

D

Designing and Development Of Product

S

Standardization and Grading

P

Packaging and Labelling

Branded

Branding

Customer Supports

Customer Support Services

P

Pricing of Product:

P

Promotion:

P

 Physical Distribution:

T

Transportation

S

Storage or Warehousing

1-G

Gathering and Analysing Market Information:

Information about want of customers :

Demands for suv. children decision is most important .

SWOT OF ENVIRONMENT.

One of the important functions of a marketer is to gather and analyse market information. This is necessary to identify the needs of the customers and take various decisions for the successful marketing of the products and services. This is important for making an analysis of the available opportunities and threats as well as strengths and weaknesses of the organisation and help in deciding what opportunities can best be pursued by it.

For example, rapid growth is predicted in several areas in the Indian economy, say in the use of the Internet, market for cell phones and several other areas. Which of these areas a particular organisation should enter, or in which area should it expand, requires a careful scanning of the strengths and weaknesses of the organisation, which is done with the help of careful market analysis. With the growth of computers, a new trend has emerged in the collection of market information. More and more companies are using interactive sites on the internet, to gather customer views and opinions, before taking important business decisions.  One of the popular TV News Channel (in Hindi) seeks viewers choice (through SMS) on which of the given four or five main news stories of the day would be broadcasted as detailed story at the prime time, to ensure that the viewers get to listen to the story of their own choice.

2-M

Marketing Planning:

ACTION PLAN -LIBERTY

Another important activity or area of work of a marketer is to develop appropriate marketing plans so that the marketing objectives of the organisation can be achieved.

For example a marketer of colour TV, having 10 per cent of the current market share in the country, aims at enhancing his market share to 20 per cent, in the next three years. He will have to develop a complete marketing plan covering various important aspects including the plan for increasing the level of production, promotion of the products, etc., and specify the action programmes to achieve these objectives.

3-D

Designing and Development Of Product

CAR DESIGN – SUV

Another important marketing activity or decision area relates to product designing and development. The design of the product contributes to making the product attractive to the target customers.  A good design can improve performance of a product and also give it a competitive advantage in the market. For example, when we plan to buy any product say a motorbike, we not only see its features like cost, mileage, but also the design aspects like its shape, style, etc.

4-S

Standardisation and Grading:

GAME LEFT HAND THUMB USING PLATFORM OF DISCOVERY, LAND ROVER, JAGUAR .

Standardisation refers to producing goods of predetermined specifications, which helps in achieving uniformity and consistency in the output. Standardisation ensures the buyers that goods conform to the predetermined standards of quality, price and packaging and reduces the need for inspection, testing and evaluation of the products. Grading is the process of classification of products into different groups, on the basis of some of its important characteristics such as quality, size, etc. Grading is particularly necessary for products which are not produced according to predetermined specifications, such as in the case of agricultural products, say wheat, oranges, etc. Grading ensures that goods belong to a particular quality and helps in realising higher prices for high quality output.

5-P&L

Packaging and Labelling:

Lays or Uncle Chips potato wafers Clinic Plus shampoos, and Colgate Toothpaste, etc.,

Explain : a little will be done in marketing mix

Packaging refers to designing and developing the package for the products. Labelling refers to designing and developing the label to be put on the package. The label may vary from a simple tag to complex graphics. Packaging and labelling have become so important in modern day marketing that these are considered as the pillars of marketing. Packaging is important not only for protection of the products but also serves as a promotional tool. Sometimes, the quality of the product is assessed by the buyers form packaging. We have seen that in the success of many of the consumer brands in recent times such as Lays or Uncle Chips potato wafers Clinic Plus shampoos, and Colgate Toothpaste, etc., packaging has played an important role.

6-B

Branding:

TATA MOTOR IS COMPANY =

HARRIER IS BRAND, SAFARI IS A BRAND.

TOYATA IS A COMPANY :

FORTUNER AND INNOVA CRYSTA IS A BRAND

Explain : a little will be done in marketing mix

A very important decision area for marketing of most consumer products is whether to sell the product in its generic name (name of the category of the product, say Fan, Pen, etc.) or to sell them in a brand name (such as Pollar Fan or Rottomac Pen). Brand name helps in creating product differentiation, i.e., providing basis for distinguishing the product of a firm with that of the competitor, which in turn, helps in building customer’s loyality and in promoting its sale. The important decision areas in respect of branding include deciding the branding strategy, say whether each product will be given a separate brand name or the same brand name will be extended to all products of the company, say Phillips bulbs, tubes and television or Videocon washing machine, television, and refrigerator. Selection of the brand name plays an important role in the success of a product.

7-C

Customer Support Services:

AFTER SALES

A very important function of the marketing management relates to developing customer support services such as after sales services, handling customer complaints and adjustments, procuring credit services, maintenance services, technical services and consumer information. All these services aim at providing maximum satisfaction to the customers, which is the key to marketing success in modern days.

Customer support services are very effective in bringing repeat sales from the customers and developing brand loyality for a product.

8-P

Pricing of Product:

SAME CAR IN PREMIUM SECTION COST IN CRORE -

Explain : a little will be done in marketing mix

Price of product refers to the amount of money customers have to pay to obtain a product. Price is an important factor affecting the success or failure of a product in the market. The demand for a product or service is related to its price. Generally lower the price, higher would be the demand for the product and vice-versa. The marketers have to properly analyse the factors determining the price of a product and take several crucial decisions in this respect, including setting the pricing objectives, determining the pricing strategies, determining the price and changing the prices.

9-P

Promotion:

Communication with customers :

Explain: a little will be done in marketing mix Promotion of products and services involves informing the customers about the firm’s product, its features, etc., and persuading them to purchase these products. The four important methods of promotion include

Personal Selling, Publicity, Advertising, and Sales Promotion. A marketer has to take several crucial, decisions in respect of promotion of the products and services such as deciding the promotion budget, the promotion mix, i.e., the combination of the promotional tools that will be use, the promotion budget, etc

10-P

 Physical Distribution:

How product will reach to customers Explain: a little will be done in marketing mix Managing physical distribution is another very important function in the marketing of goods and services. The two major decision areas under this function include

I

Channel

 decision regarding channels of distribution or the marketing intermediaries (like whole salers, retailers) to be used and

ii

Movement from manufacturer to channel

physical movement of the product from where it is produced to a place where it is required by the customers for their consumption or use.

Storage in warehouse

The important decision areas under physical distribution include managing inventory (levels of stock of goods), storage and warehousing and transportation of goods from one place to the other.

11

Transportation:

Transportation involves physical movement of goods from one place to the other. As generally the users of products, particularly consumer products are wide spread and geographically separated from the place these are produced, it is necessary to move them to the place where it is needed for consumption or use, For example, tea produced in Assam has to be transported not only within the state but to other far off places like Tamil Nadu, Punjab, Jammu and Kashmir and Haryana, Rajasthan, where it is consumed. A marketing firm has to analyse its transportation needs after taking into consideration various factors such as nature of the product, cost and location of target market and take decisions in respect of mode of transportation to be chosen and other related aspects.

12

Storage or Warehousing:

Usually there is a time gap between the production or procurement of goods and their sale or use. It may be because of irregular demand for the products such as in the case of woollen garments or raincoats, or there may be irregular supply because of seasonal production such as in the case of agricultural products (sugarcane, rice, wheat, cotton, etc.).

In order to maintain smooth flow of products in the market, there is a need for proper storage of the products. Further, there is a need for storage of adequate stock of goods to protect against unavoidable delays in delivery or to meet out contingencies in the demand.

In the process of marketing, the function of storage is performed by different agencies such as manufacturers, wholesalers and retailers.

1

Production concept

2

Product concept

3

Selling concept

4

Marketing concept

5

Societal Marketing Concept

1

The Production concept

During the earlier days of industrial revolution, the demand for industrial goods started picking up but the number of producers were limited. As a result, the demand exceeded the supply. Selling was no problem. Anybody who could produce the goods was able to sell. The focus of business activities was, therefore, on production of goods. It was believed that profits could be maximised by producing at large scale, thereby reducing the average cost of production. It was also assumed that consumers would favour those products which were widely available at an affordable price. Thus, availability and affordability of the product were considered to be the key to the success of a firm. Therefore, greater emphasis was placed on improving the production and distribution efficiency of the firms.

2

The Product concept

As a result of emphasis on production capacity during the earlier days, the position of supply increased over period of time. Mere availability and low price of the product could not ensure increased sale and as such the survival and growth of the firm. Thus, with the increase in the supply of the products, customers started looking for products which were superior in quality, performance and features. Therefore, the emphasis of the firms shifted from quantity of production to quality of products. The focus of business activity changed to bringing continuous improvement in the quality, incorporating new features, etc. Thus, product improvement became the key to profit maximisation of a firm, under the concept of product orientation.

3

The selling concept

With the passage of time, the marketing environment underwent further change. The increase in the scale of business further improved the position with respect to supply of goods, resulting in increased competition among sellers. The product quality and availability did not ensure the survival and growth of firms because of the large number of sellers selling quality products. This led to greater importance to attracting and persuading customers to buy the product. The business philosophy changed. It was assumed that the customers would not buy, or not buy enough, unless they are adequately convinced and motivated to do so. Therefore, firms must undertake aggressive selling and promotional efforts to make customers buy their products. The use of promotional techniques such as Thus, the focus of business firms shifted to pushing the sale of products through aggressive selling techniques with a view to persuade, lure or the buyers to buy the products. Making sale through any means became important. It was assumed that buyers can be manipulated but what was forgotten was that in the long run what matters most is the customer satisfaction, rather than anything else.

4

The Marketing concept

Marketing orientation implies that focus on satisfaction of customer’s needs is the key to the success of any organisation in the market. It assumes that in the long run an organisation can achieve its objective of maximisation of profit by identifying the needs of its present and prospective buyers and satisfying them in an effective way. All the decisions in a firm are taken from the point of view of the customers. In other words, customer’s satisfaction become the focal point of all decision making in the organisation. If all marketing decisions are taken with this prospective, selling will not be any problem. It will automatically follow. The basic role of a firm then is to ‘identify a need and fill it’. The concept implies that products ad-services are bought not merely because of their quality, packing or brand name, but because they satisfy a specific need of a customer. A pre-requisite for the success of any organisation, therefore, is to understand and respond to customer needs.

To sum up, the marketing concept is based on the following pillars:

I

Customer identification

Identification of market or customer who are chosen as the target of marketing effort.

II

Understand their need

Understanding needs and wants of customers in the target market.

III

Develop product and services

Development of products or services for satisfying needs of the target market.

IV

Satisfy better than competitor

Satisfying needs of target market better than the competitors.

V

And minimum profit

Doing all this at a profit.

Thus, the focus of the marketing concept is on customer needs and the customer satisfaction becomes the means to achieving the firms’ objective of maximising profit. The purpose of marketing is to generate customer value at a profit.

5

The Societal Marketing Concept

Must be sustainable :

Addressing social issues:  environmental pollution, deforestation, shortage of resources, population explosion and inflation.

drugs, is need of customer but this is not good for society., cutting tree is used by customer but this will lead oxygen shortage in the future.

The marketing concept, as described in the preceeding section cannot be considered as adequate if we look at the challenges posed by social problems like environmental pollution, deforestation, shortage of resources, population explosion and inflation.

It is so because any activity which satisfies human needs but is detrimental to the interests of the society at large cannot be justified. The business orientation should, therefore, not be short-sighted to serve only consumers’ needs. It should also consider large issues of long term social welfare, as illustrated above. The societal marketing concept holds that the task of any organisation is to identify the needs and wants of the target market and deliver the desired satisfaction in an effective and efficient manner so that the longterm well-being of the consumers and the society is taken care of. Thus, the societal marketing concept is the extension of the marketing concept as supplemented by the concern for the long-term welfare of the society. Apart from the customer satisfaction, it pays attention to the social, ethical and ecological aspects of marketing. There are large number of such issues that need to be attended.

Production base sconcept

Product concept

selling concept

Marketing concept

societal concept

1.  Starting point    

Factory

Factory

Market

Market, Society

2.  Main  Focus   

Quality of product

Quality, performance, features of product

Customer needs

Customer needs and society’s well being

3.  Means

Availability and affordability of product

Product improvements

Integrated marketing

Integrated marketing

4.  Ends

Profit through volume of production

Profit through product quality

Profit through customer satisfaction

Profit through customer and social welfare

Product:

The concept of product also include the extended product or what is offered to the customers by way of after sales services, handling complaints, availability of spare parts etc. These aspects are very important, particularly in the marketing of consumer durable products (like Automobiles, refrigerators, etc.).

The important product decisions include deciding about the features

From the customer’s point of view, a product is a bundle of utilities, which is purchased because of its capability to provide satisfaction of certain need. A buyer buys a product or service for what it does for her or the benefit it provides to her. There can be three types of benefits a customer may seek to satisfy from the purchase of a product, viz.,

functional benefits,

psychological benefits, and

Social benefits.

Thus, all these aspects should be considered while planning for a product.

Price:

Price is the amount of money customers have to pay to obtain the product. In case of most of the products, level of price affects the level of their demand. The marketers have not only to decide about the objectives of price setting but to analyze the factors determining the price and fix a price for the firm’s products. Decisions have also to be taken in respect of discounts to customers, traders and credit terms, etc., so that customers perceive the price to be in line with the value of the product.

 Place:

Activities that make firm’s products available to the target customers.

The other decision areas relate to managing inventory, storage and warehousing and transportation of goods from the place it is produced to the place it is required by the buyers

Place or Physical Distribution include activities that make firm’s products available to the target customers. Important decision areas in this respect include selection of dealers or intermediaries to reach the customers, providing support to the intermediaries (by way of discounts, promotional campaigns, etc.). The intermediaries in turn keep inventory of the firm’s products, demonstrate them to potential buyers, negotiate price with buyers, close sales and also service the products after the sale. The other decision areas relate to managing inventory, storage and warehousing and transportation of goods from the place it is produced to the place it is required by the buyers.

Promotion:

Promotion of products and services include activities that communicate availability, features, merits, etc., of the products to the target customers and persuade them to buy it. Most marketing organizations, undertake various promotional activities and spend substantial amount of money on the promotion of their goods through using number of tools such as advertising, personal selling and sales promotion techniques (like price discounts, free samples, etc.). A large number of decisions are to be taken in each of the area specified above.

For example, in the respect of advertising it is important to decide about the message, the media to be used (example, print-media– newspaper, magazines, the objections of customers, etc.). The success of a market offer will depend on how well these ingredients are mixed to create superior value for the customers and simultaneously achieve their sale and profit objectives. Let us say a firm would like to achieve necessary volume of sale at a cost that will permit a desired level of profit. But so many alternative mixes can be adopted by a firm to achieve this objectives. The issue before a firm then is to decide what would be the most effective combination of elements to achieve the given objectives.

1

Branding

2

Packaging

3

Labelling

Brand Name:

Jagwar is brand, Land Rover Brand. But tata motor is a company

That part of a brand, which can be spoken, is called a brand name. In other words, brand name is the verbal component of a brand.

Brand Mark:

That part of a brand which can be recognised but which is not utterable is called brand mark. It appears in the form of a symbol (jagwar)( merc ), design, distinct colour scheme or lettering TATA.

4. Trade Mark:

A brand or part of a brand that is given legal protection is called trademark. The protection is given against its use by other firms. Thus the firm, which got its brand registered, gets the exclusive right for its use. In that case, no other firm can use such name or mark in the country. Though branding adds to the cost e.g., to the cost of packaging, labelling, legal protection, and promotion, it provides several advantages to the sellers as well as the consumers.

1.K

KISS- Keep it Short and Sweet

2.D

Distinctive

3.V

Versatile

4.I

Imperative Represent benefit and qualities

5.R

Retain its power

6.A

Adaptable to packaging and labeling

7.L

Legally protected

1.K

KISS- Keep it Short and Sweet

The brand name should be short, easy to pronounce, spell, recognize and remember e.g., Ponds, VIP, Rin, Vim, etc.

2.D

Distinctive

A brand name should be distinctive.

3.V

Versatile

The brand name should be sufficiently versatile to accommodate new products, which are added to the product line.

4.I

Imperative Represent benefit and qualities

A brand should suggest the product’s benefits and qualities. It should be appropriate to the product’s function.

Wow, The comedy night etc 

5.R

Retain its power

Chosen name should have staying power i.e., it should not get out of date.

6.A

Adaptable to packaging and labeling

The brand name should be adaptable to packing or labelling requirements, to different advertising media and to different languages.

7.L

Legally protected

It should be capable of being registered and protected legally.