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SATHYABAMA UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION

SUBJECT: MARKETING MANAGEMENT SUBJECT CODE:SBA5108


COURSE: MASTER OF BUSINESS ADMINISTRATION Level I Term II

Unit I: Marketing- marketing, concept of marketing. Evolution of marketing management,


Marketing Management process. Marketing mix. Analysis of micro and macro
environment. PEST analysis. Marketing potential, market shares, New Trends in
marketing.

MARKET
A market consists of the forces of seller (supply) and buyer (demand) facilitating an exchange
processes between seller and buyer.
DEFINITIONS
American Marketing Association defines a market as the “ aggregate demand of the potential
buyers for a product or service”.
Philip Kotler defines,“ a market as an area for potential exchange”.

Market Communication

Market
Flow of Goods Exchange
Flow of Money
Seller Buyer
Feedback/
Information/
Satishfaction/
Dissatisfaction

MARKETING
Marketing is an ongoing process of discovering and translating consumer wants into appropriate
products and services and developing a product on the basis of marketing research and creating
demand for these products under keen competition and serving the demand with help of channel
of distribution such as wholesaler and retailers.
DEFINITIONS
Philip Kotler defines marketing as “Marketing is a societal process by which individuals and
groups obtain what they need and want through creating, offering, and exchanging products and
services of value freely with others”.

The American Marketing Association offers this managerial definition: “Marketing


(management) is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational goals”.

“Marketing is not only much broader than selling; it is not a specialized activity at all. It
encompasses the entire business. It is the whole business seen from the point of view of the final
result, that is, from the customer’s point of view. Concern and responsibility for marketing must
therefore permeate all areas of the enterprise.” – Peter Drucker

WHAT CAN BE MARKETED? / THE SCOPE OF MARKETING


Marketing people are involved in marketing 10 types of entities: goods, services, experiences,
events, persons, places, properties, organizations, information, and ideas.

Goods. Physical goods constitute the bulk of most countries’ production and marketing effort.
The United States produces and markets billions of physical goods, from eggs to steel to hair
dryers. In developing nations, goods— particularly food, commodities, clothing, and housing—
are the mainstay of the economy.

Services - Services include airlines, hospitals, tourism, hotels, and maintenance and repair
people, as well as professionals such as accountants, lawyers, engineers, and doctors are
marketed. Many market offerings consist of a variable mix of goods and services. For example,
“God’s own country”- is the tage line for Kerala Tourism to promote the Tourism.

Experiences - By orchestrating several services and goods, one can create, stage, and market
experiences. Walt Disney World’s Magic Kingdom is an experience; so is the Hard Rock Cafe.

Events - Marketers promote time-based events, such as the Olympics, trade shows, sports events,
and artistic performances.

Persons - Celebrity marketing has become a major business. Artists, musicians, CEOs,
physicians, high-profile lawyers and financiers, and other professionals draw help from celebrity
marketers.

Places - Cities, states, regions, and nations compete to attract tourists, factories, company
headquarters, and new residents.

Properties - Properties are intangible rights of ownership of either real property (real estate) or
financial property (stocks and bonds). Properties are bought and sold, and this occasions a
marketing effort by real estate agents (for real estate) and investment companies and banks (for
securities).
Organizations - Organizations actively work to build a strong, favorable image in the mind of
their publics. Philips, the Dutch electronics company, advertises with the tag line, “Let’s Make
Things Better.” The Body Shop and Ben & Jerry’s also gain attention by promoting social
causes. Universities, museums, and performing arts organizations boost their public images to
compete more successfully for audiences and funds.

Information - The production, packaging, and distribution of information is one of society’s


major industries. Among the marketers of information are schools and universities; publishers of
encyclopedias, nonfiction books, and specialized magazines; makers of CDs; and Internet Web
sites.

Ideas - Every market offering has a basic idea at its core. In essence, products and services are
platforms for delivering some idea or benefit to satisfy a core need.

CONCEPTS IN MARKETING

The Production Concept


The production concept, one of the oldest in business, holds that consumers prefer products that
are widely available and inexpensive. Managers of production-oriented businesses concentrate
on achieving high production efficiency, low costs, and mass distribution.

The Product Concept


The Product concept holds that consumers favor those products that offer the most quality,
performance, or innovative features. Managers in these organizations focus on making superior
products and improving them over time, assuming that buyers can appraise quality and
performance. Product-oriented companies often design their products with little or no customer
input, trusting that their engineers can design exceptional products.
The Selling Concept
The selling concept, undertake an aggressive selling and promotion effort. The selling concept is
practiced most aggressively with unsought goods—goods that buyers normally do not think of
buying, such as insurance. Most firms practice the selling concept when they have overcapacity.
Their aim is to sell what they make rather than make what the market wants.

The Marketing Concept


This concept - emerged in the mid-1950s. The marketing concept holds that the key to
achieving organizational goals consists of the company being more effective than its competitors
in creating, delivering, and communicating customer value to its chosen target markets. It starts
with a well-defined market, focuses on customer needs, coordinates activities that affect
customers, and produces profits by satisfying customers.

The Customer Concept


The customer concept is practicing the marketing concept at the level of each customer. In this,
company collect information about the individual customer’s past transaction, demographic
profile and psychographic behavior etc., it is like one to one market.

The Societal Marketing Concept


The societal marketing concept calls upon marketers to build social and ethical considerations
into their marketing practices. They must balance and juggle the often conflicting criteria of
company profits, consumer want satisfaction, and public interest.

The Holistic Marketing Concept


The holistic marketing concept is based on the development, design and implementation of
marketing program, processes and activities.

Internal Intergrated
Marketing Marketing
Holistic
Marketing

Performance Relationship
Marketing Marketing

Internal marketing 3is a process that occurs within a company or organization whereby the
functional process aligns, motivates and empowers employees at all management levels to
deliver a satisfying customer experience.

Integrated Marketing is When all of the company’s departments work together to serve the
customers’ interests

Performance marketing , Holistic Marketing incorporates performance marketing and


understanding the returns to the business from marketing activities and programs, as well as
addressing broader concerns and their leagal, ethical, , social and environmental effects.

Relationship Marketing aims to build mutually satisfying long term relationship with key
constituents in order to earn and retain their business.

CORE MARKETING CONCEPTS


Needs, Wants and Demand
Needs are the basic human requirements such as for air, food, water, clothing, and shelter.
Humans also have strong needs for recreation, education, and entertainment. These needs
become wants when they are directed to specific objects that might satisfy the need.
Demands are wants for specific products backed by an ability to pay. Many people want a
Mercedes; only a few are able to buy one. Companies must measure not only how many people
want their product, but also how many are willing and able to buy it.

Target Markets, Positioning, and Segmentation


Market Segmentation start by dividing the market into segments. They identify and profile
distinct groups of buyers who might prefer or require varying product and service mixes by
examining demographic, psychographic, and behavioral differences among buyers. After
identifying market segments, the marketer decides which present the greatest opportunities—
which are its target markets. For each, the firm develops a market offering that it positions in the
minds of the target buyers as delivering some central benefit(s). Volvo develops its cars for
buyers to whom safety is a major concern, positioning its vehicles as the safest a customer can
buy.

Offerings and Brands


The intangible value proposition is made physical by an offering, which can be a combination of
products, services, information, and experiences.
A brand is an offering from a known source. A brand name such as McDonald’s carries many
associations in people’s minds that make up its image: hamburgers, cleanliness, convenience,
courteous service, and golden arches.

Value and Satisfaction


Value, a central marketing concept, is primarily a combination of quality, service, and price.
Satisfaction reflects a person’s judgment of a product’s perceived performance in relationship to
expectations.
Marketing Channels
To reach a target market, the marketer uses three kinds of marketing channels. Communication
channels deliver and receive messages from target buyers.
The marketer uses distribution channels to display, sell, or deliver the physical product or
service(s) to the buyer or user.
To carry out transactions with potential buyers, the marketer also uses service channels that
include warehouses, transportation companies, banks, and insurance companies.

Competition
Competition includes all the actual and potential rival offerings and substitutes a buyer might
consider.

Marketing Environment
The marketing environment divided into two groups. Micro enviornment and macro
environment. Micro environment deals with the company, suppliers, distributors, dealers, and
target customers. Macro environment deals with demographic environment, economic
environment, social-cultural environment, natural environment, technological environment, and
political- legal environment.

DIFFERENCE BETWEEN SALES AND MARKETING


Point of SELLING MARKETING
difference
1 Starting Point Selling starts with the seller. He Marketing starts with the buyer. He
is the centre. is the centre.
2 Converts It seeks to quickly convert It seeks to quickly convert needs
products into cash. into products.
3 Business View It views business as a good It views business as a customer
producing process satisfying process
4 Marketing mix Seller determine the marketing Buyers determine the marketing mix
mix
5 Focus The firm makes the product first The customer determine the total
and then figure how to sell it and product offering that would match
make profit and satisfy the identified needs of
the customer. Therefore it is easy to
sell and make profit.
6 Exchange It emphasis on exchange aspect It emphasis on value satisfaction
rather than value satisfaction that should flow to the customer
from the exchange
7 Technology It emphasises on staying with the It emphasises on adoption of
existing technology and reducing innovative technology to provide
the cost of production better value to the customers
8 Price Costs determines price. Consumer determines price, price
determination determines costs.
9 Communication Seller motives dominate Marketing communication is looked
marketing communication. upon as the tool for communicating
the benefit/ satisfaction provided by
the product.
10 Distribution Transportation, storage and other Transportation, storage and other
Aspects distribution function are distribution function are seen as
perceived as mere extension of services to the customer.
the product function.
11 Selling Adopts somehow selling Adopts integrated marketing
approach approach. approach covering product price
place promotion.
12 Operations of Different department of the All department of the business
the department business operates as separate operate integrated manner to
watertight compartments achieve consumer satisfaction
13 Main function Production is the central function Marketing is the central function of
of the business the business
14 Customer stand Selling views the customer as Marketing views the customer as the
last link in the business vary purpose of the business. It sees
the business in the customers’ point
of view.

MARKETING FUNCTIONS
1.Selling
It is core of marketing. It is concerned with the persuasion of prospective buyers to actually
complete the purchase of an article. Selling is enhanced by means of personal selling,
advertising, publicity and sales promotion.
2.Buying
It involves what to buy, what quality, how much, from whom, when and at, what price. People in
business buy to increase sales or to decrease costs.
3.Transportation
Transport is the physical means whereby goods are moved from the places where they are
produced to those they are needed for consumption. Transportation is essential from the
procurement of raw materials to the delivery of finished products to the customers’ places.
4.Storage
It involves the holding of goods in proper condition from the time they are produced until they
are needed by consumers (in case of finished products) or by the production department (in case
of raw materials and stores). Storing protects the goods from deterioration and helps in carrying
over surplus for feature consumption or use in production.
5. Standardization and Grading

The other activities that facilitate marketing are standardization and grading. Standardization
means establishment of certain standards or specifications for products based on intrinsic
physical qualities of any commodity. This may involved quantity or it may involve. Government
may also set some standards e.g., in case of agricultural products. Grading means classification
of standardized products into certain well-defined classes or groups
6. Financing
It involves the use of capital to meet financial requirements of the agencies dealing with various
activities of marketing. The services of providing the credit and money needed to meet the cost
of getting merchandise into the hands of the final user is commonly referred to as finance,
function in marketing. In marketing, finances are needed for working capital and fixed capital,
which may be secured from three sources – onward capital, bank loans and advances, and trade
credit (provided by the manufactures to wholesaler and by the wholesaler to the retailers).
7. Risk Taking

Risk means lose due to some unforeseen circumstances in future. Risk-bearing in marketing
refers to the financial risk inherent in the ownership of goods held for an anticipated demand,
including the possible losses due to a fall in price and the losses from spoilage, depreciation,
obsolescence etc.,. From production of goods to its selling stage, many risks are involved due to
changes in marker conditions, natural causes and human factors.
8. Market Information

The vital factor on which marketing is depend - market information. Right facts and information
reduce the aforesaid risks and thereby result in cost reduction. Business firms collect, analyze
and interpret facts and information from internal sources as well as external sources. Even
ultimate consumers need market information about availability of products, their quality
standards, their prices, and also about the after-sale service facility Common sources for
consumers are sales people, media advertisements, colleagues etc.

EVOLUTION OF MARKETING

Simple Trade Era (till mid 19th century): In this, everything which is made or harvested were
available in the market but in limited supply. This era had even barter system of buying and
selling.
Production era (1860 to 1920): this era started with the industrial revolution. Mass production
increases the availability of product options in the market place. This era lasted approximately 60
years.

Sales Era (1920- 1940): this era follwed the production era once the consumer demand became
saturated. Selling everything produced was not easy. Competition for market share increased.
Companies had to waork hard to sell their product. Products became commodities and price
became distinguish competitive advantage.

Marketing department era (1940-1960): the post world war II economic boom emerged the
marketing department era where manufacturer realized that the sales orientation was not
influencing the consumer. Business firm consolidated marketing related activities
(advertisement, sales, promotion, public relation etc.,) into a single department.

Marketing Company(1960 till today): This era emerged once the marketing concepts widely
accepted. The marketing concept such as addressing customer needs, focusing on customer.
These concepts became the goal of the business not only one department. All employees became
the part f the marketing efforts, either directly or indirectly, and customer became king.

Relationship Marketing era(1990-2010): in this era the goal is to build a long term mutually
benificial, relationship with the customer. The focus changed to lifetime customer value and
customer loyalty. Customer relationship management and data mining became the buzzwords in
marketing.

Marketing Management

marketing management as the art and science of choosing target markets and getting, keeping,
and growing customers through creating, delivering, and communicating superior customer
value. – Philip kotler
Marketing Management Tasks

Developing Marketing Strategies and Plans


The first task should be taken by any company is to identify its potential long-run opportunities,
given its market experience and core competencies. The Company can design its product with
better features and range. Whichever direction it chooses, it must develop concrete marketing
plans that specify the marketing strategy and tactics going forward.

Capturing Marketing Insights


The company needs a reliable marketing information system to closely monitor its marketing
environment so it can continually assess market potential and forecast demand. It should focus
on both micro and macro environmental variables.

Connecting with Customers


The company must consider how to best create value for its chosen target markets and develop
strong, profitable, long-term relationships with customers. To do so, it needs to understand
consumer markets.

Building Strong Brands


Company must understand the strengths and weaknesses of the brand as customers see it.
Company should focus on the consumer market and develop a positioning strategy.

Shaping the Market Offerings


At the heart of the marketing program is the product—the firm’s tangible offering to the market,
which includes the product quality, design, features, and packaging. To gain a competitive
advantage, Organization may provide leasing, delivery, repair, and training as part of its product
offering. Its price should match well with the offer’s perceived value; otherwise, buyers will turn
to competitors’ products.
Delivering Value
Organization must also determine how to properly deliver to the target market the value
embodied in its products and services. Channel activities include those the company undertakes
to make the product accessible and available to target customers. It must understand the various
types of retailers, wholesalers, and physical-distribution firms and how they make their
decisions.

Communicating Value
Organization must also adequately communicate to the target market the value embodied by its
products and services. It needs to set up mass communication programs consisting of advertising,
sales promotion, events, and public relations.

Creating Successful Long-Term Growth


Based on its product positioning, Organization must initiate new-product development, testing,
and launching as part of its long-term view.

MARKETING MANAGEMENT PROCESS

1.Analyzing market opportunities. The marketer’s initial task is to identify potential long run
opportunities given the company’s market experience and core competencies. To evaluate its
various opportunities, assess buyer wants and needs, and gauge market size, the firm needs a
marketing research and information system. Next, the firm studies consumer markets or business
markets to find out about buying behavior, perceptions, wants, and needs. Smart firms also pay
close attention to competitors and look for major segments within each market that they can
profitably serve.

2. Developing marketing strategies. In this step, the marketer prepares a positioning strategy
for each new and existing product’s progress through the life cycle, makes decisions about
product lines and branding, and designs and markets its services.

3. Planning marketing programs. To transform marketing strategy into marketing programs,


marketing managers must make basic decisions on marketing expenditures, marketing mix, and
marketing allocation. The first decision is about the level of marketing expenditures needed to
achieve the firm’s marketing objectives. The second decision is how to divide the total marketing
budget among the various tools in the marketing mix: product, price, place, and promotion.19
And the third decision is how to allocate the marketing budget to the various products, channels,
promotion media, and sales areas.

4. Managing the marketing effort. In this step (discussed later in this chapter), marketers
organize the firm’s marketing resources to implement and control the marketing plan. Because of
surprises and disappointments as marketing plans are implemented, the company also needs
feedback and control.

MARKETING MIX
Definition of Marketing Mix
According to Philip Kotler - "Marketing Mix is the combination of four elements, called the
4P's (product, Price, Promotion, and Place), that every company has the option of adding,
subtracting, or modifying in order to create a desired marketing strategy"

According to Principles of Marketing, 14e, Kotler and Armstrong, 2012 - "The Marketing
Mix is the set of tactical marketing tools - Product, Price, Promotion, and Place - that the firm
blends to produce the response it wants in the target market."

Meaning of Marketing Mix


The Marketing Mix is a marketing tool used by marketing professionals. It is often crucial when
determining product or brand's offering, and it is also called as 4P's (Product, Price, Promotion,
and Place) of marketing. However, in case of services of different nature the 4 P's have been
expanded to 7P's or 8P's.

In recent times, giving more importance to customer a new concept have been introduced, i.e.
Concept of 4C's. The Concept of 4C's is more customer-driven replacement of 4P's. According
to Lauterborn's the 4C's are - Consumer, Cost, Communication, and Convenience. According to
Shimizu's the 4C's are -Commodity, Cost, Communication, and Channel.
PRODUCT: anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need. It includes physical objects, services, persons,
places, organization and idea.
PRICE: the amount of money charged for a product or service, or the sum of the values that
consumers exchange for the benefits of having or using the product or service.
PROMOTION: promotion is a process of marketing communication to inform, persuade,
remind and influence consumers or users in favour of their product or service.
PLACE: the tasks involved in planning, implementing and controlling the physical flow from
point of origin to point of use to meet the needs of the consumers at a profit.

THE MARKETING ENVIRONMENT


Meaning:
Marketing environment consists of their sectors and forces outside marketing function that affect
marketing management’s ability to develop and maintain successful transactions with its target
customers.
The marketing environment is made up of a micro environment and a macro environment.

Micro environment Macro environment


 The company  Demographic environment
 Suppliers  Economic environment
 Marketing intermediaries  Natural environment
 Customer markets  Technological environment
 Competitors &  Political environment &
 The public.  Cultural forces

Micro environment
THE COMPANY
Top management sets the company’s mission, objectives, broad strategies, and policies.
Marketing managers make decisions within the strategies and plans made by the top
management. The various groups of the company such as top management, finance, R&D,
purchasing, operations, and accounting form the internal environment of the company.
SUPPLIERS
Suppliers form an important link in the company’s overall customer value delivery system. They
provide the resources needed by the company to produce its goods and services. Supplier
problems can seriously affect marketing. Marketing managers must watch supply availability-
supply shortages or delays, labor strikes, and other events can cost sales in the short run and
damage customer satisfaction in long run.
MARKETING INTERMEDIARIES
Marketing intermediaries help the company to promote, sell, and distribute its products to final
buyers. They include:
 Resellers
 Physical distribution firms
 Marketing services agencies &
 Financial intermediaries
RESELLERS
Resellers are distribution channel firms that help the company find customers or make sales to
them.
PHYSICAL DISTIBUTION FIRMS
Physical distribution firms help the company to stock and move their goods from the point of
origin to their destination. E.g.: Warehouses
MARKETING SERVICES AGENCIES
These are the marketing research firms, advertising agencies, media firms and marketing
consulting firms that help the company to promote its products and target its products to the right
market.
FINANCIAL INTERMEDIARIES
Financial intermediaries include banks, credit companies, insurance companies and other
businesses that help finance transactions or insure the risks associated with buying and selling of
goods.
CUSTOMERS
The company needs to study five types of customer markets closely:
Consumer markets: consists of individual buyers and households that buy goods for personal
consumption.
Business markets: buy goods and services for further processing or for use in their production
process.
Reseller markets: buys goods and services to resell at a profit.
Government markets: made up of government agencies that buy goods and services to produce
public services.
International markets: consists of these buyers in other countries, including consumers,
producers, resellers, and governments.
COMPETITORS
A company must provide greater customer value and satisfaction than its competitors do. They
also must gain strategic positioning their offerings strongly against competitor’s offering in the
minds of consumers.
PUBLICS
A public is any group that has an actual or potential interest in or impact on an organization’s
ability to achieve its objectives.
Macro environment
DEMOGRAPHIC ENVIRONMENT
Demography is the study of human population in terms of size, density, location, age, gender,
race, occupation and other statistics. The demographic environment is of major importance to
marketers because it involves people and people make up markets. Changes in the world
demographic environment have major implications for business.
EXAMPLE CASE:
In china, due to its ever increasing population, the Chinese government passed regulations
limiting families to one child. As a result, the single child in each family is showered with
attention and luxuries from all the adults of that family. Therefore majority of the products
produced in china is children centric.

ECONOMIC ENVIRONMENT
The economic environment consists of factors that affect consumer purchasing power and
spending patterns. Nations vary greatly in their levels and distribution of income. Some countries
have subsistence economies-they consume most of their own agricultural and industrial output.
These countries offer few market opportunities. At the other extreme are industrial economies,
which constitute rich markets for many different kinds of goods. Marketers must pay close
attention to major trends and consumer spending patterns both across and within their world
markets.
EXAMPLE : Present recession position in the world.
NATURAL ENVIRONMENT
The natural environment involves the natural resources that are needed as inputs by marketers or
that are affected by marketing activities. Marketers should be aware of several trends in the
natural environment such as:
Shortages of raw materials
Increased pollution
Government intervention in natural resources management
Environmentally sustainable strategies and practices
TECHNOLOGICAL ENVIRONMENT
Technological environment are forces that create new technologies, creating new product and
market opportunities. The technological environment is perhaps the most dramatic force now
shaping our destiny. New technologies create new markets and opportunities. However, every
new technology replaces an older technology. For example, transistors replaced the vacuum-
tube industry, xerography/photocopier replaced the carbon paper business.
POLITICAL ENVIRONMENT
Marketing decisions are strongly affected by developments in the political environment. The
political environment consists of laws, government agencies, and pressure groups that
influence or limit various organizations and individuals in a given society. Governments
develop public policy to guide commerce-sets of laws and regulations that limit business for the
good of the society as a whole.
For example,
 PATENT RIGHTS
 FAIR PACKAGING AND LABELLING ACT (1966): provides regulation on packing &
labeling.
 CHILD PROTECTION ACT (1966): bans sale of hazardous materials to children.
 THE MONOPOLISTIC AND RESTRICTIVE TRADE PRACTICES ACT (MRTP Act,
1969)
CULTURAL ENVIRONMENT
The cultural environment is made up of institutions and other forces that affect a society’s
basic values, perceptions, preferences, and behaviors. People grow up in a particular society that
shapes their basic beliefs and values.
For example,
PEOPLE’S VIEW OF HEALTH – in recent days, Indian people lay more emphasis on the
nutritional benefits they derive from each commodity especially consumables, which shows that
the culture of health consciousness has surfaced. This has brought up a massive change in which
the products are manufactured and marketed ensuring that the consumers rightly perceive what
they expect from each commodity.

PEST ANALYSIS
It is a framework that strategy consultants use to scan the external environment in which the firm
operates. PEST is an acronym for the following factors:
1. Political
2. Economic
3. Social
4. Technological
The PEST analysis is a useful tool for understanding market growth or decline, and as such the
position, potential and direction for a business. A PEST analysis is a business measurement tool.
The PEST analysis headings are a framework for reviewing a situation,
Political Economic
 ecological/environmental issues  home economy situation
 current legislation home market  home economy trends
 future legislation  overseas economies and trends
 international legislation  general taxation issues
 regulatory bodies and processes  taxation specific to product/services
 government policies  seasonality/weather issues
 government term and change  market and trade cycles
 trading policies  specific industry factors
 funding, grants and initiatives  market routes and distribution trends
 home market lobbying/pressure groups  customer/end-user drivers
 international pressure groups  interest and exchange rates
 wars and conflicts  international trade/monetary issues
Technological
Social
 competing technology development
 lifestyle trends
 research funding
 demographics
 associated/dependent technologies
 consumer attitudes and opinions
 replacement technology/solutions
 media views
 maturity of technology
 law changes affecting social factors
 manufacturing maturity and capacity
 brand, company, technology image
 information and communications
 consumer buying patterns
 consumer buying
 fashion and role models
mechanisms/technology
 major events and influences
 technology legislation
 buying access and trends
 innovation potential
 ethnic/religious factors
 technology access, licencing, patents
 advertising and publicity
 intellectual property issues
 ethical issues
 global communications
The basic PEST analysis includes four factors:
 Political factors are basically how the government intervenes in the economy.
Specifically, political factors has areas including tax policy, labor law, environmental
law, trade restrictions, tariffs, and political stability. Political factors may also include goods
and services which the government aims to provide or be provided (merit goods) and those
that the government does not want to be provided (demerit goods or merit bads).
Furthermore, governments have a high impact on the health, education, and infrastructure of
a nation.
 Economic factors include economic growth, interest rates, exchange rates, the inflation
rate. These factors greatly affect how businesses operate and make decisions. For example,
interest rates affect a firm's cost of capital and would therefore to what extent a business
grows and expands. Exchange rates can affect the costs of exporting goods and the supply
and price of imported goods in an economy.
 Social factors include the cultural aspects and health consciousness, population growth
rate, age distribution, career attitudes and emphasis on safety. High trends in social factors
affect the demand for a company's products and how that company operates. For example,
the aging population may imply a smaller and less-willing workforce (thus increasing the
cost of labor). Furthermore, companies may change various management strategies to adapt
to social trends caused from this (such as recruiting older workers).
 Technological factors include technological aspects like R&D activity, automation,
technology incentives and the rate of technological change. These can determine barriers to
entry, minimum efficient production level and influence the outsourcing decisions.
Furthermore, technological shifts would affect costs, quality, and lead to innovation.
Expanding the analysis to PESTLE or PESTEL adds:
 Legal factors include discrimination law, consumer law, antitrust law, employment law,
and health and safety law. These factors can affect how a company operates, its costs, and
the demand for its products.
 Environmental factors include ecological and environmental aspects such as weather,
climate, and climate change, which may especially affect industries such as tourism, farming,
and insurance. Furthermore, growing awareness of the potential impacts of climate change is
affecting how companies operate and the products they offer, both creating new markets and
diminishing or destroying existing ones.
Other factors for the various offshoots include:
 Demographic factors include gender, age, ethnicity, knowledge of languages,
disabilities, mobility, home ownership, employment status, religious belief or practice,
culture and tradition, living standards and income level.
 Regulatory factors include acts of parliament and associated regulations, international
and national standards, local government by-laws, and mechanisms to monitor and ensure
compliance with these.

MARKET SHARE

Definition:
The percentage of an industry or market's total sales that is earned by a particular company over
a specified time period is called Market share. Market share is calculated by taking the
company's sales over the period and dividing it by the total sales of the industry over the same
period. This metric is used to give a general idea of the size of a company to its market and its
competitors.

When the total market expands, the dominant firm usually gains the most.
While trying to expand total market size, the dominant firm must continuously and actively
defend its current business.
Marketers need to be able to translate and incorporate sales targets into market share because this
will demonstrate whether forecasts are to be attained by growing with the market or by capturing
share from competitors. The latter will almost always be more difficult to achieve. Market share
is closely monitored for signs of change in the competitive landscape, and it frequently drives
strategic or tactical action
Market share is said to be a key indicator of market competitiveness that is, how well a firm is
doing against its competitors

Advantages
 It helps a firm save itself from potential loss.
 If a firm blindly introduces a product into the market without knowing who might buy it
or why, then the product isn't likely to find success.
 A market share reveals what a companuy must change to meet the market's needs more
profitably.
 It identifies how the firm can reach its potential consumers and appeal to their needs.
 Knowing about a market share also helps firms identify when to discontinue products.

Market Potential
Definition
Market potential is the entire size of the market for a product at a specific time. It
represents the upper limits of the market for a product. Market potential is usually measured
either by sales value or sales volume.
It's a fluid number that changes with the economic environment. For example, rising and
falling interest rates will affect the demand for products that are typically financed, like cars
and houses.
Analysis of Market Potential
Determining the market potential of a product is part of a successful marketing process and
requires marketing research.
Factors determining Market potential:
1. Potential Customer Base
2. Competition
3. Current environment
These three factors are to be analyzed to determine whether the market potential of the product is
worth the investment or not.
Analyzing Potential Customer Base
You need to determine the size and demographic characteristics of your potential consumers.
Important information to obtain includes the population size of your target market, their product
preferences and their median annual household income. This tells the number of potential
customers and whether they can actually afford the product.
Analyzing Competition
Unless the producers are very fortunate and are bringing an entirely new type of product to the
market, they almost certainly have competition. It is important to assess the number of
competitors, their respective share of the current market and how your product can be
differentiated from theirs.
Analyzing the Current Environment
Market potential is not a static concept - it changes with the general economic and political
environment. For example, if interest rates go up, people may not be willing to use credit to
purchase big-ticket items, like cars and boats. This will lower the demand for those products and
decrease the product's overall market potential. So the market environment is to be analyzed.

New Trend in Marketing


1.Rural marketing:
Rural marketing is now a two-way marketing process. There is inflow of products into rural
markets for production or consumption and there is also outflow of products to urban areas.
The urban to rural flow consists of agricultural inputs, fast-moving consumer goods (FMCG)
such as soaps, detergents, cosmetics, textiles, and so on. The rural to urban flow consists of
agricultural produce such as rice, wheat, sugar, and cotton. There is also a movement of rural
products within rural areas for consumption
2.E-commerce:
E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or
the transmitting of funds or data, over an electronic network, primarily the Internet. E-
commerce is conducted using a variety of applications, such as email, fax, online catalogs
and shopping carts, Electronic Data Interchange (EDI), File Transfer Protocol, and Web
services
3.Internet Marketing:
Internet marketing or online marketing, refers to advertising and marketing efforts that use
the Web and email to drive direct sales via electronic commerce, in addition to sales leads
from Web sites or emails. Internet marketing and online advertising efforts are typically used
in conjunction with traditional types of advertising such as radio, television, newspapers and
magazines.
Specialized Areas of Internet Marketing
Internet marketing can also be broken down into more specialized areas such as Web
marketing, email marketing and social media marketing:

1) Web marketing includes e-commerce Web sites, affiliate marketing Web sites,
promotional or informative Web sites, online advertising on search engines,
and organic search engine results via search engine optimization (SEO).
2) Email marketing involves both advertising and promotional marketing efforts
via e-mail messages to current and prospective customers.
3) Social media marketing involves both advertising and marketing (including viral
marketing) efforts via social networking sites like Facebook, Twitter, YouTube
and Digg.

4. Relationship Marketing:
Relationship marketing is a facet of customer relationship management (CRM) that focuses
on customer loyalty and long-term customer engagement rather than shorter-term goals like
customer acquisition and individual sales. Relationship marketing stands in contrast to the
more traditional transactional marketing approach which focuses on increasing the number
of individual sales.
5. Internal Marketing:
Internal Marketing is an ongoing process that occurs strictly within a company or
organization whereby the functional process is to aligns, motivates and empowers employees
at all management levels to consistently deliver a satisfying customer experience
6. Interactive marketing:
Interactive marketing is a one to one marketing process that reacts and changes based on the
actions of individual customers and prospects. This ability to react to the actions of
customers and prospects means that trigger based marketing is dramatically more effective
than normal direct marketing.

UNIT – I
PART – A
1. Outline the Evolution of Marketing from early days to date.
2. Explain the meaning of Marketing.
3. What is Marketing Concept? What are the five different concepts of marketing?
4. Discuss Product and Production marketing concepts.
5. Explain sales and customer marketing concepts.
6. Explain marketing management process.
7. Define Marketing mix. What is the importance of marketing mix?
8. What are the components of marketing mix?
9. What is Marketing Environment? What are the external & internal factors of marketing
environment?
10. Distinguish between Marketing and Selling.
11. What forces determine external marketing environment? Discuss any three forces with
examples.
12. What is Marketing Myopia? As a marketer how would you avoid myopia in your
organization?

PART – B
1. Discuss various “Marketing Concepts” and which is the best concept and why?
2. Discuss in detail the components of marketing mix with examples.
3. What is Micro and Macro Environment? Explain its factors in detail.
4. What are the factors that influence the marketing environment of an organization?
5. Discuss the relative importance of all environmental forces affecting the marketing
system of a firm.
6. “All Organizations need marketing”. Do you agree to this statement? If so give reasons in
support of your answer along with relevant examples from business and non-business
sectors.

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