Marketing Management Chapter Notes | Business Studies (BST) Class 12 - Commerce PDF Download

Market

The market is used as a place where the buyers and sellers meet and conduct buying and selling activities. In the traditional sense, the market means a place where buyers and sellers gather to enter into transactions involving the exchange of goods and services but today business can be conducted on the telephone, through the mail, the internet, etc. In the modern marketing sense, the term market has a broad meaning. It refers to a set of actual and potential buyers of a product or service.  

Marketer or Seller

If a customer is the seeker of satisfaction the marketer is the provider of satisfaction. A marketer can be a person or an organization who makes available products or services and offers them to the customer with the intention of satisfying the customer's needs and wants.  

Marketing

Marketing is a social process whereby people exchange goods & services for money or for something of value to them. Anything that is of value to the other can be marketed e.g.  

1. Physical Products - T.V., Mobile phone, etc.  

2. Services - Insurance, education, etc.  

3. Person - Selection for different posts.  

4. Place visit - Agra, Taj Mahal, etc.  

5. Events - Fashion shows, Films Festivals  

 Important Features of Marketing:  

• Needs and wants: Satisfaction of the needs and wants of individuals and organizations.  
• Creating a market offering: Complete offer for a product of service.  
• Customer value: greatest benefit or value for the money.  
• Exchange mechanism: Exchange of products/services for money/for something of value to them.  

Meaning and Concept of Marketing Management

Marketing management means management of the marketing functions. It is the process of organizing, directing, and controlling the activities related to the marketing of goods and services to satisfy customers’ needs & achieve organizational goals.  

Marketing management involves the following steps or activities  

Marketing management involves the process of planning, organizing, implementing, and controlling marketing activities to achieve organizational goals. Here are the five steps of marketing management:

1. Analyzing Market Opportunities:

• Market Research: Conduct research to identify customer needs, preferences, and market trends.
• Segmenting the Market: Divide the market into distinct segments based on demographics, psychographics, and behavior.
• Targeting: Select specific target segments that align with the organization's objectives and resources.
• Positioning: Develop a unique positioning strategy to differentiate the organization's offerings from competitors.

2. Developing Marketing Strategies:

• Product Strategy: Determine the features, benefits, and branding of the product or service.
• Pricing Strategy: Set appropriate pricing levels that consider factors like costs, competition, and customer perceptions.
• Promotion Strategy: Decide on the most effective promotional channels and messages to reach the target audience.
• Distribution Strategy: Develop a distribution plan to ensure the product or service reaches the right customers at the right place and time.

3. Implementing Marketing Plans:

• Marketing Mix: Execute the planned strategies by managing the 4 Ps of marketing - Product, Price, Promotion, and Place.
• Resource Allocation: Allocate resources effectively to support marketing activities and achieve desired outcomes.
• Timelines and Budgeting: Set timelines and budgets to ensure efficient execution of marketing plans.
• Coordination: Coordinate with various departments within the organization to ensure a seamless implementation of marketing strategies.

4. Managing Marketing Efforts:

• Monitoring and Control: Regularly monitor and assess marketing performance against set objectives and make necessary adjustments.
• Feedback and Evaluation: Gather feedback from customers, sales teams, and other stakeholders to evaluate the effectiveness of marketing efforts.
• Marketing Metrics: Track key performance indicators (KPIs) such as sales revenue, market share, customer satisfaction, and return on investment (ROI).

5. Reviewing and Adapting:

• Continuous Improvement: Continuously review and adapt marketing strategies based on market dynamics, competition, and customer feedback.
• Market Feedback: Gather insights from customer surveys, focus groups, and market research to identify emerging opportunities and challenges.
• Strategic Planning: Incorporate the learnings from previous marketing efforts into the organization's overall strategic planning process.

By following these five steps, marketing managers can effectively plan, implement, and evaluate their marketing activities to achieve organizational objectives.

Functions of Marketing/Marketing activities: 

1. Marketing research: Gathering and analyzing marketing information i.e. what the customers want to buy, when they are likely to buy, in what quantities they buy, from where they buy, etc.  
2. Marketing planning: Specific plan for increasing the level of production, promotion of the products, etc., and specify the action programs to achieve these objectives.  
3. Product designing and development: Marketers must take decisions like, what product, which model/size? brand name? Packaging? Quality level? So that Customer needs are satisfied.  
4. Buying & assembling: e.g. Car-Raw materials like steel, tires, batteries, seats, steering wheels, etc. are bought & then assembled in the form of a complete product.  
5. Packaging/Labelling: Design the package for the product and put a label on the package.  
6. Branding: Creating a distinct identity of the product from that of competitors e.g. Videocon washing machine, Usha Fans, Lux Soap, etc.  

Concepts & Philosophies of Marketing:  

1. Production Concept: Profits could be maximized by producing products on a large scale, thereby reducing the average cost of production. Drawback: Customers do not always buy inexpensive products.  
2. Product Concept: When the supply of products increases customers begin to prefer products of superior quality and features. Therefore, the focus shifted from the quantity of production to the quality of products.  
3. Sales Concept: With the passage of time the marketing environment underwent future changes in quality and availability does not ensure the survival and growth of the firm because of competition to sell quality products. Therefore, firms must undertake aggressive selling and promotion efforts to make the customer buy their products.  
4. Marketing Concept: Implies that a firm can achieve its goals by identifying the needs of the customer and satisfying them better than the competitors. Customer satisfaction is the precondition for realizing the firm’s goals and objectives,  
5. Societal Marketing Concept: Under this concept customer satisfaction is supplemented by social welfare. Some products bring harmful effects on the environment so these should not be supplied. It pays attention to the social, ethical, and ecological aspects of marketing.

Meaning and Concept of Marketing and Selling

 Marketing is a wide term. It refers to a large set of activities of which selling is just one part. A marketer before making the sale does a lot of other activities such as planning the type, design of the product, the price, and selecting the distribution outlets at which the same would be available.  

Selling

It refers to the sale of goods or services through publicity, promotion, and salesmanship. The title of the product is transferred from the seller to the buyer. The entire focus in selling is to convert the product into cash.  

Meaning and concept of Marketing Mix-in orders to satisfy the needs and wants of its customer, every business firm must develop an appropriate marketing mix.  

Marketing Mix

Marketing mix refers to ingredients or the tools or variables which the marketeer mixes in order to interact with a particular market. 11.8.1 Elements of Marketing Mix: The four main elements of the marketing mix as classified by McCarthy are:  

A. Product  

B. Price  

C. Place/Physical Distribution  

D. Promotion  

These elements are more popularly known four Ps of marketing.  

Elements/4Ps of Marketing Mix 

1. Product Mix: All the features of the product or service to be offered for sale.

2. Price Mix: Value (Money) in lieu of product/service received by seller from a buyer.  

3. Promotion Mix: Informing the customers about the products and persuading them to buy the same.  

4. Place Mix: Physical distribution: Various decisions regarding distribution of products.  

Channels of distribution

Whether wholesalers or retailers are to be used or not.  

The physical movement of the products from producer to consumer.  

Storage, transportation, managing inventory (stock), etc.  

Product Mix

Meaning and Concept of Product: 

A product is anything that can be offered to a market to satisfy a want or need.  

Product mix refers to a combination of various features relating to the product or service like quality, size, range, package, warranty, etc.  

PRODUCT MIX – Three components are - Branding, Packaging, and Labelling.

Branding 

giving a name/a sign; a symbol etc. to a product e.g.: Pepsi, Nike:  

 Qualities of a Good Brand Name

1. Simple and Short: A brand name should be simple and short as Tata, Bata  

2. Easily Pronounceable: A brand name should be easily pronounceable as Lux, Dalda.  

3. Suggestive: The brand name should be self-explanatory, suggesting the inherent quality of the product as Ujjala suggests more whiteness.  

4. Distinctive: The brand name should be so distinctive that it highlights itself in the group of other brand names such as Tide, and Perk.  

Advantages of Branding

1. Brand name helps in advertising it in an easier way.  

2. Brand name establishes the permanent identity of the product.  

3. Branded products can be easily identified by consumers.  

4. Brand name promotes repurchasing.  

5. Branding ensures a particular level of quality of the product: If there is any deviation in the quality the customers can make a complaint to the manufacturer.  

Packaging

Act of designing and producing the container or wrapper of a product. Good packaging often helps in selling the product so it is called a silent salesman.  

Levels of Packaging

1. Primary Package: refers to the product’s immediate container e.g. toffee in a wrapper, or a matchbox.  

2. Secondary Package: refers to additional layers of protection that are kept till the product is ready for use e.g. a Colgate toothpaste usually comes in a cardboard box.  

3. Transportation Package: refers to further packaging components necessary for storage, identification, and transportation e.g. package of toffees are put into corrugated boxes for storing at a manufacturer’s warehouse and for transportation.  

Functions of Packaging

1. Product Identification: Packaging helps in the identification of the product.  

2. Product Protection: The main function of the packing is to provide protection to the product from dirt, insects, and breakage.  

3. Convenience: It provides convenience in carriage, stocking, and in consumption.  

4. Product Promotion: Packaging simplifies the work of sales promotion.  

Advantages of Packaging  

1. Rising standards of Health and Sanitation: People are becoming health conscious so they like to buy packed goods. The reason is that the chances of adulteration in such goods are minimized.  

2. Innovational Opportunity: With the increasing use of packaging more innovational opportunity becomes available in this area for the researcher.  

3. Product Differentiation: Packaging is helpful in creating product differentiation. The colour, material, and size of the package make differences in the quantity of the product.  

Labelling

Labelling means putting identification marks on the package. The label is a carrier of information & provides information like - the name of the product, name of the manufacturer, contents of the product, expiry, and manufacturing date, general information for use, weight, etc. Labels perform the following functions:  

1. Identify the product: It helps the customers to identify the product from the various types available. For example, We can easily identify Cadbury chocolate from the various chocolates by the purple color of its label.  

2. Describe the product and specify its contents: The manufacturer prints all the information related to the product.  

3. Grading of products: With the help of labels, products can be graded in different categories for example Brook Bond Red Label, Brook Bond Yellow Label, Green Label, etc.  

4. Helps in the promotion of products: Attractive and colorful labels excite the customers and induce them to buy the products. For example, 40% extra free is mentioned on detergent etc.  

5. Providing information required by law: There is a legal compulsion to print batch no, contents, max retail price, weight/volume on all the products, and statutory warning on the packet of cigarettes, “Smoking is injuries of health”: In case of hazard on/poisonous material appropriate safety, warnings need to be put.  

P-Price Mix

Meaning and Concept of Price

Price may be defined as the amount of money paid by a buyer (or received by a seller) in consideration of the purchase of a product or a service. Pricing is crucial for manufacturers, customers, and intermediaries. A customer will buy a product only when he perceives that the value of a product is at least equal to the value of money, which he has to pay in the form of price. Before framing any pricing policy following factors should be considered:  

1. Pricing Objectives  

(a) to maximize profits in the short term-tend to charge maximum price.  

(b) Obtain a large share of the market i.e., by maximizing sales it will charge a lower price.  

(c) Firm is operating in a competitive market it may charge a low price for it.  

2. Cost of Production: This needs to be fully realized before fixing prices.  

3. Demand: High Demand and less supply may permit an increase in price while low demand and more supply may not allow an increase in price.  

4. Competition in the Market: Prices of competitors need to be considered before fixing prices.  

5. Government Policies: Products regulated by government pricing regulations need to be priced as per government policies.  

P-Place Mix/Physical Distribution Mix

Covers all the activities required to physically move goods from manufacturers to the customer Important activities include.  

1. Order Processing: Accurate & speedy order processing leads to profit& goodwill & vice versa.  

2. Transportation: Add value to the goods by moving them to the place where they are required.  

3. Inventory control: Additional demand can be met in less time, and the need for inventory will also be low. 

4. Warehousing: The need arises to fill the gap between the time when the product is produced & time when it is required for consumption.  

Channels of Distribution:  

Direct Channel — Manufacturer-Customer  

Indirect Channel —  

1. Manufacturer-Retailer-Customer.  

2. Manufacture-Wholesaler-Retailer-customer.  

3. Manufacture → Agent → Wholesaler → Retailer → Customer  

Factors Determining Choice of Channels of Distribution

The choice of the appropriate channel of distribution is a very important marketing decision, which affects the performance of an organization. Whether the firm will adopt direct marketing channels or long channels involving a no. of intermediaries is a strategic decision.  

P-Promotion Mix

It refers to the combination of promotional tools used by an organization to communicate and persuade customers to buy its products.  

Tools/Elements of Promotion Mix:  

1. Advertising: Most commonly used tool of promotion. It is an impersonal form of communication, which is paid by the marketers (sponsors) to promote goods and services. Common mediums are newspapers, magazines, television & radio.  

Role of Importance of Advertising:  

1. Enhancing customer satisfaction and confidence.  

2. Helpful in increasing the demand for existing products.  

3. Helpful to increase the market share.  

4. Helpful in generating more employment.  

5. Helpful in the economic development of the country.  

6. Knowledge of various products.  

7. No fear of exploitation.  

Objections against Advertising

Though advertising is one of the most frequently used mediums for the promotion of goods & services it attracts a lot of criticism/objections against it, which are as follows:  

1. Increased Product Price: Which is ultimately added to product cost, manufacturers pass this cost to ultimate customers.  

2. Confusion to Customers: The number of advertisements shown for a single product having different brands confuse the customers and it becomes very difficult for them to make a choice.  

3. Encouraging the sale of Inferior Products: In many cases, some product features are over-emphasized.  

4. Advertisement of Bad Tastes: Events and models degrade human dignity.  

5. Undermines Social Values and Promotes Materialism: It induces the customers to buy more and more products. Because of the emphasis on materialism, social relationships are distorted which brings social disorder. In the changed economic environment of globalization, advertising is considered an important tool of marketing. It helps a firm effectively communicate with its target market, increasing sales and thereby reducing the per-unit cost of production. It is not a social waste rather it adds value to the social cause by giving a boost to production and generating employment.  

Personal Selling

Personal selling consists of contacting prospective buyers of the product personally i.e. face to face interaction between seller and buyer for the purpose of sale.  

Features of the Personal Selling

1. Personal contact is established under personal selling.  

2. Oral conversation.  

3. Quick solution to queries.  

4. Receipt of additional information.  

5. Development of relationships with prospective customers which may become important in making sales.  

Qualities of a Good Salesman 

1. Physical Qualities: Physical qualities include personality health, stamina, and tolerance. A salesman can instantly connect with customers if he is good-looking and smart.  

2. Mental Qualities: These include mainly skills, mental alertness, imagination, and self-confidence.  

3. Technical Qualities: He should have full and updated knowledge about the product he is selling-Its features, price, and variety available. He should be aware of the nature of work carried on by the firm, he is working for.  

4. Good communication skills: He should be able to develop a good conversation with the customer. He should be confident while he is communicating and should be able to answer all the queries of the customer satisfactorily.  

 5. Honesty: It is a very important quality of a good salesman. In order to establish the goodwill of the firm he must be honest and sincere in performing his duty. A salesman who resorts to selling inferior goods, charging higher rates, providing wrong information, giving exaggerated claims, etc. will cause a decline in the goodwill of the firm in the long run.

6 . Courtesy: A Salesman who is polite and courteous generates buyer’s confidence selling a product becomes easy for him.  

7. Persistent: “Never give up”, is the spirit that a salesman should have. Making the customer buy the maximum amount of a product is the ultimate task given to him.  

8. Capacity to inspire trust: The salesman should have the convincing power to develop the belief in a customer that the product he is buying is the best product in the market.  

Sales Promotion 

Techniques

Short-term incentives are designed to encourage buyers to make immediate purchases of a product/service.  

Sales promotion techniques in business studies refer to various strategies and activities implemented by businesses to stimulate sales, attract customers, and promote their products or services. These techniques are designed to create immediate customer interest and encourage purchasing behavior. Here are some commonly used sales promotion techniques:

1. Coupons and Discounts: Offering coupons or discounts on products or services is a popular sales promotion technique. This involves providing customers with a price reduction or a specific discount code that they can use during their purchase. Coupons and discounts can attract new customers, encourage repeat purchases, and create a sense of urgency.

2. Free Samples: Providing free samples of a product allows potential customers to try it without any cost. This technique aims to generate interest, create a positive brand experience, and ultimately increase sales. Free samples can be distributed at stores, through mailings, or online.

3. Contests and Sweepstakes: Organizing contests or sweepstakes can generate excitement and engagement among customers. Participants have a chance to win prizes by completing certain actions, such as making a purchase, submitting an entry, or sharing content on social media. Contests and sweepstakes help increase brand awareness, attract new customers, and encourage customer loyalty.

4. Buy One, Get One (BOGO) Offers: BOGO offers involve giving customers an additional product or service for free or at a discounted price when they purchase one. This technique incentivizes customers to make a purchase by offering extra value. It can also help clear out excess inventory or introduce new products.

5. Loyalty Programs: Loyalty programs are designed to reward and retain existing customers. Customers earn points or rewards based on their purchases or engagement with the business. These rewards can be redeemed for discounts, free products, exclusive offers, or other incentives. Loyalty programs encourage repeat purchases and build customer loyalty.

6. Bundling: Bundling involves combining multiple products or services together and offering them at a discounted price. This technique encourages customers to purchase more items than they initially intended, as they perceive greater value in the bundled offer. Bundling can help increase sales and introduce customers to new products.

7. Flash Sales: Flash sales are limited-time promotions that offer significant discounts or exclusive deals for a short period. These sales create a sense of urgency and encourage immediate purchases. Flash sales are often conducted online, with a countdown timer or limited quantities available, to maximize the sense of urgency.

8. Referral Programs: Referral programs incentivize customers to refer their friends, family, or acquaintances to the business. Customers are rewarded with discounts, credits, or other incentives when their referrals make a purchase or become customers themselves. Referral programs leverage the power of word-of-mouth marketing and can expand the customer base.

These sales promotion techniques are just a few examples of the strategies businesses use to boost sales and attract customers. The choice of techniques depends on the target audience, product or service offering, marketing objectives, and budgetary considerations of the business.

Public Relations

“The Chartered Institute of Public Relations” defines Public Relations as a strategic management function that adds value to an organization by helping it to manage its reputation Public relations covers a wide range of tactics, usually involving providing information to independent media sources in the hope of gaining favorable coverage. It also involves a mix of promoting specific products, services, and events and promoting the overall brand of an organization which is an ongoing tact. Public Relations tools include:  

1. Press Release: A press release is an announcement of an event, performance, or other newsworthy item that is issued to the press by a public relations professional of an organization. It is written in the form of a story with an attractive heading so that the media newspaper/radio/television/internet.  

2. Press Kits: It is a comprehensive package of information outlining a company’s quick grasp and circulating the message through products and services most frequently sent to members of the press. It includes A brief company biography. Information of senior management. Comments from customers. Reprints of newspaper and magazine articles. Photos of products.  

3. Brochures: It is a booklet published by the organization which contains the organization’s background, ethics, vision, mission, past, present, and future projects, its CISP, etc. E.g.: a brochure was given to new employees to give them a gist of the organization.  

4. Newsletter: It is a printed publication produced at regular intervals focusing on a particular set of people. The content of a newsletter is presented in a writing style that is less formal and letter-like. For example, a newsletter published by a college consists of information about activities conducted during a particular period, special achievements by students or teachers, etc.  

5. Events and Press support: Special events are acts of news development. The ingredients are time, place, people, activities, drama, and showmanship; one special event may have many subsidiary events, such as luncheons, banquets, contests, speeches, and many others as part of the buildup.  

6. Conferences and Seminars: Conferences and seminars are conducted for making people aware of the organization. For example, travel companies generally call prospective clients and offer travel packages. The members are contacted by telephone and asked to attend the seminar.  

7. Websites: A website acts as a window for the outside world to know an organization. So it is designed not just to serve as a resource for members, but also to present a positive message to non-members who are browsing through.  

Role of 'PR' in an Organisation  

(i) Smooth functioning of business and achievement of objectives.  

(ii) Building corporate image that affects favorably on its products. Upkeep of parks, gardens, sponsoring sports activities, etc.