1 NATURE AND PURPOSE OF BUSINESS

SOLE TRADER

SOLE TRADER

YOU WILL KNOW ME VERY MUCH

YOU WILL MEET ME EVERY DAY

FOR GETTING GOODS NEEDED

I WILL SERVE YOU VERY JOYFULLY

I WILL WAIT FOR YOU EVERY DAY

BECAUSE YOU ARE A FRIEND OF ME

I AM THE KING OF MY BUSINESS

I  WILL FIX THE PRICE OF MY PRODUCTS

I WILL SAVE ALL PROFITS

AND I WILL MEET ALL LOSSES

BUT ALWAYS HAPPY WITH MY KINGDOM.

ORGIN OF E- COMMERCE

ORIGIN  OF E- COMMERCE  

[ A SHORT STORY ON E-COMMERCE ]

IT WAS A CALM EVENING TWO YOUNG PEOPLES MET IN THE VALLEY OF GANGES .ONE MAN KEPT A APPLE AND OTHER MAN A BANANA . THEY EXCHANGED BOTH GOODS MUTUALLY GO TO HOME SINGING SONG JOYFULLY.  ALONG YEARS AFTER  THEIR CHILDRENS MET IN THE SAME PLACE WITH SAME PRODUCT BUT NOW THEY SOLD IT FOR CASH.BOTH OF THEM WENT TO HOME WITH HAPPY. FEW YEARS LATER THEIR CHILDRENS ALSO AGAIN MET IN THE SAME PLACE.

 THEY STARTED TWO SHOP IN THE PLACE FOR SELLING THE SAME PRODUCTS. YEAR AFTER YEAR THEY GROWN INTO NATIONAL AND INTERNATIONAL LEVEL. ONE WENT TO FOREIGN COUNTRY STARTED BUSINESS THEIR. IF HE NEED MORE PRODUCT HE WILL CALL THE OTHER PERSON IN INDIA HE WILL SEND NEEDED PRODUCTS TO HIM. YEARS AFTER NOW THEIR CHILDRENS CONTROLLING THEIR BUSINESS WITH COMPUTER AND INTERNET .THEY ALL ARE HAPPY.

AN INTRODUCTION TO MARKETING MANAGEMENT

 AN INTRODUCTION TO MARKETING  MANAGEMENT

Marketing is one of the functional areas of the management which enables the free flow of goods and services from the producer to ultimate consumers. Good are produced in anticipation of demand. Producers and consumers are separated through the limitations of location, time and knowledge .Where are these products produced? Who are the producers? How does it reaches to the hands of consumers? Answers to these questions would convey the significance of marketing.

What is Market?

 

The term market is derived from the Latin word “Marcatus” which means merchandise trade or place of business. In common paralance,the term market means a location where buyers and sellers of goods assemble to facilitate exchange.In marketing the term market has a wider meaning and varied dimensions. It refers to the aggregate potential demand for acommodity or service. The demand concept of market is predominant today than the place concept as it is the aggregate demand, which is more relavent than the meeting place for potentiai buyers and sellers.

Who is a customer?

               Consumer is the most important part of a business. Without consumer no marketing takes place. Individuals and organizations consume the products and services for their satisfaction. Generally  the term ‘consumers’ is used in respect of a group of people or organization who consume a particular product or service on the basis of their consumption habit.

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Who is Marketer or seller?

             Consumers seeks satisfaction by consuming a series of products and services , whereas the marketer or seller provides the satisfaction by offering a series of products and services to satisfy the consumers needs.The marketer satisfies the existing needs and desires of the customers according to their socio-economic conditions.It is the marketer who creats new needs in to the minds of the consumers.Needs are transformed into the form of wants and to satiafy needs and wants, different productsand services are generated.

CONCEPT OF MARKETINGS

The concept of marketing evolved over a period of time with its basic objective viz. enhancement of sales is remaining the same. The primary objective of marketing is to enhance sales through consumer satisfaction. Consumer derive satisfaction when their needs are met by a product or service.

            “ Marketing is nothing but desining and promoting products that match consumer needs. The extend of sales would depend on the need satisfying capacity of the product.”

MARKETING MANAGEMENT

                          Marketing management is animportant functions of management.It performs all the managerial functions in the field of marketing. It is responsible for planning, organisingf,directing and controlling the marketing activities.

                    According to E.W.Cundiff and R.R.Still ” marketing management is conserned with the purposeful activities towards the attainement of marketing goals. The basic goals of marketing are satisfaction of the needs of the customers and generation of the revenue for the business.” 

 Marketing manangement deals with planning, organising, directing and controlling the activities rellated with the marketing of goods and services to satisfy the customers’ needs.

 

Objectives of Marketing Management

           A bucsiness aims at earning reasonable profit by satisfying the needs of the customers. Marketing management is conserned with those activities, which are necessery to determine and satisfy the needs of the customers so as to achieve the objectives of business.The following are the main objectives of marketing management;

(1) To create new customers for the business: The marketing manager must atract                                                           customers to buy the firm’s products and services, that facilitate increased sales.The new customers may be atracted through advertisement and salespromotion activities.

(2) To satisfy the needs of the customers : Modern marketing begins and ends with needs of customers before offering them any goods and services.

(3) To determine the type of products that will satisfy the needs of the customers:

      Marketing aims at developing a product or service that will satisfy consumer’s needs, determining an apropriate pricing strategy, promoting the product among potential users and ensuring fair distribution.

(4) To generate adequate profits for the growth of the business: Marketing department is the only department, which generates revenues for the business. Profits are essential for survival and groeth of the business.

(5) To earn goodwill for the business: Marketing basically attempts to provide quality products to customers at reasonable price and thus, builds up good image for the business. This goodwill is a valuable asset for the business.

(6) To raise the standard of living of the people: Marketing facilitates production and distribution of a wide variety of goods and services for the use of consumers.

Difference between Marketing and Selling

      The term marketing and selling  are often used synonymously. Marketing begins before production of goods and continue even after the sale has been take place. Selling is the mere transfer of ownership of goods from the seller to the buyer. The difference between marketing and selling is presented in table;

	Marketing	Selling
1   2 3 4	Marketing focuses on customer’s needs of want- satisfying goods. Marketing begins before actual production takes place. Emphasis is given on product planning. Customer oriented – Customer is treated as a King. He is given supreme importance.	Selling focuses on seller’s needs converting his goods into cash Selling takes place after the production. Emphasis is placed on sales of goods already produced. Product oriented – Product enjoys supreme importance.
5 6 7 8	Marketing aims at profits through consumer satisfaction. The principle of caveat vendor (let the seller beware) is followed. Integrated approach to marketing is followed. Marketing includes marketing research, product planning, advertisement, etc. Marketing has a long- term perspective.	Selling aims at profits through sales volume. The principle of caveat emptor (let buyer beware) is followed. Fragmented approach to selling is followed. Attempt is made to sell whatever is produced. Selling has a short-term perspective.

Functions of Marketing

         The functions of marketing may be classified into two;

                                            Marketing Functions

Buying and assembling Selling Standardization ,Grading and Branding. Packaging,Storage,Transportation ,Salesmanship. Advertising Pricing,Insurance

Basic functions                                                                                      Facilitating functions

Marketing Research Product planning and development

(1) Marketing Research: Marketing research is a systematic collection of data relating to a marketing problem, its analysis and meaningful interpretation so that it facilitates decision-making. Marketing research helps in solving problems in the discharge of marketing functions.

(2) Product planning and development; Product planning and developments begins with the identifications of consumer needs. Based on the identified needs , the products are designed and developed so as to suit the requirements of users.

(3) Buying  and Assembling: Buying involves the determination of requirements, finding the source of supply, placing order and receiving goods. Assembling  means collections of goods already purchased from different sources and bringing them together to a common point.

 

(4) Selling: This is an important aspect of marketing under which ownership of goods is transferred from the seller to the buyer. It is at this point that marketing  action takes place.

(5) Standardization: The setting up of standards or specifications of a product and maintaining these standards are known as standardizations. Standardization is the basis of grading. It makes the grades stable till the standards are received. Standardization of goods helps sale of goods by convincing the customers about quality of the goods. The customers will purchase goods of that standard, which fulfill their requirements.

(6) Packaging: Packaging is done to protect the goods from damage  in transit and to facilitate easy transfer of goods to customers. Labelling means putting identification marks on the package. It is that part of a product which contains

information about the producer and the product. Packaging has become one of the essential services of the modern marketing.

 

(7) Storage: Goods are generally produced in anticipation of demand. They  to be stored properly in warehouses to protect them from any damage which may be caused by ants,rats,moisture,sun,theft,etc. till they are sold out.Storage of goods in warehouses has become an indispensible service these days.

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(8) Transportation:Transportation helps in bringing  the raw meterials to the place of production and making available the finished products at the point of consumption. It removes the hindrance of place It is an  integral part of marketing, as it helps in making available the product at the terminal point of consumpion.

(10) Advertising: Advertising has become an important function of marketing in the competitive world. It helps to spread the message about the product and thus promotes its sale. These include newspapers,magazines,radio, television,cinemahalls,hoardings,windw display,etc.

 

(11) Pricing: Price of a product is influenced by the cost of production and services offered, profit margin desired, prices fixed by rival firms and government policy. A sound pricing policy is an important factor for selling the products to the customers.

(12) Insurance: Loss or damage to goods or property may arise due to fire, theft,natural calamities so on. People employed in business firms are also liable to the risks of injury or of loss of life due to accidents at workplace. Insurance provides protection against these risks.

(13) Grading : Grading means division of product into different grades or classes made up of units possessing similar features as regards size, weight and quality. Grading is done in accordance with the specifications set up by the standards.

(14) Trademark: Trade mark is a legal term. It refers to a brand, which is registered with the government under the Trade and Merchandise marks Act,1958. Thus all brand names or marks cannot be termed as trademarks.

(15) Branding: The American Marketing Association has defined a brand as “a

name,term,symbol or a combination of them , which is intended to identify the goods of one seller or group of sellers and to differentiate them from those of competitors”

 

MARKETING MIX

             According to William J.Stanton ,”Marketing mix is the term used to describe the combination of the four inputs which constitutes the core of a company’s marketing system , the product, the price structure,the promotional activities and the distribution system”

Marketing mix represents a blending of decisions in four areas product,pricing,promotion,and physical distribution. marketing mix serves as the link between the business firm and its customeras. Since marketing mix takes care of the needs of the customers,it helps in increasing the sales and earning higher profits. Marketing mix gives due consideration to the various elements of the marketing system.

Components of Marketing mix

           Marketing mix implies a firm’s total marketing program.It requires decision making with regard to; product,  place, promotion and price.

(1) Product: The different types of products a firm manufactures and markets is called a product mix. The product mix consist of the product line, the depth of the mix, the width of the mix in addition to its consistency.

* Product line : It refers to a group of similar products, which fall with in a product mix.

*The depth of the mix: This refers to the variation in the product line for a product.

*The length of the mix: This implies the number of items that are included in a product line.

*The width of the mix: It indicates the number of products lines,the firm markets.

*Consistency: Consistency refers to the close association between the products in a mix .

(2) Price: The term price means exchange value of goods or services in terms of money. The decision relating to pricing of a product or services are called ‘price mix’

Factors in pricing

          It is very difficult for the marketing manager to fix the right price of a product that will ensure its  sale. A number of factors to be considered before fixing the price of a product. These factors are;

·        Type of customers: The target customers must be able to afford the price.

·        Cost of production and distribution: While fixing the price of a product the cost of production and distribution must be considered.

·        Profit margin: The sale price is also influenced by the profit margin decided by the firm.

·        Competition: If there is a keen competition in the market, the price fixed will be lower to stay in the market.

·        Demand for the product: If demand of a product is increasing,the firm can increase its prices.

·        Government regulation: The maximum sales price of some products are fixed by the government.

·        Miscellaneous services: The customer has to pay higher price if he wants additional attachments.

Pricing Strategy of a new product

      In pricing a new product, generally two types of strategies are suggested Skimming price policy and Penetration price policy.

·        Skimming price policy: In this a product is priced at a very high level due to incurring  large promotional expenses in early stages. Skimming price refers to fixing a high price when a new product is introduced in the market.This price policy aims at skimming the cream of demand at the initial stage by keeping a very high price and it will be reduced later step by step.

·        Penetration price policy: This is a practice of charging a low price right from the beginning to stimulate the growth of the market and to capture a large share of it.This policy found success in the following conditions;

*Product has high price elasticity in the initial stage.

*The product is accepted by large number of customers.

*Economies of large scale production are available to a firm.

* The potential market for the product is fairly large and has a good deal of future prospects. 

(3) Place: Place refers to the marketing efforts undertaken to make the product available at the right time in the right place. There are products which are manufactured at one part of the country which is most favorably located for that purpose.In order to ensure availability of products at the right place,two factors requires

(a) Channels of distribution                   (b) Physical distribution.

(a)Channels of distribution: Goods are produced for ultimate consumption by the consumers. The path taken by such goods in their movement from the producer to the consumers refers to channels of distribution.The number of intermediaries in the channel determines the channel length.Various channel levels are;

*Zero level;This is a case when no intermediaries involved in the channel i.e.the producer sells goods directly to the consumers.

*One level channel: Here one intermediary is involved between the producer and the consumers.

*Two level channel: There are two intermediaries involved in the distribution process i.e. the wholesaler and the retailer.

*Three level channel: In a three level channel, there are three intermediaries viz agents, wholesalers and retailers.

(b)Physical distribution: Physical distribution is basically concerned with handling and movement of goods from the place of production to the place of distribution.The major activities involved in physical distribution basically  constitute four decision areas.

*Transportation :Physical distribution of goods requires a mode of transportation. Selection of the mode would depend on the type of the product,the place where it is demanded,the quantity in which it is demanded.

 

*Stock or inventory: The level of stock ,which a firm should hold is dependent on meeting its distribution objectives.Stock refers to the holding of finished goods in anticipation of demand.

*Warehousing: Every firm needs to store its finished goods until they are sold.Such storage protect the goods from being damaged.This enables only through warehouses.

*Order processing: The manner in which customers orders are procured or processed is a factor which determines the extend of services available to them.

(4) Promotion;Promotion deals with informing and persuading the customer

 about the firim’s product.Promotion mix involves decisions about advertising,personal sellingand other sales promotion techniques. The elements of promotional mix are described under;

*Advertising: It involves dissemination of information about a product or a service to target customers through newspapers,magazines,radio,T.V,, outdoor displays, etc.

*Personal selling: It implies a face –to-face contact between a seller and a buyer.

*Sales promotion: Activities other than mentioned above to promote a product are known as sales promotion activities.

*Publicity: It involves non paid form of non personal communication.

ADVERTISING

Advertising and personal selling are the important tools of sales promotion. Advertising is any paid form of non- personal presentation and promotion of ideas goods or services of an identified sponsor.

Functions of advertising

             Advertising has become an essential marketing activity in the modern era. It performs the following functions:

·        It promotes the sale of goods and services by informing and persuading the people to buy these products.

·        It helps in the introduction of a new product in the market.

·        Advertising enables large –scale production.

·        Advertising educates the people about new product and its uses.

Benefits to Manufacturers and Traders

·        Advertising helps in introducing new products.

·        It creates new taste among the public.

·        Advertising assists to increase the sales of existing product.

·        Advertising helps in steady demand of the product.

·        Advertising helps in meeting the forces of competition in the market.

·        Advertising is used for increasing the good will of the firm.

·        Advertising increases the morale of the employees of the firm.

Benefits to the Customers

·       Advertising helps the customers to know about the existence of various products and their prices.

·       Advertising is dissemination of information concerning an idea, product or services to induce action in accordance with the intention of the advertiser.

Benefits to the Society

Ø Advertising provides employment to peoples engaged in writing, designing,and issuing advertisements.

Ø Advertising promotes the standard of the living of the people.

Ø Advertising educates the people about the various uses of different product and this increases their knowledge.

Ø Advertising sustains the press and other media.

Media of Advertisement

      A manufacturer or a trader can make use of the following media to spread his message to the people;

v Press Advertising Media : Press advertising, i.e. advertising through news papers, magazines, journals, etc. comes under this. Advertisement through news papers reach almost every place and are read by all kind of people. Magazine and periodicals are an excellent medium of advertisement when a

v Outdoor Advertising: Outdoor advertising has gained wide popularity these days. Its purpose is to the attention of the people at busy road and markets.It includes poster displays, billboard displays and electric displays. Posters are fixed on walls of building , bridges and other places. Printed or billboard displays involves the advertisements directly involves the advertisements directly painted on board meant for this purpose. Electrical displays involves the use electric light or neon tubes to attract the attention of the people. Vehicular displays has a become fashion these days to use modes of public transport for advertising.

v Film Advertising: Films are an important medium of advertisement. Business concerns as usually get their short motion picture prepared and distribute it to different cinema houses.

v Radio Advertising: Radio advertisement is gaining greater popularity these days.Advertisements are broadcast from the transmitting station of the commercial services of All India Radio.

v Television Advertising: Television is the fastest growing medium of advertisement because of huge expansion of electronic media. It appeals through both the eye and the ear.

v Direct Mailing Advertising: Direct mail is probably the most selective of all advertising media.It is used to send message directly to the customer.

v Window display Advertising: Window display is highly effective medium of advertisement. Goods can be displayed in artistically laid out window at the shop front or at important centres like railway station and busstops.

v Speciality Advertising: Many advertisement firms offer speciality articles to the present and prospective customers. These articles may be diaries, pen, etc the name of the advertiser is printed or inscribed on the speciality items.

   

   

Selection of the Advertising Media

      For selecting appropriate media of advertisement the following facts should be considered.

§  Nature of the product: Product may be classified into two broad categories ,consumer goods and industrial goods. Consumer goods can be advertised in news papers, magazines, radio, T.V.etc.,but industrial goods can be advertised only through specialized trade, technical and professional journals.

§  Nature of market : Nature and extend of market can be determined by various factors like geographical region, size of the population and purchasing power of the population.

§  Objectives of advertising: The objectives of the advertising program are very important to determine the choice of advertising media. The objectives may be introduction of a new product,to increase demand of an existing product,etc.

§  Circulation of Media: If the media have greater circulation, the message of the advertiser will reach a large number of people.

§  Financial considerations : The cost of advertising is an important consideration and it should be considered in relation to; the amounts of fund available,the circulation of the media.

§  Type of audience : If the message is to be conveyed to literate or less literate people, radio, television and cinema advertisement will serve the purpose in a better way.

§  Media used by competitors; The advertising media also depends upon the media used by the competitors.

SALES PROMOTION

                It refers to short-term activities, which are aimed at promoting sales. The peculiarity of sales promotion is that it brings stronger and faster response from the prospective buyers. Sales promotion activities include;

¯ Rebates : A deduction is made on the price of the product to make it attractive to the buyers to buy on special occasions.

¯ Discounts: Certain percentage of price is reduced as discount from the price of the product.

¯ Free gifts: The consumer is given a free gift along the product.

¯ Contests: The consumers are required to participate in some competitive event and winners are given some awards.

¯ Refunds: The seller offers to refund a part of price paid by the customer on production of some proof of purchase.

¯ Packaged Premium: Marketers pack some gifts inside the product package and this will create motivation among the customers to buy the product.

Salesmanship or Person selling

            Salesmanship or personal selling involves involves face to face contact between the seller and the prospective customer with an intention of selling some products. Salesmanships the art of presenting an offering that the prospect appreciates the need for it.

Features of Salesmanship; The basic features  of salesmanship are the following;

F Salesmanship involves persuasion of customers: A salesman must have the ability to convince the people to buy his product. The customer is not to be pressurised, but influenced favourably by the salesman.

F Salesmanship involves winning buyer’s confidence: Modern salesmanship aims at educating the customer and providing a solution to his problems.

F Salesmanship involves providing information; Salesmanship is an educative process.It tells the people the ways in which they can satisfy their needs.

F Salesmanship aims at mutual benefits: Salesmanship is a two- way process. It results in benefits not only to the sellers but also to the sellers but also to the customers.

Importance of Salesmanship.

          Salesmanship consists of individual and personal communication in contrast to the mass and impersonal communication through advertising. Personal selling helps in sales promotion. It is very important to the manufactures and traders because it helps them to sell their products. It also helps them in knowing the  tastes ,habits, attitudes and reactions of the people. Personal selling is an important method of demonstrating the product to the customers and giving them full information about the product. It is easier to persuade a person to buy a product through personnel explanation. A good sales person educates and guide the customers about the features and utility of the product.Sales man can also handle the grievances of the customers.

Qualities of a Good Salesman

   A successful salesman should possess the following qualities;

X  Good personality.

X  Cheerfulness.

X  Enthusiasm.

X  Initiative.

X  Self confidence.

X  Good memory.

X  Courtesy.

X  Shrewdness.

X  Loyalty.

X  Honesty.

X  Foresight.

X  Communicating ability.

X  Education and Training.

X  Knowledge of the product.

PUBLIC RELATIONS

     The marketing concept focuses on customer. Public relation means the relation of an organization with the public. It includes all efforts by an organization which leads to a favourable openion about the organization in the minds of the public. Co-operation of public is essential for the smooth operation of business.

Public relation Tools: In order to create a public image, the public relations professionals use various methods and tools. These includes ;

    News : This is in the form of news coverage relating to corporate stories or events.

    Speeches: Speeches by company executives at the various forum of shareholders, bankers, select customer groups and employees produce company image.

    Events: Organizing news conferences, multimedia presentations, press tours, star studded programmes, etc.

    Written materials: Written materials sent to relevant public group can influence their opinion.

    Public service activities:Business firms now a days associate themselves with public service. They join hands with other voluntary organizations to undertake welfare activities to create a favourable image.