MarketingTheory&Practice561M.B.A.

Definemarketinganddiscussthedifferencebetween marketingandselling. MARKETING AMarketconsistsofallthepeopleand/ororganizations whodesireagoodorservice,havesufficient sourcesto make purchase, and are willing and able to buy. Marketing can be defined as a system of activities designedtoplan,price,promoteanddistributeproducts and/or services, which satisfy needs and wants of the consumers,inordertoachieveorganizationalobjectives. In broader sense the anticipation, management and satisfactionofdemandthroughtheexchangeprocessis calledmarketing. Marketing stimulates consumers, costs a large part of sales, employs people, supports industries, affects all consumersandplayamajorroleindailylives. Itisclearfromthisdefinitionofmarketingthatthebasic purposeofmarketinghelps toachievetheorganizationsgoals; tosatisfyconsumers;and toprovidedesirablegoods,servicesideas.

To earn profit as well as other objectives are goals of marketing. Therefore, the notion of profit is included directlyorindirectlyineverydefinitionofmarketing. The affect of acceptance of the concept of marketing would be that all activities of the organization would become customeroriented. This is to say that the companywouldidentifywhatcustomersneedandwant and tailor all its activities to satisfy those needs and wantsefficiently,effectivelyandprofitably.

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MarketingTheory&Practice561M.B.A. SELLING Sellingreferstoeffortsforpersuadingcustomerstobuy companys product. There are vast differences between marketing and selling, as selling is internally focused while marketing is externally focused. Selling process involves prospecting for customer leads, approaching customers, determining customer wants, giving a sales presentation,answeringquestions,closingthesalesand followup. DISTINCTIONSBETWEENSELLINGANDMARKETING

Asfocusedthesellingandmarketingintheabovefigure thedistinctionsbetweentheseareexplainedbelow: The benefits of a marketing, rather than a sales, orientation are many. Selling stresses on the sellers needs whereas the marketing emphasis on consumers analysistomakegoodsorservicesaspertheirwantsand satisfaction.Therefore,thepurviewofsellingacompany firstmakestheproductandthenfiguresouthowtosell it. Whereas this phenomenon in marketing is that a company first determines customers wants and then figuresouthowtomakeanddeliveraproducttosatisfy those wants. In selling management is sales volume oriented, planning is shortrun oriented in terms of todaysproductsandmarkets.Marketingisgearedtothe long run, for future growth and marketing goals reflect overall companys goals. Finally, marketing views customerneedsinbroadratherthanasnarrowmanner.

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Critically evaluate the need of the study of marketingenvironmentforamarketer. NEEDOFTHESTUDYOFMARKETINGENVIRONMENT Marker,maybeapersonororganizationthatdesiresto stimulateandfacilitateexchanges,isinneedtostudythe marketing environment becauseitisanintegralpartof successful marketing as various environmental forces influence its activities in which some are external and others within the organization. In types of forces the management can generally control the internals but cannot do much on externals. The interaction of controllable and uncontrollable factors determine an organizations level of success or failure in reaching its objectives. To start with, management should set up a system for environmental monitoring of its market programme is s process of gathering and analyzing information about external environment and the forecasting the impact of whatever trends the analysis suggests. There are two levels of external forces one is related with macro environmentandotherismicroenvironment.

The above six variables of external macroenvironment are interrelated and have considerable influence on marketing opportunities and activities. These are describedinsomedetailasunder: DEMOGRAPHICS: Demographics are the statistics that describes a populations. Their popular characteristics include age, genderfamilylifecycle,education,incomeandethnicity. Organizations need to understand these consumer
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MarketingTheory&Practice561M.B.A. characteristics. These characteristics of demographic factors influence marketing programme through their proportional or disproportional change in each characteristicswithriseandfall.

ECONOMICCONDITIONS: Therateofgrowthinthecountryseconomy,whichcan be studied by reviewing yearly change in the Gross NationalProduct(GNP),canhaveasignificantimpacton an organizations marketing efforts. Other economic related factors are current and anticipated stage of the business cycle, information and interest rates that influencemarketingprogramme.

COMPETITION: This is also one of the influence factors because a companys competitive environment is major initskind and often affects marketing efforts and success in attractingatargetmarketbecauseoneorganizationsells a good or service and has control over marketing in a monopoly. These are three types of competition. First typecomes from marketersof directly similar products. Secondissubstitutedproductswhichsatisfiesthesame needandlastismoregeneraltypeofcompetition.

SOCIALANDCULTURALFORCES: Thesereferstoquickchangeintheconsumerslifestyle, theirvaluesandbeliefsthatisthewayinwhichaperson livesandspendstimeandmoney.Itisafunctionofthe social and psychological factors internalized by that person, alongwithhisorherdemographicbackground. Somesocioculturaltrendsare(i)changinggenderroles
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MarketingTheory&Practice561M.B.A. (ii)agreaterpremiumontimeand(iii)addedemphasison physicalfitnessandhealth.

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MarketingTheory&Practice561M.B.A.

POLITICAL&LEGALFORCES: Some legislation seek to maintain a level playing field for all competitors by prohibiting organizations from usingmarketingpracticethatunfairlyinjurecompetitors. Somelawsprotectconsumersrightsandrestrictscertain marketing activities. The political environment often affectslegislationwhicharealwaysdiscussedbeforetheir enactment. Besides, monetary and fiscal polices and Government relationship with industries are also categoriesoftheseforceswhichaffectingmarket.

TECHNOLOGY: Technologyincludesdevelopmentanduseofmachinery, productsandprocesses. Itsadvancementiscostlyand required employees training. Therefore, technological breakthroughs affect markets by cost and also starting new industries, radically or virtually destroying existing industries and stimulating markets & industries not relatedtothenewtechnology.

The organization can be influenced to some extent through these above stated microenvironmental forces. Asthesuppliersfocusonpricepolicy,conditionsofsale, territorial rights and the services. Marketing intermediaries are wholesalers, retailers and various facilitating organization. These have interrelationship between the organization with its external environment andhasalargeimpactonallothermarketingdecision. Thechoiceofatargetmarketthroughthebasicpurpose of marketing i.e., to achieve the organizations goals; to satisfy consumers; and to provide desirable goods,

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MarketingTheory&Practice561M.B.A. servicesideasiscriticalbutdealingeffectivelywiththem isnecessarytobusinesssuccess.

As illustrated above, a set of nonmarketing resources within the firm is consisting of Production facilities, Personnel, Finances, Location, Research &Development and Company Image. These are also as internal environmentalforcesandaffectsmarketingenvironment. These variables are generally controllable by management.

TheMarketerssuccessinreachinggoalsdependsonhow wellitdirectsandimplementsitscontrollablefactorsand the impact of uncontrollable factors on the marketing plan. Alsobymeasuringconsumersatisfaction,looking at competitive trends, evaluating the relationship with government agencies, monitoring the economy and potentialresourceshortage.

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MarketingTheory&Practice561M.B.A.

Explainthedifferentmethodsofsegmentation. MARKETSEGMENTATION Market segmentation means to subdivide the total market for a good or service into smaller groups or segments so that the organization may focus on a particularsegment.Marketsegmentationallowsafirmto focusonaparticularsegmentofbuyers.Thistechniqueis particularly useful for smaller firms which do not have enough resources to compete with their larger counterparts.Forexample,amanufacturerofshoesmay focus itsattentiononladies shoes only.This would,of course,reduceitstargetmarket,butwouldenableitto competeandevengiveanedgeoverlargercompetitors. Largerfirmsusemarketsegmentationtoaddresstothe needs of different buyers. For example, a large manufacturer of clothing may classify its market by gender(clothesformenandwomen),byage(clothesfor newborn,kids,youngsters,andgrownups),bylifestyle (clothes for conservative people, and for liberal people etc.) or by climate (clothes for summer, winter, and moderate weather). Such segmentation would allow the firmtoindividuallyaddresstoeachcategoryofbuyers.

Thefirststeptowardssegmentationofmarketistodivide themarketintofollowingtwocategories Ultimate Consumers that buy goods and services for theirownuse;and Businessusersthatbuygoodsandservicestoresell,or touseintheirorganizationortomakeotherproducts.

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ULTIMATECONSUMERS: Thebasisforsegmentationofconsumersmarketare: Demographic Geographic Psychographic Buyingbehaviour

Consumer demographics are objective and quantifiable population characteristics. They are easy to identify, collect, measure and analyze. They include population size,genderandage,maritalstatus,education,income, etc. Geographic which is basic identifiable characteristic based on location, region, town and cities, etc., where consumersliveandwork. PsychographicThistypeofsegmentcanbedescribedon thebasisofsocialandpsychologicalfactorssuchaslife style,values,personality,etc. Buyingbehaviourbasedonthebenefitsdesiredfroma product and the rate at which the consumers uses the product. Forexample,wemaysegmentamarketonthefollowing bases: 4 4 4 Age (e.g. new born, infant, child, adult, middle aged,old) Gender(i.e.maleorfemale) Familystatus(single,married,marriedandhaving children)

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MarketingTheory&Practice561M.B.A. 4 4 4 4 4 4 4 4 4 Social status (lower, lower middle, upper middle, upper) Occupation (professional, managerial, clerical, student,unemployed) Educationlevel(doctorate,postgraduate,graduate, schoollevel) Life style (conservative, liberal, lavish, sports orientedetc.) Personality (introverted, extroverted, ambitious, aggressiveetc.) Religion(Muslim,Christian,Hindu,Buddhistetc.) Region(city,countryetc.) Climate(hot,cold,moderate) Ethnic background (Asian, American, African, European,etc.)

BUSINESSUSERS: Theybuyinstallations,rawmaterialsandsemifurnished materials. Theyoftenbuyonthebasisofspecifications, use joint decision making, lease equipment and use binding and negotiations. Their demand is generally derived from that of their consumers and can be quite cyclical. Businessusersarefewerinnumberandmore geographicallyconcentrated.Theseareclassifiedbyarea ofspecialization,sizeandresources,locationandgoods andservicespurchased. Some of the characteristics and their basis for segmentationare: Customerlocationregion,location. Customertypesize,industry.

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MarketingTheory&Practice561M.B.A. Transaction conditions buying situation, usage rate, purchasingprocedure,ordersize,servicerequirements.

What is the difference between marketing researchandmarketinginformationsystem? MARKETINGRESEARCH Marketing research is a systematic gathering, recording andanalyzingofinformationaboutspecificissuesrelated tothemarketingofgoods,services,organizations,people, placesandideas. Suchresearchmaybeundertakenby anoutsidepartyorthefirmitself. Marketing research is a function which links the consumer/customerandpublictothemarketerthrough informationthatusedtoidentifyanddefine: marketingopportunitiesandproblems; generate,refineandevaluatemarketingactions; monitormarketingperformance;and improveunderstandingofmarketingasaprocess. It specifies the information required to address these above stated issues; designs the method for collecting information;managesandimplementsthedatacollection process; analyzes the results; and communicates the findingsandtheirimplications. Contributiontotheneedformarketingresearchisbased onthefollowingfactors:

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MarketingTheory&Practice561M.B.A. In view of the above mentioned need, the marketing mangersusethefollowingmainsourceofinformation:

SyndicateServices regularlyscheduledreportsthat areproducedandsoldbyresearchfirms. Marketing Information System provides regularly scheduledflowofinformationandreports. Decision Support System provides direction interaction with data through Personal Computer to managers. Marketing Research Project resolve a specific marketingproblem.

MARKETINGINFORMATIONSYSTEM: Marketing Information System refers to an ongoing organized procedure to generate, analyze, disseminate, store,andretrieveinformationforuseinmakingmarket decisions.

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Regular and customized reports

Marketing Manager

Request for Information

Marketing Information System

Systems & procedures for data Collection Analysis Storage Retrieval and Dissemination

MarketingInformationSystemprovidesamanagerwitha regularly scheduled flow of information and report for decisionmakingsuchasretailsalesbygeographicarea on a weekly basis, monthly reports on the prices that competitorsarechargingandhowmuchadvertisingthey aredoing,developmentinthemarketinayear,etc. This system is based on coordination across all subsidiaries of a firm, recognition of differences in management styles and cultures, and an internal marketing effort to convince each unit of the value of timelyandaccuratelyinformation. DIFFERENCES BETWEEN MARKETING MARKETINGINFORMATIONSYSTEM RESEARCH
AND

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MarketingTheory&Practice561M.B.A.

Marketingresearchshouldbeconsideredasjustonepart of an ongoing integrated information system. A marketinginformationsystemisasetofproceduresand methods designed to generate, analyze, disseminate, store,andretrieveinformationforuseinmakingmarket decisions. The marketing intelligence phase of a Marketing Information System consists of marketing research, continuous monitoring and date storage. A MarketingInformationSystemcanbeusedbybothsmall andlargefirmsandtheapplicationofMkISarespreading rapidly.

What factors must be considered for the planningofaproduct? PRODUCT Product refers to a set of tangible and intangible attributes which may include packaging, colour, price quality and brand plus the sellers services and reputation. A product may be a good, service, place, personorideawhichsatisfywantsintheformofbenefits asthebuyersexpecttoreceivefromtheproduct. PRODUCTPLANNING This is relating to all aspects of the development and managementofproductthatsatisfyconsumers. OVERVIEW In the following lines an overview of factors involved in product planning is described. It examines the basic

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MarketingTheory&Practice561M.B.A. areas in which an organization takes steps to decide product type, product mix, product management organizationandproductpositioning. Italsoenlightens theproductlifecycleanditsmarketingimportance. Therearethreedistinctwaystodefineaproduct: Tangibleproductwhichhasprecisespecifications. Augmented product includes image and service features. Genericproductcentersonconsumersbenefits PRODUCTTYPE Firststeptowardsproductplanningisthechoiceofthe typeofproductwhichmaybeasgoodsorservicesandfor consumerorbusinessusers. GOODS marketing the sale of physical products durableand/ornondurable. SERVICESmarketingrentalofgoods,thealterationor repair of goods owned by consumers and personal service. CONSUMERS PRODUCTS goods and services for the finalconsumersclassifiedasconveyance,shoppingand specialtyitems. BUSINESS USERS PRODUCTS goods and services to resell, or to use in their organization or to make other products.

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MarketingTheory&Practice561M.B.A. PRODUCTMIX Afterdeterminingthetypeofaproduct,thenextstepisto outline the variety and assortment of this product. A product item is a specific model, brand or size of a product that a firm sells. A product lineis agroup of closely related items sold by a firm. A product mix consistofallthedifferentproductlinesafirmoffers. A productmixhaslevelsofwidth,depthandconsistency. PRODUCTMANAGEMENTORGANIZATIONS A firm may choose from among or combine several products. Management organizations including market manager, system product brand managers, product planningcommittee,newproductmanagersystem,etc. PRODUCTPOSITIONING Productpositioningisaprocessofdevelopingapositive image of a product in relation to its competition or in relationtootherproductsofthesamefirm.Thisstrategy isusedtoidentifytargetmarketstrengthforaproduct. Positioning can be done in the following four different ways: Positioninginrelationtothecompetition:Thisstrategyis most suitable for firms which already have a clear differential advantage over its competitors. In this strategy,thefirmmaylaunchacampaigntoconvinceits buyers that its product is superior to its competition. However, if the competitor has a very strong market position as compared to the firm, headtohead positioningisnotrecommended. Positioning in relation to a product class: In this positioningstrategy,thefirmassociatesitsproductwitha class or an attribute. For example, a product may be

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MarketingTheory&Practice561M.B.A. attributed as environment friendly or low energy consumption,orsomeotherdesirableattribute. Positioningbypriceandquality:Afirmmayconvinceits buyersonthebasisofpriceorquality.Forexample,in automobilemarket,aluxurycarmaybepositionedbyits high quality. On the hand, an economy car may be positionedbyprice. Positioning in relation to a target market: This positioning strategy takes into consideration the target markets.AnheuserBusch,forexample,usesthisstrategy for its line of beers offering 18 different products of different taste, calories and price, which address to the needsofdifferentconsumers. PRODUCTLIFECYCLE This seeks to describe a products sales, profits, customers,competitorsandmarketingemphasisfromits inception until its removal from the market. The traditional cycle consists of four stages: introduction, growth, maturity and decline. During each stage, the marketing objective, industry, sales, competition, industry profits, customers and the marketing plan change. Althoughthelifecycleisusefulinplanning,it shouldnotbeaforecastingtool.

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