The ongoing era of marketing:-
Marketing has its own origin in the fact that a human being is a creature of needs and wants. Needs and wants create a sense of discomfort in persons and they tend to get objects i.e product those satisfy the needs and wants of a man. The word marketing has been derived from the market which may be looked upon as a medium of exchange i.e a place where products can be exchanged by money or anything else. Marketing includes many terms like policy, techniques, and new methods necessary for selling and distribution(S&D). The word market is derived from the Latin word Mercatus means place of trading or where the business is conducted.
To a layman, a market is a place where goods and services are brought and sold. A market is a place of a bunch of buyers and sellers interested in negotiating the terms of purchase and sale of goods and services. Broadly market is any region in which buyers and sellers are brought in contact with one another where demand and supply take place between both of them at an agreed value. Thus exchanging is the essence of marketing. Exchange only takes place when there are two or more parties involved in it between the contract. Therefore, a market is a place where a group of people comes together for trading that consist of a group of person or persons on one side having the goods they want to sell and on the other group of people called buyers who want to pay for the product and buy goods. While trading three points are interlinked named place, area, and demand.
A market is a convenient meeting place for buyers and sellers to gather at one point to lead the exchange of goods and services.
A market develops in any area, where, there are:
- *Two or more individuals having unsatisfied wants
- *They have products to exchange by any means
- *They have some means of communication such as phone, teller, correspondent, etc. By means of communication, the force of demand and supply can easily take place.
A market consists of people with needs to satisfy money to spend and the will to spend money to satisfy their wants. The process of exchange represents the market where buyers(demand) and sellers (supply). They both exchange the product against money. Usually, money act as the medium of exchange between both parties If the customer is satisfied the buyer makes repeated purchases otherwise he simply switches to another brand.
There are two ways of doing marketing…
- ☆Old Concept
- ☆New Concept
This concept of marketing was way back popular in the olden times when business was done on small scale and there was little or no competition at all among each other. According to this marketing consists of merely buying and selling activities that affect the transfer of ownership of goods and services.
Features of the old concept of marketing:-
- ^It consists of only production, purchase, and sales activities
- ^It is product-oriented
- ^It focuses attention only on the product to be sold ignoring customers interest, taste, and preferences
- ^The marketing comes to an end on sale
- ^It does not bother customers satisfaction
- ^It aims at earning maximum profits
- ^It only focuses on production, purchases, and sales activities
- ^It neglects consumer research
- ^It is product-oriented
- ^It doesn’t bother the after-sale service
- ^Consumers satisfaction and social responsibility has no place in this concept
- ^It fails to point out the relationship between demand and supply.
The new concept of marketing is a broader concept which considers marketing as a continuation to discover and converting consumer wants into appropriate products and services by developing a product on the basis of marketing research, creating demand for these products through promotion, advertising, and serving the demand through transportation and storing in a warehouse with the help of channels of distribution such as wholesalers and retailers.
Marketing concepts states that consumers want satisfaction in the way of economic and social justice. Therefore all the firm’s activities in the areas of production, engineering, finance as well as marketing must be directed at the primary level to determine what the consumer wants are and then take initiative steps to satisfy these wants through making a reasonable profit. The new concept is consumer-oriented. It considers the consumer as the king around which all business activities rotate. The concept is also founded on consumer satisfaction.
Features of a new concept of marketing:-
- ^It recognizes the consumer’s supremacy as it is consumer-oriented.
- ^Creating the level of satisfaction to the consumers
- ^Modern marketing starts will customers and ends with customers
- ^Modern marketing starts before production as well is succeed with production
- ^Product planning is done before actual production takes place
- ^Modern marketing adopts the systematic approach to marketing
- ^It aims at earning profit only by satisfying customers need
- ^It provides after-sale services such as home delivery, guarantee, etc
This concept can be described as under:
Various views regarding marketing concept:-
- °Distribution of goods and services
- °Creation of utilities
- °Standard of living
- °Systematic approach
- °Social marketing
Distribution of goods and services:-
According to this concept, marketing includes only those activities that assist in the distribution of goods and services from the production house i.e the producer to the customer i.e final consumption. This concept has lost its significance in today’s changed scenario. It is an indication of old concepts as such includes only three activities in marketing i.e purchase, production, and selling. Therefore this concept is also criticized on some issues as the old concept.
Creation of utilities:-
According to this concept, it states that marketing is concerned with providing a good and reasonable standard of living to society. It is a consumer-oriented concept and it emphasizes satisfying the desires and needs of one. Therefore product planning comes under its scope. In order to give the desired standard of living it is necessary to make arrangements for the development of goods desired by society and to include all the features desired by them.
According to this concept, marketing refers to the total process by means of which goods and services are exchanged. It involves all business activities because these activities are mutually interrelated to each other. Today the business environment is faced with the mass volume of production, stiff competition, and complex channels of distribution so there is a need for a proper system process that will help the producer as well as consumer to overcome all the obstacles in the exchange of goods and services.
Assembling of inputs
Dispersion of outputs
This concept more concentrates on producing goods and services which benefit society. It says that a firm’s task is to determine the needs and desires of consumers and to satisfy them more than the competitors in a way that is beneficial both to the consumer and society. It aims at balancing profits, consumer satisfaction, and public interest.
When it comes to marketing it involves a number of functions in order to achieve its target of consumer satisfaction. These functions are independent in themselves. The marketing mix is made up of four elements namely product, price, promotion, and place that constitute the marketing decisions from the marketer’s viewpoint. However, these can be four C’s from the angle of consumers. This can be illustrated as follows
- ☆Product for a marketer – Consumers needs and wants for customers
- ☆Price for a marketer – Cost to the customer
- ☆Promotion for a marketer – Communication for the customer
- ☆A place for a marketer – Convenience for the customer
In brief marketing mix is the head mix of sub-mix namely, product mix, price mix, promotion mix, and place mix. These are the elements of marketing decisions over which the firm has control. Hence marketing mix signifies internal controllable forces.
Elements of the marketing mix:-
- (i)Product:- quality, features, design, brand, package, service.
- (ii)Place:- transportation, warehousing storage, inventory, wholesaler, retailer
- (iii)Price:-Price differentials, credit terms, discount, the payment period
- (iv)Promotion:- personal selling, advertising, sale promotion, public relations
Forces affecting changes in the marketing mix:-
The marketing mix is dynamic in nature. It must be changed from time to time to cope up with the demands of the environment. The following are the reasons that require the change in the marketing mix:-
1)Consumers buying behavior
Consumer buying behavior:-
Consumers’ buying behavior gets affected by the habit of buying, the standard of living, social environment, technological changes, etc. The change in any of these terms changes the buying behavior of consumers and as such, the marketer must make necessary changes in his marketing mix in order to satisfy his customers.
With the entry of new firms, entities, the competition gets intense. To face this competition in the market the marketers need to make an actual or psychological change in their marketing mix.
The behavior of intermediaries- wholesalers or retailers and their attitudes, practices, commission rate, etc affect the marketing of the product. If at a certain period of time, the above chain of distribution gets less effective the marketer must go in for another channel. Thus it makes a change in his marketing mix.
The government makes rules and regulations in due respect of products, pricing strategies, competitive practices, advertising, etc. Any change in such rules will force the marketer to make necessary changes in his marketing mix.
Consumers must be satisfied in a better way through improvements in the quality of the product the latest design, according to the sizes, etc. This requires the modification of products, the introduction of new products, and the elimination of unprofitable products. All this brings out a change in the existing marketing mix.
The brand creates a particular image in the minds of the audience the consumers. Decisions to shift or make a change in brand considering the objectives and economies make a change in the marketing mix. Similarly, change is affected if the change in packaging is desired.
While it comes to distribution the distributor has to follow the scalar chain-like distribution then transportation, warehousing, stock control or we can say inventory control. To fulfill the basic objectives he may need to make the necessary changes accordingly.
Price affects the volume of sales. Altering the price may be made by the marketer in order to attract customers or buyers. This may be in the form of discount, allowance, credit sales, etc.
Firms undertake promotion work-advertising, personal selling, sales promotion, etc to inform and persuade the customers. Any change in message or technique of promotion brings about a change in the marketing mix.
The four P’s model of the marketing mix has gained acceptance because it must be cleared that what is a suitable mix for one business entity may not be suitable for another.
Objectives of the marketing environment:-
- ¤To know and explain the major forces in the economic environment that influence marketers
- ¤To know the major characteristic of competition in the market
- ¤To understand the importance of technology in the market
- ¤Understand the significance of the socio-cultural environment
- ¤To get the importance of the political-legal environment to marketers
- ¤Environment monitoring and marketing
The marketing environment is mostly influenced by the economic environment, inflation and disinflation, unemployment, high-interest rates, and the last competitive environment.
Elements of consumer behavior:-
Buyers Black Box
|Buyers Characteristics||Buyers Decision|
|Social Recognition||Information Research|
- Buyers purchase decision
- Product choice
- Brand choice
- Dealer choice
- Purchase timing
- Purchase amount
Determinants of consumer behavior
- 1)personal income
- 2)family income
- 3)income expectations
- 4)liquid assets
- 5)consumer credit
- 6)government policy
- 2)reference groups
- 3)opinion leaders
- 4)roles and status
- 1)culture and subculture
- 2)social class
- 1)age and life cycle stage
- 4)belief and attitudes
Segmenting the industrial market demographic variable:-
- a)Industry-which industries that buy the product should be focused
- b)Company size-what size of the organization is to be focused
- c)Location-what geographical area should be focused
- a)Users/nonusers status-the focus should be on heavy, medium, light users or non-users
- b)Customer capability-the focus should be on the industry producing many customer services of few services.
- a)Purchasing function organization-the focus should be on companies with the centralized or decentralized purchasing organization
- b)General purchase policies-the focus should be on companies that prefer leasing, service, contracts, sealed bidding
- c)Purchasing criteria-the focus should be on companies that are seeking quality, service, price.