BBA-III Material

INTRODUCTION TO MARKETING MANAGEMENT 

BBA SEM- III

UNIT-1 

Q.1 Meaning of market and marketing and marketing management

Meaning

(1)   Market

(2)   Marketing

(3)   Marketing management

(1)Market

1. A market is defined as the Sum total of all the buyers and sellers in the area of region under consideration. 

2. Market is a place where commodities are bought and sold at retail or wholesale prices.

3. Cournot’s definition – the French economist cournot defined  a market thus “ economists understand by the ‘market’ not any particular market place in which things are bought and sold but the whole of any region in which buyer and sellers are in such free intercourse with one another that the prices of the same goods tend to equality, easily and quickly.

   (2) Marketing

1. “Marketing is the organization of the sale of a product, for example, deciding on its price, the areas it should be supplied to, and how it should be advertised.”

2. 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.

(3) Marketing management

            According to Philip Kotler, “Marketing management is the analysis, planning, implementation and control of programmes designed to bring about desired exchanges with target markets for the purpose of achieving organisational objectives.

 

Q.2 Significance of marketing management

Marketing management smoothen the process of exchange of ownership of goods and services from seller to the buyer.

1. Analysing Market Opportunities:

Marketing management collects and analyses information related to consumer’s needs, wants and demands, competitor’s marketing strategies, changing market trends and preferences. This helps to identify market opportunities.

2. Determination of Target Market:

Marketing management helps to identify the target market that the organization wishes to offer its product.

3. Planning and Decision Making:

Marketing management helps to prepare future course of action. Planning relates to product introduction, diversification. Decision making regarding pricing, selection of promotional mix (advertising, Personal selling, sale promotion, direct marketing, publicity), selection of distribution channel is taken by the marketing management.

4. Creation of Customer:

Consumers determine the future of the market .Therefore providing the best product to the consumer according to their preference is the important task of marketing. Marketing management helps in creation of new customers and retention of current customers.

5. Helps in Increasing Profit:

Marketing caters to the varied and unlimited needs of consumers. Marketing management helps to increase profit and sales volume. This is achieved by expansion of market and increasing customers.

6. Improvement in Quality of Life:

Marketing management aims at providing innovative product and services to the customers. Marketers continuously strive to incorporate new technology and mechanism in their product to provide more satisfaction to customers than before. This improves quality of life and makes life of consumers easier than before.

7. Employment Opportunities:

Marketing process is a combination of different activities like research work to assess the marketing environment, product planning and development, promotion, distribution of product to customers and after sales service. Marketing process requires researcher, production engineer, different distribution intermediaries, sales personnel also creates employment opportunities in advertisement section. Thus marketing management opened up different employment avenues thus creating employment opportunities.  

Q.3 Scope of Marketing Management

Marketing management, like all other areas of management comprises of the function of planning, organising, directing coordinating and controlling.

1. Marketing research:

Marketing research involves identification of needs, wants taste and preferences of the targeted customer. Marketing management conducts a continuous analysis of consumer’s behaviour towards firm’s marketing mix strategies, business environment; competitor’s marketing strategies in order to plan effectively the marketing activities of future.

2. Determination of Objectives:

Marketing management performs the task of setting marketing objectives. The marketing objectives are set in accordance with the overall organisational objectives of profit maximization. Marketing objectives relates to attracting new customers, retention of current customer, expansion of customer base, introduction of new product, improvement of old product and so on. Marketing management aims at maximising the customer’s value by providing high satisfaction to the customers.

3. Planning Marketing Activities:

Planning involves determining the future course of action. Planning helps in accomplishment of objectives in a systematic manner. Planning of marketing activities relates to determining product line strategies, planning for product diversification, advertisement and promotional activities, planning related to selling and distribution process.

Planning may be conducted on short term, medium term and long term basis depending upon the requirements. Plans should be flexible so as to adjust with the changing business environment.

4. Product Planning and Development:

Product is the basic element of marketing. Products are goods or services that are offered to the customer for satisfying their needs and wants. Products are customer oriented and offered to the customer’s as per their requirement and preferences. Product planning involves new product development, product innovation, product diversification plan.

5. Pricing of Product:

Pricing is a complex function of marketing management. Pricing decisions are based on cost of the manufacturing and distribution of product, competitor’s pricing strategies, customer’s willingness to pay for the product, customer’s perception about the product.

6. Promotion:

Promotion and advertisement are essential in order to maximise sales. Promotion and advertisement is essential to provide information to the customers about the product, to attract new customers, to provide reminder to customers about the product and to continue purchase, to provide information about product improvement or introduction of new brand. Marketing management develops new techniques and tools for promotion of their product.

7. Distribution:

Distribution process facilitates easy availability of goods and services to the customers at right time and at right and convenient location. Selection of distribution channel depends upon the nature of the product, price of the product, availability of intermediaries for distribution and cost involved in the distribution process.

8. Evaluation and Controlling of Marketing Activities:

Marketing management performs the task of evaluation and controlling of the marketing activities. Evaluation enables identification of effectiveness of marketing plans and actions.

Q.4 Functions of Marketing Management

We need to understand the major functions of marketing management in order to understand and groom our organization. The following are some of the major functions of marketing management −

1.     

5 Standardization and Grading 6 Financing 7 Risk Taking 8 Market Information

Selling

2.      Buying and Assembling

3.      Transportation

4.      Storage

The marketing process performs certain activities as the products and services move from the producer to consumer. All these activities or jobs are not performed by every company.

1.      Selling

Selling is the crux of marketing. It involves convincing the prospective buyers to actually complete the purchase of an article. It includes transfer of ownership of products to the buyer.

Selling plays a very vital part in realizing the ultimate aim of earning profit. Selling is groomed by means of personal selling, advertising, publicity and sales promotion. Effectiveness and efficiency in selling determines the volume of the firm’s profits and profitability.

2.      Buying and Assembling

It deals with what to buy, of what quality, how much from whom, when and at what price. People in business purchase to increase sales or to decrease costs. Purchasing agents are much tempted by quality, service and price. The products that the retailers buy for resale are selected as per the requirements and preferences of their customers.

Assembling means buying necessary component parts and to fit them together to make a product. ‘Assembly line’ marks a production line made up of purely assembly functions. The assembly operation includes the arrival of individual component parts at the work place and issuing of these parts for assembling.

Assembly line is an arrangement of employees and machines in which each individual has a particular job and the work is passed directly from one employee to the next until the product is complete.

3.      Transportation

Transportation is the physical means through which products are moved from the places where they are produced to those places where they are needed for consumption. It creates locational utility.

Transportation is very important from the procurement of raw material to the delivery of finished products to the customer’s places. Transportation depends mainly on railroads, trucks, waterways, pipelines and airways.

4.      Storage

It includes holding of products in proper, i.e., usable or saleable, condition from the time they are produced until they are required by customers in case of finished products or by the production department in case of raw materials and stores.

Storing protects the products from deterioration and helps in carrying over surplus for future consumption or usage in production.

5.      Standardization and Grading

Standardization means setting up of certain standards or specifications for products based on the intrinsic physical qualities of any item. This may include quantity like weight and size or quality like color, shape, appearance, material, taste, sweetness etc. A standard gives rise to uniformity of products.

Grading means classification of standardized items into certain well defined classes or groups. It includes the division of products into classes made of units possessing similar features of size and quality.

Grading is very essential for raw materials; agricultural products like fruits and cereals; mining products like coal, iron and manganese and forest products like timber.

6.      Financing

Financing involves the application of the capital to meet the financial requirements of agencies dealing with various activities of marketing. The services to ensure the credit and money needed and the costs of getting merchandise into the hands of the final user are mostly referred to as the finance function in marketing.

Financing is required for the working capital and fixed capital, which may be secured from three sources — owned capital, bank loans and advance & trade credit. In other words, different kinds of finances are short-term, medium-term, and long-term finance.

7.      Risk Taking

Risk means loss due to some unforeseen situations. Risk bearing in marketing means the financial risk invested in the ownership of goods held for an anticipated demand, including the possible losses because of fall in prices and the losses from spoilage, depreciation, obsolescence, fire and floods or any other loss that may occur with the passage of time.

They may also be due to decay, deterioration and accidents or due to fluctuation in the prices induced by changes in supply and demand. The different risks are usually termed as place risk, time risk, physical risk, etc.

8.      Market Information

The importance of this facilitating function of marketing has been recently marked. The only sound foundation on which marketing decisions depend is timely and correct market information.

The importance of this facilitating function of marketing has been recently marked. The only sound foundation on which marketing decisions depend is timely and correct market information.