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2412230612324823544market and Marketing

The document defines 'market' as a mechanism for exchanging products and services, detailing various concepts and types of markets, including traditional and non-traditional markets. It outlines the characteristics of marketing, stages of marketing evolution, and the role of marketing in economic and social development. Additionally, it differentiates between products and services, highlighting their features and the increasing importance of services in modern economies.

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0% found this document useful (0 votes)
22 views14 pages

2412230612324823544market and Marketing

The document defines 'market' as a mechanism for exchanging products and services, detailing various concepts and types of markets, including traditional and non-traditional markets. It outlines the characteristics of marketing, stages of marketing evolution, and the role of marketing in economic and social development. Additionally, it differentiates between products and services, highlighting their features and the increasing importance of services in modern economies.

Uploaded by

gurubhai19961125
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MEANING OF MARKET

In common language, the term market is used to refer to a


place where buyers and sellers meet to effect purchases and
sales. It is a place where goods are bought and sold.
But in real sense the term market means a mechanism
through which products and services are exchanged, sold
and transferred.

Concepts of market.
1. Place concept: To the common man, market is a place
where products and services are sold. Place refers to a
physical location where buyers and seller meet. It may be a
'Hatt', a 'Bazar' or a Shopping Mall.
2. Area concept: According to this view, market means a
geographical area in which products and services are sold or
exchanged. For example, European Common Market.
3. Demand concept: It refers to the aggregate demand for a
product or service.
4. Exchange concept: It means an organisation through
which exchange of an item takes place, e.g. stock exchange,
commodity exchange, etc.
5. People concept: According to this view, market consists of
buyers and sellers, and all those middlemen who assist in
buying and selling.

TYPES OF MARKETS
Markets may be classified as follows:
I. Traditional Markets
1. On the Basis of Geographical Area
(a) Local Market: This is a market wherein buying and
selling are limited to a local area, e.g., a village, town or city.
(b) Regional Market: This is a market wherein buying and
selling are restricted to a particular region or state, e.g.,
Southern India.
(c) National Market: This is a market wherein buying and
selling activities are limited within the boundaries of a
particular country, e.g., India.
(d) International Market: This is a market wherein buying
and selling involves buyers and sellers of several countries,
e.g., the European Union.

2. On the Basis of Volume of Business


(a) Wholesale Market: This is a market where goods are sold
in bulk to retailers.
(b) Retail Market: This is a market where goods are sold by
retailers in small quantities directly to the ultimate
consumers.

3. On the Basis of Subject of Exchange


(a) Commodity Market: This is an organised market where
commodities (e.g., cotton) are bought and sold according to
prescribed rules and regulations.
(b) Capital Market: This is a specialised market for providing
long-term finance to business enterprises. It comprises
specialised financial institutions, stock exchanges,
investment trusts, insurance companies.
(c) Money Market: This is a specialised market for providing
short-term finance to business enterprises. It consists of
various types of banks.

4. On the Basis of Position of Buyers and Sellers -


(a) Primary Market: This is a market wherein primary
producers sell their agricultural products to the wholesalers
or their agents.
(b) Secondary Market: This is a market where wholesalers
sell their products to retailers.
(c) Terminal Market: This is a market where retailers sell
their goods to the consumers

5. On the Basis of Nature of Transactions -


(a) Spot Market: This is a market where goods are physically
transferred from sellers to buyers.
(b) Future Market: This is a market where buyers and sellers
enter into future contracts without the intention of actual
delivery of goods. Their purpose is to make profit out of
fluctuations in prices.

6. On the Basis of Nature of Goods


(a) Consumers' Market: This is a market where goods are
purchased for personal consumption.
(b) Producers Market : This is a market where goods are
purchased for use in further production.

II. Non-traditional markets


Modern marketing has created several non traditional
markets.
1. Catalogue Market: In this type of market, a catalogue and
samples of products are kept in the showroom. The catalogue
contains details of goods and their prices. Customers select
goods by reading the catalogue and examining the samples.
2. In-House Market: Door-to-door sales persons visit the
homes of consumers and offer products to them. Before the
visit, initial contact may be created through telephone or
mailed-in-coupon. This is an effective method and offers
great convenience to the customer. Ex- Aquaguard Water
purifiers by Eureka Fobes
3. Mail Order Market: In this market, the seller -mails price
lists and other publicity materials to the prospective buyers.
Customers place order after reading advertisements and the
mailed literature. Goods are despatched through VP.P. or
courier.
4. Automatic Vending Machines : Well-known brands of
products of daily use are sold through vending machines.
These machines are installed at workplaces, schools and
public places. Customers insert coupons/cash in the machine
and collect the product.
5. Telemarket: The product is advertised and demonstrated
on television and in the newpapers. Toll-free telephone
numbers are mentioned in the advertisement.
6. Network Market: The marketer recruits independent
business people who act as distributors. These distributors in
turn recruit and sell to sub-distributors who eventually
employ persons to sell the product in the homes of
customers.Ex-Amway

Characteristics of marketing:
1. Marketing is an Integrated Process : Marketing is not a
single activity. It is rather a coordination of several
interrelated activities. Marketing is a managerial process in
so far as it involves the functions of planning and control.
2. Marketing is Customer-oriented : Marketing exists to
identify and satisfy the wants of present and potential
consumers. It starts and ends with the consumer. Customer is
the focus of all marketing activities.
3. Marketing is a System: Marketing is a system comprising
several sub-systems. Under marketing inputs information
about customers are drawn from the society supra-system
and converted into outputs want satisfaction which are
supplied to the society.
4. Marketing is a Part of Total Environment: Marketing
operates within the framework of total environment which
comprises economic, social, legal, political, international
and other forces.
5. Marketing is Creative: Marketing creates time, place and
possession utilities. Time utility is created by preserving
goods for use in future. Place utility is created by carrying
goods to places where they are needed most. Marketing
creates possession utility by transferring products and
services from producer to customer.
6. Marketing is Goal-oriented: Marketing seeks to achieve
benefits for both buyer and seller. It results in a mutually
beneficial relationship by satisfying wants of customers and
by generating revenue for the seller.

STAGES OF MARKETING

From subsistence level and self-sufficiency to modern


marketing has been a long journey. The following stages of
Marketing :
1. Production-oriented Stage (1869 - 1930): In this stage, the
motto was to sell what can be produced. There was acute
shortage of goods and there was no need to create demand.
Product was the focus of attention and communication with
the buyer was not needed. Products were manufactured on
the assumption that customers would search and buy well-
built and reasonably priced products.
2. Sales-oriented Stage (1930 - 1950) : The focus shifted from
production to selling. How to sell became a problem and the
new motto was to ' get rid of what you have '. Producers
began, to realise that consumers will not buy though unless
they are approached with substantial selling and
promotional efforts. The focus was on increasing sales rather
than on consumer satisfaction.

3. Product-oriented Stage (1950-1960): In this stage,


marketers believed that customers will buy the product if its
quality was good Therefore, the focus shifted from promotion
to product improvement . Firms made efforts to improve
product features and performance. However, overemphasis
on product quality may overlook other aspects which
influence satisfaction of consumers.

4. Marketing-oriented Stage (1960-1980): Emergence of keen


competition and consumer awareness forced producers to
rethink over the philosophy of marketing They realised that
business policies and programmes should be built around the
goal of customer satisfaction. Management should think of
itself not as producing products but as providing value
satisfaction to customers.

5. Societal Marketing Stage (1980-) Under the societal


marketing concept firms are expected to ascertain the needs,
wants and interests of target markets and to deliver the
desired satisfactions more effectively and efficiently than
competitors in a way that preserves or enhances the well-
being of not only the consumers but of the society as a whole.

ROLE OF MARKETING
Marketing is said to be the eye and ear of business because it
keeps a business enterprise in touch with the changing needs
and preferences of consumers. Marketing is essential for the
survival and growth of business. Business aims at profits. To
realise profits, a sale has to be made. To make a sale, a
customer has to be created. Creating and satisfying
customers is the job of marketing.

Contribution of marketing to the economic and social


development of a nation

1. A nation's income is composed of goods and services which


money can buy. Any increase in the efficiency of marketing
reduces the cost of distribution and lesser prices to
consumers. These in turn help to improve the real income of
the people.

2. Marketing contributes to national income and wealth.


Business firms create and sell new products and services to
satisfy human wants. In order to do so, they make productive
use of the country's latent resources. Fuller exploitation of
national resources generates income and wealth.

3. Marketing generates employment. A large number of


people are gainfully employed in the distribution and
marketing of products and services. In addition, marketing
generates employment by increasing production and trade
volumes.

4. Marketing helps to improve the standard of living of the


people. By increasing per capita income and by bringing new
and better products and services to consumers, marketing
raises the quality of life in society. It is marketing which has
converted "yesterday's luxuries into today's necessities".

5. Marketing contributes to the development of


entrepreneurial and managerial talent. Development of
marketing leads to the integration of agriculture, industry
and other sectors of the economy.

6. Marketing enables the government and non- government


organisations to eliminate social evils like insanitation,
illiteracy, drinking, gambling, dowry system, racism, etc. It
is through social marketing that family planning, pollution
control, AIDS awareness and other socially useful
programmes have achieved a reasonable degree of success.

MEANING AND NATURE OF PRODUCT


A product means anything tangible that can be offered to a
market for attention, acquisition, use or consumption that
can satisfy a want or need. A product is a physical object that
can be seen, touched and felt. A ball pen, a car, a refrigerator,
a house, all are examples of products.

The features of a product are given below:

1. Tangibility: A product is tangible. It is made of certain


physical attributes such as shape, size, etc. It can be seen,
touched and felt.

2. Associated Attributes: In addition to physical features, a


product has certain attributes which help customers to
distinguish it from other products. Package, brand name,
warranty, etc., are such associated attributes.
3. Life Cycle: Every product has its life cycle which consists of
introduction, growth, maturity and decline stages.

4. Exchange Value: A product has some value which can be


measured in terms of money.

5. Need Satisfaction: Every product is meant to satisfy some


human need.

Products may be classified as follows :

1. Consumer Products : These products are meant for final


consumption and are not for further use or sale.
Consumer products are of three types:
(a) Convenience Products: These products are purchased
frequently and with minimum of efforts. They are meant for
personal convenience. Newspapers, cigarettes, toothpastes,
soaps, tea, etc., are examples of convenience products.
(b) Shopping Products: These products are purchased after a
comparative analysis of quality, price, warranty, etc. of
competitive brands. Furniture, cloth, TV, fridge, washing
machine, scooters, cars are examples of such products.
(c) Speciality Products: These products are purchased with
special efforts. Jewellery, fancy items, computers are
examples of these products.

2. Industrial Products: These products are purchased for use


in the production of other goods. Raw materials, components
and machinery are industrial products. Industrial products
are of the following types:
(a) Raw Materials: These include natural and farm products
such as wheat, cotton, milk, coal, etc.
(b) Supplies: These include nuts, bolts, lubricating oil,
heating fuel, typewriter ribbons, etc.
(c) Accessory Equipment: These include typewriters,
calculators, small lathes, portable drills etc.
(d) Installations: These include heavy machinery, factory
sites, trucks, etc..

MEANING AND NATURE OF SERVICE


Service means an intangible act or performance that can
satisfy some human needs and can be offered for sale. Beauty
parlour, dry cleaning, nursing home, courier firm, cinema
theatre, auto repair workshop all provide services. The
functions performed by teachers, doctors and lawyers are
also services.

The main features of services are as follows:

1. Intangibility: Services are intangible as they cannot be


seen or touched. They have no physical shape. They are
invisible.

2. Perishability: Services cannot be stored for future use. For


example, if a bus having 45 seats is carrying 35 passengers,
the 10 vacant seats cannot be utilised in future.

3. Inseparability : Services are produced and consumed at


the same time. The service cannot be separated from the
service provider. For example, the driver and conductor of
the bus have to be in the bus whenever the bus provides
service to passengers.

4. Variability: Services can rarely be standardised or made


uniform. For example, the quality of service which a waiter
provides in a hotel or restaurant may differ from customer to
customer or from one time period to another.
Services may be classified into the following categories :

(a) Financial Services: Banks and financial institutions


provide various financial services to their customers.
Accepting deposits, granting loans and advances, agency
and utility functions are examples of financial services.

(b) Insurance Services: Insurance companies provide life


insurance, fire insurance, marine insurance, motor
insurance, medical insurance and all types of insurance
services.

(c) Transport Services: Railways, roadways, shipping and


airways provide transport services for passengers and
goods.

(d) Warehousing Services: Warehouses and cold storages


provide services to businessmen for storage of goods.
Businessmen can keep their goods in public warehouses for a
charge.

(e) Communication Services: Postal services, courier


services, telephone services, All India Radio, Doordarshan,
internet services are examples of communication services.
(f) Food and Lodging Services: Hotels, guest houses and
restaurants provide food, drink and accommodation.

DIFFERENCE BETWEEN PRODUCT AND SERVICE


A product can be differentiated from a service on the
following grounds.

1. Tangibility: A product is tangible as it can be seen, tasted


and touched. On the other hand, a service is intangible
because it cannot be seen, tasted or touched. Therefore, a
product can be checked before purchase while a service
cannot be checked before purchase.

2. Perishability: A product is durable and it can be stored.


For example, a showroom can store twenty cars which could
not be sold this year. But a service is perishable and cannot
be stored. If a bus which can carry forty passengers has only
thirty passengers, then the service meant for ten seats
perishes.

3. Ownership: When one buys a product one becomes its


owner. For example, when you buy a car the ownership of
the car is transferred from the seller to you. But when one
buys a service one does not become its owner. For instance, if
you hire a taxi there is no transfer of ownership from the
seller to you.

4. Inseparability: A product can be separated from its


producer. For example, the producer of a car need not be
present when the car is sold to a customer. But a service
cannot be separated from the service provider. For example,
when you travel by a taxi, the taxi driver has to be present.

5. Homogeneity: In case of a standardised product, each unit


of the product is a perfect substitute for another. It is
impossible to differentiate one unit from other units. For
example, when you buy a Maruti car you will get the same
quality irrespective of the place of purchase. But services are
not homogeneous.

6. Technology: A product is technology based whereas a


service is person-based. For example, the quality of a car is
dependent largely on production technology but the quality
of its repair is dependent largely on the skill of the mechanic.

REASONS FOR INCREASING IMPORTANCE OF SERVICES

(i) Economic Planning: Industrialisation requires industrial


infrastructure (transport, communication, power,
insurance, banking, finance etc.) and social infrastructure
(education, medical facilities, community services etc.).
Therefore, these services have expanded rapidly in the
country.

(ii) Increasing Urbanisation: Urbanisation leads to rise in


demand for infrastructure services such as communications,
public utilities and distribution services.

(iii) Media: Television, internet and other media have led to


spurt in tourism. Modern technology has made business
more comfortable. Tourism in turn has promoted all types of
services such as hotel, restaurants, travel agents, amusement
parks, event management etc.

(iv) Rise in Per Capita Income; Growing per capita income


has led to demand for new and better services., Interior
decoration, garden care, beauty parlours, slimming centres,
health clubs etc. are examples of these services. More leisure
time creates demand for recreation and entertainment
services such as water parks, etc.

(v) Women Workforce: Higher percentage of women in


workforce has created demand for baby sitting, household
domestic help and such other personal services.

(vi) Greater Life Expectancy: Increase in life span has led to


greater demand for health care and related services. Greater
concern for ecology and resource scarcity requires time
sharing, pollution control and other services.

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