Marketing

Written and reviewed by Rohit Singh, Computer Science & Commerce faculty at UniDrill (MCA, Osmania University · 6 years teaching). Based on NCERT Business Studies Class XII, Chapter 10.

Is marketing just a fancy word for selling?

Two pickle makers start on the same day. Dev Agro makes 10,000 jars of one spicy pickle, hires salesmen and pushes the jars into every shop it can reach. Asha Pickles first asks families what they want, hears that small households want 200 gram jars with less oil, designs that jar, prices it for a monthly budget, and makes sure it sits next to the rice and flour in local stores. Six months later Dev Agro is cutting prices to clear stock, while Asha Pickles has a waiting list.

Dev Agro sold. Asha Pickles did marketing. The difference is the whole chapter: selling begins when the product is ready, marketing begins before it exists.

What marketing really is

In the modern sense, a market is the set of actual and potential buyers of a product or service, not just the physical place where trade happens. Marketing covers the business activities that direct the flow of goods and services from producers to consumers, including what is done before production (finding needs, designing, branding) and after the sale (looking after the relationship). It is a social process: individuals and groups get what they need and want by creating offerings and freely exchanging things of value.

For an exchange to happen, five conditions must hold: there are at least two parties, each has something of value, each can communicate and deliver, each is free to accept or reject, and each is willing to deal. Notice that the parties do not have to be in the same place. An online order is a valid exchange.

Marketing management is the planning, organising, directing and control of activities that bring about exchange between producers and consumers. A marketing manager also manages the level of demand. When demand is overfull, as with a product that is selling faster than it can be supplied, the manager may raise prices or cut promotion to reduce it. When demand is irregular, as with seasonal goods, short-term incentives can even it out.

The five marketing philosophies

The way a firm thinks about marketing has changed with market conditions. Each idea fits a different stage.

The ladder in one line: make more → make better → sell harder → serve the customer → serve the customer and society.

The societal concept is the marketing concept with a conscience. It looks at problems such as pollution, deforestation, resource shortage, population growth and inflation, and asks how a product's making and use affects society in the long run.

Beyond the textbook. For the exam: the five concepts are stages, each with its own starting point and focus. In reality: they are not neatly replaced one by another. A large firm often uses the production concept for a basic item that must be cheap and everywhere, and the marketing concept for a premium line that must match a particular customer. Why it matters: a CUET case question tests the idea the passage shows, not the era the business seems to belong to.

Pause and predict: a small town has one tailor with a three week waiting list. A second tailor opens, and both now compete. Which concept does the first tailor have to move away from?

Check your answer: the production concept, where demand exceeds supply and being available is enough. Once rivals appear, the first tailor has to think about quality, selling and customers.

Functions of marketing

The twelve functions describe what marketers do, not the tools they use.

Standardisation means producing goods to predetermined specifications so that every unit is uniform. It also cuts the need to inspect every item. Grading means classifying goods that are already produced into groups by quality or size, which is common for agricultural produce such as apples or eggs.

The marketing mix: four tools

The marketing mix is the set of tools a firm uses to pursue its objectives: Product, Price, Place and Promotion. The twelve functions and the four Ps are different lists: functions are the jobs, the mix is the toolbox.

Product

A product is a bundle of utilities, not just a physical thing. A motorcycle gives functional benefit (transport), psychological benefit (the pride of owning it) and social benefit (acceptance among friends). Firms sell all three.

Industrial products are those used as inputs to make other products. They fall into three groups.

Branding

A brand is a name, term, sign, symbol, design or combination used to identify one seller's products and set them apart from others. It has parts, and CUET loves to test them.

A good brand name is short, easy to say, spell and remember, suggests the product's benefit, is distinctive, suits packages and media in different languages, can stretch to new products, can be legally protected and lasts over time.

Packaging and labelling

Packaging is the act of designing and producing the container or wrapper of a product. It has three levels.

Packaging does four jobs: it identifies the product, protects it from spoilage, breakage, leakage, pilferage and climate, makes use easier (such as a pump or a resealable lid), and promotes it. In self-service stores, a striking pack can work even better than advertising. Packaging matters more as hygiene standards rise, as self-service shops grow, because innovation lets products last longer (some dairy products can be stored for days without refrigeration), and because it helps differentiate a product.

Labelling is designing the label on the package. A label does five things: it describes the product and its contents, identifies the product or brand, helps in grading, supports promotion (for example "40 percent extra free") and gives the information that the law requires, such as vegetarian marks and hazard warnings.

Price

Price is the amount a buyer pays or a seller receives in return for a product or service. Six factors set it.

Beyond the textbook. For the exam: product cost is the floor and utility and demand the ceiling. In reality: a firm may sell below cost for a while, for a launch offer or to clear old stock, because the goal is a larger customer base or freeing cash. It cannot do so for long. Why it matters: "floor" in the exam still means cost, not the lowest price ever charged.

Pause and predict: it costs Rs 40 to make a unit of a product, and buyers will pay up to Rs 90 for it. Between which two figures will the price be set, and which factors decide where exactly?

Check your answer: between Rs 40 and Rs 90. Competition, rules, pricing objectives and marketing methods decide the final point. More competition pulls the price down towards the floor.

Place: physical distribution

Physical distribution includes all activities that move goods physically from the manufacturer to the customer.

Promotion

Promotion uses communication for two purposes: to inform potential customers and to persuade them to buy. The tools together are the promotion mix: advertising, personal selling, sales promotion and publicity.

Advertising is a paid, impersonal form of communication by an identified sponsor. It is a one way message, not a conversation. Its strengths and the objections raised against it are shown below.

Personal selling is an oral presentation to one or more prospective customers to make a sale. It is personal (two way) and builds a relationship. Its merits are flexibility, direct feedback and minimum wastage because the message goes only to interested people. Salespeople act in persuasive, informative and service roles.

Sales promotion means short-term incentives that encourage immediate purchase. It supplements advertising and personal selling. Common tools are shown below.

The merits of sales promotion are attention value, usefulness in launching a new product and synergy with the other promotion tools. Its limitations are that heavy use can reflect a crisis (the firm seems unable to manage sales) and can spoil the product image.

Public relations builds goodwill with the public. Its five functions are publicity, press release, corporate communication (newsletters, annual reports, speeches), lobbying (engaging the government on policy) and counselling (advising on issues that affect the public). Publicity is non-paid, non-personal and has no identified sponsor, so it often appears as news. Public relations helps to build awareness, build credibility, motivate the sales force and lower promotion costs.

Exam traps

60-second revision

Where this chapter connects

Marketing is one of the functional areas of management, and the idea of identifying a need and filling it connects to the planning and directing of the whole business in Nature and Significance of Management. Motivation and communication, which sales teams depend on, are covered in Directing. Customer rights when marketing goes wrong are the subject of Consumer Protection, and the funds that pay for stock and promotion come from the decisions in Financial Management.