PRINCIPLES OF MARKETING

Chpt1: Introduction to Marketing

MEANING:
●​ Marketing is the process of discovering and translating consumer needs and
wants into product and service specifications, creating demand for these
products and services and satisfying them with their requirements.
●​ Marketing is a process by which goods and services are exchanged and their
values are determined in monetary terms as to price. It is the activity the
manufacturers undertake and by which they try to understand the consumer
needs and wants and then produce and supply it for amount of money.
●​ Marketing is the process of communicating the value of a product or service to
customers.
●​ function for attracting customers.
●​ satisfies these needs and wants through exchange processes and building
long-term relationships.
●​ set of processes for creating, delivering, and communicating value to
customers, and managing customer relationships
●​ Marketing is the science of choosing target markets through market analysis
and market segmentation, as well as understanding consumer buying behaviour
and providing superior customer value.
DEFINITION
Acc. to Philip Kotler, Marketing is defined as “a social and managerial process by
which individual and groups obtain what they need and want through creating and
exchanging products and value with other”.
Acc. to American Marketing Association, “Marketing is the term used to
describe collectively those business functions most directly concerned with the
demand stimulating and demand–fulfilling activities of the business
enterprise”.
CONCEPTS OF MARKETING
●​ Need, Want and Demand
●​ Product and Value Proposition
●​ Value and satisfaction
●​ Customer Satisfaction
●​ Exchanges and Transactions
●​ Relationships and Networks
●​ Market
●​ Marketing Channels
●​ Segmentation, Target market and Positioning
●​ Supply Chain
●​ Competition
EVOLUTION OF MARKETING CONCEPTS:
Marketing evolution refers to the different stages that businesses have gone
through as they continued to seek new and innovative ways to achieve, maintain
and increase revenue through customer sales and partnerships.
Since the 1900s, a variety of different strategies have been employed as various
industries created and refined their marketing approaches.
1.​ Production concept:
●​ The Industrial Revolution set the stage for modern marketing. It promoted
mass-produced consumer products. Mass quality production was done and
sold at lower/cheaper rates.
●​ Large scale production reduced product cost
●​ Motive: business can be managed with maximisation of production
●​ Hence, old and out-dated concept in marketing scenario as compared to
present situation

2.​ Selling concept:

●​ From the 1930s onwards, it was difficult to have competitor-free
environment. In response to the pressures of natural selection, businesses
developed unique adaptations.
●​ This facilitates in two vital innovations of modern marketing: the central
importance of brand identities and an emphasis on the selling orientation.
●​ Development of new selling strategies
●​ Concentrated more on sales promotions techniques

3.​ Marketing concept:

●​ traditional marketing had focused on simply getting products to customers
and convincing them to buy.
●​ As per new concept marketers were driven to better understand
consumers’ needs, concerns and desires. New marketing strategies were
implemented.
●​ Planning and operations at every stage is customer oriented
●​ Customer as core- all other marketing strategies will be revolving around it.
●​ Modern marketing trends adopted.

4.​ Social Relationship concept:

●​ Customer relationship played important role.
●​ to employ a relationship orientation to marketing.
●​ prioritizes relationships is focused on encouraging customer retention and
loyalty as well as continued interaction with the brand.
●​ Social responsibility can also be a cornerstone of this orientation.
 ●​ emphasizes an organization’s responsibility to develop strategies that
positively impact the consumers’ well-being and the environment.
●​ companies shifted their goals to provide a better-quality lifestyle while
ensuring that the environment is not polluted. They don’t just create
high-quality products; they were environmentally friendly, too.

5.​ Holistic marketing concept:

●​ 4 main components- relationship marketing, integrated marketing,
internal marketing and performance marketing.
●​ Concept introduced by Philip Kotler.
●​ New concept- ensure excellent performance, goodwill, cordial relation
with stakeholders
●​ Implementation of modern marketing techniques, program, activities
●​ Broader concept
●​ gave attention and importance to every element of marketing, gave
competitive advantage.

Marketing did not happen in a few years. It has significantly under gone an evolution
in the past centuries, even today. Marketing shifted to building a genuine relationship
with customers to keep them happy and loyal to brands. Today, in an era of a societal
and digital revolution more multiple companies are aware of the environmental
consequences and their actions. They no longer limit themselves to traditional
marketing.
FEATURES OF MARKETING
1.​ Marketing is a science as well as art: Marketing has evolved from the
economics but it has a closer relationship with social and behavioural sciences.
Marketing is closely associated with streams of science as well humanities and
subject lines such as Economics, Law, Psychology, Anthropology, Sociology,
Information Technology etc. Marketing heavily depends upon the demographic
features of the target market, political environment, philosophy, mathematics,
statistics etc.
2.​ Exchange is essence of marketing: Marketing revolves around commercial
exchange. This also involves exchange of technology, exchange of information
and exchange of ideas.
3.​ Marketing is Goal Oriented: The ultimate goal of marketing is to generate
profits through the satisfaction of the customer. All marketing strategies are
concerned with the objective. Various aims are set at various levels, but the
overall aim is to make a profit and provide human needs fulfilment. Sellers use
marketing methods to identify flaws in the current system and take steps to
repair them in order to meet goals
4.​ Marketing is a continuous process: marketing is not an isolated, static
process but is a complex, continuous and interrelated process. It involves
continuous planning, implementation and control. It is an important functional
area of the management.
5.​ Marketing is Consumer Oriented: All firms exist because of their business to
satisfy the human needs, wants and demands. The ultimate objective of
marketing is to find out what the consumer wants and how to fulfil consumer
need. This leads to production of the goods and services as per the needs of the
customer.
6.​ Marketing mix: A company’s marketing system is made up of four inputs:
product, price, place, and promotion. The marketing mix is a flexible
combination of variables that can be adjusted. Consumer behaviour, trade
conditions, competition, and government regulatory actions all have an impact
on the marketing mix.

7.​ Integrated approach: Marketing activities must be coordinated with other

organizational departments. Functional areas such as production, finance,
research, purchasing, storekeeping, and public relations (PR) must all be
integrated with marketing. This will aid in the accomplishment of company
objectives. Otherwise, there will be organizational conflicts.

8.​ Precedes and follows production: The primary responsibility of a marketing

manager is to identify customer demands and wishes. These client needs are
met through manufacturing operations. As a result, marketing comes first.
Following production, marketing aids in the distribution of products. As a
result, production and marketing processes are tightly linked.

9.​ Marketing starts with consumer and ends with consumer: Marketing is
consumer oriented and it is very important to know what the consumer wants.

ADVANTAGES OF MARKETING

1.​ Marketing expansion: Marketing pulls out the hidden wants of consumers,
creates new demand, discovers the untapped areas, and discovers the
possibilities of selling new products. It thus widens the market and allows the
producers to improve production and earn more profits.

2.​ Marketing Improves the National Income: National income is the total of
goods and services that a country has. The net effect of all marketing efforts is
a rise in the production of existing industries, investment in new industrial
units, and provision of more services. The nation becomes more prosperous
with the increase in its national income and per capita income. The economy
 grows from underdeveloped to developing and then marches towards a
developed economy.
3.​ Marketing Raises the Standard of Living: With the provision of more
necessities, comforts, and luxuries, cheaper and costly, and with more services
and amenities at its disposal, the community enjoys a higher standard of living.
Even the poorer sections of society discover many more things within their
reach because of the lowering costs of items and services.

4.​ Employment opportunity: Marketing forms a climate for more products and
services. It also results in more social overhead as more roads, warehousing
facilities, transport and communication, banks, training, and technical
institutions; more manpower is required for the same, and the avenues of
employment are boosted. It is assessed that 30 to 40 per cent of the total
population is employed in direct or indirect marketing activities.
5.​ Marketing Helps in Optimal Utilization of Resources: As the marketing
efforts broaden the market area, the producers can employ their resources,
remaining partly used, to the maximum. This optimum usage of resources
lowers the total cost per unit.

6.​ Marketing Boosts Other Activities: Because of marketing, many other

activities, such as banking, transport, insurance, warehousing, etc., grow as
they are required to help in the marketing process.

7.​ Marketing Acts as a Basis for Making Decisions: An entrepreneur faces

many issues regarding what, how, when, how much, and for whom to produce.
In the past, there were fewer problems because of local markets and the direct
link between producers and customers.

8.​ Maximum Satisfaction of Human Desires: It effectively links the business

and society, withdraws hindrances of knowledge, enlightens people, stimulates
their minds, attracts them to buy the best, and thus eventually facilitates them
to get maximum satisfaction.

9.​ Increase revenue

10.​Trust over brand
11.​Better control over price
 What all can be Marketed?

1.​ Product Marketing:

●​ Tangible offerings manufactured in bulk and requiring proper marketing
to make it available to the right customer at the right time.
●​ Can be perishable or non-perishable.
●​ Include import-export activities
●​ Product designing, planning, sales promotion, market research, etc.
●​ Example – mobile phones, televisions, cosmetics, medicines, etc.
2.​ Service Marketing:
●​ Intangible activities that can’t be separated by the provider.
●​ Developed countries (USA)- large scale services are provided and even
exported
●​ India- services sector-growing at faster pace.
●​ Example – hotels, airlines, barbers, financial services, professional etc.
3.​ Event Marketing:
●​ Products marketed at sponsored events
●​ Eg: national/international cricket matches, sports sponsorship (hockey,
football, cricket, etc)
●​ Time based events like trade shows, artistic performances (music shows,
movie, award function), etc.
●​ IBM, Sony official sponsor at Olympics
●​ HUL free dental check up camp (schools) promote toothpaste brands
4.​ Experience Marketing:
●​ services and goods associated with experience.
●​ Experiences are marketed, share information and knowledge to other
potential customers
●​ Example – amusement park experience, foreign trip experience, etc.
5.​ Person Marketing:
●​ A person known for his skills, profession, art, celebrities, sports person,
dancers, company director/CEO, etc.
●​ Celebrity marketing- growing business
●​ Earn huge profit and benefits
●​ Celebrity endorsement
●​ Example – Ronaldo, Michael Jackson, etc.
6.​ Place Marketing:
●​ Places, cities, states, and countries with an aim to attract potential
investors and/or tourists.
●​ Economic development
●​ Promote tourism industry
●​ Using celebrity/sport person to promote places
●​ Example – islands, states in India
7.​ Property Marketing:
●​ Intangible rights of ownership of the real estate, stocks, securities,
debentures, etc.
●​ Buying selling of commercial/residential properties
8.​ Organisation Marketing:
●​ Corporations and not for profit organisations like schools, colleges,
universities, NGOs, etc.
9.​ Information Marketing:
●​ Information related to healthcare, technology, science, media, law, tax,
market, finance, accounting, etc. offered by books, schools, universities,
websites, media houses, etc.
●​ Trade journals, encyclopaedia, dictionaries, websites, reports, etc.
●​ Computers have made job easy
●​ Technology- sharing info. Quick and economical
10.​Idea Marketing:
●​ Ideas communicated through social, religious, political, govt. platforms.
●​ Eg: HIV/AIDS, quit smoking, polio dose, women empowerment,
Covid-19, family planning, blood donation, etc.
●​ Publicity of ideas
●​ Modify behaviour and attitude of customers
●​ Raising social welfare and awareness among society
 Scope of Marketing

1. Study of Consumer Wants and Needs

Goods are produced to satisfy consumer wants. Therefore the study is done to
identify consumer needs and wants. These needs and wants motivate the
consumer to purchase.

2. Study of Consumer Behaviour

Marketers perform a study of consumer behavior. Analysis of buyer behavior
helps marketers in market segmentation and targeting.

3. Production Planning and Development

Product planning and development starts with the generation of product ideas
and ends with product development and commercialization. Product planning
includes everything from branding and packaging to product line expansion and
contraction.
4. Pricing Policies
The marketer has to determine pricing policies for their products. Pricing
policies differ from product to product it depends on the level of competition,
product life cycle, marketing goals, and objectives
5. Distribution
The study of distribution channels is important in marketing. For maximum
sales and profit, goods are required to be distributed to the maximum consumers
at minimum cost.
6. Promotion
Promotion includes personal selling, sales promotion, and advertising. The right
promotion mix is crucial in the accomplishment of marketing goals.
7. Consumer Satisfaction
The product or service offered must satisfy the consumer. Consumer satisfaction
is the major objective of marketing
8. Marketing Control
The marketing audit is done to control the marketing activities

Functions of Marketing

Marketing functions are the foundation for the work that marketing
professionals do. Each function comprises a set of responsibilities and tasks for
a marketing team to design, organize and execute a successful campaign. There
are seven widely accepted marketing functions that contribute to the overall
world of marketers. These functions are:
1.​ Promotion
2.​ Selling
3.​ Product management
4.​ Pricing
5.​ Marketing information management
6.​ Financing
7.​ Distribution
The seven marketing functions are important since each of them represents a
category of activities that occurs in marketing. The goal of marketing is to
promote and sell products in a competitive marketplace, and referring to the
seven marketing functions often while developing a campaign allows marketing
teams to remain focused on their goals
1. Promotion
Promotion fosters brand awareness while educating target audiences on a
brand's products or services. It emphasizes introducing potential consumers to
your brand. This function of marketing varles in form, and marketing
professionals tailor each form to relate to a particular product, brand or target
audience. Promotion may include any of the following strategies : Email
marketing, Social media advertisements, Public relations, Digital or print
advertising, Content marketing, Brand partnerships, Influencer marketing
​
2. Selling
Selling is a function of marketing that comprises communicating with potential
customers and pursuing sales leads. It's important for marketing professionals to
pursue sales leads with subtlety, which helps them build relationships with
potential customers. As communication with a potential customer progresses,
successful marketers may introduce their product and answer questions
customers may have Effective selling techniques can help you distinguish your
brand from competitors Marketers and salespeople may collaborate to determine
how to best position their product within their market and sell it to potential
customers
3. Product management
Product management includes the development, design and improvement of
products or services. The role of a marketer in product management is to ensure
that a finished product meets customer needs. This includes examining the
overall visual of the product, its usefulness and how it's delivered. Some product
management strategies include
4. Pricing
Establishing a price for a product incorporates several factors of cost and value,
Ideally, marketers find a price between customers perceptions of a product's
value and the actual cost of producing it. Other factors include the price your
competitors set and the amount customers might pay for your product.
Marketing professionals consider these elements when deciding how to price a
particular product or service. It can be challenging to determine a priče for your
product, but using in depth market research can help you make an informed
decision. Whatever price you choose for your product. it's important for your
promotions and branding to match its price. For example, if you sell a handbag
for $1.000, you might market It as a luxury item. This emphasizes your
product's value, which could convince customers to purchase your Hem

5. Marketing information management

You can optimize your marketing strategies when you focus on data and
information. It's important to collect and store data, such as customer
preferences and demographics. Often, this data directly relates to your target
audience for your products and services. This also can inform effective business
decisions for the entire company, so consider sharing your data and findings
with other departments, as well. You can gather relevant information from
various marketing tools, such as: Surveys, Online reviews, Social media
engagements, Market research reports. Each marketing tool provides unique
data and feedback, so choosing the right one depends on your specific needs.
For example, if your team wants to measure the effectiveness of your last social
media campaign, you could research the number of followers that your brand's
accounts gained during the campaign This can help you determine whether your
efforts succeeded in increasing social media engagement
6. Financing
Financing is a marketing function that involves securing funding either
internally or externally to create marketing campaigns It's important for
marketing teams to secure enough availability in their annual budget to improve
previous marketing campaigns and remain updated with industry trends.A
marketing team can demonstrate its added value to its company if revenue
continues to increase due to high-quality marketing campaigns. This upward
trajectory might also allow that team to secure future funding, as they can
demonstrate a quantifiable positive return on their investment
7. Distribution
Distribution is the process of transporting your company's products or services
to your customers There are several physical and digital methods of distribution,
including: Online stores, Catalogue or magazines, Sales calls, Retail stores,
Wholesalers
Marketers often choose the channel of distribution that best fits a particular
product, brand or target audience. It's important to choose a location to sell your
product that your target audience often visits. Distribution is a function of
marketing that requires collaboration across departments to ensure that each
product reaches your consumers in its intended fashion

MARKETING MIX

●​ The 4 P’s marketing mix concept (later known as the 7 P’s of marketing) was
introduced by Jerome McCarthy.
●​ It refers to the thoughtfully designed blend of strategies and practices a
company uses to drive business successfully.
●​ Initially these elements were Product, Price, Place and Promotion, which were
later expanded by including People, physical evidence and Process. These are
now considered to be the “7 P’s” mix elements.

1.​ PRODUCT:
 ●​ Help to understand product
●​ What, why, for whom, who needs it
●​ Need to understand associated features and quality
●​ Products need technological development, updating
●​ Components of product- heart of marketing
●​ Includes: product line, design, features, quality, colour, packaging,
labelling, guarantee/ warrantee, durability
2.​ PRICE:
●​ Crucial component
●​ Valuation of product
●​ Cost at which product is sold/willing to sell
●​ Competitiveness of product among others
●​ Need regular review and updating
●​ Include- pricing strategies, discounts/offers, credit terms, delivery terms,
etc.
3.​ PLACE:
●​ Delivering at right place, right time.
●​ Physical distribution of product
●​ Need of efficient transportation, warehousing, inventory management
control
●​ Services offered by wholesalers, retailers
4.​ PROMOTION:
●​ Encourage and influence to buy goods/services
●​ Helps large scale selling
●​ Face competition
●​ Build reputation, goodwill and lead firm on profitable grounds
●​ Includes: advertising, publicity, sales promotion, personal selling, etc.

4 C’s of marketing
1.​ CUSTOMER:
●​ Consumer, or the customer, is the individual who uses your product. In the
4Cs marketing mix, the consumer is the first C.
●​ It establishes that all marketing should be customer focused and the first C
is about providing a product strategy that is customer centric.
●​ marketing and product development begin their process with customer
needs and wants. A company will develop products that customers want.
●​ This process requires a deep understanding of your customer and their
journey.

2.​ COST
●​ Cost is the concept that looks at the cost of acquiring and using a product
from the customers perspective. It includes every aspect that a customer
may face when using the product.
●​ The cost component can include things like the price, the cost of
production, the time it takes to learn a new product, and any ongoing
maintenance costs, operating cost, etc.
●​ Cost creates a holistic view of the customers perspective for acquisition and
use of your product.
 3.​ CONVENIENCE:
●​ Convenience- is how easy/convenient it is for a customer to purchase,
acquire, or use a company’s product.
●​ Convenience addresses all aspects of the buying experience. That includes
finding information about customers need, finding alternative, evaluating,
comparing them, and the act of purchasing.
●​ Convenience is concerned with making each step as easy as possible.

4.​ COMMUNICATION
●​ Communication is the process by which a company communicates with
their customers.
●​ it includes the concept of two-way communication with customers.
●​ Thus, communication is the push given to customers regarding promotions
and product information. Also, communication is the feedback that a
company receives from their customers.

DIFFERENCE BETWEEN MARKETING AND SELLING

What Is Marketing Vs Selling?

Point of Difference Marketing Concept Selling Concept

Marketing is the process of

delivering goods and services to Sales are the process of rounding
Definition
create value for the customer and up customers to increase sales.
make a profit.

It views the business as a It views business as a

View on business
customer-satisfactory process. goods-producing process.

Price Consumers determine the price. The cost determines the price.

This concept is applicable to the This concept is useless in a pure

Effectiveness
pure competition market. competition market
 This concept gives equal This concept gives importance to
Marketing mix
importance to the marketing mix. only promotion.

This concept thinks about market This concept never thinks about
Market segmentation
segmentation deeply. the market concept.

This concept starts with actual and This concept starts with existing
Start
potential customers. products.

This concept earns profit through This concept earns profit through
Profit
customer satisfaction. attractive sales and promotion.

This concept emphasizes customer This concept emphasizes products

Emphasis
needs. or services.

The scope of the marketing concept The scope of the selling concept is
Scope
is wider. narrow.

The objective of this concept is to The objective of the selling

Objective satisfy the customer through goods concept is to increase sales of
and services. goods and services.

Interface of marketing.

Marketing interacts with various functional areas within an organization to ensure

seamless business operations. Here's how marketing interfaces with different
departments:

1. Research & Development (R&D) - Marketing provides insights into consumer

needs, guiding R&D in developing innovative products.

2. Production & Operations Ensures that products meet market demand and quality
standards while optimizing supply chain efficiency.

3. Finance-Works with finance teams to set budgets, pricing strategies, and

profitability goals.

4. Human Resources (HR) Collaborates on employer branding, internal

communications, and customer service training.
5. Sales & Distribution - Aligns marketing strategies with sales efforts to maximize
revenue and market reach.

6. Customer Service - Supports customer engagement and feedback loops to improve

brand loyalty.

7. Information Technology (IT) - Utilizes digital tools and data analytics to enhance
marketing campaigns

CONCEPTS OF MARKETING

1.​ NEEDS:
●​ “Needs” are the basic human requirements that are needed to survive. These
necessities include shelter, clothes, food and water.
●​ No influences are needed; the customer buys it themselves
●​ In today’s world, the market is becoming increasingly competitive, and so brands are
fighting for attention. Eg: TATA salt
●​ As a marketer, it’s important to know how your brand has targeted these needs.
Companies have different products for different consumer needs.
Abraham Maslow’s need hierarchy ​

2.​ WANT:
●​ The desire for products or services that are not necessary, but which consumer
wish for.
 ●​ Humans have unlimited needs, and to satisfy them, people desire different
things, like products or services and ways of doing things. Never satisfied with
single thing.
●​ Needs are something essential for your survival. Whereas wants are intangible
and volatile – something you may desire but don’t need.
●​ As time passes, people change their wants accordingly. The desire for different
things varies from culture to social class and from personality to personality.
●​ Marketers can influence human wants by providing a wide range of
need-satisfying products.
●​ Wants become demand when they are backed by buying power/ purchasing
demand.
3.​ DEMAND:
●​ When a customer is willing and able to buy what they need or want, it becomes
a demand for the organization.
●​ Want becomes demand when supported by purchasing power. For example,
everybody would like to drive a Mercedes, but everybody cannot afford it; that’s
why only those wants which are backed by purchasing power will be calculated as
demand.
●​ People can make demands because they have the ability, willingness and desire to
buy what’s necessary.
●​ For a marketer, demand is very important. It plays a significant role in managerial
decision making. This helps to forecast the demand while doing strategic marketing
planning.
4.​ TRANSACTION:
●​ A transaction is marketing’s unit of measurement. It consists of a trade of values
between two parties.
●​ A monetary transaction involves trading goods and services in return for money
whereas a barter transaction involves trading goods and services for other goods
and services.
●​ Buying- selling mutually comes into an agreement
●​ Transaction- exchange of ownership
●​ Money- medium of transaction
●​ Need ‘two’ parties to complete transaction, exchange of goods for money.

5.​ EXCHANGE:
●​ Act of obtaining thing/object which one needs from another person/firm by
offering something in return or by exchange process.
●​ ‘two’ or more parties needed to carry exchange process. Person needs to have
something valuable by the other person.
●​ person should be of sound mind to carry out exchange discussions
●​ offering should be mutually benefitting and acceptable terms by both.
●​ Eg: construction of building- offers given by builder to the old residents.
6.​ TRANSFERS
●​ movement or handing over place/ product to another
 ●​ physical movement of goods moving from point of production to the point of
consumption
●​ eg: transfer of raw material from supplier to producer, transfer of finished
goods from producer to distributor, transfer from retailer to consumers.

END OF UNTI 1

UNIT 2: MARKETING ENVIRONMENT, RESEARCH AND CONSUMER

BEHAVIOUR

Importance of Marketing Environment

1.​ Identifies Opportunities & Threats - Helps businesses adapt to market

changes.
2.​ Guides Strategic Planning - Ensures marketing strategies align with external
conditions
3.​ Enhances Competitive Advantage - Allows firms to stay ahead of
competitors.
4.​ Supports Customer-Centric Approach - Helps understand consumer
behavior and preferences.
 5.​ Ensures Sustainability - Encourages ethical and responsible marketing
practices.

ENVIRONMENTAL ANALYSES- MICRO AND MACRO ENVIRONMENT

Marketing Environment concerns the influences or variables of the external and

internal environment of a firm that controls the management’s capability to construct
and preserve the flourishing relationships with the consumer.

A few of them are governable while others are unmanageable. It is the task of the
marketing manager to modify the company’s policies together with the shifting
environment.

Micro-factors inside the firm​

Macro-factors linked to economic, social, cultural aspects, etc.

MICRO ENVIRONMENT
●​ The micro-environment is basically the environment that has a direct impact
on your business. It is related to the particular area where your company
operates and can directly affect all of your business processes.
●​ They have the ability to influence your daily proceedings and general
performance of the company.
●​ The micro-environment includes customers, suppliers, resellers, competitors,
and the general public.

1.​ CUSTOMERS: The kind of customer base that your company attracts, as well as
the reasoning behind purchasing your product, are going to highly affect the way
you create marketing campaigns.
 2.​ SUPPLIERS:
●​ Provides raw materials and other necessary components required for
production
●​ Helps to regulate pricing
●​ Supports on-going production
●​ Fulfils market demand

3.​ COMPETITORS:
●​ Every business that sells the same or a similar kind of product as you do
is your competition on the market.
●​ their sale and marketing tactics matter to you a lot.
●​ their product and its price affect your company and how you can make
use of that in order to gain an edge over them.

MACRO ENVIRONMENT
●​ A firm’s macro environment contains elements that can impact the firm but are
generally beyond its direct control.
●​ These factors should be addressed and understand its consequences by all businesses,
regardless of the industry they are in or type of business they are.
●​ It is unable to direct/avoid change things in the macro environment.
1.​ POLITICAL FACTOR
●​ Level of stability in politic
●​ Local taxation policies
●​ NAFTA, ASEAN, EU (European union)- trade agreements
●​ Foreign trade agreements
●​ Social welfare policies
2.​ ECONOMICAL ENVIRONMENT
●​ Current and future rate of interest
●​ Level of inflation
●​ Employment opportunities
●​ GDP of economy
3.​ SOCIO-CULTURAL ENVIRONMENT
●​ Local lifestyle trends
●​ Demographic pattern, how it changes
●​ Level of education and income pattern
●​ Local religion followed, influencing consumer attitude and beliefs
●​ Customer preferences
●​ Market diversity

4.​ TECHNOLOGICAL FACTOR

●​ Level of initiative from government in technology development
●​ Incentives benefits given for advancement
●​ Role of technology in gaining competitive advantage
●​ At what level or pace technology growing in different fields/sectors
●​ Internet usage, techno. Development in field of communication, speedy
connectivity, automation.

5.​ ENVIROMENTAL FACTOR

●​ Local/national environmental issues relating different sectors
●​ Ecological sustainability and balance
 ●​ Recycling and use of alternative energy
●​ Eco friendly approach in production and selling process
●​ Environmental protection law
●​ Encourage usage of natural energies (Solar, wind)

6.​ LEGAL FACTOR

●​ Legal measures followed
●​ Protection to IPR
●​ Consumer law adopted and implemented
●​ Employment safety, product safety, health and security measures, etc.
CONCLUSION
Thus, when a marketing manager is considering putting forward a marketing plan, then he
has to consider both the internal and external marketing environments and see both
opportunities and threats to the business; only then he/she would be able to take the correct
decisions regarding the business.

MARKETING RESEARCH
MEANING
●​ Marketing research is defined as any technique or a set of practices that
companies use to collect information to understand their target market better.
●​ Organizations use this data to improve their products, enhance their service
performance, and offer over-all better performance to their customers.
●​ Marketing research is used to determine what the customers want, and how
they react to products or features of a product.
●​ The results of market research, which are usually summarized in a report, are
then used to help business owners make more informed decisions about the
company’s strategies, operations, and potential customer base.

●​ Main purpose of market research

-​ Identifying and understanding the target market
-​ Product/Service Development and Innovation
-​ Market Entry and Expansion
-​ Brand and Reputation Management

An example of market research would be a company conducting a survey to learn

more about their target audience's preferences and buying habits. They might ask
questions about age, gender, income level, and what types of products they purchase.

FEATURES OF MARKETING RESEARCH

1. Continuous process:
Marketing research is not only continuous but also a scientific and systematic process.
It is scientific and systematic because it has well-defined procedures. It is a process of
generating and evaluating data, and then refining it. It is professionally organized. It is
a continuous process because every firm is faced with problems and opportunities.
2. Wide scope:
Marketing is a specialized activity. It encompasses several functions. Thus, marketing
research has a wide scope. It includes product research, market research, consumer
research, promotion research, international market research, price research and
distribution research.
3. Aid to decision-making:
It helps the managers take practical decisions. Decisions based on experience and
research is better than decisions based on intuition. Functions such as description,
evaluation, explanation and prediction by the marketing researcher help in practical
decision-making. Thus, it an essential tool not only for marketing managers but also
for other functional managers.
4. Uncertainty of conclusions:
Consumer is the focal point of marketing research. However, consumer behaviour is
difficult to judge precisely. It is not a physical science, but social science. Due to this
inherent nature, it suffers from certain levels of inaccuracy.
5. Commercial intelligence:
Marketing research is equivalent of military intelligence. It provides vital insights and
information of product, price, place and promotional aspects. It is the soul of modem
marketing management.
6. Statistical tools:
Various mathematical and statistical tools are used for data analysis and
interpretation. Percentages, ratios, averages, z-test, t-test, chi-square tests, etc. are
used for presentation and interpretation of findings. The use of computer software has
made it more convenient for in-depth analysis, cross-sectional studies, detection of
errors in sampling and questionnaires.
7. Research approaches:
A researcher has several options of research methodology. Methods include the field
survey method, the observation method and the experimental research. The choice
depends on factors such as time availability, funds, number of respondents to be
covered, location of respondents and literacy levels.
8. Links a company to the consumers:
Marketing research is a function that links a company to the consumers, customers
and public, through information. It evaluates marketing actions, marketing
performances and marketing processes. This evaluation results in collection of
information that brings company closer to its customer and society.
Objectives of Marketing Research
Marketing research helps businesses make informed decisions by gathering and
analyzing data. The key objectives include:
1. Understanding Consumer Needs - Identifying customer preferences, behaviors,
and expectations.
2. Market Analysis - Evaluating market trends, competition, and demand
fluctuations.
3. Product Development - Assessing product feasibility and improvements based on
consumer feedback.
4. Pricing Strategies - Determining optimal pricing models for profitability and
competitiveness.
5. Advertising & Promotion - Measuring the effectiveness of marketing campaigns.
6. Sales - Forecasting Predicting future sales trends to optimize inventory and
production.
7. Customer Satisfaction - Gauging consumer experiences to enhance brand loyalty

IMPORTANCE OF MARKETING RESEARCH

●​ It helps to gather a huge amount of marketing information. As every business
firm requires various marketing information, it helps the firm to design
effective marketing programs to realize firm’s goals and satisfy customers need
and want as well.
●​ It helps the business firms to find a target market, select the right product &
service, set appropriate prices, set channels of distribution, select the
appropriate promotion technique, etc. However, the main importance of the
marketing research is:

1.​ Help to identify new products and services

2.​ Face competition
3.​ Better understanding of customer’s requirements
4.​ Identify potential customers
5.​ Understanding present and future market trends
6.​ Market expansion
7.​ Business diversification
8.​ Decision over marketing strategies
9.​ Risk management
10.​Business profitability
11.​SWOT analysis
12.​Setting realistic goals
(Select any 9 points and explain)
Problems in Marketing Research

Marketing research is essential for business decision-making, but it comes with

several challenges:
1. Defining the Problem - Unclear objectives can lead to misleading research
outcomes.
2. Data Collection - Issues Gathering accurate and relevant data can be difficult.
3. High Costs - Conducting thorough research requires significant financial
investment.
4. Time Constraints - Research processes can be time-consuming, delaying
decision-making.
5. Respondent Bias - Survey participants may provide inaccurate or biased
responses.
6. Rapid Market Changes - Trends evolve quickly, making some research
outdated
7. Limited Access to Information - Some data sources may be restricted or
unreliable.
8. Ethical Concerns - Privacy issues and data misuse can pose ethical challenges.
 SCOPE/TYPES/AREAS OF MARKETING RESEARCH

1. Research on Products:
Products involve goods and services. This branch of marketing research covers all the
issues related to firm’s products.
It studies and solves the product-related problems, such as:
i. Study of products’ qualities and performance, shape, size, colour
ii. Study of physical and psychological characteristics of product
iii. Determining uses of the existing products
iv. Comparative study of competitive products
v. Detecting consumers’ problems related to the products
vi. Determining need for developing new products
vii. Assessing success of a new product in market, including market testing
viii. Product life cycle and consumer adoption study
ix. Study of branding, packaging, labelling, after-sales services, and remarking.
X Benefits, usage, attractiveness, consumer friendly, ecological features
2. Research on Market:
This area of marketing research deals with market/consumers. It studies characteristics
and compositions of the target markets. It covers both current as well as potential
markets.
This branch includes:
i. Defining and selecting target market
ii. Studying needs and wants of target market
iii. Study of size and location of current market
iv. Assessing the current market trends and projecting the future trend
v. Setting sales territories and sales quotas
vi. Market share analysis
vii. Studies on relative profitability of different markets
viii. Estimating demand of a new product

3. Research on Sales Methods and Policies:

This area of marketing research concerns with study and analysis of the sales- related
activities.
Various aspects covered under this head may be listed as below:
i. Study and analysis of sales records, sales forecasting
ii. Analysis of sales territories in terms of products, size of orders, times, terms and
conditions and methods
iii. Study on activities and effectiveness of salesmen
iv. Evaluating existing selling methods
v. Sales force management including size, compensation, training, control, etc.
vi. Study on effect of various promotional tools such as advertising, personal selling,
sales promotion, and publicity tools on sales
vii. Study on organisation structure of sales department
4. Research on Advertising:
Advertising is one of the powerful methods of market promotion. Major part of
promotional budget is devoted to advertising activities. Therefore, it is imperative to
conduct research on various aspects related to advertising.
Under this area, at least following aspects are covered:
i. Comparative study of various elements of promotion
ii. Study on advertising objectives, media and media selection, advertising message,
theme, copy, and advertising agency
iii. Social aspects of advertising – negative and positive effects of advertising on
society at large
iv. Advertising role in different stages of product life cycle
v. Government restrictions on advertising
vi. Study on costs and contribution of advertising or evaluating advertising
effectiveness
vii. Study of competitors’ advertising practices and strategy
5. Research on Pricing:
Price is an important element of marketing mix. In developing and underdeveloped
countries, price plays a vital role. Suitable pricing policies and methods can contribute
positively in attainment of marketing goals. It is clear that price has remained a major
determinant of buying decision.
This branch covers:
i. Study on pricing objectives
ii. Study on effectiveness of pricing policies and strategies
iii. Study of various methods for setting price
iv. Quality v/s value analysis
v. new product and pricing policies
vi. Study on effect of discount, allowance, and seasonal variables
vii. Pricing strategies on different stages of product life cycle

6. Research on Distribution:
In today’s marketing, distribution has unique role to determine success of product. A
marketer can contribute to total consumer satisfaction by designing appropriate
distribution network. Physical distribution and distribution channel are two important
components of such research.
This area includes:
1. Assessing role of distribution decisions in achieving marketing goals
2. Comparative study of between direct and indirect distribution
3. Physical distribution and ancillary services
4. Study on various types of channels of distribution
5. Study on relevant factors affecting channel decision/selection
6. Comparing company’s distribution strategies with competitors
7. Relevance of online marketing
8. Legal issues related to distributions

7. Consumer Research
Consumer is the person who purchases the goods and services. The consumer is the
king in the market. Consumer research studies consumer behaviour. It studies the
consumer’s needs, wants, likes, dislikes, attitude, age, sex, income, location; buying
motives, etc. This data is used to take decisions about the product, its price, place and
promotion.

8. Packaging Research
Packaging research is a part of product research. It studies the package of the product.
It improves the quality of the package. It makes the package more attractive. It makes
the package more convenient for the consumers. It reduces the cost of packaging. It
selects a suitable method for packaging. It also selects suitable packaging material.

CONSUMER BEHAVIOUR
MEANING
The “consumer” more generally refers to anyone engaging in any of the activities
(evaluating, acquiring, using or disposing of goods and services) used in the definition
of consumer behaviour.
Consumer behaviour is a decision process and physical activity individuals engage in
when evaluating, acquiring, using or disposing of goods and services.
Consumer behaviour is the study of consumers’ action during searching for,
purchasing, using, evaluating and disposing of products and services they expect will
satisfy their need. It helps marketers in understanding consumer decision-making
process.
Acc. To Walters and Paul,” Consumer behaviour is the process whereby
individuals decide what, when, where, how and from whom to purchase
goods and services.
Consumer Buying Process
In consumer buying process, the purchaser passes through five
distinct stages in consumer buying process namely;
1.​ Stage of Problem Recognition
2.​ Stage of Information Search
3.​ Stage of Alternative Evaluation
4.​ Stage of Purchase Decision
5.​ Stage of Post Purchase Behaviour

Importance of Consumer Behaviour

It is important for marketers to study consumer behaviour. This helps
marketers to investigate and understand the way in which consumers
behave. Below are some of the importance of consumer behaviour is given
below:
a.​ Identifying market opportunity
2.​ The study of consumer behaviour helps in identifying the unmet
needs and wants of consumers. These demands evaluating the
prevailing trends in the marketplace, consumers’ lifestyles, income
levels and emerging influences.
a.​ Selecting target market
3.​ A review of market opportunities often helps in identifying distinct
consumer segments with very distinct wants and need. Identifying
these groups, learning how they behave and how they form purchase
decisions enables the marketer to design and market products
/services particularly suited to consumers wants and needs.
a.​ Customer retention
4.​ Organisations lay emphasis on retaining customers than merely on
customer acquisition. Customer retention is the process of
maintaining existing customers by catering to their needs and even
exceeding their expectations. Study of consumer behaviour helps to
convert a casual customer into a committed loyal customer.
 a.​ Dynamic nature of market
5.​ Consumer behaviour lays emphasis on dynamic nature of the market.
It helps the manager to be dynamic and proactive in satisfying
consumers ahead of its competitors. If the organisation is not able to
keep up with the current market trends it will find it arduous to
survive in the industry.
a.​ Marketing-mix decisions
6.​ Once unsatisfied needs and wants are identified, the organisation
has to evaluate the right mix of product, price, distribution and
promotion. In this context, consumer behaviour study is pivotal to
resolve many challenging questions.
a.​ Effective use of productive resources
7.​ The study of consumer behaviour assists the manager to make the
organisational efforts consumer-oriented. It ensures optimum
utilisation of resources for achieving maximum efficiency.
a.​ Fulfil varied consumer preferences
8.​ With the onset of globalisation customers have wide range of alternatives in
contrast to pre 1991 era. So, in order to cater to diverse customer preferences, it
is pertinent for marketers to study customer behaviour.
9.​ For example, in the current scenario customers have various car manufacturers
to choose from such as Hyundai, Honda, Mercedes, BMW etc. Every
automobile maker leverages a certain segment of customers.
a.​ Address customer’s needs
10.​Consumer opt for differentiated products that depict their special needs,
personalities and lifestyles. The study of consumer behaviour enables
organisations to gratify the peculiar needs.
a.​ Market segmentation
b.​ Designing product portfolio

Factors/determinants affecting consumer behaviour

FEATURES OF CONSUMER BEHAVIOUR
1.​ Process
2.​ Influence by various factors- marketing, demographic, psychological,
situational, social and cultural factors
3.​ Different for different consumers
4.​ Different for different product
5.​ Varies across region
6.​ Essential for marketer
7.​ Reflect status
8.​ Improves standard of living
9.​ Customers’ demand keep changing

MIS
The marketing information system (MIS) is a system which includes a collection of
procedures that are designed to generate a systematic collection, analysis,
interpretation, storage and dissemination of the market decisions and information.
This helps in the smooth management of marketing.
The marketing information system (MIS) collects information regarding the various
aspects of the marketing world including packaging, pricing, new product
development, media, distribution, etc. This information system then distributes this
information to the people working in marketing who can then make appropriate
decisions based on the information.
According to Philip Kotler, marketing information system consists of people,
equipment, and procedures to gather, sort, analyse, evaluate, and distribute
needed, timely, and accurate information to marketing decision. information to
marketing decision.

FEATURES OF MIS
1.​ CONTINUOUS FLOW
2.​ DECISION MAKING
3.​ USE OF COMPUTER/ INTERNET
 4.​ COMPLEX PROCESS
5.​ ECONOMICAL
6.​ FUTURE ORIENTED
7.​ FLEXIBLE
8.​ VARIETY

IMPORTANCE

Features of Management Information Systems (MIS)

Management Information Systems (MIS) help organizations manage data efficiently
and support decision-making. Key features Include:
1. Data Collection & Processing - Gathers, stores, and processes business data
systematically.
2. Decision Support - Provides Insights for strategic, tactical, and operational
decisions.
3. Integration - Connects various business functions like finance, HR, and marketing.
4. Automation - Reduces manual work by automating routine tasks.
5. User-Friendly interface - Ensures accessibility for employees at different levels.
6. Security & Control - Protects sensitive data with authentication and encryption
7. Real-Time Information - Offers up-to-date data for quick decision-making.
8. Scalability- Adapts to growing business needs and technological advancements.

Components of Management Information Systems (MIS)

Management Information Systems (MIS) consist of several key components that work
together to collect, process, and manage business data efficiently:
1. People Resources - Users, managers, and IT professionals who operate and
maintain the system.
2. Data Resources - Organized databases that store and manage business information.
3. Software Resources - Programs and applications that process and analyze data.
4. Hardware Resources - Physical devices like computers, servers, and networking
equipment.
5. Processes - Defined workflows and procedures for data collection, analysis, and
reporting.

AREAS IN WHICH MIS USED WITH SUPPORT OF COMPUTER/INRENET

END OF UNIT 2