Marketing Small business

Unit 1

What is marketing?
Marketing encompasses the strategies and tactics brands use to promote their products and

services to consumers. Everything from market research to writing ad copy falls within the

realm of marketing.

At first glance, marketing even a single product or service can seem like an enormous
challenge. You understand the value of your offering – but how do you show it to consumers?
And how can you ensure they actually pay attention to your message? Creating a successful
marketing strategy is all about getting to know your audience, analysing consumer behavior
and acting on it appropriately.

Nature of Marketing
The Nature of Marketing (or Modern marketing) may be studied under the following points:
1. Human activity: Originally, the term marketing is a human activity under which human needs are
satisfied by human efforts. It’s a human action for human satisfaction.
2. Consumer-oriented: A business exist to satisfy human needs, hence business must find out what the
desire of customer (or consumer) and thereby produce goods & services as per the needs of the
customer. Thus, only those goods should be produce that satisfy consumer needs and at a reasonable
profit to the manufacturer (or producer).
3. Art as well as science:  In the technological arena, marketing is the art and science of choosing target
markets and satisfying customers through creating, delivering, and communicating superior customer
value. It is a technique of making the goods available at right time, right place, into right hands, right
quality, in the right form and at right price.
4. Exchange Process: All marketing activities revolve around commercial exchange process. The
exchange process implies transactions between buyer and seller. It also involves exchange of
technology, exchange of information and exchange of ideas.
5. Starts and ends with customers:  Marketing is consumer oriented and it is crucial to know what the
actual demand of consumer is. This is possible only when required information related to the goods
and services is collected from the customer. Thus, it is the starting of marketing and the marketing end
as soon as those goods and services reach into the safe hands of the customer.
6. Creation of Utilities: Marketing creates four components of utilities viz. time, place, possession and
form. The form utility refers to the product or service a company offers to their customers. The place
utility refers to the availability of a product or service in a location i.e. Easier for customers. By time
utility, a company can ensure that products and services are available when customers need them. The
possession utility gives customers ownership of a product or service and enables them to derive
benefits in their own business.
7. Goal oriented: Marketing seeks to achieve benefits for both buyers and sellers by satisfying human
needs. The ultimate goal of marketing is to generate profits through the satisfaction of the customer.
8. Guiding element of business: Modern Marketing is the heart of industrial activity that tells what,
when, how to produce. It is capable of guiding and controlling business.
9. System of Interacting Business Activities:  Marketing is the system through which a business
enterprise, institution or organization interacts with the customers with the objective to earn profit,
satisfy customers and manage relationship. It is the performance of business activities that direct the
flow of goods and services from producer to consumer or user.
10. Marketing is a dynamic process e. series of interrelated functions: Marketing is a complex, continuous
and interrelated process. It involves continuous planning, implementation and control.

Scope/Functions of Marketing
The term scope of marketing can be understood in terms of the functions of the marketing
manager. The major purpose of marketing manager is to generate revenue for the business by
selling goods and services to the consumers. It lies in insuring the customer needs and
converting them into product or services and moving the product and services to the final
user or customer, to satisfy the wants and needs of specific segment of customers with
emphasis on profitability and ensuring the optimum use of resources available with the
organization. The marketing manager has to perform the research functions and exchange
functions. They are discussed below:
Functions of Research
The modern marketing activities start with consumer research. It is referred with the analysis
of consumer attitudes, tastes, habits, reactions and preferences to the company’s product so
that the products may be produced according to the needs of the consumers. The major
functions of research are as follows:
Marketing Research: The marketing research is helpful in analyzing the customer’s
behaviour, popularity of product, effectiveness of advertising, pricing policy, etc.  In other
words, it is the systematic gathering, recording and analyzing of data about problems relating
to the marketing of goods and services. For making correct and timely decisions, the
marketing manager analyses all the available opportunities, threats, strengths and weaknesses
of the organization and determine the best opportunity to be pursue for it.
Product planning and development: Under modern marketing activities, product planning
is determined before the start of actual production. It is the process in which shape, size,
color, weight, design, packing, etc. of the product is determined on the basis of information
gathered with the help of market research. Product development involves decisions regarding
shape, size, color, weight, design, quality, brand, label, etc. as per the needs of the consumer,
which will give maximum satisfaction to the consumer and reasonable profit to the
manufacturer.
 But before we dive into things, let’s start with some basic marketing fundamentals.

The marketing fundamentals we’ll cover in this article are:

1. Product.

2. Price.

3. Promotion.

4. Place.

5. People.

6. Process.

7. Physical Evidence.

Basic Marketing Fundamentals: The 7 Ps of Marketing

In the late 20th century, marketing thought leaders developed the concept of the “Marketing

Mix,” a set of concepts and tools that help companies achieve their objectives within a

market. At the core of this model are the four Ps:

1. Product: What are you selling? A shiny new business widget? A hand-crafted luxury item?

Chicken tacos? Whatever it is, you’ll need to think about how to package or present it.

Marketers should be familiar with all the features and specifications of the products they sell.

2. Price: To determine how much your product should cost, you’ll need to do some research.

Learn how your competitors price their offerings, and understand how much consumers are

willing to pay.

3. Promotion: These days, marketers have many channels through which to promote their

products. From radio ads to social media banners, you’ll need to decide which are right for

your brand.

4. Place: Your customers need to be able to find and purchase your product. Can they buy your

product online? Do they need to visit a store? Additionally, you’ll need to consider how much
 inventory to hold and where to keep it. These days, inbound marketing strategies rely on

engaging content to bring customers to you (or your website).

5. People: Optimal customer service is going to get you return customers and referrals, both of

which can ultimately convert sales. Having a strong team for marketing communication is a

great way to showcase your brand reputation, solve problems on the fly and connect with

your customers so they continue to come back for more.

6. Process: Creating and promoting a valuable product is essential, but the delivery process is

almost just as critical for ensuring your competitive advantage. Your delivery process needs

to have efficiency and reliability in mind, both from the perspective of your own team and

your customers.

7. Physical Evidence: We work from a digital ecosystem, which means that having a physical

store or office outside of your home isn’t as common as it used to be. But having physical

evidence of your brand is key. In this case, it could be your website, social media presence or

email newsletters. Physical evidence can also include branding and packages related to your

product or service.

Small businesses have a lot to manage, including

marketing. This guide will introduce you to core concepts
of small business marketing.
When you’re a new or small business that doesn’t have the funds or other resources for a full-
scale marketing plan, what’s there to do?

Actually, you can do a lot with what you have. This guide will help you put a small business
marketing strategy in place without breaking your budget.                       

“A business marketing strategy is a set of tactics designed to increase awareness of your

business, while increasing sales and revenue through new customer acquisition,” said Jayson
DeMers, CEO of Email Analytics. 
Steven Jaenke, founder and CEO of Dig mark Australia, added that people are looking to
solve a problem, be entertained or be distracted. If your product or service fulfils any of these
needs, you will attract customers.

But your product and service can’t speak for themselves. They need a little help, and that’s
where a marketing strategy comes in.
How to develop your small businesses marketing strategy
The first step to develop your small business marketing strategy is to think about your
audience.

“You need marketing if you want to be found by your target audience,” DeMers said. “If your
competitors are marketing but you aren’t, your competitors will get all the business instead of
you.”

Your audience is out there, but they might not know about you if you aren’t putting your
business out there.

“Without marketing, you’re reliant on hard selling,” Jaenke said. “You’re approaching people
that aren’t ready, don’t know who you are and may not even know they have a problem.
Marketing helps people discover the small business, identify the problem that they have and
the solution that the business provides as being the solution for them, and don’t feel pressured
but instead relieved.”

The following steps can help you develop a basic plan from which your larger marketing
strategy will take shape. Here’s how to define your brand and begin engaging your audience.

1. Define your brand.

Your marketing strategy will, of course, be different from a business that has a different
brand. Normally when you think of a brand, you think of the company name, like Apple or
Sony. However, that isn’t all a brand means. So, how do you figure out your brand?

“Developing a brand is a comprehensive first step in any marketing strategy,” Jaenke said.
“You need to first identify why you are in business. If people can’t identify with you and why
you are doing what you do, you don’t have a brand. Construct a brand story, demonstrating
how you came to be in business and why it started. Tone, typography and logo are also
important for [defining] a brand, but not as important as the brand story. It’s the glue that
holds everything together.”

2. Create brand awareness.

Once you’ve defined your brand, the next step is making sure people know about it. Every
person who is aware of your brand is a potential customer. 

“Content is one of the best ways to increase brand awareness,” Jaenke said. “Video, written
and auditory content helps highlight the business as an expert in the industry and provides
value without the customer feeling they are being pitched.”

Alison Ver Halen, owner of AV Writing Services, said content is definitely important, but it’s
also critical that you deliver it to the right people – your target audience.

“Content marketing, social media marketing and networking are all important, but beware
that there are a lot of options out there for those three things, so don’t skip the first step where
you identify your target audience and where they hang out so you can be sure your marketing
efforts are getting you in front of the right people.”

3. Conduct market research.

If you’re having trouble figuring out who your audience is, the first step is doing some
market research. 

“Market research helps you identify whether you have a viable product or service, how
saturated the market is, any gaps that you can fill, and … the appropriate price point,” Jaenke
said. “To do this, you should apply social listening on Facebook and especially Twitter. Join
groups and find out what problems people are facing. Look on forums like Quora and Reedit,
and record the questions that are being asked. Put all of these together and look for
commonalities. These common questions are their pain points.” 

DeMers said he uses a tool called Ubersuggest to research competitors and identify their
strengths, weaknesses and opportunities.

4. Put together a buyer persona.

Another helpful tool for gaining an audience and pinpointing the various audiences you’re
targeting is a buyer persona. It might seem silly at first, creating fake customers with fake
lives and hobbies, but the more detail you go into, the better. 

“Your market research should help guide this, but effectively what this means is identifying a
fictional person that represents a segment of the market,” Jaenke said. “You want to make it
as thorough as possible, including more than just demographic.”

“If you’ve started a business already, then you probably have some idea of who your target
audience is already,” DeMers added. “But it’s always a good idea to create a customer
persona – a description of the demographics of your ideal target customer. This could include
the age, gender, marriage status, job, job title and annual income. Get specific so you can
really identify the perfect match.”

Jaenke provided an example buyer persona based on his business:

“We have Jim the accountant. He’s a 45-year-old man who runs a mildly successful
accounting firm. He employs three other accountants and a receptionist and has a revenue of
$500,000. Jim enjoys watching golf and working on vintage cars in his spare time. He
participates in car rallies on the weekends as much as he can. He’s grown his business to
$500,000 through referrals and networking but hasn’t been able to move past this mark. He’s
looking for a way he can increase this through marketing.”

5. Find your target audience.

You can’t run a successful business without customers, which is why experts and experienced
business owners take figuring out your audience so seriously.  

“Many small business owners struggle with finding a target audience,” Jaenke said. “This is
because they feel that they are limiting their options by narrowing their focus. It’s important
to remember that choosing a target audience doesn’t decrease your marketing, it only focuses
your attention.” [Read related article: Everyone Is Not Your Customer: That’s OK]

But what happens if you haven’t opened yet and don’t have any customers? That’s a normal
place to be in when starting a business.

“If you don’t have any clients yet, look at your top competitors: What kinds of customers are
they targeting?” Ver Halen said. “Who follows them on social media? Take a handful of their
social media followers, and see who else those people follow on social media and the things
they post about so you can get a feel for their hobbies and interests and the things they have
in common that make humans, and not just prospective customers.”

6. Create a website.

Even if you don’t plan to sell products online, it’s crucial to have a website. When a potential
customer finds a new business (new to them, or new in general), they are going to cross-
reference that business, looking for its social media and website. A business website is a great
and easy way to convey legitimacy to your audience.

“I recommend small businesses build their website on Word Press,” DeMers said. “You can
use a popular Word Press theme like Divi and then hire a webmaster through a site like Up
work to build and maintain the website.”

Jaenke takes a different approach. He said Word Press, or a similar platform, should be a last
resort.

“Often people fall into the drag-and-drop trap,” Jaenke said. “The companies that provide
these make it easy to use and the monthly is affordable, but the cost does add up, and the end
result is often not unique or engaging. Instead, we recommend hiring a professional web
designer that focuses on the customer’s experience on the website.”

However, he said paying for a Divi subscription on Word Press is a great option if custom
web development is not in the budget.

“This will provide you with a page builder similar to a drag-and-drop company, but the code
will be cleaner, the end result more unique, and after you’ve paid the yearly cost of hosting
Divi, it’s free,” Jaenke said. “You will also own the website.”

7. Calculate a marketing budget.

You could do all your marketing in-house, but it might not be your best bet. Consider hiring a
consultant or outsourcing your marketing efforts to a small business marketing agency. 

“It’s probably best to hire a consultant, even if just for a one-time consultation, to figure out
what a good budget would be to meet your goals,” DeMers said. “Budgets can vary widely
based on your industry, competition, and product or service. So, talk to an expert specifically
about your goals to get an idea of budget.” 

In theory, you could spend as much or as little as you want on marketing, but Jaenke said that
how much you spend does play a moderate role in a marketing strategy.
“Generally, we work [with] the idea that businesses should spend 5% of their revenue on
marketing if they are bringing in $5 million or less, and 8% if they are bringing in more than
$5 million,” he said. “If the small business only brings in $100,000 for the year, their
marketing budget is only $5,000 for the year, or $416.67 per month. This really narrows
down the focus on a few marketing areas, which may not be viable options at that price point.
You definitely can’t outsource locally, and you can’t hire internally.”

8. Choose marketing channels.

Marketing channels are the various ways you reach your target audience. Email is one
popular digital marketing channel, as is Facebook. Each platform you use to reach any
segment of your audience is considered a different channel.

“Most business owners default to Facebook, and it is a good channel to focus on,” Jaenke
said. “Most people still use it on a daily basis, it’s not likely to go anywhere, and [it’s]
continually updating the options available to business owners.”

As for which one is best for your business, Jaenke said it’s best to identify where your
customers spend their time, because you may find that they check in with family and friends
on Facebook but look for answers on Reddit. They might check their emails once a week but
check Instagram every hour.

9. Start blogging.

Once you’ve determined your audience and you have a website and marketing channels, the
next step is engagement. You want to interact with your customers and provide them with
value before they even spend money. Your blog is an excellent tool in this respect. It allows
you to teach them things and generate engagement that fosters a real relationship between
you and your customers. As your online presence grows, you will find that your blog can be
the backbone of your SEO and engagement efforts.

10. Set up your online tools.

If a blog is your first step in engagement, your online media tools are the rest of the journey.
A Yelp page allows customers to provide direct feedback, and you can respond to them in
kind. Your Google Business page has a similar power. Your social media tools will be even
more effective as they allow continuous dialogue between you and the customers. If you have
ever used Twitter to get a company’s attention, you understand just how valuable social
media can be. Set up all of your online tools so you can drive engagement and develop your
brand.

11. Start advertising.

There’s a reason advertising is one of the largest industries in the world. Ads can establish
your initial contact with customers. From there, you can proceed with building customer
relationships and everything else, but the ads get your name on people’s minds. This is how
you open the floodgates, so make sure you’re ready.
12. Invest in outreach.
Advertising is a great way to generate outreach, but modern marketing provides plenty of
additional methods to achieve your goals. You can pay for outreach through social media
platforms or text message marketing services. If you have a Facebook Business page,
Facebook will offer you paid options to promote your page to many more viewers. 

13. Master SEO.

Search engine optimization is one of the best marketing methods out there. The idea is that
when you create valuable engagement with your audience, your website will rise to the top of
relevant Google searches. There is no outreach in the world that beats topping the Google
search page. SEO is equal parts art and science. It will require investment of time and money,
but when you get powerful organic results with SEO, they last. Moreover, the customers who
come to you because of your SEO effort will be valuable customers who already hold strong
trust for you.

Examples of marketing channels

Email

Email is a vital part of digital marketing, as it allows you to communicate with those who
have purposely signed up to receive communications from you, whether that’s a newsletter,
discounts or general information. However, it’s easy for people to get scammed through
email, so design your emails in a way that lets people know it’s actually your business
sending them.

“The online world can be a wonderful, weird, uplifting, scary – and just about any other
adjective you can think of – kind of place,” said Andy Wood, digital marketing expert and
founder of Evil Marketers Club. “It really is a world in which you can find just about
anything you can imagine, but unfortunately, this includes quite a few crooks, scammers and
fraudsters. When you’re reaching out online, you need to convince your audience that you are
who you say you are, you have what you say you have, and you can deliver what you say you
can deliver.” 

Jaenke said email converts better than other forms of marketing. “Often, you [already] have a
warm connection, as you have their email address. We use a mix of traditional marketing and
digital marketing to formulate a one-two-punch method.”

Social media

With so many social media platforms available, and more popping up every day, it’s
important to know which ones will actually benefit your business.

“It’s essential to focus your efforts, and so you should only choose one, maybe two social
media platforms to interact on,” Jaenke said. “If you choose more than this without someone
to delegate tasks to, you’re spreading yourself too thin, and your message will be lost in the
noise or appear inauthentic.”
On the other hand, Laurie Wilkins, founder of Call Outdoors, is a proponent of getting on as
many social platforms as you can handle. She said a Facebook page, an Instagram page, a
Twitter profile and a YouTube channel are all essential to increase your range of audience.
Let’s look a bit deeper into each of these platforms.

Facebook

A Facebook page is a great way to really talk with your customer base in real time. When you
post something, it’s open for people to leave comments, raise concerns and start
conversations. As the business owner, you’ll be able to jump right into those threads and
converse with your customers on topics that are important to them. Share ideas, photos and
updates about your business with the goal to create a more personal relationship with your
audience.

Instagram

If you use an Instagram page to market your business, it’s important to be consistent in your
posting habits, think about the layout and look of your grid, and have photos at the ready so
you aren’t scrambling for content. Being prepared will let your customers know that you care
about the way you present your business and lead to a higher-quality Instagram page. This
can all increase the number of people who want to follow you and engage with your content.
Instagram also allows for influencer marketing, which can be a big benefit for the right type
of industry.

YouTube

If you have the type of business where making videos is appropriate, YouTube is the way to
go. Videos of activities like cleaning carpets, detailing cars and making soap have gone viral
because they are satisfying to watch and the end result is worth sticking around for. Look into
channels of other businesses in your industry to gauge how well they’re doing on the
platform and help you decide if it’s worth pursuing.

Twitter

Twitter for business is interesting because, unlike Instagram, its primary focus isn’t photos,
and unlike Facebook, the goal isn’t always to start conversations. But many businesses have
had success on Twitter with their witty comebacks to customers as well as competitors; think
fast food chains ribbing on each other about the quality of their respective burgers. Twitter is
a little more casual than Facebook and lends itself well to quick notes about your business.
You can include a link to your website or another resource in these notes.

Pay-per-click (PPC)

PPC is a method of marketing that allows you to place targeted ads on pages that your
customer base is likely to visit. A click on that ad will redirect the customer to your website,
and all you have to pay is a small fee per click. If you are trying to branch out into a new
target audience or just gain a larger customer base, this could be a great channel to explore.
It’s essentially the opposite of organic traffic, but with the amount of use search engines get,
it has the potential to increase your business substantially.
Online networking

As you develop your brand and become recognizable, other companies and personalities will
want to work with you on campaigns and marketing efforts. For small businesses, guest
blogging, partnered YouTube videos, and similar collaborations are a popular way to
mutually boost outreach and help each other grow. Every time you collaborate with another
online presence, you get valuable links that point back to you and boost your online authority.
Networking is one of the most cost- and time-efficient marketing channels. That said, it does
not work alone. It performs much better when paired with other channels, especially the last
one on this list.

Website

You might be wondering why we saved this one for last, when it seems like the most
obvious. The reason is that some businesses really underutilize their websites. A website is
usually the first thing a business owner creates for marketing and the first thing customers
will see of the brand. But all too often, a website isn’t optimized to bring in traffic and reach
new customers. Pay attention to your search engine optimization (SEO), including keywords
and product descriptions, to help your website rank higher in search results.

Examples of marketing strategies

Social media platforms aren’t the only marketing channels available to new and small
businesses. There are other marketing options; you just have to figure out the best ones for
your business. 

“I recommend starting with a content marketing strategy,” DeMers said. “That means
creating and publishing great content that provides value to people in your target audience.
Think about who your ideal customers are, what questions they have and what problems they
need solved. Publish content that answers those questions and solves their problems, and
they’ll love you for it. Eventually, they’ll even become customers.”

Influencer marketing is another strategy that has been around for years. Ver Halen said
influencer marketing can absolutely work, but it isn’t right for every brand.

“B2C industries, especially ones that focus on providing products rather than services, tend to
get the most out of influencer marketing,” she said. “I don’t recommend it for service-based
industries or B2B industries, and the data shows that even for B2C industries, influencer
marketing appears to be on the way out.”

These marketing strategies would be nothing without the channels and platforms on which
they live, so let’s take a closer look at the channels best used for your marketing strategy.

Marketing is a specialized field that many established businesses have a whole department
for, but that’s not a luxury small businesses always have. Use the tips in this marketing guide
for small businesses to start heading in the right direction.
Marketing Environment:
Meaning of Marketing Environment:
The marketing environment refers to all internal and external factors, which directly
or indirectly influence the organization’s decisions related to marketing activities.
Internal factors are within the control of an organization; whereas, external factors do
not fall within its control. The external factors include government, technological,
economical, social, and competitive forces; whereas, organization’s strengths,
weaknesses, and competencies form the part of internal factors. Marketers try to
predict the changes, which might take place in future, by monitoring the marketing
environment. These changes may create threats and opportunities for the business.
With these changes, marketers continue to modify their strategies and plans.
2. Features of Marketing Environment:
Today’s marketing environment is characterized by numerous features, which are
mentioned as follows:
2.1. Specific and General Forces: It refers to different forces that affect the marketing
environment. Specific forces include those forces, which directly affect the activities
of the organization. Examples of specific forces are customers and investors. General
forces are those forces, which indirectly affect the organization. Examples of general
forces are social, political, legal, and technological factors.

2.2 Complexity: It implies that a marketing environment include number of factors,

conditions, and influences. The interaction among all these elements makes the
marketing environment complex in nature.

2.3. Vibrancy: Vibrancy implies the dynamic nature of the marketing environment. A
large number of forces outline the marketing environment, which does not remain
stable and changes over time. Marketers may have the ability to control some of the
forces; however, they fail to control all the forces. However, understanding the
vibrant nature of marketing environment may give an opportunity to marketers to gain
edge over competitors.

2.4. Uncertainty: It implies that market forces are unpredictable in nature. Every
marketer tries to predict market forces to make strategies and update their plans. It
may be difficult to predict some of the changes, which occurs frequently. For
example, customer tastes for clothes change frequently. Thus, fashion industry suffers
a great uncertainty. The fashion may live for few days or may be years.

2.5. Relativity: It explains the reasons for differences in demand in different countries. The
product demand of any particular industry, organization, or product may vary depending upon
the country, region, or culture. For example, series are the traditional dress of women in India,
thus, it is always in demand. However, in any other western country the demand of saree may
be zero.
Types of Marketing Environment:
The sale of an organization depends on its marketing activities, which in turn depends
on the marketing environment. The marketing environment consists of forces that are
beyond the control of an organization but influences its marketing activities. The
marketing environment is dynamic in nature.
Therefore, an organization needs to keep itself updated to modify its marketing
activities as per the requirement of the marketing environment. Any change in
marketing environment brings threats and opportunities for the organization. An
analysis of these changes is essential for the survival of the organization in the long
run.
A marketing environment mostly comprises of the following types of
environment:
1. Micro Environment
2. Macro Environment
The discussion of these environments are given below:
1. Micro Environment: Micro environment refers to the environment,
which is closely linked to the organization, and directly affects
organizational activities. It can be divided into supply side and
demand side environment. Supply side environment includes the
suppliers, marketing intermediaries, and competitors who offer raw
materials or supply products. On the other hand, demand side
environment includes customers who consume products.
Let us discuss the micro environment forces in the following points:
i. Suppliers: It provides raw material to produce goods and services.
Suppliers can influence the profit of an organization because the
price of raw material determines the final price of the product.
Organizations need to monitor suppliers on a regular basis to know
the supply shortages and change in the price of inputs.
ii. Marketing Intermediaries: It helps organizations in establishing a
link with customers. They help in promoting, selling, and
distributing products. Marketing intermediaries include the following:
a. Resellers: It purchases the products from the organizations and
sell to the customers. Examples of resellers are wholesalers and
retailers.

b. Distribution Centers:It helps organizations to store the goods. A

warehouse is an example of distribution center.

c. Marketing Agencies:It promotes the organization’s products by

making the customers aware about benefits of products. An
 advertising agency is an example of marketing agency.

d. Financial Intermediaries:It provides finance for the business

transactions. Examples of financial intermediaries are banks, credit
organizations, and insurance organizations.

iii. Customers:Customers buy the product of the organization for

final consumption. The main goal of an organization is customer
satisfaction. The organization undertakes the research and
development activities to analyze the needs of customers and
manufacture products according to those needs.
iv. Competitors:It helps an organization to differentiate its product to
maintain position in the market. Competition refers to a situation
where various organizations offer similar products and try to gain
market share by adopting different marketing strategies.

2. Macro Environment:
Macro environment involves a set of environmental factors that is beyond the
control of an organization. These factors influence the organizational activities to
a significant extent. Macro environment is subject to constant change. The
changes in macro environment bring opportunities and threats in an organization.
Let us discuss these factors in details:
i. Demographic Environment: Demographic environment is the scientific
study of human population in terms of elements, such as age, gender,
education, occupation, income, and location. It also includes the
increasing role of women and technology. These elements are also called
as demographic variables. Before marketing a product, a marketer
collects the information to find the suitable market for the product.
Demographic environment is responsible for the variation in the tastes
and preferences and buying patterns of individuals. The changes in
demography environment persuade an organization to modify marketing
strategies to address the altering needs of customers.
ii. Economic Environment: Economic environment affects the
organization’s costs structure and customers’ purchasing power. The
purchasing power of a customer depends on the current income, prices of
the product, savings, and credit availability.
The factors economic environment is as follows:
a. Inflation: It influences the customers’ demand for different products.
For example, higher petrol prices lead to a fall in demand for cars.
b. Interest Rates: It determines the borrowing activities of the
organization. For example, increase in interest rates for loan may lead
organizations to cut their important activities.
 c. Unemployment: It leads to a no income state, which affects the
purchasing power of an individual.
d. Customer Income: It regulates the buying behavior of a customer.
The change in the customer’s income leads to changed spending patterns
for the products, such as food and clothing.
e. Monetary and Fiscal Policy: It affects all the organizations. The
monetary policy stabilizes the economy by controlling the interest rates
and money supply in an economy; whereas, fiscal policy regulates the
government spending in various areas by collecting the revenue from the
citizens by taxing their income.
iii. Natural Environment: Natural environment consists of natural
resources, which are needed as raw materials to manufacture products by
the organization. The marketing activities affect these natural resources,
such as depletion of ozone layer due to the use of chemicals. The
corrosion of the natural environment is increasing day-by-day and is
becoming a global problem.

Marketing Research
Definition of Marketing Research
Marketing research is a key to the evolution of successful marketing strategies and
programmes. It is an important tool to study buyer behavior, changes in consumer lifestyles
and consumption patterns, brand loyalty and forecast market changes. Research is also used
to study competition and analyze the competitor product’s positioning and how to gain
competitive advantage. Recently, marketing research is being used to help create and
enhance brand equity.

According to Philip Kotler, Marketing research is systematic problem analysis, model

building and fact finding for the purposes of important decision making and control in the
marketing of goods and services.

The important decision making related to market strategy and other tasks related to marketing
depends on findings or marketing research. Marketing research process reduces the chances
of errors, miss conceptions and uncertainty from decision making process. It is therefore very
important to conduct marketing research to identify any changes in market environment, and
understand customers and market. It means that this is the process of strategically
importance.
Objectives of Marketing Research:
Marketing research is undertaken for attaining the following
objectives:
(1) To Provide Basis For Proper Planning:
Marketing and sales forecast research provides sound basis for the
formulation of all marketing plans, policies, programmes and procedures.

(2) To Reduce Marketing Costs:

Marketing research provides ways and means to reduce marketing costs
like selling, advertisement and distribution etc.

(3) To Find Out New Markets for The Product:

Marketing research aims at exploring new markets for the product and
maintaining the existing ones.

(4) To Determine Proper Price Policy:

Marketing research is considered helpful in the formulation of proper price
policy with regard to the products.

(5) To Study in Detail Likes and Dislikes of the Consumers:

Marketing research tries to find out what the consumers, (the men and
women who constitute the market) think and want. It keeps us in touch
with the consumers, minds and to study their likes and dislikes.

(6) To Know The Market Competition:

Marketing research also aims at knowing the quantum of competition
prevalent in the market about the product in question. The company may
need reliable information about competitor’s moves and strategies which
are of immense significance for further planning.
(7) To Study The External Forces and Their Impact:
Marketing research provides valuable information by studying the impact
of external forces on the organisation. External forces may include
conditions developing in foreign markets, govt, policies and regulations,
consumer incomes and spending habits, new products entering in the
market and their impact on the company’s products.

Prof. Gilies has rightly pointed out that, “The basic objective of marketing
research is to supply management with information which will lead to a
fuller understanding of the distribution habits and attitudes of present and
potential buyers and users, and their reactions to products, packing, selling
and advertising methods”.

Marketing Research Process

There are seven steps in marketing research process: define the research problem, determine
the research design, choose the method for collecting primary data, design the sample, collect
the data, analyze and interpret the data, prepare the research report. Though those steps,
marketers will make conversant decisions or reduce the risk of their decisions.
1. PROBLEM DEFINITION

This is the starting point in the marketing research exercise. Invariably, in any enterprise,
there are several marketing issues that may require examination, and invariably every
decision maker perceives his information need as being the most important. In problem
definition it is important to be specific, avoiding ambiguities and generalities. Care should
also be taken, not to define problems in too narrow a field as that may distract the
researcher’s perspective. This may even affect creativity in the research.
 2. RESEARCH OBJECTIVES

Once the problem is defined, the next logical step is to state what the researcher wants to
achieve. This statement is called objectives. To be meaningful and help focus the researcher’s
attention, these objectives should be specific, attainable & measurable. The purpose of these
objectives is to act as a guide to the researcher and help him in maintaining a focus all
through the research.

3. RESEARCH DESIGN

The third stage in the marketing research process is deciding on the research design. There
are three types of research designs, namely:

1. Exploratory: This kind of research is conducted when the researcher does not know how & why a
certain phenomenon occurs, for example, how does the consumer evaluate the quality of a bank or a
hotel or an airline? Since the prime goal of an exploratory research is to know the unknown, this
research is unstructured. Focus groups, interviewing key customer groups, experts and even search for
printed or published information are some common techniques.
2. Descriptive: This research is carried out to describe a phenomenon or market characteristics. For
example, a study to understand buyer behavior & describe characteristics of the target market is a
descriptive research. Continuing the above example of service quality, a research done on how
consumers evaluate the quality of competing service institutions can be considered as an example of
descriptive research.
3. Causative:  This kind of research is done to establish a cause and effect relationship, for example the
influence of income & lifestyle on purchase decision. Here the researcher may like to see the effect of
rising income & changing lifestyle on consumption of select products.

4. SOURCES OF DATA

Once the research design has been decided upon, the next stage is that of selecting the
sources of data. Essentially there are two sources of data or information- secondary &
primary

 Secondary data: This refers to the information that has been collected earlier by someone else. Often
this includes printed or published reports, news items, industry or trade statistics etc. this also includes
internal documents like invoices, sales reports, payment history of customers etc. these are important
 to the researcher as they provide an insight to the problem. Often the preliminary investigation is
restricted to secondary data.
 Primary data: To overcome the limitations of incompatibility, obsolescence and bias, the researcher
turns to the primary data. This is also resorted to when the secondary data is incomplete. Primary
sources refer to data collected directly from the market place- customers, traders & suppliers often are
the major sources. They are often reliable data sources and help in overcoming limitations of
secondary data. The problem in primary data is its cost, both In terms of money & time, and often a
researcher bias also creeps in.

5. DATA COLLECTION

The researcher is now ready to take the plunge. But still he or she needs to be clear about the
following.

Procedure for data collection.

Data can be collected through any or combination of the following techniques.

 Observation: This technique involves observing how a customer behaves in the shopping area, how
he or she dresses up & what does the customer say when he or she sees the product.
 Experimentation: This is a technique that involves experimenting new product ideas, advertising
copies & campaigns, sales promotion ideas & even pricing & distribution strategies with the target
customer group. These experiments can be conducted in an uncontrolled environment or in a
controlled & simulated market environment.

Tools for data collection

The researcher has to decide on the appropriate tool for data collection. These tools are:-

 Questionnaire — used for the survey method

 Interview schedule — used mainly for exploratory research
 Association test — primarily used in qualitative research, also called as TAT (Thematic  
Apperception Test)

6. DATA ANALYSIS

The next stage is that of data analysis .It is important to understand raw data has no usage in
marketing research .hence appropriate analytical tools must be used. The most elementary is
the arithmetic analysis using percentile and ratios. Statistical analysis like mean, median,
mode, percentages, standard deviation and coefficient of correlations should be used
wherever applicable

7. REPORT & PRESENTATION

The last stage is that of writing out a report and making a presentation to the Decision —
maker. It is important that the report has summary, called the executive summary, giving a
bird’s-eye view of the research. This is because most senior managers have little time for
going through the entire report in depth. The executive summary can direct the reader’s
attention to specific issues by turning to the relevant sections in the report and should not
exceed thousand words.
 The report should be structured and pages chronologically numbered generally, the structure
of a good repot is somewhat like the following:

 Introduction to the problem

 Marketing research finding or survey findings
 Interpretation of research finding
 Policy implications