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Principles of Marketing: Unit 1: Introduction To Marketing and Marketing Environment

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0% found this document useful (0 votes)
160 views14 pages

Principles of Marketing: Unit 1: Introduction To Marketing and Marketing Environment

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Varnika Rai
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Principles of Marketing
Unit 1 : Introduction to marketing
and marketing environment

Marketing is process of understanding customer needs and


wants and creating pricing, promoting and distributing goods
and services to satisfy customer needs and wants and building
lasting relationship with them to generate revenues for survival
and growth of business

Marketing is social and managerial process by which an


individual and organization obtain what they need and want
through creating and exchanging value with others.

Market refers to a place where buyer and seller meet for


exchange of goods and services .

Marketer can be a person or organization who makes available


the product and service and offer them to customer with
intention of satisfying their needs and wants.

Nature of Marketing :
1. Customer focused : marketing intends to satisfy and
delight customer. The activities of marketing must be
directed and focused at customer. Marketing should start
with identification of customer needs and wants.
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2. Based on system approach : marketing system is based


on system approach to marketing. It require intelligent
coordination of 4 P’s of marketing mix.
3. Integrated process : Marketing is an integrated process.
It is not just one activity, it involve interaction of many
activities such as product, planning, pricing, promotion,
packaging etc
4. Mutually benefit exchange : it means buyer get want
satisfying goods and services and seller gets value in
exchange of goods and services
5. Interaction with external environment : marketing
operates within framework of external environment which
comprise economical, social, natural, legal forces. Change
is environment influence market activities.
6. Creative : Marketing perform certain crucial function
which create time, place, possession utilities. Time utility
created by preserving goods for use in future. Place utility
is created by carrying goods to place where they needed.

Scope of marketing :
Marketing is pervasive in nature as it applies to all types of
organization. It is not applicable to only business organization
but also in educational, medical, government organization

The scope of marketing is determined by market offering of an


organization. Market offering is combination of goods, service,
idea, person, place, info etc
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 Goods : An item is considered goods if it tangible. They


generally offer same benefit each time.
 Services : these include services of profession like doctor,
advocate, CA and other services like banking, insurance,
transport etc. The consistency of benefit may vary over
time to time.
 Ideas : An idea is mental concept and intangible in nature.
A marketer market an idea to change behavior of targeted
people.
 Persons : marketing of persons refers experts are
employed to market specific personalities.
 Organizations : many organizations market themselves
to build up their reputation and to make people aware
about their activities.
 Places : marketing of places involves when tour and travel
agencies induce people to visit various tourist and health
resorts

Importance Of Marketing :
1. Benefits to firms :
 Beating heart to business firm : marketing is sole revenue
producing activity and considered most important function
of management.
 Give top priority to needs of customer : quality of goods,
storage display, advertisement, packaging all directed
toward satisfaction of customer
 Help in creation of place, time, possession utilities : the
significance of marketing lies in creation of these utilities
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to satisfy the needs of these customers and thereby earn


profits.

2. Benefits to customer :
 Provision of information : Marketers provide important
information to users about the availability of their product
in market and their usefulness.
 Satisfaction of needs and wants : marketing helps the
consumer in procuring goods and services to satisfy their
needs and wants
 Wider choice : Marketing helps in creating competition
among the marketer who come out with new and improved
product for customer.
 Improvement in standard of living : By providing a wide
variety of product, marketer helps in improving standard
of living of customer.
 Time and place utility : Marketers create time utility by
providing goods to consumer when they need the same.

3. Benefits to Society :
 Satisfaction Of Society Needs : Marketing determine the
needs of society and set out the pattern for production of
goods and services.
 Improved Standard of living : Marketing help in improving
standard of living by offering a wide variety of product to
society with freedom of choice.
 Generation of employment : Marketing generate
employment for people. A large number of people are
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employed by modern business house to carry out the


functions of marketing.
 Better utilization of resources : marketing helps in better
utilization of resources of society as each firm try to
produce goods and services economically and efficiently.

Concepts of marketing :
1. Production Concept : This concept is based on belief that
high production efficiency and mass distribution would sell
product offered to market. It will lead to economies of
scale and decline in cost per unit. Mass production and
distribution are essence of production concept.
2. Product concept : this concept believes that by producing
superior product and improving their feature over time
they would be able to attract more customer with
assumption that customer favour product quality,
innovative feature.
3. Societal Marketing concept : This concept goes beyond
understanding customer needs and matching product
accordingly. This philosophy cares not only for consumer
but also for social welfare.
4. Marketing Concept : It emphasis the determination of
requirement of potential customers and supplying product
to satisfy their requirements. The objective of firm is not
maximization of sale volume but profit through
satisfaction of customer.
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Marketing Mix
Every business has to determine its marketing mix for
satisfaction of needs of customer. It represent a blending of
decision in 4 areas – product, price, promotion and physical
distribution.

It is a dynamic concept. It concentrate on how to satisfy needs


of customers.

Importance of marketing mix :


1. Customer Satisfaction : It serve as link between business
firm and its customer. It focuses attention on satisfaction
of customer
2. Balancing of marketing strategy : It give consideration to
various elements of marketing system, there is balanced
relation between these elements.
3. Integrated strategy : It signifies that its 4 elements are
closely interrelated. Decision or changes in one element
usually affect decision or changes in other.
4. Facilitates Market segmentation : marketing mix
facilitates meeting the requirement of different segment
of customers. If requirement of customer change the
marketing mix also change to satisfy their requirement.
5. Higher Sales Volume : marketing mix takes care of needs of
customer, it helps in increasing sales and earning higher
profit.
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Component Of marketing mix :


1. Product :
It involve planning, developing, and producing right types
of product and services to be marketed by firm. It deals
with the product range, durability and other qualities. Its
emphasis also laid down on branding, packaging, color and
other features.

2. Price :
It involve establishing policies regarding credit and
discount. Firm should determine the price in such a way
that it able to sell product successfully.
Pricing decision have direct influence on sales volume and
profit of firm.

3. Promotion :
It deals with informing and persuading the customer
regarding the firms product. It involve decision about
advertising, giving free article on purchase of particular
commodity, other promotion techniques.
It help in fighting with competition in market.
A mix of advertising, personal selling, sales promotion and
public relation used for promotion of firm and its goals.
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Advertising  It is a tool marketing manager use to


communicate a message to customer through newspaper,
magazine etc
Personal selling  It is another means of communicating
customer and consist of direct person to person interaction
between salesman and customer. It is necessary where
target consumer are industrial organizations
Sales Promotion  It involve communicating with target
customer through various techniques such as free samples,
premium on sale contest, display, shows and exhibition.
This has arisen because of large scale competition and
widen market.

4. Place :
It entails activities that are necessary to transfer
ownership of goods to customer and to make good
available at right time and place. Thus it include decision
like channel of distribution and the place at which product
should displayed and made available to customer

Marketing Mix For Services :

1. People : People constitute an important dimension in


marketing of services in their role both as performer of
service or as customer
2. Process : It refers to a process by which a customer is
served wit desired product. The process of delivery
become important in service organization. It refers to
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routine, procedure, mechanism, followed by


organization to render services
3. Physical Ambience : A Customer needs the services but it
is also important how the service is offered.

Marketing Environment
All External factors and forces that affects a firms ability to
develop and maintain successful transaction and relationship
with the target customer

It includes all factors that affect marketing policies, decision


and operation of firm. The external factors consist micro and
macro factors

Environmental Scanning involve environmental monitoring


and evaluating changes and trends in marketing environment

Benefits of scanning Marketing Environment :

 Identification of opportunities : Opportunities refers


to positive or favourable external factors that are likely to
help a firm to increase its business. By keeping in touch
with changes in external environment an enterprise can
identify opportunities and design strategies to capitalize
strategy.
 Identification of threat or warning signals : Threat
refers to negative or unfavourable external factors that
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are likely to create hurdles for firm. It helps to identify


possible threat in future.
 Helps management to Cope with rapid change : A
keen watch on trends in environment would help to
sensitise the firms management to changing technology,
competition, government policies and changing needs of
customer.
 Formulation of strategy and policies : Environmental
analysis help in identifying threat and opportunities in
market. They can serve as basis of formulation of
strategies to counter threat and capitalize an opportunities
in market.
 Image Building : if a firm is sensitive to external
environment, it will come out with new product and
services to meet the requirement of customer. This would
build the image or reputation of firm in eyes of customer
and general public.
 Continuous Learning : Strategy formulation is a
continuous process that involve keeping in touch with
external environment. Manager continue to understand
environment change and act on basis of such information.

Micro Environment :-
It implies the force in immediate environment which affect
marketing manager ability to serve the customer. It include
both internal and external forces. Internal factors includes
company top management and its departments. External
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factors includes suppliers, intermediaries, customers and


general public ec.

1. Suppliers : Suppliers include those business firms that


provide raw material for production of goods and services.
The buyer supplier relationship is one of mutual economic
independence, unexpected development in supplier
environment have immediate effect on firms operation.

2. Intermediaries : Normally, not all manufacturers are able


to sell their products or services to customers directly. To
get their goods to customers, producers employ a variety
of intermediaries. . Intermediaries: Normally, not all
manufacturers are able to sell their products or services to
customers directly. To get their goods to customers,
producers employ a variety of intermediaries. These people
typically favour trusted brands. It could be very challenging
for newcomers to locate a dealer who will stock their
goods.

3. Competitors: Competitors present a challenge to a


business. Marketing choices are also influenced by
competitors’ strategies. Competition is a scenario in which
numerous businesses provide comparable goods and
compete for market share using various marketing tactics.

4. Customers: Numerous different types of customers exist in


the market. A business might offer products or services
directly to consumers, resellers, businesses, the
government or foreign consumers. The reputation a
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business has established can sometimes persuade


consumers to become its client or customer.

Macro Environment :
A group of environmental variables known as the macro
environment are out of an organization’s control. These
elements have a considerable impact on the organisational
operations. The macro environment is constantly changing

1. Political Environment : Political changes result in new


laws and policies that affect business. Government
regulations continues in various ways, and the laws and
regulations formed under them grow more complex. The
expenses and pricing of the goods and services marketed
are directly influenced by tax legislation, such as sales tax,
excise duty, octroi, income tax, etc.

2. Economic Environment : The economic environment is


determined by the state of the economy as measured by
the Gross National Product (GNP), per capita income, and
the favourable or unfavourable position of the trade
balance.

The cost of living, minimum wage, working hours, local and


national unemployment, interest rates, currency rates,
inflation, and pay rates are all considered economic issues.
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These variables affect a company immediately and have


long-lasting impact on the success of the economy.

3. Socio-Cultural Environment : The socio-cultural


environment is influenced by factors like societal norms,
attitudes, perceptions and actions. These factors assist in
understanding the types of things that customers prefer,
what influences their attitude toward or choice of
purchases, which brand they favour, and when they
acquire products.
Hence, the society’s culture has a good amount of influence
on how people’s consumption and buying patterns.

4. Demographic Environment : Age, race, wealth, and


other variables are only a few examples of the many
characteristics of the people in a certain area that are
covered by demographics. these characteristics might have
an impact on a business’s ability to expand and succeed,
most firms find the information about them through
survey of the population.

5. Technological Environment : The term “technological


environment” refers to the country’s current status of
science and technology as well as related elements like the
speed of technological development, institutional setups
for the creation and use of new technology, etc.
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The use of technology in marketing and advertising has


greatly changed.

6. Environmental Factors : Natural resources are found in


the environment and are used by the company as raw
materials to produce products. These natural resources are
harmed by marketing efforts, such as the ozone layer being
destroyed due to use of certain chemicals in the products.
It should be the duty of the manufacturer and marketer to
opt for eco friendly processes to manufacture or promote a
product and make sure that the harm on environment can
be minimized.

7. Ethical Factors : The term “ethical” refers to both moral


or ethical issues that could develop in a business as well as
ethical standards. It takes into account issues like fair
trade, acts of slavery, and child labour, as well as Corporate
Social Responsibility (CSR), in which a firm supports
regional or societal objectives by participating in volunteer
work or other philanthropic, activist or charity endeavours.

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