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Marketing
“The process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges that satisfy individual and organisational objectives”

Marketing
“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”(American marketing association). In other words it is a
management process through which goods and services move from concept to the customer. It includes the coordination of four elements called the 4 P's of marketing:

(1) identification, selection and development of a product, (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy. For example, new Apple products are developed to include improved applications and systems, are set at different prices depending on how much capability the customer desires, and are sold in places where other Apple products are sold. In order to promote the device, the company featured its debut at tech events and is highly advertised on the web and on television. Marketing is based on thinking about the business in terms of customer needs and their satisfaction. Marketing differs from selling because (in the words of Harvard Business School's retired professor of marketing Theodore C. Levitt) "Selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. It is not concerned with the values that the exchange is all about. And it does not, as marketing invariable does, view the entire business process as consisting of a tightly integrated effort to discover, create, arouse and satisfy customer needs." In other words, marketing has less to do with getting customers to pay for your product as it does developing a demand for that product and fulfilling the customer's needs.

Read more: http://www.businessdictionary.com/definition/marketing.html#ixzz2Zfihz9k4

Marketing:

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (Approved October 2007) Marketing Research: Marketing research is the function that links the consumer, customer, and public to the marketer through information--information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications. (Approved October 2004) Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling the product or service. It is a critical business function for attracting customers. From a societal point of view, marketing is the link between a society?s material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. It is the process of communicating the value of a product or service through positioning to customers. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that also benefit the organisation and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value. There are five competing concepts under which organizations can choose to operate their business; the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept.[1] The four components of holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. The set of engagements necessary for successful marketing management includes, capturing marketing insights, connecting with customers, building strong brands, shaping the market offerings, delivering and communicating value, creating long-term growth, and developing marketing strategies and plans.[2]
Contemporary approaches

Recent approaches in marketing include relationship marketing with focus on the customer, business marketing or industrial marketing with focus on an organization or institution and social marketing with focus on benefits to society.[5] New forms of marketing also use the internet and are therefore called internet marketing or more generally e-marketing, online marketing, "digital marketing", search engine marketing, or desktop advertising. It attempts to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing. Internet

marketing is sometimes considered to be broad in scope, because it not only refers to marketing on the Internet, but also includes marketing done via e-mail, wireless media as well as driving audience from traditional marketing methods like radio and billboard to internet properties or landing page.

MARKETING mIX
Marketing as a subject of study is now attracting attention from business firms, companies, institutions and even from countries. In history, its origin dates back to the days when the people realized that he should specialize only in the activity to which he was best suited and he found it to be his advantage to utilize the services of others when they could do things better than him. This specialization created the necessity of exchange and thus the foundation of business was started. After Industrial Revolution, there were changes in the techniques, methods and volume of production. Large scale production introduced the new methods of marketing to create demand for products and services. Marketing includes various activities which are involved in the generation of markets and the satisfaction of consumer needs. Marketing is not a single activity nor is it the sum of several activities. It is the result of a balanced interaction of several activities. In this unit we will explain the basic concept of marketing, its nature, scope, importance and the evolution of marketing concepts. LET US KNOW Industrial Revolution: The Industrial Revolution was a period in the late 18th and early 19th centuries when major changes in agriculture, manufacturing, mining, and transportation had a profound effect on the socioeconomic and cultural conditions in Britain. The changes subsequently spread throughout Europe, North America, and eventually the world. The onset of the Industrial Revolution marked a major turning point in human society; almost every aspect of daily life was eventually influenced in some way.

MEANING OF MARKET

The term „Market? refers to a place where goods are bought and sold by the buyers and sellers. In wider sense, market includes the whole of any region in which buyers and sellers are brought into contact with one another and by means of which the price of goods tend to be

equalized easily and quickly. Basically, there are two concepts of market– (a) Place Concept: A convenient meeting place of buyers and sellers for exchange of goods e.g. physical or spot market. (b) Demand Concept: A market is equated with the total demand. Market means buyers having unmet wants and purchasing power to make their demand effective with the will to spend their income to fulfill those wants. This is a right approach to determine a target market. Demand concept of market assumes unique importance in the marketing concept.

MEANING AND DEFINATION OF MARKETING

The traditional view of marketing states that marketing is mainly concerned with the physical and ownership transfer of goods and services from the producer to the ultimate consumers. But the modern concept of marketing states that marketing involves the production of the product acceptable to the customers and the activity which helps physical transfer and ownership from the producer to the ultimate consumers. The modern view assumes that marketing means identifying, anticipating and satisfying consumer?s needs and desires. Thus, marketing creates place utility, time utility and possession utility. Marketing is a human activity directed at satisfying needs and wants through exchange processes. A need is a state of felt deprivation. Marketers create wants on the basis of needs. For example, food is an essential to satisfy the hunger needs. Marketers produce various types of food such as Pulao, Sweets, Tea, and Coffee etc. to create wants. Creating wants means creating demand for a product by providing an opportunity for choice or selection. Here, the buyers have an opportunity to select out of the four alternatives –Pulao, Sweets, Tea or Coffee to satisfy their hunger needs. The exchange process means the transfer or transaction of goods which cannot be made free of cost i.e. it should be on payment basis. The process of marketing starts with the identification of needs and wants through market survey and converting them into products or services and distributing the same to ultimate consumers through buyer oriented channel with suitable sales promotion technique at logical price to make a reasonable profit.

Definition of Marketing The term “marketing” has been defined by a number of scholars in a variety of ways. In fact, there are as many definitions as there are popular scholars in marketing. The reason is obvious. The subject is even changing and at every stage of evolution new potentialities are recognized which result in a new definition. We shall describe a few definitions here to realize how dynamic the subject marketing is– 1. “Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer or user”. –Committee of the American Marketing Association. This definition merely emphasizes one particular aspect i.e. movement of goods and services from producer to consumer. It makes marketing production oriented rather than consumer oriented. 2. “Marketing is that part of economics which deals with the creation of time, place and possession utilities” –American Marketing Association Place utility is created by marketing the goods and services available to the consumer at the place where such goods are needed. Time utility is created by making the goods available at the time when they are needed. Possession utility is created by transferring the goods to those who need them. This definition expresses the traditional views of marketing and it covers only few aspects of marketing. 3. “Marketing is a total system of interacting business activities designed to plan, promote and distribute want satisfying products and services to present and potential consumers” –W. J. Stanton The above definition given by Stanton appears to be more suitable as it covers almost all the modern views such as– (a) It views marketing as a total concept. (b) It describes marketing as dynamic process. (c) It covers all the activities ranging from product planning to distribution. (d) It indicates that marketing is the result of interaction of several activities. (e) It pays importance for satisfying consumer?s needs and wants. 4. “Marketing is the process of discovering and translating consumer wants into product and service specifications and then in turn helping to make it possible for more and more consumers to enjoy more and more of these products and services”. –Harry L. Harsen 5. “Marketing is the business function that identifies customers? needs and wants, determines which target markets the organisation can serve best, and designs appropriate products, services, and programmes to serve these markets”

–(Kotler and Armstrong, 1996). This definition has also covered all the activities of marketing starting from identification of needs and wants of consumers, converting than into product and service and making things available to consumers in a manner that they can enjoy more and more.

IMPORTANCE OF MARKETING

The success or failure of any organization, profit making or otherwise depends on marketing. As the economy progresses, the importance of marketing also increases. With the progress of economy, the demand and supply of certain new products and services start increasing and some of the existing products or services start losing their demands. In this ever changing situation marketers are forced to sell the product according to the needs, wants and desires of the customers. The importance of marketing may be studied from both from the point of view of society and producer. Importance of marketing from society point of view: (I) Marketing improves standard of living: Marketing promotes large scale production and sales which bring down the cost of production and increase the amount of profit. Lower price results in large consumption by large number of consumers which improves the standard of living at large. (II) Marketing connects the producers and consumers: The producers produce goods and services for the purpose of selling. Therefore, the producers should be in touch with the consumers who require such goods and services. In the absence of marketing process, it would have been extremely difficult for producer to find out what customer want. (III) It provides employment opportunities: Marketing results in large scale production which in turn creates a good number employment in the production process. Thousands of people are employed to manage the retail and wholesale establishments. In our country, the business establishment ranks second to agriculture sector in providing employment opportunities. (IV) It helps to provide economic stability: Good marketing system enables to maintain the price level stable by equalizing the demand and supply at various places and different period. This is possible by creating time and place utility. (V) It helps to utilize our natural resources: It is marketing which collects needs, wants desires, preferences etc. of domestic consumers and international consumers and analyze the information to produce goods and services for better satisfaction of consumers. In the process of producing various goods, they are utilizing the national resources up to optimum level.

Importance of marketing from producers/firms point of view: (a) Marketing creates awareness among potential consumers and motivates people to purchase the products and services to satisfy their needs and wants. In this process, the firms generate revenue by selling the goods and services with which the firms further produce and grow. (b) The marketing organization provides a channel of communication between the firm and the consumers. It is furnishing information about the consumers demands, tastes and preferences to the top managements. This process helps the firm to adjust its production schedule to suit the tastes of the consumers. (c) It helps the producers to increase the volume of sales which forces large scale production and results more profit. From the above explanation you will be able to realize the importance of marketing in the economic development of a country.

BASIC CONCEPTS UNDERLYING MARKETING

· NEEDS The core concept of marketing is to understand or feel the “human needs” that denotes the state of felt deprivation. Therefore being the marketers you need not go for inventing these needs. Rather you should try to understand it. The needs are in-built in human nature itself and thus naturally existed in the composition of human biology and human condition. When the needs are not satisfied, a person will try to either reduce the need or look for a substitute object that has the ability to satisfy the need. The need for food, clothing, shelter and safety are the basic physical needs and the needs of belongingness and affection are the social needs. The individual needs include the need for knowledge and self expression. · WANTS Human wants are desires for specific satisfaction of deeper needs that means the needs become wants when they are directed to specific object that might satisfy the need. For example, a teenage may need water to quench his thirst but want to have a cold drink. Human needs may be few, but their wants are numerous. These wants are continually shaped and re-shaped by social forces and institutions such as families, collogues, office neighbours etc. Marketers need not to create needs because these needs pre-exist in the market. But they can influence the

wants and suggest and inform the consumers about certain products and persuade them to purchase these by stressing the benefits of such products. · DEMANDS People may have almost unlimited wants. But resources are limited in compare to the wants they have. Therefore they have to choose the products that are likely to provide the most value and satisfaction for their money. When backed by purchasing power, wants become demand. Thus, demands are basically wants for specific products that are linked /associated with the ability and willingness to pay for these products. For example, many desire a car such as Mercedes Benz, Toyota, BMW, Honda etc. but only a few are really willing and able to buy one. Therefore being a marketing executive you must measure how many people would actually be willing and able to buy your company?s products than how many of them want the products. · PRODUCTS To satisfy the wants and needs of people the company must offer their products in the market. That means people purchase the products to satisfy their needs and wants. Specifically, a product can be defined as an object, service, activity, person, place, organisation or idea. You can note here that the tangible items are known as product while the intangible items are known as service. The hidden use of a physical objects may be to provide the service. For example a lipstick is bought to supply service (beautify); toothpaste for whiter teeth – prevent germs or give fresh breath etc. Therefore it is the job of marketer to sell the service packages associated with the physical products. If you give a thought, you will realise that the importance of a product does not lay not so much in owning them than to use them to satisfy our wants. For example, we do not buy a bed just to admire it, but because it aids resting better. · EXCHANGE We have already got that marketing takes place only when people decide to satisfy needs and wants through exchange. So in the process of marketing there is exchange value between the two party?s i.e buyer and seller. The value for buyer is to obtain the desired object to satisfy its needs and wants while the value for the seller is generally the profit or the money. For example, hungry people can find food by hunting, fishing or gathering fruits. They could offer money, another food or a service in return for food. Marketing focuses on this last option. Kotler (1984) states that for exchange to take place, it must satisfy five conditions, namely: (i) There are at least two parties. (ii) Each party has something that might be of value to the other party. (iii) Each party is capable of communication and delivery. (iv) Each party is free to accept or reject the offer. (v) Each party believes it is appropriate or desirable to deal with the other party.

Evolution of Basic Marketing Concepts

A few decades ago, companies face a number of tough decisions for marketing their products. They had to determine product features, and quality, establish accompanying services, set the price, determine the distribution channels, decide how mush to spend on marketing, and decide how to divide their resources among advertising, sales force, and other promotion tools. Modern marketing has become very complex and dynamic. Chronologically, the concepts are classified in five. They are mentioned below: (i) Production concept, (ii) Product concept, (iii) Selling concept, (iv) Marketing concept, and (v) Societal Marketing concept. (i) Production Concept: This concept assumes that customers will favour products that are available and highly affordable and that management should therefore; focus on increasing production and distribution. Most of producers believe that the customers prefer only low priced products and so they concentrates on large scale production to reduce the cost. A firm may apply this concept in two types of situations: (a) When the demand for the product or service is higher than the supply of the same. (b) When the cost of the product is high and increase in production is going to reduce the cost due to economics of large scale production. This concept can work only in a sellers market. In buyer?s market it fails to market under keen competition. American luxury car market was captured by Japanese and European car because of this concept. (ii) Product Concept: This concept assumes that buyers favour those products that offer the most quality, performance and features. The producers are of the opinion that it is the quality of product that attracts the customers, the quality of the product alone will yield satisfactory sales and profits. Though this concepts appears to be initially very sound, it failed in actual operation. Leading companies have produced quality products but have not been able to push up the sales, unless they take positive steps to design, pack and price attractively, to place them in proper distribution channels, bring them to the notice of persons concerned and convince them that the product is of superior quality. No wise marketer can follow this philosophy of marketing in this competitive world. This concept may lead to “marketing myopia” or shortsighted marketing because of undue concentration on the product rather than the needs and desires of consumers for whom the products or services produced. (iii) Selling concept: The selling concept assumes that the consumer?s response will not increase without promotional efforts. Even the best products cannot have assured sales without the help of sales promotion and aggressive salesman-ship. It implies, the consumer?s satisfaction is considered secondary; selling the product is the primary consideration. The seller in the long run is likely to lose his customers, who would not be satisfied with the product. Dissatisfied customers do act on their dissatisfaction. As a result, the dissatisfied consumers do not purchase further and do not recommend your product to any of their friends and relatives or they do complain to consume. Since there are many potential customers, the producer is not very particular about the reparative sales in monopoly or less competitive markets but in highly competitive market, the producers are under compulsion to play attention

or reparative purchases. The selling concept starts with the factory and it focuses on the existing products and promotion and calls for heavy selling and promotion to obtain profitable sales volume. This concept may be explained with the help of the following diagram.

(iv) Marketing Concept: This is a new idea in the field of exchanging of goods. Under this concept the organization trice its best to determine the needs, wants and values of the buyer?s market and takes all possible steps to deliver the desired satisfaction more effectively and efficiently than its competitions do. Every attempt is made to satisfy the wants of customers and to achieve this objective; a special programme of Market Research is undertaken. The organization fully understands that it can win the loyalty of its customers and their appreciation only by providing them satisfactory services in respect of their needs and wants. Winning the confidence of customers is as good as fulfilling the goals of the organization. It fully believes in theory known as customer sovereignty and ensure the maximum welfare of consumers, thereby ensuring a good amount of profits. This concept assumes that organizations produce what customer want and thereby yield consumers? satisfaction and make profits. This concept may be explained with the help of the following diagram.

(v) Societal Marketing Concept : This concept is management orientation that holds that the key task of the organization is to determine the needs and wants of target market and to adapt the organization to deliver the desired satisfaction more effectively and efficiently than its competitor in a way that preserves or enhances the customers? and society?s well being. Environmental trends like public welfare concerns for better living quality of life etc. indicate that organization would have to adopt socially responsible marketing policies and plans in order to assume social welfare in addition to consumer welfare. The socially responsible marketing concept is based on the assumption: (a) The mission of an organization is to create satisfied and healthy customers and contribute to the quality of life. (b) The organization will not offer a product to customer if it is not in the best interest of customers. (c) Marketing plans and programmes shall duly consider consumers wants, interest, desires, social welfare and corporate needs e.g. profits. (d) The organization will offer long run customer and public welfare.

The last two concepts of current market philosophy have been extensively adopted and widely accepted in the interest of the organization, the consumer and society. The first three concepts remained successful till competitors did not emerge in a large number and supply was less than demand. As the numerous competitors came into market it became flooded with goods and services of same quality and price. That led producers to give importance on selling efforts like personal selling and advertisement. But the selling efforts of the producers did not last long. As almost all producers applied the same sort of selling efforts. Ultimately, the producers started price-war to increase their market share but all of them were adversely affected in price-war. Thus during those periods marketing managers were in big crisis. Some enlightened marketing managers thought changing of their basic attitude and philosophy to solve the crisis. They started to take into con-sideration of needs, wants, tastes and preferences of consumers for marketing their products. This idea saved them from unnecessary selling efforts including false propaganda and protected them from going out of market with the adoption of this concept. The first three concept are known as traditional concept and the last two concepts are known as Modern marketing concept.

Selling Concept Vs Marketing Concept

The differences between the two concepts are explained on the basis following points: (i) Satisfaction: The experts of selling concepts did not pay due priority to the elements consumers? satisfaction. They were of the view that the ultimate objective of marketing is to bring circulation of products so that the customers get the product in time and in right manner. But the experts of marketing concept assumed that customers? satisfaction is an important element of marketing. The marketers can not survive for long period if they do not consider consumers? satisfaction is an essential element. (ii) Profit Generation: The selling concept experts worked with an objective of generating profit. Whereas, the market concept experts are of the view that the generation of profit would not be possible unless, the marketers concentrate on consumers? satisfaction. (iii) Consumer Orientation: The selling concept experts felt that marketing should be product oriented. Where the experts of marketing concept advocates that marketing should be consumer oriented. This concept pays emphasis on customer?s needs and wants. The marketers first determines the needs and wants of the customer and then delivers the product to satisfy those needs and wants. But in selling concept they make the product and then decide how to sell it. (iv) Planning: In selling concept, planning is short run oriented where as in marketing concept,

planning is long term oriented. (v) Process: In selling concept, first production, then selling takes place at a profit without knowing customer?s needs. In marketing concept, first consumer?s need is known and then production takes place, then the product is sold at a profit. (vi) Price: In selling concept, cost of production determines price where as in marketing concept, buyer determines the price and price determines the cost. (vii) Welfare: In selling concept, the experts did not assign any place to the welfare channelisation. In marketing concept, the experts talk about the payment of taxes to the government and the social welfare programmes taken up by the business houses. (viii) Research and Development: In selling concept, the marketing survey and research did not receive the due place but in marketing concept these activities are considered very essential for growth of marketing. In conclusion, it may be mentioned that the selling concept unnecessarily limited the preview of marketing. This selling concept cannot get results in the age of globalization.

MARKETING MIX

Marketing mix is the mixture of the essential elements of marketing in order to enhance consumer satisfaction. Marketing mix is the mixture of 4Ps? – Product, Pricing, Promotion and Place (Physical distribution and channel of distribution). To attain success in marketing effort, the various components should be well coordinated. Marketing mix offers an optimum combination of all marketing elements so that we can achieve company goals such as profit, return on investment, sales volume, and market shares and so on. The market mix will naturally be changing according to changing marketing conditions and also with changing environmental factors such as technical, social, economic, and political and competition. Elements of Marketing Mix: The elements of marketing mix are described below: (i) Product: Product means anything which can satisfy consumers needs and wants through exchange process. It provides economic utility and socio-psychological advantages. The marketer may offer a single product or several products. The marketer should also revise the product design, make improvements in the products frequently so as to suit the changing tastes, habits and preferences of the consumers. Packaging and branding decisions are also included in product decision.

(ii) Price: Price is the value which is paid by the buyer to the manufacturer in exchange of the products and services. The marketer has to take into consideration the cost factors, profit margin, the possibility of sales at different price level and the competitors pricing policy as well as number of competitors. (iii) Promotion: The marketers should provide information to the customers about its products and services and motivate customers to buy. Advertising, personal selling, publicity and other sales promotional programs are the various promotional activities. All these activities increase the volume of sales by expending as well as retaining the market share for the products. Basically, promotion deals with no price competition in the market. Promotion is done for three purposes – (a) informing, (b) persuading and (c) influencing consumers. (iv) Physical Distribution: Distribution is the delivery of the product and transfer of ownership to the buyers and consumers. It includes channels and outlets through which products move to the buyer and arranging their physical movement to different market segments. It depends upon the middlemen, products and services, channels of distribution etc. It maintains the flow of products and services from the producers to the buyers. The combination of all the ingredients of marketing mix is shown in the following figure:

Service can be defined as “a service is an act or performance offered by one party to another. Although the process may be tied to a physical product, the performance is transitory, often

intangible in nature and doesn?t normally result in ownership of any of the factors of production”. Phillip Kotler defined services as “Service is any act or performance that one party can offer to another that is essentially intangible and does not result in any ownership”. A service is an act or performance offered by one party to another. This performance is transitory and intangible in nature. This does not necessarily result in ownership of any of the factors of production. The process of offering performance may be tied to a physical product. A service is an economic activity that creates value and provides benefits for customers of specific times and places by bringing about a desired change in, or on behalf of, the recipient of service. In the case of „goods?, the benefits come from ownership of physical objects, whereas in „services? the benefits are created by actions or performances. The growing complexities in the service environment demand a higher emphasis on the marketing aspects of services. It is very important to run efficient operations, but that alone is no longer enough for success. Employers must be customer service oriented in addition to being concerned about efficiency in operations. The service product must meet customers? requirements. The service product should be priced realistically and judiciously distributed through effective channels convenient for the customers and should be actively promoted so that customers become aware and interested in the service product. As a service is a deed or performances, it is ephemeral – transitory and perishable – and so cannot be stocked as inventory after being produced. The service is produced and consumed simultaneously.

CHECK YOUR PROGRESS

1. Explain the meaning of marketing. 2. Explain two importance of marketing. 3. Distinguish between selling and marketing concept (Any two points). 4. Match the organizational objectives given in column I with the marketing concepts in Column – II

5. State whether the following statements are true or false: (i) Demand for a product exceeds the supply during the stage of production concept. (ii) Marketing creates only time and place utility. (iii) Marketing helps to utilize our natural resources. (iv) Marketing helps to provide economic stability.

SERVICE MARKETING MIX

Generally for goods market we use four P?s of marketing strategy. But the major difference in the education of services marketing versus regular marketing is that instead of the traditional “4 P?s,” Product, Price, Place, Promotion, there are three additional “3 P?s” consisting of People, Physical evidence, and Process. Thus, 7p?s of service marketing are as follows: · Product: A product is anything that can be offered to a market for consumption that might satisfy a want or need. Generally when we talk about a product we consider physical objects. But a service product is different from a physical product. A service product refers to an activity that a marketer offers to perform, which result in satisfaction of a need or want of pre determined customers. Managers must select the core service and its supplementary service to create value for customers. · Price: Price is one of the important marketing tools that a marketer controls and manages. In service marketing price is often used by the buyers in making pre purchase quality

assessments. Therefore low priced services are often considered to be low quality and high price services are considered to be high quality. Service marketing is not limited to the traditional pricing task of determining the selling price to customers. While setting price, service marketer should include monetary costs, such as travel expenses, time, mental and physical effort etc.

Promotion: Promotion means promoting a product to the potential customers. Marketers employ various promotional tools like advertising, sales promotion, public relation and personal selling. As services are intangible in nature, promotion plays a vital role in this field. In service marketing much promotion is educational in nature, specially for new customers. Companies may need to teach this customers about the benefits of the service, where and when to obtain it, and how to participate in service processes. Communication can be delivered through advertising or face to face interaction with sales people. For example, insurance agent explains us about the benefit of their service. Place: Delivering product or service to the customers involves decision on the place and time of delivery, as well as the methods and channels used. Firms may deliver service directly to the customers or through intermediaries. Service marketers also have to handle distribution of their services. But, services can not be produced in some centralized location and transported later to different market for sale and consumption. Rather services must move near the place of demand. Physical Evidence: It is the environment in which service is delivered and where the firm and the customer interact. The appearance of buildings, equipments, vehicle, interior furnishing, staff member, brochures, other printed material etc. provides tangible evidence of a firm?s

service quality. Process: The actual procedure through which service is delivered is known as process. Creating and delivering product elements require the design and implementation of effective process. A badly designed process generally leads to slow and ineffective process and customer dissatisfaction. People: Here people mean all the human being who takes part in the service delivery process. Many services depend on direct interaction between customers and a firm?s employees. These interactions strongly influence the customer?s perception of service quality. For example getting a hair cut strongly influences customer?s expectation from the barber.

Difference between Goods and Service marketing

Marketing Mix and 4 Ps of Marketing - Management Article
Post : Gaurav Akrani Date : 5/28/2010 10:30:00 AM IST No Comments Labels : Education, Management, Study Notes

1. Introduction To Marketing

Marketing is an important socio-economic activity with history of many centuries. It is an essential activity for the satisfaction of human wants and for also raising social welfare. Production is the base of marketing. It supplements production activities by distributing goods and services.

Marketing links producers and consumers together for mutual benefits. It facilitates transfer of ownership of goods and services to consumers. Production will be meaningless if goods produced are not supplied to consumers through appropriate marketing mechanism.

Marketing activities are conducted through the medium of money. They are conducted regularly throughout the world. Modern marketing is global in character. Everyone participates in marketing activities for the satisfaction of needs / wants.

Customer is the most important person in the whole marketing process. He is the cause and purpose of all marketing activities. According to Prof. Drucker, the first function of marketing is to create a customer or market. All marketing activities are for meeting the needs of customers and for raising social welfare. Marketing itself is a "need-satisfying process". It facilitates physical distribution and creates four types of utilities viz., Form Place, Time and Possession.

The term marketing can be given narrow or broad interpretation. In the narrow sense, marketing is concerned with the flow of goods and services from producers to consumers / users. This interpretation is 'product-orientation' of marketing. In the broader sense, marketing essentially represents consumer-oriented activity. It is for meeting the needs of consumers and naturally production and marketing activities are to be planned as per the needs and expectations of consumers. Marketing is for demand creation and demand satisfaction. This interpretation of marketing is now accepted. The broader interpretation views marketing as a "Total Concept".

2. Definitions of Marketing

1. According to Philip Kotler, "Marketing is human activity directed at satisfying needs and wants through exchange process." 2. According to J.F. Pyle, "Marketing is that phase of business activity through which human wants are satisfied by the exchange of goods and services." 3. According to William Stanton, "Marketing is a total system of business activities designed to plan, price, promote and distribute want-satisfying products to target markets to achieve organizational objectives." This definition treats marketing as one managerial function. It also suggests consumer orientation to marketing concept.

3. Features of Marketing

1. Marketing is a regular and continuous activity: Marketing is a continuous activity in which goods and services are manufactured and distributed to consumers. Assembling, grading, packaging, transportation, warehousing, etc. are supplementary to marketing and are useful for smooth and orderly conduct of marketing operations. 2. Facilitates satisfaction of human wants: Marketing activities are basically for satisfying the needs of consumers and also for raising social welfare. Identification of consumer needs should be the starting point of marketing activity. 3. Relates to goods and services: Marketing relates to goods and services. It is concerned with the exchange of goods and services with the medium of money. Trade transactions are between sellers and buyers of goods. Thus, goods and services constitute the basic and the most lively element in marketing. 4. Brings transfer of ownership: Marketing activity brings transfer of ownership of goods and services and facilitates physical distribution. Production acts as a base of marketing. 5. Creates utility: Marketing activity creates utilities (time, place and possession) through which human wants are satisfied. 6. Wider socioeconomic significance: Marketing activity has wider socioeconomic significance as it facilitates large-scale production, creates massive employment opportunities, and promotes social welfare and cultural exchanges. 7. Importance of 4 Ps: Marketing is the sum total of 4Ps. These are: product, price, promotion and physical distribution. Large-scale marketing is possible through appropriate combination of 4Ps called marketing mix. 8. Integral part of business: Marketing is one aspect of business. It is within the scope of business and is also linked with other functional areas of business. 9. Evolutionary concept: The concept of marketing has undergone significant changes. It is not merely for profit maximization. It has wider social significance. 10. Precedes and follows production: Production and marketing are closely related activities. Goods are produced for marketing. Here, marketing follows production. In addition, marketing suggests what consumer wants and production is adjusted accordingly. Here, production follows marketing. 11. Wide in scope: The concept of marketing is wide/comprehensive. It is not concerned merely with selling of goods but with other functional areas of business such as production, finance and personnel.

4. Importance of Marketing

1. Satisfies Human Wants: Marketing plays an important role in the satisfaction of human wants by maintaining regular supply of goods to consumers. It provides better life and welfare to people by satisfying their wants and also by providing useful goods and services which can make their life happy and enjoyable. 2. Provides profit and goodwill to marketing enterprises: Marketing is important to marketing firms as they earn profit by conducting marketing activities. Marketing enables a firm to expand business activities for market reputation and goodwill. The firm can achieve its objectives

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through successful conduct of marketing activities. Even new product can be introduced for consumer satisfaction and sales promotion. Facilitates specialization and division of labour: Marketing function, if performed successfully, leads to specialization, division of labour and efficient performance of production function climaxing in economic stability. Widens markets: Marketing facilitates widening of markets through large scale movement of goods throughout the country. Even advertising and sales promotion techniques are useful for widening markets. They provide convenience to consumers and profit to traders. Improves the standard of living of the society: Continuous production improves the skill of the workers. In addition, marketing process provides new varieties of quality goods to customers. It facilitates production as per the needs of consumers and supplies such production to consumers. This raises the standard of living of the people. It is the marketing which has converted "Yesterday's luxuries into today's necessaries". Facilitates economic growth: Marketing brings industrial/economic growth. It facilitates full utilisation of available natural resources. Marketing creates new demand for goods and thereby encourages production activities. This leads to the creation of massive employment opportunities. Thus, marketing is the kingpin that sets revolving of the whole economy. Creates new norms of socioeconomic behavior: Marketing develops new ways of life in the society. It makes the society progressive and dynamic. National economic policy is successfully implemented through marketing. It not only expands the home market but tries to establish a sound base for exports. Provides channels of communication to marketing firms: The marketing firms receive continuous feedback about demand for products and services through marketing. The three elements of marketing, namely, concentration, equalization and dispersion with their sub processes such as buying, assembling, transport, storage, standardization, grading, insurance, etc., facilitate quick communication between traders and consumers. Marketing is beneficial to producers and consumers. They get goods as per their needs and manufacturers get more profit and consumer support. Facilitates price control: Marketing facilitates price control by the manufacturers. It brings proper balance between demand and supply and this ensures price stability. Facilitates stability to marketing firm: Marketing is one major revenue generating source of a firm. It raises the turnover and profit of a business unit. A firm's survival, growth and stability are dependent on its ability to market the products efficiently. Marketing is thus one challenging function of management. Brings success in business: Marketing is a major activity of every business enterprise. If the marketing is not efficient, there will be losses and the whole firm will come in danger. This suggests that marketing is a risky activity with equal chances of getting profit and incurring losses. It is the successful marketing which supports all other activities of a business unit.

5. Introduction To Marketing Mix

Marketing Mix is one of the most fundamental concepts in marketing management. For attracting consumers and for sales promotion, every manufacturer has to concentrate on four

basic elements/components. These are: product, pricing, distributive channels (place) and sales promotion techniques. A fair combination of these marketing elements is called Marketing Mix. It is the blending of four inputs (4 Ps) which form the core of marketing system. This marketing mix is marketing manager's tool for achieving marketing objectives/targets. He has to use the four elements of marketing mix in a rational manner to achieve his marketing objectives in terms of volume of sales and consumer support. Meaning of the term 'marketing mix' is made clear with reference to the following points:

1. Marketing mix is the combination of four basic elements/ingredients under one head. Product itself is the most important element of marketing mix. Price, place and promotion are the other supporting elements. Marketing mix indicates an appropriate combination of four Ps for achieving marketing objectives. 2. James Culliton, the American marketing expert, coined the expression Marketing Mix and described the marketing manager as 'mixer of ingredients" as he has to establish fair balance among the four elements of marketing mix in order to achieve marketing targets. He is also a 'decider', 'artist' of marketing mix formula. 3. The four components of marketing mix are also called "marketing mix variables" or "controllable variables" as they emanate from within the enterprise and the marketing manager can use them freely as per his desire or need of the situation. 4. The elements of marketing mix constitute the core of marketing system of a firm. It is a profitable formula for successful marketing operations.

A marketing manager executes his marketing strategies through these instruments. The diagram given suggests the nature of marketing mix.

6. Customer Oriented Marketing Mix

7. Definitions of Marketing Mix

1. According to W. J. Stanton, "Marketing mix is the term used to describe the combination of the four inputs which constitute the core of a company's marketing system: the product, the price structure, the promotional activities, and the distribution system." 2. According to Philip Kotler, "A Marketing mix is the mixture of controllable marketing variables that the firm uses to pursue the sought level of sales in the target market."

8. Features of Marketing Mix

1. Combination of four marketing variables: Marketing mix is a combination/integration of four basic marketing variables namely, product, price, promotion and place. These variables are interdependent. 2. Useful for achieving marketing targets: Marketing mix aims at achieving marketing targets in terms of sales, profit and consumer satisfaction. It is rightly said that marketing mix is the marketing manager's instrument for attainment of marketing objectives/targets.

3. Flexible and dynamic concept: Marketing mix is not a rigid combination of four variables. It is in fact a flexible combination of variables. It is necessary to adjust the variables in the mix from time to time as per the changes in the marketing environment. It is the continuous monitoring of the marketing mix which facilitates appropriate changes in the mix. 4. Periodical adjacent of variables necessary: Marketing mix variables are interrelated and need suitable adjustments from time to time. Updating of marketing mix is essential for making it a powerful tool for achieving marketing targets. Updating is also essential due to environmental changes taking place within the firm. 5. Marketing manager acts as a mixer of ingredients: A marketing manager has to function as a mixer of marketing ingredients and has to achieve desired results through skillful combination of four Ps. He needs maturity, imagination and intelligence for appropriate blending of the variables. 6. Customer is the focus point: The main focus of marketing mix is the customer. His satisfaction and support are important. Variables of marketing mix are for giving more satisfaction and pleasure to consumers. 7. Variables are interrelated: Marketing mix variables are interrelated. Decisions in one area affect action in the other areas. An integrated approach is needed while making changes in the marketing mix variables. 8. Consumer-oriented activity: Marketing mix is a consumer-oriented activity as its purpose is to give satisfaction and pleasure to consumers. Here, the needs and expectations of consumers are given special attention and 4 Ps are adjusted accordingly. 9. Four Ps of sellers correspond to four Cs of customers: Four Ps in the marketing mix represent the sellers' view of the marketing tools available for influencing buyers. Each tool is designed to deliver a customer benefit.

The sellers' four Ps correspond to the customers' four Cs as shown above.

9. Elements / Ingredients of Marketing Mix

1. Product: Product is the article which a manufacturer desires to sell in the open market. It is the first element in the marketing mix. The product mix includes the following variables. a. Product line and range, b. Style, shape, design, colour, quality and other physical features of a product, c. Packaging and labeling of a product, d. Branding and trade mark given to the product, e. Product innovation, and f. Product servicing.

Managing product component involves product planning and development. Here, the decisions are required to be taken regarding product range, branding, packaging, labeling and other features of the product. The product manufactured for market should be as per the needs and expectations of consumers.

Product is the most powerful competing instrument in the hands of the marketing manager. It is the heart of whole marketing mix. If the product is not sound /attractive to the customers, no amount of sales promotion, appropriate channel selection or price reduction will help to achieve the marketing target. Hence, durability, quality, uses, etc. of the product are important from the marketing point of view.

Various Aspects of Product Decisions in Marketing: In the marketing process, various decisions regarding the product are required to be taken. Marketing will be easy and quick if the decisions taken on various aspects of a product are appropriate. AU such decisions need to be taken by the marketing division of the Organisation. Such decisions should be based on current marketing environment, nature of market competition, consumer expectations, information available through marketing research and so on. Cooperation of other departments is also necessary in marketing decision-making.

Production or product is rightly treated as the heart of the marketing mix. Customers purchase a product because of its attributes, features and benefits. These are the selling points of a product. They should be adjusted to the buying motives of consumers. A consumer/customer considers the total package of benefits available from the product and takes a decision to purchase the product. This suggests that various decisions regarding the product to be marketed need to be taken correctly. As a result, the product offered in the market will be a quality product. In addition, it will be utility oriented, attractive, convenient, property designed and branded. Even attractive packaging decision facilitates sales promotion.

The following aspects of a product need careful attention in marketing decision-making.

7. 8. 9. 10. 11. 12. 13. 14. 15.

Product line and range, Style, shape, design, colour, quality and other physical features of a product, Packaging and labeling of a product, Branding and trade mark given to a product. Product servicing and channel of distribution. Product pricing. Guarantees and warranties of the product. Product innovation. Special features of the product from the marketing point of view.

Decisions on these aspects of a product are important as marketing is directly related to these aspects. Sales promotion measures will be useful but their role will be supplementary/ supportive. Such measures may not be effective if the product to be marketed is not of standard quality or if the brand or package is not attractive or if the product is not as per the requirements/expectations of consumers. This suggests that decisions relating to product are important /crucial in the marketing of a product.

Distribution channel (Place): Physical distribution is the delivery of goods at the right time and at the right place to consumers. Physical distribution of product is possible through channels of distribution which are many and varied in character. Physical distribution (place mix) includes the following variables: . Types of intermediaries available for distribution, a. Distribution marketing channels available for distribution, and b. Transportation, warehousing and inventory control for making the product available to consumers easily and economically.

For large-scale distribution, the services of wholesalers, retailers and other marketing intermediaries are required. A marketing manager has to select a channel which is convenient, economical and suitable for the distribution of a specific product. For instance, large numbers of outlets are required for the distribution of products of mass consumption such as soaps and oils. On the other hand, for the marketing of speciality products like refrigerators and TV sets, selective distribution through authorized dealers is quite convenient.

Promotion: Promotion is the persuasive communication about the product offered by the manufacturer to the prospect. Promotion mix includes the following variables: . a. b. c. Advertising and publicity of the product, Personal selling techniques used, Sales promotion measures introduced at different levels, Public relations techniques used for keeping cordial relations with dealers and consumers, d. Display of goods for sales promotion.

Promotional activities are necessary for large scale marketing and also for facing market competition effectively. Such activities are varied in nature and are useful for establishing reasonably good rapport with the consumers.

Advertising gives information and guidance to consumers. Brand names are made popular through advertising. Along with advertising, personal selling is also useful for motivating the customers to buy a specific product.

In addition to advertising and personal selling, a manufacturer has to use other sales promotion techniques at the consumer level and at the dealer level. The techniques at consumer level include displays, exhibitions, discount coupons, small gifts and free samples, attractive container and consumer contests. Consumer psychology is favorable for extensive use of such sales promotion techniques. After-sales services are also useful for promoting sales of durable good.
Price: Price is one more critical component of marketing mix. It is the valuation of the product mentioned by the seller on the product. Price mix includes the following variables: . a. b. c. d. Pricing policies, Discounts and other concessions offered for capturing market, Terms of credit sale, Terms of delivery, and Pricing strategy selected and used.

Pricing has an important bearing on the competitive position of a product. The marketing manager may use pricing as a tool for achieving the targeted market share or sales volume. Pricing can also be used for capturing market and also for facing market competition effectively. Pricing decisions and policies have direct influence on the sales volume and profits of the firm. Market price of a product also needs periodical review and adjustments. The price charged should be high enough to give adequate profit to the company but low enough to motivate consumers to purchase product. It should also be suitable to face market competition effectively. Basic elements of marketing mix is shown in below point number 9 on this page.

1.4 Key Concepts and Tools: The Marketing Mix (The Four Ps)
Tools: The Marketing Mix (The Four Ps)

The Marketing Mix (also known as “the four Ps”) is probably the most commonly used concept in marketing. It shows that a marketing strategy is a blend of four different components, and that the particular emphasis of a strategy might change depending on what the objectives of the strategy are. Before we look at that in more detail, let?s examine what each part of the marketing mix is.

Products

These are the goods or services provided by the organisation to the target market. This includes factors such as quality, features, design, packaging, ease of use, durability, after-sales care, and customer service. Remember that when we talk about “products” they do not have to be a tangible object like a car or DVD player. They can be intangible things like public transport, hotels, medical procedures and meals on wheels. In that respect you can break down big services like “hotels” in to smaller ones like “check-in” or “online booking” which are easier to focus on.

Place

Place is everything like the way the product is distributed, where it is available, and how it is delivered to the customer. So not only does it include the location of your business or outlets, but the design of those outlets, the way customer service is delivered, the distribution network and telephone or web-based sales and customer care.

Price

Price is, as you can imagine, how much the product costs the customer. But it is more complex than that because not only does this involve price setting (which has to take in factors such as the

cost of production, storage, distribution and sales as well as the cost of returns and repairs) but also discounts for special types of customers or for general promotions (two-for-one sales, for example) and the cost of allowing the use of debit and credit cards. Depending on the market there may be other considerations. The seller of building materials described earlier may give large discounts to customers who order millions of pounds worth of goods. That has to be considered by the business. Fortunately that?s not something you are likely to have to do, but bear in mind that coming up with the suggestion of a 20% discount offer has costs attached to it, and to be accepted someone has to work out how many more sales will have to be made to make up for the drop in income. In other words, the client will usually come to you saying they are having an offer on pricing rather than you going to them to suggest it.

Promotion

Promotion is how you communicate the particular value and benefits of the product. This may be about persuading people to switch to the product, or about reminding existing customers why they should continue to buy it. Again, it depends on the strategy. The methods used to communicate this are part of the promotion and may involve advertising or other techniques such as direct marketing, the use of sales people, in-store promotion or competitions. For the purposes of this module, although we use the word “advertising” you should always consider the broader potential of “promotion” because sometimes what we normally think of as advertising may not be appropriate. When was the last time you saw an advertisement for a meals on wheels service, or a library?

Getting the mix right

As suggested in the discussion of promotion, what you do and how heavily one or more of the four Ps are emphasised depends on what you are trying to achieve. If you are running a meals on wheels service how do you make sure all those who are eligible for it actually know it is available? Leaflets through doors? Notices in doctors? surgeries? A flyer given out when the pension is collected at the post office? What information would be needed? What if the objective were to make sure people with elderly relatives were aware of the service? Then the message, and how it is communicated, will change. But wait! If your meals on wheels service suddenly sees a 25% increase in usage, what effect will that have on costs? And what effect will that have on quality of the food, and effectiveness of the delivery system? Think about that for a second because it should help you see that success in one part of the marketing mix might have a knock-on effect in others. A good example of this is the iPad. When it was launched in 2010 there was a lot of demand for it internationally and Apple rolled it out across the world, beginning in the USA. But demand in

the USA was so high that Apple sold out. That meant they had to delay its introduction in other countries. When the iPad 2 was launched in 2011 Apple made sure that they stuck to the promised dates in different countries but knew they may not be able to satisfy demand. That meant that people ordering online had to wait several weeks before theirs arrived while if you wanted to get one in a store you had to queue before it opened. As it happens, the fact the iPad was hard to get hold of added to its mystique, and the fact there were really no competitors for it meant Apple had the market to itself. If you couldn?t get an iPad, it was not that likely you would buy another brand of tablet. However in the 1990s if you were in the market for a computer it was quite hard to get hold of a Mac because their distribution was limited. In that case, though, there were many competitors that were easy to get hold of and the only real reason for going through all the hoops of getting a Mac would have been because you especially wanted one, rather than “a computer”. In that case the distribution problems and the price (the Mac was – and still is – more expensive than competitors) caused a major problem. Today the distribution problems of the iPad are a symptom of excessive demand, and the price is low (lower than competitors, in fact). The iPad is also well promoted and the fact it is hard to get hold of only added to the promotion! But in this marketing mix, the product is the important thing. Apple spent a lot of time engineering a product that is easy to use, not over featured (as discussed earlier) and well designed. Its competitors are, arguably, less well designed and in some cases not finished (some tablets shipped with features missing such as a card reader that didn?t work until an update to the operating system, while Blackberry?s PlayBook shipped without an email app).

Being different

The marketing mix also differs depending on the market you are in. If the thing you are selling is similar to lots of competitors you may have to focus on things differently than if you are selling something that isn?t really available anywhere else. Consider electric cars and tea bags. There are not many manufacturers of electric cars, and the market you are selling to are not the masses, but people with certain incomes or life styles, who read certain newspapers and magazines. The price is very high because it is new technology (see the product life cycle below) and they are not easy to get hold of because your typical car showroom won?t have space for them. So you don?t need to talk about features the way other cars are sold, and you don?t need to promote it as being a family car or a symbol of your sexuality. You simply need to get its existence out there. That means you?re likely to focus on web and telephone sales and services, your distribution network (delivering them yourself rather than using car showrooms), test drives and public relations (getting journalists to write about them) or having a car on display in a town centre or shopping mall. For now you?re more interested in targeting people with lots of disposable income and quite possibly people who live in big cities who will use it for short trips (and because only a few cities have the infrastructure to recharge them), or who want a second car. The newspapers you target will be quality papers for now, and you will spend a lot of money on glossy brochures and your web site. You won?t advertise on TV or in the press because there is no point – you can only make small numbers of them at the moment and while, like the iPad, a waiting list is not a bad thing, you don?t want to go bankrupt because you are building too many before the money starts coming in. With tea bags, it?s rather different. Your competitors are everywhere and unless you are a premium specialist brand, you need to get consumers either to stick with you or to give you a try. How do you do that? By making the boxes temporarily bigger, having a 50% extra free offer? By lowering the price for a short period? By giving stockists incentives for putting more of your product on the shelves in prominent places? What about advertising on TV and in the press, with money-off coupons as an incentive? In your ads, what do you focus on? Taste? Heritage? Manufacturing skills? How do you differentiate your products from all the competitors?



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