Marketing

INTRODUCTION TO MARKETING

A.

B.

C.

Meaning, Evolution and Importance of Marketing - Evolution of Marketing Various Concepts of Marketing 1. Production Concept 2. Product Concept 3. Selling Concept 4. Marketing Concept 5. Societal Marketing Concept Marketing Mix : Concept, Major & Supportive Components and Importance

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2 Introduction to Marketing

introduction TO MARKETING
A. MEANING , EVOLUTION AND IMPORTANCE OF MARKETING

Marketing is not a new word to us. All of us use this word in our daily life in one way or the other. However, it seems that the meaning of the term marketing is not often clear to those people who use this word. To a salesman it means selling whereas to an advertiser it means advertising. To a housewife it means purchasing domestic items from the market i.e. shopping. Similarly for a producer marketing means distribution and selling of goods manufactured by him. According to Paul Mazur, "Marketing is the delivery of a standard of living". In short, marketing is a most popular word which is mostly misunderstood by most of us. In fact, the term marketing is not confined to selling, advertising, shopping, distribution, standard of living, etc. Marketing is a comprehensive term. It is a dynamic, exciting and contemporary field encompassing a wide range of activities. It includes not only buying and selling but also before production and after sales such as marketing research, product planning, pricing, promotion, distribution, sales, and after sales services.

Meaning of Marketing
Different authors and experts have given different definitions of marketing. There is not a single definition of marketing which is universally acceptable to all. The main reason is that marketing is a most developing science.

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Traditionally, marketing has been defined as buying and selling activities. In the words of Prof. Pyle, "Marketing comprises both buying and selling activities. According to American Marketing Association (1960) "Marketing is the performance of business activities that direct the flow of goods and services from producers to consumers or user." These definitions of marketing include all those activities carried on to transfer the goods from the manufacturers to the consumers. The essence of marketing is buying and selling. This is narrow meaning of marketing. This way of defining marketing represents 'product orientation'. It concentrates on selling. By this, the scope of marketing is limited to physical distribution, sales promotion and selling of products. Hence, the functions of marketing begin after the production and ends after sales of that product. This traditional concept is based on the assumption that the product produced will be acceptable to the consumer. In this way, the producer is concerned only with the production of goods without taking into account the need, choice or behavior of the consumers. The importance of after-sales service is not highlighted.
PreProduction Production
Pricing Promotion Sales

Marketing Research Product Planning

After Sales
After Sales Services

Distribution

Fig. 1.1 : Marketing Activities

This traditional concept is not appropriate in modern business because it totally ignores consumer needs and satisfaction. It does not include the pre-production and after-sales service which are important functions of marketing. In the cut-throat competitive environment of today, products have to be designed and developed keeping in view the wants and tastes of consumers. The reward goes to them who can best understand customer wants and deliver the greatest value to their target consumers.

4 Introduction to Marketing The modern concept of marketing is a consumer oriented which emphasizes on the satisfaction of the consumers. It represents a distinct philosophy of business. Marketing is the business process by which products are matched with the wants of consumers and through which transfer of ownership are affected. Matching products with the market means determining the requirements of potential customers and supplying the products which meet their requirements. If a business organization produces the products after assessing the requirements of prospective customers, it is more likely to be successful to achieve its objectives. The consumer-orientation marketing has given rise to a new philosophy in business known as the 'marketing concept'. A comprehensive definition of marketing covering all the ingredients of marketing has been provided by Stanton in the following words: "A total system of business activities designed to plan, price, promote and distribute want satisfying products to target markets in order to achieve organizational objectives". According to American Marketing Association (1985), "Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives". A key point of all definitions of marketing is that they view marketing as an exchange process. Exchange is the act of obtaining a desired object from someone by offering something in return. Exchange is the core concept of marketing. For an exchange to take place, five conditions are necessary. 1.There must be at least two parties. 2.Each party must have something that could be of value to the other. 3.Each party must be able to communicate and deliver. 4.Each party must be free to accept or reject the offer. 5.Each party must want to deal with the other party. These conditions simply make exchange possible. Whether exchange actually takes place depends on the parties' coming to an agreement. It gives consumers more consumption possibilities.

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Evolution of Marketing
The evolution of marketing is closely related with the development of society. It has passed through a number of stages as shown in figure 1.2 to reach the present level. These stages are as follows: 1.Self-sufficient stage 2.Exchange-oriented stage 3.Production-oriented stage 4.Sales-oriented stage 5.Marketing-oriented stage

SelfSufficient Stage Absence of marketing

ExchangeOriented Stage Foundation of marketing

ProductionOriented Stage Late 1800s

SalesOriented Stage Early 1930s

MarketingOriented Stage Mid 1950s

Early Civilization

Growth of Marketing

Fig. 1.2 : Evolution of Marketing (1) Self-Sufficient Stage

Our primitive ancestors consumed what they produced. This stage of human history is known as self-sufficient stage. Each family then was a self-sufficient unit as far as production and consumption were concerned. They produced what they wanted to consume and practically no surplus were available to initiate the process of exchange. Hence, it may be stated that the concept of marketing was absent in this stage.

(2) Exchange-Oriented Stage

Human wants increased with the advance of civilization. They could not produce everything they needed. People came to know that man is skillful in producing a few commodities. He can

6 Introduction to Marketing make them quite rapidly in large numbers and in beautiful forms. So, families started to produce more than their needs. This necessitated exchange of surplus with others. Hence, the foundation of marketing was laid by the introduction of Barter system. However, the inconveniences of such a system were felt a little later. It was gradually realized that the double coincidence of wants could be attained only if the products are brought to a central location so that exchange will take place smoothly. Thus, markets came into existence. Invention of money further facilitated to increase the momentum of exchange process and avoided inconveniences of barter system.

(3) Production-Oriented Stage

The evolution of marketing is usually measured from the Industrial Revolution which occurred in the later part of the 18th century. As a result of Industrial Revolution, goods began to be produced on a mass-scale. Before 1930, most firms in world economy were production-oriented. The primary concern in this stage was to produce as much as possible with high efficiency. Selling was no problem, because not only the population were large but many of them had much unsatisfied demand. The underlying assumption is that marketing effort is not needed to get people to buy a product that is well made and reasonably priced. During this stage the term marketing was not used. Instead, producers had sales departments headed by sales executives whose job was to manage a sales force. The function of sales department was simply to sell the company's output, at a price set by production and financial executives. Firms that prospered during this period were those that advanced in production technology and could lower production costs as a result.

(4) Sales-Oriented Stage

As more and more producers appeared on the scene, these arose competition among them. So supply of goods exceeded demand. The imbalance between production and consumption intensified, then came the Great Depression in the early 1930s. It made it clear that the main problem in the economy was not to produce or grow but rather to sell the production. Just making a better product there was no assurance of market success. Thus, the major concern of the most firms soon became selling and they

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adopted sales orientation. During this stage, firms added significantly to marketing expenditures. The firm with best sales personnel and wide distribution network were mostly successful. Firms aggressively used promotional tools, such as advertising and sales people to convince the customer to purchase firm's products, regardless of whether the customer wants or needs the product. At this stage everyone started realizing the importance of marketing. However, in this stage greater emphasis was on increasing the sales than on customer satisfaction.

(5) Marketing-Oriented Stage

In United States marketing has been fully developed to its highest level. By the early 1950s, the evil effects of competition made the producers realize that the product could not be sold through aggressive promotional and sales activities only. Many firms found that demand fell short of their production capabilities. Rapid changes in consumer demand continually drove many organizations into turmoil. Thus, many companies decided they needed to focus on the needs of their customers and carry out broad range of marketing activities to be successful. In this way evolution of marketing came to the marketing-oriented stage. Production and Sales-Oriented Stage
Produce Product Sell Product Exchange with Customers

Marketing-Oriented Stage
Understand Customer Wants & Needs Produce Product Market Product Exchange with Customers

Fig. 1.3 : Production and Sales-Oriented Stage Versus Marketing-Oriented Stage

In this stage, attention is focused on marketing rather than on selling. Customer satisfaction should be the real and correct perspective on which marketing policies of an organization should be built. Marketing is viewed as an integrated process of

8 Introduction to Marketing identification, assessment and satisfaction of human wants. The marketers following this orientation regard the creation of customer and satisfaction of his wants as the justification of business. Product is developed and produced to satisfy the needs of the customers. The emphasis is on selling satisfaction and not merely selling goods. In the above paragraphs, it was described how marketing evolved and developed. In the course of development, marketing underwent radical changes and its emphasis shifted from one concept to another.

Importance of Marketing
Marketing is the main reason for the existence of any business. The success of an organization or business depends largely on its successful marketing. In this rapid change, marketing is the heart of all business operations. The ultimate aim of all production is consumption. But, there is a widespread gap between production and consumption. Marketing bridges this gap and facilitates smooth exchange through creating the various utilizes - form, place, time, and possession utilities. This is shown in the following figure 1.4. These utilities aim at serving demands of the customers by offering the right goods on the right time, at the right place, at the right price and to the right customers. Hence, the very existence of business lies in this marketing process. The following table indicates how marketing bridges the gap between producers and consumers:

Table 1 : How Marketing Bridges the Gaps Between Producers and Consumers
Gaps Form
Place Time Possession

How Marketing Bridges the Gap ? Product planning & development, packaging, branding Transportation, middlemen Risk bearing, warehousing Customer contact, termination of sale

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Information

Communication and mass media

Production
Producers do not know who needs what, when and at what prices. Geographical separation of producers and consumers. Consumers are scattered.

GAP

Consumption

FORM UTILITY PLACE UTILITY TIME UTILITY

POSSESSION UTILITY

MARKETIN G BRIDGES THE GAP

Separation caused by differences in production and consumption timing. Problem of transfer of title or ownership.

Fig. 1.4 : Marketing Bridges the Gap

However, the importance of marketing can be explained under the following heads: (1) (2) (3) Importance of marketing to the Consumers Importance of marketing to the Society Importance of marketing to the Firms

1. Importance of Marketing to the Consumers

Marketing aims to satisfy the unlimited wants and needs of the consumers. Marketing provides knowledge about the product to the consumers and facilitates in selecting and consuming the products. Today, through relatively efficient mass marketing, we enjoy products that once were considered luxurious. The importance of marketing to the consumers can be explained from the following services and facilities provided to them.

10 Introduction to Marketing 1. Provide Information: Consumers can obtain information about the products of various producers and compare relative merit and demerits of the products through marketing. Marketing increases the knowledge of customers by means of advertising, sales promotion, publicity, etc. It helps to become a better consumer. 2. Provide Satisfaction: Modern marketing is based on consumer satisfaction. Products are produced according to the needs and taste of the consumers. Besides production, it also emphasizes selection of a suitable channel of distribution and also makes the products available at reasonable prices in the market.

IMPORTANCE OF MARKETING
To the Consumers
1. Provide information 2. Provide satisfaction 3. Selection facility 4. Increase in standard of living 5. Creation of utilities

To the Society
1. Provide employment 2. Delivery of standard of living 3. Protection from depression 4. Increases national income

To the Firm
1. Business planning and decision making 2. Developing successful exchanges 3. Helpful in increasing profits 4. Communication between firm and society

Fig. 1.5 : Importance of Marketing to Various Sectors

3. Selection Facility: Today similar products are produced by various producers. In order to satisfy the demand of different types of customers, products of different varieties, designs, colours, sizes, etc. are also produced. It facilitates the choice of the consumers as they are free to select the product of their own interest and need.

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4. Increase in Standard of Living: Marketing creates and increases demand of existing and new products. It provides knowledge about different varieties of products and services to the consumers by means of advertising, publicity, and sales promotion. By consumption of desired product increases the standard of living. The standard of living increases not only by consumption more but also by buying "right" product. Prof. Malcolm has rightly remarked, "Marketing is the creation and delivery of a standard of living." 5. Creation of Utilities: The range of utilities created by marketing is another indication of its importance to the customers. It adds value to the product. The production system creates form utility. Form utility is created when separate materials are combined and transformed into a finished product that has higher value than the separate materials composing it. Marketing also creates time, place, and possession utility. Place utility is created by making a product readily available where customers desire it. Making a product available to consumers when they want it adds time utility. Possession utility is created when a customer buys the product: that is ownership is transferred to the buyer. These utilities aim at serving demands of the customers by offering the right goods on the right time, at the right place, and at the right price.

2. Importance of Marketing to the Society

Marketing plays even more significant role for the society. The importance of marketing to the society can be further explained by the following services provided to the society. 1. Provide Employment: Marketing is an important source of providing employment. According to one estimate about one third of the labour force is engaged in marketing activities such as, wholesaling, retailing, transportation, warehousing, and communication. Furthermore, jobs in marketing are increasing much more rapid rate than jobs in production. This has helped to control the unemployment problem in the society. 2. Delivery of Standard of Living: Marketing produces and supplies the products according to the needs of the society. It

12 Introduction to Marketing provides knowledge about different varieties of products and services to the society by means of publicity and sales promotion. Hence, Paul Mazur has aptly said, "Marketing is the delivery of standard of living to society". 3. Protection from Depression: Marketing saves the economy from depression. If the products are not purchased by the consumers, the country has to suffer from depression which will have long term effect in the economy. Hence, it helps by discovering new markets, making it customer-oriented, improving the quality of products, suggesting alternative uses of products, etc. 4. Increases National Income: When different varieties of products are made available according to the needs and tastes of consumers, there is an overall increase in demand. An increase in demand stimulates production activity in the country which in turn increases the national income of the country. Increase in the national income brings all round prosperity in the society and country as a whole.

3. Importance of Marketing to the Firm

Marketing is the distinct and unique function of business. The very existence of any firm depends upon marketing. The importance of marketing to the firm can be explained as under. 1. Business Planning and Decision Making: In modern economy, production is planned according to the sales forecast and not according to production capacity. Hence, marketing is an important factor in modern business planning and decision making. A firm will produce what it can sell and in as much quantity as it can sell and not how much it can produce. Thus, business planning and decision making of the firm is based on the marketing. 2. Developing Successful Exchanges: Marketing is important to every firm because it helps them create successful exchange relationship with potential buyers. For this, the right product must first be produced and then correctly distributed, promoted, and priced. These all are integral parts of marketing.

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3. Helpful in Increasing Profits: The main objective of every business is to earn profit. Marketing helps in increasing profits by reducing the distribution cost on one side and increasing the demand of the product by means of advertising and sales promotion on the other side. Hence, marketing is consider as the art of earning profit through profitable sales. It alone generates revenue or income to the firm. In essence, marketing is ascertaining, creating, and satisfying the needs and wants of people at a profit. 4. Communication Between Firm and Society: Today, marketing is an important source of communication between the firm and the society. In this dynamic environment consumers' behavior wants and tastes are changing rapidly. Marketing provides information about these changes to the firms. Even the producers and the consumers are situated at a distance and it is marketing which is the source of establishing effective communication between them.

Marketing concepts are the philosophies under which organizations conduct their operations. These philosophies guide the marketing efforts and activities of any organization. According to Philip Kotler there are five competing marketing concepts under which organizations conduct their marketing activities: (1) The production concept, (2) The product concept, (3) The selling concept, (4) The marketing concept, and (5) The societal marketing concept.

B. VARIOUS CONCEPTS OF MARKETING

1.

The Production Concept

One of the oldest concepts in guiding the marketing activities is the production concept. This concept holds that consumers will favour those products that are widely available and low in cost. Thus, producers/managers should concentrate on achieving high production efficiency and wide distribution coverage, which lead to economies of scale and decline in cost per unit. This concept implies: (1) It aims at selling what can be produced.

14 Introduction to Marketing (2) (3) (4) It concentrates on high production efficiency to reduce cost. It concentrates on wide distribution to make products easily available. It attracts consumers through low pricing.

This concept is based on the philosophy of mass production and mass selling. It assumes that consumers are primarily interested in product availability and low price. The price is the critical variable in the buying decisions. Thus, organizations use mass production to cut prices and expand market sizes. The production concept is useful in two types of situation. First, when the demand for a product exceeds the supply. Here producers should look for ways to increase production. Second, when the product's cost is too high, this can be brought down by mass production. Thus, under this concept, producers concentrate on increasing production, reducing costs, and widening distribution. It emphasizes on uninterrupted product availability and low price at which the product is made available. This concept is applicable in developing countries where consumers are more interested in obtaining the product than in its features. It is also used when a company wants to expand the market.

2.

The Product Concept

The product concept holds that consumers will favour those products that offer the most quality, performance, and innovative features. Producers/managers focus their energy on making quality products and improving them over time. It is a shift from production orientation to quality orientation. This concept implies: (1) (2) (3) (4) It is quality oriented philosophy that aims to produce quality goods in large quantity. It emphasizes quality product at reasonable price which needs less effort to sell. It does not care consumer's needs, wants or interest It attracts consumers through quality improvements over time.

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The ultimate goal of the product concept is to earn maximum profit by producing and selling high quality products at reasonable prices. Organizations believe that little effort is required to sell the quality products that are reasonably priced. The buyers will admire quality products. Sometimes, product concept is alleged that it leads to 'marketing myopia' because the focus is on the product rather than on the consumer needs.

3.

The Selling Concept

The selling concept is a common approach for any marketing effort. This concept holds that people ordinarily will not buy the organizational product unless they are persuaded to buy through an aggressive selling and promotional effort. This concept implies: (1) (2) It is sales oriented philosophy that aims at satisfying the needs of sellers. It emphasizes on selling what is made rather than what can be sold. It is not concerned with the consumers' needs. It involves aggressive promotion to attract consumers. Consumers are persuaded to buy the product.

(3) (4)

This concept aims to sell what they make rather than make what the market wants. This concept is based on the idea that people will buy more products if aggressive promotional tools are used. The selling concept is usually practical with unsought products, which buyers do not normally think of buying i.e. lifeinsurance, encyclopedia, etc. The selling concept is also practiced in non-profit area. A political party, for example, will vigorously sell its candidate to voters as a fantastic person for the job. It does not care for the after-sales service.

4.

The Marketing Concept

The marketing concept is a modern business philosophy. This concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than

16 Introduction to Marketing competitors. According to Stanton, "The marketing concept emphasizes customer orientation and coordination of marketing activities to achieve the organization's performance objectives." It is a customer-oriented marketing. In other words, product is developed and produced to satisfy the needs of the customers. This concept implies: (1) (2) (3) (4) It is customer-oriented philosophy that aims at producing what can be sold. It is based on well defined target market. It integrates all of the activities that affect customers through coordinated marketing. The organizational goals are achieved through customer satisfaction.

The marketing concept rests on four pillars: target market, customer needs, integrated marketing, and profitability. Hence, the marketing concept starts with the organization's target customers and their needs and wants. It plans a coordinated set of products and programmes to serve their needs and wants to derive profits through customer satisfaction. Under marketing concept, the focus is on the customer and his wants. The emphasis is on selling satisfaction rather than selling a mere product. Satisfied customers express loyalty to the firm by buying its products regularly. The marketing concept has been expressed in many ways i.e. "Find wants and fill them", "Love the customer and not the product", "We are not satisfied until you are", and "You are the boss".

Distinction Between Marketing Concept and Selling Concept

The selling concept and marketing concept are often confused. Figure 1.6, compares the two concepts. The selling concept is product-oriented whereas marketing concept is customeroriented. The selling concept starts with the existing products. It focuses on products to earn profit through increased sales volume and follows aggressive promotional tools. On the other hand

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marketing concept starts with the target customers and their need and wants before the production. It focuses on customer satisfaction for earning profit through integrated marketing. The following table shows the differences more clearly:

Starting Point

Focus
Products

Means
Selling & promotion

Objectives
Profits through sales volume

Selling Concept

Factory

Marketing Concept

Target market

Customer needs

Integrated marketing

Profit through customer satisfaction

Fig. 1.6 : Selling Concept Vs Marketing Concept Table 2 : Difference Between Marketing Concept and Selling Concept
Marketing Concept 1. Starting Point: Marketing starts with customers needs and takes outside-in view of the market. 2 Focus: It focuses on customer's needs of wantsatisfying products. Means: All marketing activities should be organizationally integrated to achieve organizational goals. 1. Selling Concept Selling starts with factory and takes inside-out view of the market.

2.

Selling focus on seller's needs of converting his products into cash. Customers are persuaded through an aggressive selling and promotional tools.

3.

3.

18 Introduction to Marketing Marketing Concept 4. Profit: Marketing aims at profit through customer satisfaction. End: Marketing continues even after sales so as to provide aftersales service. 4. Selling Concept Selling aims at profits through sales volume. Selling comes to an end with the delivery of the product to the consumers.

5.

5.

5.

The Societal Marketing Concept

The societal marketing concept focuses on society. Marketing must act responsibly towards society. It should deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer's and the society's well-being. It is the newest of the five business concepts. The societal marketing concept evolved out of the movements of consumerism and environmentalism. These two popular movements have raised serious questions whether the pure marketing concept is adequate in an age of environmental problems, resource shortages, rapid population growth, and neglected social services. The societal marketing holds that the key to achieving objectives is customer need satisfaction, protect the interest of consumers, and safeguard the well being of the society. The marketers must balance three considerations in setting their marketing policies: company profits, consumer wants, and society's interests. For an organization to prosper in the long-run, must do a good job of satisfying consumers' social and economic demands. The society marketing concept has the following features: (1) The starting point of societal marketing is target market.
(2) It believes in supplying better quality goods than those of

competitors to satisfy the needs of target customers. (3) It adopts socially responsible marketing activities to enhance social welfare.

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(4) This concept emphasizes on integration and coordination

among all the organizational activities.

(5) This concept believes that profit can be earned only

through caring the interest and well being of the society, consumers and firm.

Table 3 : Comparison of Business Concepts

Business Concepts
Production Concept: Aims at selling what can be produced Product Concept: Aims at improving the product Selling Concept: Aims at satisfying seller's needs Marketing Concept: Aims at satisfying customer needs Societal Marketing Concept: Aims at promoting social welfare

Starti ng Point
Factory

Main Focus

Means

Organizatio nal Goal

Profit through mass production and selling Profit through well made products Profit through high sales volume

Product

Factory

Product

Factory

Product

Target market

Customer s' needs Social responsibi lity

- Mass production - Low price - Wide distribution - High quality - Performance guarantee - Aggressive selling - Heavy promotion - Integrated marketing - Integrated marketing - Concern for societal and ethical issues

Target market

Profit through customer satisfaction Profit through customer and social well-being

C.

MARKETING MIX

Marketing mix is the policy adopted by the producers to get success in the field of marketing. It is set of tools that the firm uses to pursue its marketing objectives. According to Stanton, "Marketing mix is the term used to describe the combination of the four inputs - the product, the price structure, the promotional activities, and the distribution system, which constitute the core of a company's marketing system". The marketing mix is the combination of four components the product, place, price, and promotion. These are popularly

20 Introduction to Marketing known as "Four P's". E. Jerome McCarthy popularized the concept of "four P's" - product, place (physical distribution), price, and promotion. Each P is perceived as having its own mix. The four P's of marketing mix are in interrelated. Decisions in one element usually affect action in others. While making marketing mix decision, the needs and wants of customers should be considered. It focuses on how the customers' needs can be satisfied.

Product

Promoti on

TARGET MARKET

Price

Place

Fig. 1.7 : Four Ps of Marketing (Components of Marketing Mix)

Major and Supportive Components of Marketing Mix

The marketing mix consists of everything the organization can do to influence the demand for its product in the target market.

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The term marketing mix is the combination of four major components - the product, place, price, and promotion.

1.

Product Mix

A product is the most important element of the marketing mix. A product is anything that can be offered to satisfy customer needs. A product mix involves planning, developing, and producing the right types of products and services to be marketed by the organization. It deals with the product range, durability, and other qualities. Apart from producing the right products emphasis should also be laid on their packaging and branding. The product mix includes the following decisions: (a) (b) (c) (d) (e) (f) Product, planning and development Product range (line and items) Standardization and grading Packaging Branding Warranties

2.

Price Mix

Price stands for the amount of money customers have to pay to obtain the product. It is one of the most difficult tasks of the marketing manager to fix the right price. He should determine the price in such a way that the firm is able to sell its products successfully. Pricing also involves establishing policies regarding credit and demand. The variables that are taken into consideration while fixing prices are demand for the product, its cost, actual and potential competition, and government regulations. The price mix includes the following decisions: (a) (b) (c) Setting list price Discount and allowances to provide price flexibility Terms of sale (credit terms, payment period, etc.)

22 Introduction to Marketing Pricing decisions and policies have direct impact on the sales volume and profits of the organization. Pricing is, therefore, an important element of the marketing mix.

3.

Place or Distribution Mix

Place mix comprises the activities that make the product available to target consumer. The place mix calls for selecting channels and outlets through which products reach into the hands of customers and arranging their physical movement to different market segments. The important channels used for physical distribution of products are wholesalers and retailers. In some cases, the producers even own the retail outlet. Whatever may be channel selected, the marketing managers are also responsible for measuring channel performance and making changes when performance falls short of expected goals. In addition, he has to develop a distribution system for handling and transporting the products through these channels. Thus, place mix include the following decisions: (a) (b) Channels of distribution (direct or middlemen). Physical distribution activities such as warehousing, materials handling, inventory control, order processing, and transportation.

4.

Promotion Mix

Promotion deals with informing and persuading the customers regarding the organization's product. Promotion mix includes all the activities undertaken communicate and promote products to the target market. It involves decision about advertising, personal selling, sales promotion, publicity, public relations, exhibitions, and demonstrations. Advertising and personnel selling are important tools to promote the sale of products. The use of promotional activities like contents, free distribution of samples, etc. is also significant to fight competition in the market. Thus, the elements of promotion mix are as follows: (a) Advertising

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(b) (c) (d) (e)

Sales promotion Personal selling Publicity Public relations

It is significant to point out that every organization has to devise its own marketing mix - four P's - i.e. taking decision relating to product, price, place (physical distribution), and promotion and then coordinate them. The purpose of determining the marketing mix is to satisfy the needs of the customers in the most effective and efficient manner. Since the needs of the customers change, the marketing mix also changes. It is also influenced by the forces of competition in the market. Thus, marketing mix does not remain static. Determining the optimal marketing mix is not an easy exercise. It requires a lot of information, imagination, and judgement. Marketing research, farsightedness and judgement are used in designing marketing mix.

FOUR P's OF MARKETING ( Major and Supportive Components of Marketing Mix )

Product Mix
Product planning and development Product range Standardizatio n and grading - Packaging - Branding - Warranties

Price Mix
- Setting list price Discount and allowances Terms of sale

Place Mix
- Channels of distribution - Physical distribution: - Warehousing Material handling Inventory control Order processing Transportation

Promotion
- Advertising Sales promotion Personal selling - Publicity Public relations

Importance of Marketing Mix

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Marketing mix represents four elements of marketing i.e. product, place (physical distribution), price, and promotion. Determination of marketing mix is an important decision, which the marketing manager has to take. If proper marketing mix is determined, the organization receives the following benefits: (1) Satisfaction of Customers: Marketing mix serves as a link between the organization and its customers. It concentrates on the satisfaction of customers. Thus, it helps in pursuing customeroriented marketing. (2) Increase Sales: As the marketing mix takes care of the needs of the customers, it helps in increasing sales. The result would be earning higher profits. (3) Closely Interrelated: Marketing mix signifies that its four elements are closely interrelated. There is a balanced relation between these elements. Decisions or changes in one element usually affect decisions or changes in the other. Thus, product features, price, promotion, and place (physical distribution) are all determined in an integrated manner. (4) Meeting Requirements of Customers: Marketing mix gives due consideration to the various elements of marketing. It facilitates meeting the requirements of different types of customers. Product design, pricing, promotion, and channels of distribution will depend upon the needs and purchasing power of the customers. If the requirements of customers change, the marketing mix will also be changed to satisfy their requirements.

Case Studies
1.

Select a firm that you believe is not practicing the marketing concept. Explain why you think the firm is not practicing it and then suggest how it could implement the marketing concept.

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2. Name some companies that you believe are still in the production or sales stage in the evolution of marketing. Explain why you choose each of them.

IMPORTANT QUESTIONS
Short Answer Questions:
1. 2. 3. 4. 5. 6. What is marketing ? Explain the importance of marketing to the firm. What are the various concepts of marketing ? Explain any two of them. How does marketing create utility ? Explain with example using a product that you are familiar. Differentiate between selling concept and Marketing concept. What is marketing mix ? Describe the importance of marketing mix to the organization. Do you agree with the statement- "There is a widespread gap between production and consumption." Support your answer with examples.

Long Answer Questions:

1. 2. 3. 4. What is Marketing ? Describe the evolution of marketing. Define Marketing. Describe the importance of marketing to the consumers and society. Explain the various concepts of marketing. Explain the components of marketing mix and its importance to the organization.

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IMPORTANT NOTES