Marketing Aptitude For Bank Exams

Marketing Aptitude For Banking Exams

Understanding Market Before we understand the meaning of marketing, we should know what a market is. Market is a place where buyers and sellers meet each other to enter into transactions. The transactions involve transactions of ideas, goods, services and information. The exchange of goods or services for money is a transaction. Market comprises not only the actual buyers but also the potential buyers of a product or service. The potential buyers are those people who profess some level of interest in a good / service/ information and who can afford it. For example, a mill produces a cotton cloth. The mill (manufacturer & seller) and all the potential and actual buyers of the cloths will constitute the market. The presence of sellers and actual & potential buyers of a products or services over the Internet is known as "Online market" or "web market". In a broadest sense: A market is any one of a variety of different systems, institutions, procedures, social relations and infrastructures whereby persons trade, and goods and services are exchanged, forming part of the economy. It is an arrangement that allows buyers and sellers to exchange things" Can Two Persons make a Market? Two persons can trade. However to create a market it takes at least three persons to have a market, so that there is competition on at least one of its two sides. The offerings may include physical products, Services, Ideas and information. These offerings have values for their customers. "Exchange" is central to marketing. Exchange in which two or more parties give something of value to each other to satisfy felt needs is the core of the market place. Exchanges may include tangible goods for money or also intangible services. Features of Markets: As mentioned above, two people can trade but cannot create a market. In markets, the buyers outnumber sellers. An individual buyer is weaker than any individual seller is economically, but the total economic power of even a fraction of the buyers is enough to assure the survival or death of most businesses. The sellers compete to sway the largest number of buyers they can to their, rather than another sellers (competitors) offerings and attempt to meet competition and attract the largest number of buyers, are influenced as well, regularly modifying their behaviors so they will have more success, with more buyers, over time. Definition of Marketing

After understanding the Market in the last chapter, now let us understand what the marketing is. In market, the sellers and buyers exchange ideas, goods, services and information for money. The ideas, goods, services and information possess a value for the customer. Every organization or firm has to create a value for its product or service and this is very much essential for its survival. The economists call this value utility. Utility is the want-satisfying power of a good or service. The utility is of four kinds- form utility, time utility, place utility and ownership utility. Form utility is created when the firm converts raw materials and component inputs into finished goods and services. Any firms production function is responsible for creating form utility and marketing provides important inputs that specify consumer preference. Marketing creates the other three utilities, time utility, place utility and ownership utility. Time and place utility occur when consumers find goods and services available when and where they want to purchase them. EBay and other online retailers have a 24X7 format. This format emphasizes the time utility. Cola vending machines at malls and complexes focus on providing place utility for people buying snacks and soft drinks. Similarly, dial a pizza creates place utility. ATMs in banks also create the place utility. The transfer of title to goods or services at the time of purchase creates ownership utility. Utility is created by marketing. The firms determine what products or services may be of interest to customers. In simple words, the strategy to use in sales, communications and business development is called marketing. Marketing is an integrated process through which a firm creates value for customers and builds strong customer relationships in order to capture value from customers in return. Just like transaction is central to a market, customer is central to marketing. Marketing involves identifying, retaining and satisfying the customer. Marketing is not an isolated process. it is an integrated process which involves the planning, execution, pricing, distribution, promotion and after sales service. The American Marketing Association as has defined the marketing as: "Marketing 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 objectives" The latest definition of Marketing by AMA in October 2007 was revised as: "Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." The Chartered Institute of Marketing defines marketing as "the management process responsible for identifying, anticipating and satisfying customer requirements profitably" Difference Between Selling & Marketing

The market is a place for economic transactions. The buying and selling are two sides of the same "coin" that is "transaction'. Selling is different from marketing. While selling means offering to exchange something (intangible or tangible) of value for something else, marketing means much more. Selling is a part or component of marketing. Marketing may start even before production of goods and services. Marketing involves analyzing consumer needs, securing information needed to design and produce goods or services that match buyer expectations, creating, and maintaining relationships with customers and suppliers. The selling starts from the factory in case of tangible goods, while marketing starts in the market place. The focus of selling is "product or service" which exists, while the focus of marketing is "customer needs". The means of selling is a sale and to conclude a sale depends upon the "Persuading art" of the sales person, means of marketing is a complex, integrated and interdependent factors. The ultimate end of selling is profit while the ultimate end of the marketing is "Customer satisfaction". A common person, due to continuous exposure to advertising and personal selling links marketing and selling. There are some misconceptions or myths regarding the selling and marketing, biggest of which is "Marketing and selling are synonymous". The other myths are: 1. Marketing job is to create good advertising campaign 2. Marketing means to push the product to customer. 3. Marketing is transaction oriented. 4. Marketing is short term strategy 5. Marketing is an independent function. 6. Marketing is part of selling. Both marketing and selling promote a product or service but marketing involves selling, promoting, educating and exciting people about a product or service. Marketing builds a brand. Who is a Customer? A customer, also known as a client is a current or potential buyer of a product good or service. The firm or organization is seller. A potential customer is also known as prospective customer or client. A customer may view, check, experience the service but not purchase. Evolution of Marketing Marketing has changed over the centuries, decades and years. The production centered system systematically changed into relationship era of today and over the period; the specializations have emerged such as sales versus marketing and advertising versus retailing. The overall evolution of marketing has given rise to the concept of business development. Marketing has taken the modern shape after going through various stages since last the end of 19th century. The Production oriented practice of marketing prior to the twentieth century was conservative and hidebound by rules-of-thumb and lack of information. Science & technology developments and specially the development of information technology have now

changed the way people live, the way people do business and the way people sell and purchase. Following is a short summary of the various stages of evolution of marketing. Production Orientation Era: The prevailing attitude and approach of the production orientation era was -"consumers favor products that are available and highly affordable" . The mantra for marketing success was to Improve production and distribution". The rule was "availability and affordability is what the customer wants". The era was marked by narrow product-lines; pricing system based on the costs of production and distribution, limited research, primary aim of the packaging was to protect the product, minimum promotion. Advertising meant, "Promoting products with a lesser quality". Product Orientation Era: The attitude changed slowly and approach shifted from production to product and from the quantity to quality. The prevailing attitude of this period was that consumers favor products that offer the most quality, performance and innovative features and the mantra for marketers was A good product will sell itself, so does not need promotion. Sales Orientation Era: The increased competition and variety of choices / options available to customers changed the marketing approach and now the attitude was "Consumers will buy products only if the company promotes/ sells these products". This era indicates rise of advertising and the mantra for marketers was Creative advertising and selling will overcome consumers resistance and convince them to buy". Marketing Orientation Era: The shift from production to product and from product to customers later manifested in the Marketing Era which focused on the "needs and wants of the customers and the mantra of marketers was " The consumer is king! Find a need and fill it. The approach is shifted to delivering satisfaction better than competitors are. Relationship Marketing Orientation Era: This is the modern approach of marketing. Today's marketer focuses on needs/ wants of target markets and aims at delivering superior value. The mantra of a successful marketer is Long-term relationships with customers and other partners lead to successes The following sentences summarize the above evolution of marketing. 1. Production era: Cut costs. Profits will take care of themselves 2. Product era: A good product will sell itself 3. Sales era: Selling is laying the bait for the customer 4. Marketing era: The customer is King! 5. Relationship marketing era: Relationship with customers determine our firms future Features of Marketing The marketing Management refers to planning, organizing, directing, control of the activates which facilitate the exchange of goods and services between the producers to end consumers. Firms today need to spend money to create time, place and ownership utilities .The main features of modern marketing are as follows: Marketing is a science as well as art: Marketing has evolved from the economics but it has a closer relationships with social and behavioral sciences. Marketing is closely associated with streams of science as well humanities and subject lines

such as Economics, Law, Psychology, Anthropology, Sociology, Information Technology etc. Marketing heavily depends upon the demographic features of the target market, political environment, philosophy, mathematics, statistics etc. Exchange is essence of marketing: Marketing revolves around commercial exchange. This also involves exchange of technology, exchange of information and exchange of ideas. Marketing is Goal Oriented: The ultimate goal of marketing is to generate profits through the satisfaction of the customer. Marketing is a continuous process: marketing is not an isolated, static process but is a complex, continuous and interrelated process. It involves continuous planning, implementation and control. It is an important functional area of the management. Marketing is Consumer Oriented: All firms exist because of their business to satisfy the human needs, wants and demands. The ultimate objective of marketing is to find out what the consumer wants and how to fulfill consumer need. This leads to production of the goods and services as per the needs of the customer. Marketing starts with consumer and ends with consumer: Marketing is consumer oriented and it is very important to know what the consumer wants. Functions of Marketing The ultimate aim of marketing is exchange of goods and services from producers to consumers in a way that maximizes the satisfaction of customers needs. Marketing functions start from identifying the consumer needs and end with satisfying the consumer needs. The universal functions of marketing involve buying, selling, transporting, storing, standardizing and grading, financing, risk taking and securing marketing information. However, modern marketing has some other functions such as gathering the market info and analyzing that info. Market planning and strategy formation. To assist in product designing and development also comes under the marketing functions. The marketing functions have been discussed here briefly: Market Information: To identify the needs, wants and demands of the consumers and then analyzing the identified information to arrive at various decisions for the successful marketing of a firms products and services is one of the most important functions of marketing. The analysis involves judging the internal weaknesses and strengths of the organization as well politico-legal, social and demographic data of the target market. This information is further used in market segmentations. Market Planning: Market-planning aims at achieving a firms marketing objectives. These objectives may involve increasing market presence, dominate the market or increase market share. The market planning function covers aspects of production levels, promotions and other action programmes. Exchange Functions: The buying and selling are the exchange functions of marketing. They ensure that a firm's offerings are available in sufficient quantities to meet customer demands. The exchange functions are supported by advertising, personal selling and sales promotions. Product Designing and development: The product design helps in making the prodyct attractive to the target market. In todays competitive market environment not only cost matters but also the product design, suitability, shape, style etc. matter a lot in taking production decisions. Physical Distribution: The physical distribution functions of marketing involve transporting and storing. The transporting function involve moving products from their points of production to locations convenient for purchasers and storing

function involve the warehousing products until needed for sale. Standardization and Grading: Standardization involves producing goods at predetermined specifications. Standardization ensures that product offerings meet established quality and quantity. It helps in achieving uniformity and consistency in the output product. Grading is classification of goods in various groups based upon certain predetermined characteristics. It involves the control standards of size, weight etc. Grading helps in pricing decisions also. The higher quality goods and services attract higher prices. Financing : The financing functions of marketing involve providing credit for channel members or consumers. Risk Taking: Risk taking is one of the important marketing functions. Risk taking in marketing refers to uncertainty about consumer purchases resulting from creation and marketing of goods and services that consumers may purchase in future. Packaging, labeling and branding: packaging involves designing package for the products, labeling means putting information required / specified on a products covering. Packaging and labeling serve as promotional tools now a days, Branding distinguishes the generic commodity name to a brand name. For example, Wheat Flour is a generic name of a commodity while Ashirvad Aata is a brand name. In service industry, also branding matters a lot. Customer Support: Customer support is a very important function of marketing. It involves pre sales counseling, after sales service, handling the customer complaints and adjustments, credit services, maintenance services, technical services and consumer information. For example, water purifier comes with an onsite service warranty of 7 years helps in marketing and is an important marketing function as well. Importance of Marketing Whether a firm is a profit making organization or a nonprofit making organization, marketing has to play a very important role in the firms business, society and country. While raising the standard of living by designing products suitable to needs and wants of the customers, marketing also helps in development of the national economy. Producing goods and services for the society according to the needs and create demand for them and thus improving the standard of living of the people is one of the most important role played by marketing. For a firm, marketing helps in reducing the cost of business by reducing market distribution cost. Marketing also helps in increase in the employment opportunities. The successful marketing channel involves services of wholesalers, retailers, transporters; storage functionaries finance professionals, insurance services and so on. By creating, maintaining and increasing the demand marketing indirectly adds to the national income. Marketing also helps to build a cushion against slack business and recession. Meaning & Functions of Marketing Management Management is the processes of planning, organizing directing motivating and coordinating and controlling of various activities of a firm. Marketing is the process of satisfying the needs and wants of the consumers. Management of marketing activities is Marketing Management. Management Guru Philip Kotler defines marketing as Marketing Management is the

analysis, planning, implementation anc control of programmes designed to bring about the desired exchanges with target audiences for the purpose of personal and mutual gain. It relies heavily on adoption and coordination of the product, price, promotion and place for achieving response: In other words, a business discipline, which is focused on the practical application of marketing techniques and the management of a firms marketing resources and activities, is Marketing Management. Marketing Management focuses upon the psychological and physical factors of Marketing. The Marketing managers are responsible for influencing the level, timing, and composition of customer demand accepted definition of the term. While the psychological factors focus upon discovering the needs and wants of the consumer and the changing patterns of buying behavior, habit etc. the physical factors focus upon fulfilling those needs and demands buy better product design, channel of distribution and other functions. In summary, Marketing in action is marketing Management. Marketing Management has the responsibility of to perform many functions in the field of marketing such as planning, organizing, directing, motivating, coordinating and controlling. All these function aim to achiven the marketing goals. Following is a brief summary of functions of Marketing

Marketing Objectives: marketing management determines the marketing objectives. The marketing objectives may be short term or long term and need a clear approach. They have to be in coherence with the aims and objectives of the organization. Planning: After objectively determining the marketing Objectives, the important function of the marketing Management is to plan how to achieve those objectives. This includes sales forecast, marketing programmes formulation, marketing strategies. Organization: A plan once formulated needs implementation. Organizing functions of marketing management involves the collection and coordination of required means to implement a plan and to achieved pre determined objectives. The organization involves structure of marketing organization, duties, responsibilities and powers of various members of the marketing organization. Coordination: Coordination refers to harmonious adjustment of the activities of the marketing organization. It involves coordination among various activities such as sales forecasting, product planning, product development, transportation, warehousing etc. Direction: Direction in marketing management refers to development of new markets, leadership of employees, motivation, inspiration, guiding and supervision of the employees. Control: Control refers to the effectiveness with which a marketing plan is implemented. It involves the determination of standards, evaluation of actual performance, adoption of corrective measures, Staffing: Employment of right and able employees is very crucial to success of a market plan. The market manager coordinates with the Human Resource Manager of an organization to be able to hire the staff with desired capability. Analysis and Evaluation: The marketing management involves the analysis and evaluation of the productivity and performs mace of individual employees.

Basic Concepts of Marketing Anything that has a value can be marketed. A product, a service, a place, a person, an idea, information , an event, an organization, property or even experiences. However, there are some basic concepts of marketing, which are interrelated, and one building on one before it. These concepts are summarized in the following figure.

Here is a brief Description of the fundamental marketing concepts: Needs, wants and demands: A need is a state of felt deprivation or feeling of being deprived of something. Human need is the most basic concept underlying the marketing. Need is a part of human nature. There are many kinds of needs such as physical needs, social needs, spiritual needs, etc. Needs are shaped up by culture, personality and religion and they become wants when the need indicate an object to fulfill that need. Wants depend upon the internal as well as external factors. Want is defined in terms of an object that will define the need. If thirst is need, water, a cola drink, or a fruit juice may be the want. If hunger is need, pizza, burger, bread, or chapatti is a want. There may be more than one object that may fulfill a need and this is called a want-list. People have choices to choose a desired object or service from the want-list to fulfill a particular need. However due to limited resources, people want best value of their money. When a want is backed by buying power, it becomes a demand. So if no buying power, no demand. Money is required to create as well as fulfill a demand. This is the most fundamental concept of marketing. The marketer has to know the potential want list of his target market and make them available the best value for their money. Product: Anything tangible or intangible that is offered to satisfy a need or want is a product. They are called goods (tangible) and services (intangible). The tangible products are physical products, which can be touched or felt or tested, while the intangible products cane only be experienced. For example, a service of a hotel can be experienced (intangible) while food in the restaurant in the same hotel can be tested (tangible). Cars, groceries, computers, places, persons , ideas and informations -everything are objects that have the capability of fulfilling the needs and wants. When products are offered in the markets they are called market offering. A good market offering has to have a good value for money. Value & Satisfaction: The potential want list may have many products, which may fulfill the need and want of a customer. However, a customer chooses what gives him or her best value for money. There are market offerings for the objects in their potential want list. The market offerings have to provide the best value of the money and satisfaction of fulfilling a want. This is the fundamental concept of marketing, that when there are so many offerings in the market, the customer buys a product on his / her perception. Based upon their own perception the customers estimate the product value and judge whether, it has the capacity of fulfilling their need. Customer value is a guiding principle. The customer may rank the products as per his / her estimate of a products capability to satisfy a need. The price attached to the product may also affect this ranking. Ultimately, the customer chooses a product, which gives him / her best value of his / her money.

Exchange, Transactions and Relationships: As mentioned above, the wants backed by buying power create demand. The demand is fulfilled through exchange. Exchange is the act of obtaining a desired object from someone by offering something in return. Barter is also an exchange. One person cannot make exchange happen. To make exchange happen, two people are required at least. However, the transaction between two people can be a trade. Two people cannot create a market. Three people are at least required to create a market, so that there is competition from at least one side. For exchange to take place, two people are needed. Both of them must have something to offer each other and both of them should have a value to offer each other. Each of them must be free to accept or reject the offer. Both of them must be able to communicate with each other and must be able to deliver what they offering to each other. These are some basic conditions to make exchange happen. Exchange cannot be forced. Both the people must be independent and able to accept or reject one anothers offer. Exchange may be for profit or also for no profit. Whether for profit or no profit , an exchange must give some value to the exchange partners. A successful exchange is a transaction. The transaction is the unit of measurement in marketing. The value associated with transactions is the trade values. A monetary transaction involves money for goods / services and a barter transaction involves good/ service for good / service. A marketer does not want a single transaction. His aim is to continuously make market offerings and the continuous exchanges / transactions create relationships. Todays marketing is relationship marketing. The focus of marketing is not to get maximum profit from a single transaction but to get long running relationship with the customers. If there are good relationships, the transactions will follow and run long term. Markets: As we have discussed, an exchange may take place between two people, but three people are required to create a market. There are always many potential buyers and many potential sellers and the set of these potential buyers and sellers is market. A market essentially needs competition (except in absolute monopoly). A market may be a physical market with few shops to a large complexes and shopping malls. A market also may be virtual and today virtual markets are no inferior to the physical markets, thanks to greater access to information technology. Basics of Marketing Process The predetermined objectives of marketing are to maximize the profits and maximize the share in the market. To achieve these objects, a well-formulated marketing plan is needed. Marketing plan involves the important decisions and route map to achieve enterprise goals. A plan is implemented and reviewed through marketing process. A well designed marketing process achieves the marketing goals due to effective decision making, while a faulty process may lead to wrong decisions which further lead to marketing failure. The overall process of marketing has been divided into various steps by various marketing philosophers. To understand the marketing in simple way, we have divided the marketing process in following 6 steps. Strategy Formulation Marketing Planning Marketing Programming, Allocating And Budgeting

Marketing Implementation Monitoring And Auditing Analysis And Research Each step is interrelated with other steps, as marketing is a complex and continuous process. The relationships are shown as below in the figure. There are only vague and unclear dividing lines between any two parts of the process as precise boundaries are not as important as the general concept. Following is a brief Description about each of the above steps: Strategy Formulation: Marketing strategy formation involves the development of the broadest marketing/business strategies with the longest-term impact. Through marketing strategy, the organization is allowed to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered on the key concept that customer satisfaction is the main goal. Marketing strategy also defines the principles on which competition is faced successfully. At the strategy formulation stage, complex integration with other corporate functions is required. A marketing strategy has to be in rhythm with other functional strategies and overall corporate strategy. In fact, marketing strategy and overall corporate strategy are meld into a unified strategy. The overall target of strategy formulation is to achieve a sold positioning of the product or service of the firm. Market Planning: Market Planning is the base of the marketing. It involves objectives and plans with a 2-5 year time horizon and is thus further from day-today activity of implementation with an objective to make the best possible utilization of all the human & physical resources of a firm. A well-formulated marketing plan helps in establishing the effective coordination among various activities / departments of a firm. Most marketing plans are broad in nature and have a long term impact. Plans have to be developed by a combination of the specialists as well as the line managers who are responsible for carrying out a plan. Programming, Allocating & Budgeting: Marketing Programming, Allocating and Budgeting involves detail and focuses relatively on a shorter duration generally. Programming is like creating functional implementation programme keeping in view one or more elements of the marketing mix. Programming depends upon the nature of the firm, its organizational structure. Allocating means allocation of the resources of the firm on various elements of the marketing programme such as advertising or distribution etc. Through allocation, the firm decides what to do and what not to do and also how much and how long to do. Allocation is not based upon optimism of the marketer but involves hard decisions within the limits of firms priority and market environment. Budgeting involves the quantitative forecasts and estimates of each marketing function. It involves forecast cash flows and needs, sales forecasts etc. Market Implementation: This is the most functional stage of marketing process. Strategy formulation, market planning programming, allocating and budgeting lead to marketing implementation. Marketing implementation is the execution phase. This phase produces the actual results. The best strategies carved out by the best marketing specialists may get busted if the implementation is poor. Implementation depends upon the human resources of the organization very much.

For different personnel the meaning of implementation is different and set within his/ her work area. For example, for a sales person , the implementation means to go through effectively all the sales steps. While for a sales manager, the implementation is to organize the sales team/ force. Marketing implementation is people oriented and focuses on prospects, customers, distributors, retailers, and wholesalers. Marketing implementation needs support, coordination, and a welldeveloped network for successful results. Monitoring & Auditing: In general, audit is evaluation of a person, organization, system, process, enterprise, project or product and monitoring is act of supervising. In marketing, the monitoring and auditing involve to identify those existing (external and internal) factors, which will have a significant impact on the performance of firm. Therefore, it involves the assessment of performance against quantitative goals. The comprehensive audit also involves review of the processes as well qualitative and non-quantifiable aspects of marketing operation. The audit has to be done on a certain occasions while the monitoring refers to the day-to-day supervision and review activity. Analysis and Research: Analysis and Research is the end and beginning of marketing process. The marketing decisions need to be based upon the careful analysis and research. This may be quantitative based upon mathematics, statistics, and other quantitative disciplines and qualitative based upon psychology, behavioral science, moral science, anthropology and other disciplines. All the above activities are interrelated to each and other. The marketing is the front end of a corporate while bearing the lateral connections with all the other functional departments. Marketing Process: The Basic Schematic Marketing process is a complex & complicated set of various activities. The given graphic makes you understand the basic schematic of the marketing process. Every marketer has to understand some basic questions before making a marketing plan. The first set of areas of analysis is 5Cs of the market viz. Customers, Company, Competitors, Collaborators & Context. Customers: Customer is the king and ultimate goal of marketing process is to derive profit as well as satisfy the customer needs. The marketer has to find out what are the needs and demands of the customers and how the firm would seek to satisfy those demands. Customer is central to marketing as well as business and existence of a firm. Company: Todays markets are competitive and here goes the principle survival of the fittest. The company has to have some competencies and abilities to survive and flourish. The marketer has to judge, analyze and make marketing plans and strategies within the limits of the competencies and capabilities of the firm. Competition: Market essentially has competition. Competition makes choices & options available to customers as well as provides the best value for money to the end consumers. The marketer has to find out who competitors are and how to meet that competition. There is always competition in the market offerings and

unless the competition taken into account, the marketer may lead the firm in wrong direction. Collaborators: Someone who assists in a programme is a collaborator. The collaborator term in marketing involves all the people whose help required meeting the marketing goals. The personnel of the company as well as external collaboration such as advertising agencies, direct sales agents etc. need to be discussed. Context: Context deals with the external and internal environment of the firms and markets. The efficient marketer has to judge the political, legal, social, cultural and technological environment of the market and decide upon the factors, which may affect the course of marketing process. The above specification leads to analyze the market prerequisites. It is followed by specification of the target market. A target market is a set of customers that the firm decides to aim its marketing efforts. A well-defined target market is the first element to a marketing strategy. The selected market needs to be segmented on the basis several of geographic, demographic/socio-economic, psychographic, behavioral & product-related criteria and this is called market segmentation. Apart from this, the firms need to create an image or identity in the minds of the target market for its product/ service, brand or organization. Next comes the Marketing Mix. Neil Borden first used the term market mix in 1953. Neil Borden used this term in his American Marketing Association presidential address. Marketing Mix refers to Product, Price, Place and Promotion. Place here means the channel of distribution. Most important is the pricing decision. The 4Ps altogether creates value for the customer and creates value for the firm too. This leads to Customer acquisition and customer retention for a long-term profit for the firm. Understanding Marketing Environment Marketing Environment refers to the forces or variables of the outer and inner environment of a firm that affects the marketing managements ability to build and maintain the successful relationships with the customer. The marketing environment framework consists of macro environment and micro environment. Microenvironment variables are close to the firm and include the suppliers, marketing intermediaries, customer markets, competition & publics. Microenvironment also refers to the internal environment of the company and affects not only marketing but also all the departments such as management, finance, research and development, Human resources, purchasing, operations and accounting. Macro-environment deals with the Demographic, economic, Technological, Natural, socio-cultural and politico-legal environment of the markets. The following graphic shows the environmental framework. Customers: Customers are the core of the marketing environment. There are different types of customers such as end consumers, business customers,

government customers, international customers and retailer customers. Suppliers: A slightest delay in receiving the supplies may result in dissatisfaction of the customers. The marketers have to watch the supply availability and other trends related to the suppliers Marketing intermediaries: The resellers, physical distribution firms, marketing services agencies, and financial intermediaries all make marketing intermediaries. They help in promotion of the company and sales and distribution of the companys products. Stores and warehouses are the physical distribution firms that store and transport the companys product from its origin to its destination. Other intermediaries are marketing services agencies, which are responsible for conducting marketing research, advertising, and consulting. Financial intermediaries are institutions such as banks, credit companies and insurance companies. Publics: Publics is any group that has interest or impact on firms ability to meet its goals. This includes the financial publics, media publics, government publics, local publics such as NGO and citizen action organizations. While the financial publics can hinder a companys ability to obtain funds affecting the level of credit a company, the media publics can publish articles of interest regarding the company and editorials that may influence customers opinions. Similarly, government publics is capable of affecting the company by passing legislation and laws that put restrictions on the companys actions and citizen-action publics (eg. environmental groups and minority groups ) can question the actions of a company and put them in the public spotlight. Competitors: Competitors are the companies with similar offerings for goods and services. To remain competitive a company must consider who their biggest competitors are while considering its own size and position in the industry. The company should develop a strategic advantage over their competitors. Politico-legal factors: Political factors include how and to what degree a government intervenes in the economy. This includes monetary and tax policies of the government, labour laws, environmental laws, various trade restrictions, tariffs. Political stability is one of the main factors. This also includes the merit goods and demerit goods as per the provisions of the local government. Legal factors deal with the discrimination law, consumer law, antitrust law, employment law, and health and safety law. Economic factors: Economic factors are general economic growth, interest rates, exchange rates , balance of payments, monetary policies, inflation rate etc. These factors play a very important role in business operations. These factors have the capability to alter the cost of operations, cost of capital and returns ultimately. There is a major impact of the exchange rates on exports and imports of the country. Social factors: Social factors are the social and cultural aspects, which include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety.They, have a major impact on demand of a firms products and services. Technological factors: Technological factors include the research and development, automation, expansion of internet and other communication technologies, technology incentives and technological barriers. They affect the efficiency of the production. Outsourcing decisions mainly depend upon technological environments.

Natural Environment Factors: These factors include the weather, climate, and climate change, availability of water, availability of raw products etc. Understanding Consumer Behavior Consumer is King and Consumer is always right are the buzzwords in modern marketing. The activities of the marketer revolve around the consumer behavior. The firms have to provide what their consumers want and for this purpose they adopt various types of marketing strategies to reach and alter the consumers buying behavior in favor of their products and services. Consumer behavior is a dynamic, multidisciplinary and multidimensional process and studies when, why, how, and where people do or do not buy. Marketing has borrowed the elements from psychology, sociology, social anthropology and economics to explain the consumer behavior. The consudmer behavior is now a distinct discipline of marketing which attempts to understand the buyer decision making process, both individually and in groups Kurt Lewin, a German-American psychologist who is also known as of the the pioneers of modern social, organizational, and applied psychology provides a very useful classification of Buyer's behavior. this is known as Lewin's Proposition. The Lewin's proposition says: B= (P,E) The above proposition says that Buyers behavior (B) is a function of Personal Influences (P) and Outside or External environmental forces (E). The most generic model of understanding the buyer behavior is stimulus-response pattern, which say that response of the consumer is a result of different types of stimuli. These stimuli are applied to the consumer and consumer in return comes up with a response. The stimuli can be marketing or environmental stimuli. The marketing stimuli are subject to manipulation by the marketer while the environmental stimuli like economy, culture etc are subject to consumers environment. The response is to buy and not to buy, what to buy, which brand, which dealer, which location and so on The above graphic shows that there is a complex and continuous interaction of stimuli, consumer characteristics, and decision process and consumer responses. Cultural & Social Factors Affecting Buyer's Behavior What is culture? The values, beliefs preferences and tastes passed on from one generation to another generation in the society are called culture. Culture is one of the broadest determinants of Buyers behavior. A marketer needs to understand the culture to be able to do successful marketing. Culture keeps changing and so do the values, beliefs, preferences and tastes of the people. The successful marketer needs to monitors these changes and inculcates them in the marketing strategy of the firm. Culture is very important in Global marketing. To market a product overseas, one needs to understand the cultural taboos, social customs, preferences, religious outlook and other things. Social Factors: Man is a social animal. Every person belongs to social group or groups. Group imparts a major influence on a consumers buying decisions. These influences may be informational or normative. In psychology, it is referred to as conformity. Conformity is a process by which an

individual's attitudes, beliefs, and behaviors are conditioned by what is conceived to be what other people might perceive. Solomon Eliot Asch, an American Psychologist, first explained this and it was known as Asch Phenomenon. The group influences may be the result of subtle unconscious influences, or direct and overt social pressures. Informational social influence occurs when a person turns to the members of his/ her group to obtain accurate information. Normative social influence occurs when a person conforms to be liked or accepted by the members of the group. It usually results in public compliance, doing or saying something without believing in it. The impact can be easily seen in children. The decisions of children are often based upon their groups what the other children are wearing, eating and doing. The people who affect a group like the brand ambassadors are known as Opinion Leaders who have the capability to act as trendsetters and affect the buyers behavior. Family Influences: Family is a group and one of the most dominant factor affecting the purchase decisions of person. Family often has a set of norms and has different role and status for its members. Household decision-making depends upon the role of the family members. Personal Factors Affecting Buyer's Behavior Consumer behavior is also affected by internal factors such as personal & interpersonal factors. Each individual has his own set of unique needs, motives, perceptions, attitudes, learning and self concepts, to buying decisions. Individual purchase decisions are driven by the needs, motives, perceptions, attitudes, learnings and self-concept. They have been discussed here: Needs and Motives: A need is necessary for a person to live a healthy life. need is different than want, a deficiency of need is a dysfunction or death. Needs can be physical needs or psychological needs. Physical needs involve water, food and shelter while the examples of social need are self -esteem. Want is something that is desired. Every person has unlimited wants, but his/ her resources are limited. Thus, people cannot have everything they want and must look for the most affordable alternatives. A need is an imbalance between the consumer's actual and desired states. This imbalance needs to be corrected A marketer does the job of creating an imbalance. Marketing makes the need felt and motivates the person to correct this imbalance. The action taken to bring the condition in equilibrium the ultimate goal of a marketer. This action leads to person's buying decision. Perceptions: The word "perception" is derived from Latin words perceptio, percipio, which mean "receiving, collecting, action of taking possession. Perceptions is what a person attributes the incoming stimuli gathered through five sense of hearing, sight, touch, smell, and taste. Perception is the process of attaining awareness and is dependent on the senses. Perception also involves a person's understanding which depends upon his / her Psyche; i.e. imagination, conscience, intellect, memory. Perception is widely used in management science. In consumer behavior, perception plays a very important role in driving the purchasing decisions at personal level. Attitudes: An attitude is a hypothetical construct. Attitude represents the degree

of like or dislike of a person for an item/ idea/ information/event. Attitudes may be positive or negative views of a person, place, thing, or event. Attitudes affect the perception. The purchasing decisions are strongly based upon the current attitude about a product/ service / brand/ shop/ sales person. The marker's job is to create favorable attitude, which positively affect the brand preferences. Marketers need to determine the consumer attitude towards their products. Learning: Consumer learning is a process by which the consumer acquire the purchase and consumption knowledge and this experience affects the future purchases. Self Concept: A persons multifaceted picture about himself or herself plays a very important role in the consumer behavior. The self-concept is an outcome of personal and interpersonal influences and they affect the buying behavior of a person. Economical Factors Affecting Buyer's Behavior A need when identifies an object to fulfill that need becomes a want. A want backed by a buying power becomes a demand. A demand leads the person to make a purchasing decision, which is duly affected by the economic factors such as personal income, family income, consumer credit, govt. policies, etc. Personal Income: Income of a consumer is most important factor affecting the demand and subsequently the purchase decisions. Every person has unlimited wants but limited resources so higher the income higher is want backed by the buying power i.e. demand. The demands may increase or decrease depending upon the persons expectations about the future income. A persons deposable income is what is left after fulfilling the basic needs and the disposable income increases the purchasing power of the consumers. Family Income: The low-income families have lesser demands and happy and prosperous family income have more demands. Consumer Credit: The facility of credit available to the consumer increases the demand. Government Policies: Tax rates and other government policies have a great impact on the consumers buying behavior. Understanding Market Segmentation A market segment is a subset that fits with other subsets to constitute a whole market. A market is composed of people, consumers, institutions, firms with needs & wants backed by sufficient purchasing power and willingness to buy. Markets are heterogeneous and consist of elements that are not of the same kind or nature. However, the heterogeneous market can be divided into many homogenous customer segments using several variables. This division of the whole market into relatively homogenous groups is called market segmentation.

A market segment consists of people or organizations sharing with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function.

A true market segment is distinct from other segments as different segments have different needs. A market segment is homogeneous within the segment and exhibits common need, wants and demands. A true market segment responds similarly to a marketing stimulus. Market segmentation is based upon the assumption that markets of all commodities are heterogeneous. Two groups of people are never common in all characteristics and all products seldom succeed by appealing to everybody. The marketers with clear marketing communications target the identified homogenous segments. Marketing Guru Philip Kotler defines market segmentation as the subdivision of a market into homogenous subsets of customers where any subject may conceivably be selected on a market target to be reached with a distinct marketing mix. Market segmentation helps the marketing decision in following ways: By helping the marketer to identify the groups of customers to whom he can more effectively target marketing efforts. By helping the marketer to avoid trial and error methods of strategy formulation. By helping the marketer in addressing the customer needs and satisfying them. By providing important data to the marketer on which long term plans can be formulated. By helping, the marketers to stay focused rather than scattering their marketing resources. Features of a Market Segment: The market segment must be internally homogenous because consumers within the segment would be more similar to each other in characteristics. The market segment must be identifiable so that the individuals can be placed within or outside the segment. The market segment must be accessible to that it can be reached by an advertising media and distribution channels The market segment must represent an effective demand. A Marketers Questions on Segmentation Analysis Market segmentation makes it possible for a firm to best utilize its available resources. It needs intensive marketing research. Once it is decided to go for market segmentation, there are lists of questions, which must be answered. The examples of the questions are given as under. These are just general steps, which make you aware of the market segmentation, and each firm may have its own set of questions.

1. What is the marketing objective of the firm? 2. Is marketing looking for new segments? 3. If yes, what about the research, shall the firm use the existing data or will invest money in research? 4. If no, how to better satisfy the existing market segments?

5. What is the size of the total market and its various segments? 6. What are the users and non users of the products / services 7. What are the factors that distinguish between users and non-users? 8. Who are the competitors and what are their market / niche segments? 9. What is the firms position in the competition in the market? 10. How the firm can differentiate the consumers? 11. What are the possible segment profiles? 12. Does this segment profile makes internally homogenous groups? 13. Is the number of segments needs to be reduced or increased? 14. Which segments represent the best competencies and market opportunities? 15. What are the target segments characteristics and market behavior? 16. Who are the competitors in the target segment? 17. What kind of market mix will be suitable to this segment? 18. Does the firm have the necessary resources to carry out a segment strategy? 19. How flexible is this segment strategy? Can this be broadened in future? 20. Does this segment strategy fits the corporate strategy?

Variables of Segmentation: Consumer Markets There are two types of the markets- consumer markets and industrial market. Consumer markets are those markets where the ultimate consumers for their personal use purchase the products. In Industrial markets, the goods and services are purchased for use directly or indirectly in the production of other goods and services for resale. Marketers use different variables for market segmentation. The variables of dividing the consumer markets can be placed in two broad categories. One is Consumer background characteristics, which include Geographical, Demographical, Psychographical & General Life-style variables. Another is consumers market history, which includes product usage, product benefit and Decision process. Here is a brief discussion about them: Consumer background characteristics: Geographical variables: The geographic segmentation is the oldest, most basic and

most conventional way of segmenting the markets. The variables included in geographical segmentation are Region of product distribution, Cultural differences, languages, accessibility to the target market, mobility of the consumers and so son Demographic Variables: Demographic features of the markets are also basic variables of market segmentation. Demographic variables include the Age, Sex, Income, Educational level, Social status etc. Psychographic Variables: The psychographic variables include the personality traits, perception, and attitudes, Reference Groups like family and friend circles, and Social roles of the consumers. General Lifestyle Variables: General lifestyle provides a multidimensional profile of the consumers and deal with the general way of life of the consumers. The represent a correlation of demographic, geographic and psychographic variables. Consumer's Market History: Product Usage: The market can be segmented based upon the product usage. For example, the market can be divided into heavy, medium, light and non-users of a particular product or service. The variables can be use, Brand loyalty and attitude of the consumer towards a product. It also involves the durability and no durability of a product. Product benefit: Product benefit variables are used in product positioning as well. This variable includes expectations of product performance, the needs which are fulfilled by the product, brand perception, brand satisfaction etc. Consumer decision process: This variable segment the markets based upon sensitivity to the markets, shopping patterns, Product information searches etc. Variables of Segmentation: Industrial Markets Industrial marketing involves the marketing of goods and services from one business to another. The industrial gods are used in the industry for producing different end products. The segmentation of the Industrial markets takes into account the Size of Industry, Size of company, Location, Infrastructure, purchasing criteria and so on. These variables have been divided into 5 broad categories viz. Demographic variables, Operating Variables, Purchasing approaches, Situational Factors and Personal characteristics. Here is a brief discussion: Demographical Variables: The demographic variables of Industrial market segmentation include the type of industry, type of the target company, its location. Some marketers target a specific type of industry while some marketers seek a group of industries to target. For example, a company, which produces clutch wires for motorcycles, may target a motorcycle company. On the other hand, a company which deals with multiple products such as Spoilers, GRP Components, GRP Panels, Car Styling Kits, Rear Parcel Shelves, Door Trim Panels, Injection Molding, Azdel Components, Tractor Body Parts etc. will look for a portfolio of target companies such as Automobiles, Trucks and Buses manufacturers, tractors and construction equipment manufacturers, Locomotives and Railways, Defense, Airport furniture manufactures, medical equipment, windmills and so on......... Operating Variables: Operating variables deal with the customer technologies, user and no user or heavy user status, and the customer capabilities. Purchasing Approaches: Some companies have centralized purchasing while others

have decentralized purchasing. Industrial marketing often involves competitive tendering. In this process, the purchasing organization undertakes to procure goods and services from suitable suppliers. This is normally done for high value of some purchases and the purchasing organization shall seek a number of bids from competing suppliers and choose the best offering. This is called strategic procurement. Organizational structure or power structure is also important criteria. This gives an insight into the general purchase policy of the buying organization. Situational Variables: These variables include the urgency, quick delivery or scheduled delivery of the goods and services. The other criteria may be specific application and size of the order. Personal Characteristics: Personal selling is very important & effective in industrial marketing because many products need to be customized to suit the requirements of the individual customer. Other criteria are buyer-seller similarity, attitude towards risk and loyalty of a industrial customer. Understanding Targeting Approaches: Differentiated, Undifferentiated, Niche & Micromarketing Identification of the market segment leads a firm to decide how to approach the selected markets. However, there are many firms, which do not segment the market and would work for the aggregate market. This is called market aggregation which exactly opposite to segmentation. There are different kinds of targeting approaches and each marketing firm has its own unique way of targeting its customers. These targeting approaches are simply divided into four kinds viz. undifferentiated marketing, differentiated marketing, concentrated marketing and Micro marketing. Understanding Marketing Mix : 4P's and 4C's The selection of a target market leads the marketers to focus their activities towards profitability of the target segment. For this purpose, they need to manipulate many variables. Such variables were named marketing mix. The term marketing mix was first of all used by Neil Borden, in his American Marketing Association presidential address in 1953. However, E. Jerome McCarthy proposed a classification of marketing mix in four areas viz. Product, Price, Place & Promotion. The marketing mix is the blending of these four elements as per the needs and preferences of the specific target market. Each element of marketing mix has its own set of sub elements. For service industry, an extended version of Marketing Mix with 7Ps has been proposed. Here is a brief Discussion about the 4Ps of marketing mix. Product : A product may be a tangible product or an intangible product. A product is produced with a specific volume of units with an aim to satisfy the needs of the customers.. The sub elements of product are Product design, positioning, branding, packaging & labeling, Product line, customer service, warranties & guarantees, new product development, and product life cycle. Price: Amount a customer pays for the product is its price. Price is determined by a lot of factors such as demand, supply of raw components. Market share,

competition, material cost and operational cost (production cost), and customer's perceived value of the product. The sub elements of Price include Manufacture, Wholesaler and retailer prices, terms and conditions of pricing, bidding tactics. Discount policies, Price differentiation and Skim vs. Penetrating prices. Promotion: Promotion refers to all of the communications that a marketer may use in the marketplace. The supplements are Advertising, Sales force polices, direct marketing, Public relationships, Price promotions, Trade shows and special events. The four distinct factors of promotion are advertising, public relations, word of mouth and point of sale. Promotion may be paid or unpaid. Paid promotions include advertising through various media, sponsorship deals, exhibitions, conferences, seminars, paid participation in trade fairs and events and unpaid promotion include the press releases, word of mouth etc. Place: Place refers to the location where a product can be purchased. It represents the distribution channel. The Distribution channel may be direct or indirect. Channel length and channel breadth matter a lot. Some other sub elements are sublets, franchisees, direct sales agents, wholesalers, retailers etc. The above marketing mix is product focussed. There is a customer-focused marketing mix which is known as 4C model. The elements are 4 C model of marketing mix are Commodity, Cost, Channel and Communication. Here is a brief discussion: Undifferentiated marketing: Undifferentiated marketing refers to an approach when a firm produces only one product or product line and targets all of its customers with a single marketing mix. The other term used for this approach is mass marketing. In Mass Marketing, the market coverage strategy essentially ignores the market segment differences and goes after the whole market with one offer. This marketing approach attempts to sell through persuading a wide audience. Usually the idea is to broadcast the message with an aim to reach the largest number of people possible. Mass marketing focuses on media coverage such as radio, television and newspapers. The idea is to maximize the exposure to the product. Examples of mass marketing products are toothpastes, which are not made especially for one consumer group or segment and are sold in huge quantities. Other examples are furniture, artwork, automobiles, residential communities, cola drinks and personal computers. Differentiated Marketing: The differentiated marketing refers to the approach of the firms, which produce numerous products with different marketing mixes. These products are designed to satisfy the smaller segments. In this approach, instead of marketing one product with a single marketing program the firm approaches the different consumer groups with products customized for each group. Most companies do this for specialization and to remain competitive. The differentiated marketing essentially requires market segmentation and incurs a higher production cost, inventory cost and marketing costs. Concentrated marketing: The popular term for concentrated marketing is niche marketing. Another term for the same is Focused Market. A niche market is a subset of the market on which a specific product is focusing. Each niche market essentially defines specific product features such as product design, price range, production quality and the demographics that is intended to impact. In niche marketing, the firm essentially focuses. Niche marketing chooses a small segment provided its a profitable segment. This approach is most suitable to smaller firms, which have lesser resources. Micromarketing: This is the narrowest approach of targeting. It is most effective

technique for small business users to sustain, build and grow their own brand. It targets the potential customer at the very basic and personal level. The Extended Marketing Mix for Service Industry: Additional 3 Ps The marketing mix of product marketing consists of 4Ps, the services marketing takes in 3 more Ps making the extending market mix for service industry: 7Ps The additional 3Ps are People, Process and Physical Evidence. Why additional Ps? These additional 3P are required because of the special characteristics of the Service Industry. The product of a service industry is not tangible. The Service cannot be manufactured and inventoried but are often produced & delivered simultaneously. The service cannot be touched or felt but has to be experienced. The quality of the service is perceived quality and depends upon who is providing, when is providing and how is providing. The services are perishable and depend upon the people who are providing, the ambience where it is being provided and the way it is being provided. Because of certain characteristics like intangibility, inseparability, heterogeneity, perishability etc. Service industry needs additional marketing mix elements. The Process industrializes and standardizes the services, Physical evidence tangibilizes the services and people (personnel) are the essential parts of the service. The sub elements of these 3Ps are discussed here: Process: The sub elements of process are flow of activities, service steps, and involvement of the customers. Physical evidence: The sub elements of physical evidence are Ambience, facility design, Equipment, signage, Employee attire, Displays etc. People: The sub elements of people are Employees and customers. Concept of Product Generally market offering of any kind is called a product. In management, a product is anything that is offered in the market to satisfy a need or want. The products may be raw materials in industries, merchandise in retailing or services in service industry. The raw materials are called commodities often. Commodity is also something offered in an open market. A product essentially has utility. A product is a bundle of utilities consisting of various features and services. The bundle of utilities here means that the product is not the physical product but the total package of the benefits obtained by a customer. A product is a mixture of tangible plus intangible attributes. For example if we buy a book or CD from amazon.com, the product is not only the book but also the guarantee of getting delivered with 24 hours. The book in this example is the core product or core benefit. A product as a bundle of tangible and intangible attributes is a Total product and the concept is called Total Product Concept. Core Benefit refers to what the product means to a customer. The Generic product is the unbranded and undifferentiated commodity which provides the core benefit. A Branded product gives an identity to the generic product. For example water is a

generic product, but Bisleri and Aquafina are the brands. Car is a generic product which offers the benefits of convenience in travelling but Wagon R or Mercedes are brands. The generic products are undifferentiated products. However, differentiated products have a distinction from other similar products. The differentiation is mostly claimed by the marketers; however It may or may not have the real distinction of ingredient, quality, utility and service. For example Pacimol and Calpol are two brands which offer Paracetamol as ingredient used for fever medicines. In customized product, the customer requirements are taken into account. The augmented products involve the voluntary improvements made by the product manufacturers. The potential product is tomorrows product which may possibly introduced by the firm in future depending upon the technological and economic resources of the firm Understanding Product Positioning The Concept of Positioning is very important in the Marketing Management. Positioning refers to the concept of placing a product in a certain position in the minds of the prospective buyers. The concept was introduced by Positioning Gurus named Al Ries and Jack Trout in their article in "Advertising Age". Their work Positioning: The Battle For Your Mind is the industry standard for the subject. They define positioning as " an organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances" According to them Positioning starts with the product, but positioning is not what you do to the products. Positioning is what you do to the mind of the prospect" In other words by Positioning marketers try to create an image or identity in the minds of their target market for its product, brand, or organization in contrast with the competing products/ brands and organizations. The positioning strategy has a crucial impact on the marketing success of a company. Anything that makes a brand or product unique is positioning. There are different possibilities of positioning. Some companies use some attribute or benefit of the product. This is called attribute positioning. Some examples of attribution positioning are Volvo (safety) , Dettol (Hygiene), Fairness (Fair & Lovely), Tough Shoes (Woodland) etc. Quality or price positioning refers to product positioning as the best value for money. Competitive Positioning is when a comparison is highlighted with the competitor. Product category positioning refers to the positioning of a product belonging to a particular category. Some companies use unique taglines for better brand positioning. For example Jeete raho.. (ICICI-Prudential) , Jindagi ke saath bhi Jindagi Ke Baad bhi (LIC) , Thanda Matlab .. (Coca Cola), Just do it (Nike) , Hum Hai na..."(ICICI Bank), Pure banking Nothing Else (SBI) all these taglines have a great brand recall value. Product positioning is closely related to market segment focus. Product positioning involves creating a unique, consistent, and recognized customer perception about a firm's offering and image. A product or service may be positioned on the basis of

an attitude or benefit, use or application, user, class, price, or level of quality. It targets a product for specific market segments and product needs at specific prices. The same product can be positioned in many different ways. Positioning is a process to create an image or identity in the minds of their target market. Positioning is the brand identity & value proposition in a perspective customer's mind. Positioning demonstrates an advantage over competing brands

SUMMARY NOTES Q.1What is Utility in reference to marketing? Utility is the want-satisfying power of a good or service. There are four basic kinds of utility Form Utility : Time Utility Place Utility Ownership Utility. Form utility is created when the firm converts raw materials and component inputs into finished goods and services. Although marketing provides important inputs that specify consumer preference, the organizations production function is responsible for the actual creation of form utility. Marketing function creates time, place and ownership utilities. Time and place utility occur when consumers find goods and services available when and where they want to purchase them. Online retailers with 24*7 format emphasize time utility. Vending machines focus on providing place utility for people buying snacks and soft drinks. The transfer of title to goods or services at the time of purchase creates ownership utility. Q 2. If you are a Marketing Manager of a Firm, How you will "Create a Customer"? creating a customer means identifying needs in the marketplace, finding out which needs the organization can profitably serve and developing an offering to convert potential buyers into customers. Marketing managers are responsible for most of the activities necessary to create the customers the organization wants, These activities include: Identifying customer needs Designing goods and services that meet those needs Communication information about those goods and services to prospective buyers Making the goods and services available at times and places that meet customers needs Pricing goods and services to reflect costs, competition and customers ability to buy Providing for the necessary service and follow-up to ensure customer satisfaction after the purchase Q 3. What is the meaning of " Relationship Marketing" ? Relationship Marketing focuses on needs/ wants of target markets and delivering superior value. Besides it also means to develop 'Long-term relationships with

customers and other partners lead to success Q 4. Which are the eras of Evolution of Marketing ? There are five eras in the history of marketing the production era, the product era, the sales era, the marketing era and the relationship marketing era. Q 5. What was the focus of marketing in production Era? In the production era, the production orientation dominated business philosophy. Indeed business success was often defined solely in terms of production victories. The focus was on production and distribution efficiency. The drive to achieve economies of scale was dominant. The goal was to make the product affordable and available to the buyers. Q 6. What was the focus of Marketing in Product Era? In the product era, the goal was to build a better mouse trap and it was assumed that buyers will flock the seller who does it. However, a better mousetrap is no guarantee of success and marketing history is full of miserable failures despite better mousetrap designs. Inventing the greatest new product is not enough. That product must also solve a perceived marketplace need. Otherwise, even the bestengineered. Highest quality product will fail. Q 7. What did the firms attempt in Sales Era? In the sales era, firms attempted to match their output to the potential number of customers who would want it. Firms assumed that customers will resist purchasing goods and services not deemed essential and that the task of selling and advertising is to convince them to buy. But selling is only one component of marketing. Q 8. Describe the marketing Era of Marketing History: During marketing era the company focus shifted from products and sales to customers needs. It can be explained best by the shift from a sellers to a buyers market one with an abundance of goods and services. The advent of a strong buyers market created the need for a customer orientation. Companies had to market goods and services, not just produce them. This realization has been identified as the emergence of the marketing concept. The keyword is customer orientation. All facets of the organization must contribute first to assessing and then to satisfying customer needs and wants. Q 9. What is the meaning of Relationship Marketing? Organizations carried the marketing eras customer orientation one step further by focusing on establishing and maintaining relationships with both customers and suppliers. This effort represented a major shift from the traditional concept of marketing as a simple exchange between buyer and seller. Relationship marketing, by contrast, involves long-term, value-added relationships developed over time with customers and suppliers.

Q 10. The statement " Customer is King" comes from which era of marketing History ? Marketing Era

Q 11. Today Marketing is Customer Oriented or Product Oriented or profit oriented? Customer oriented Q 12. What is the center Point of Marketing Concept? Customer Q 13. Which will you keep in modern marketing concept? "Make & Sell" or "Sense & Respond" ? Sense & Respond Q.1 What are the marketing Functions? There are 8 universal functions of Marketing, categorized into 3 broad categories: Buying, Selling, Transporting, Storing, Standardizing and grading, Financing, Risk taking Securing marketing information. Q.2 What are Concepts of Marketing ? The 5 concepts of marketing are as follows: Needs, wants and demands Products Value and satisfaction Exchange, transactions and relationships Markets Q.3 Internet has empowered the customer. Write a Brief note In the connected world, the customers empowered by Internet can Get objective information for multiple suppliers without relying on the manufacturer or the retailer(http://www.alibaba.com/ ) Initiate requests for information and advertising from manufacturers (e.g., http://www.dealtime.com/) Design and configure customized offerings e.g., http://www.hp.com/ Use buying agents to pit sellers against each other http://www.indiamart.com/ Unbundle offerings and arbitrage across channels http://www.naaptol.com/ Payby the minute, by the month, by the mile http://www.paypal.com/ Communicate with peers and experts for feedback on products and brands http://www.amazon.com/ and http://www.epinions.com/ Q.4 What are Different Steps in marketing Process? Different Steps in Marketing Process are as follows: Strategy formulation the development of the broadest marketing/business

strategies with the longest term impact Marketing planning the development of longer-term plans which have generally stronger impact than the short-term programs Marketing programming, allocating and budgeting the development of short-term programs which generally focus on integrated approaches for agiven product and on the allocation of scarce resources such as sales effort orproduct development time across various products and functions Marketing implementation the actual task of getting the marketing job done5. Monitoring and auditing the review and analysis of programs, plans and strategies to assess their success and to determine what changes must be made Analysis and research the deliberate and careful acquisition and examination of qualitative and quantitative data to improve decision making Q.5 What are 5 C's of Marketing Decision Making? Following are five major areas of analysis (5 Cs) that underlie marketing decision making : Customer needs - What needs do we seek to satisfy? Company skills - What special competencies do we possess to meet those needs Competition - Who competes with us in meeting these needs? Collaborators - Who should we enlist to help us and how do we motivate them? Context - What environmental (say, cultural, technological or legal) factors limit what is possible? Q 6. Write a brief note on Nature of Marketing Marketing is a universal activity Marketing is an art as well as science Marketing is a human activity Marketing is a socio economical activity Product or service is the subject matter of marketing For marketing presence of market is a must The basis of marketing is exchange Marketing is consumer oriented and not product oriented
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