BSSS-Institute of Advanced Studies

Study/Reading Material

Course Name: Marketing Management

COURSE CONTENTS:

UNIT – 1

INTRODUCTION

People sometimes think of marketing as “the art of selling products,” but many
people are surprised when they hear that selling is not the most important part of
marketing! Selling is only the tip of the marketing iceberg.

Marketing is about identifying and meeting human and social needs. One of
the shortest good definitions of marketing is “meeting needs profitably.” When eBay
recognized that people were unable to locate some of the items they desired most, it
created an online auction clearinghouse.

DEFINITION

The American Marketing Association offers the following formal definition:

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.

Marketing is a societal process by which individuals and groups obtain what

they need and want through creating, offering, and freely exchanging products and
services of value with others.

Marketing management as the art and science of choosing target markets and
getting, keeping, and growing customers through creating, delivering, and
communicating superior customer value.

Marketing management is defined as the analysis, planning, implementation,

and control of programmes designed to create, build and maintain beneficial
exchanges with target buyers for the purpose of achieving organizational objectives.
THE FUNDAMENTAL TRIO

Marketing serves customers, and each customer has different needs, wants,
and demands for themselves. Differentiating them is the marketer’s responsibility. In
summary, needs are items that satisfy basic requirements only. Items that a buyer
desires but does not require can be considered wants. Products the buyer will go over
and beyond to acquire and pay for are known as demands.

Understanding the difference between needs, wants, and demands is crucial in

marketing. These terms define consumer behavior and guide businesses in crafting
their offerings.

Needs: The Essentials

• Definition: Needs are the basic requirements that an individual wishes to

satisfy to maintain a good quality of life.

• Nature: They are universal and common to all humans, irrespective of their
background or culture. Examples include food, shelter, and clothing.

• Marketing Perspective: Identifying and addressing these fundamental needs

is the first step in creating any product or service.

Wants: Desires Born from Needs

• Definition: Wants are the specific pathways through which people choose to
satisfy their basic needs.

• Nature: They are shaped by one’s society, culture, and individual personality.
For instance, while food is a need, wanting a pizza or a sushi roll is a want.
 • Marketing Perspective: Marketers play a pivotal role in shaping wants by
exposing consumers to various products and services through advertising and
promotions.

Demands: Wants Backed by Purchasing Power

• Definition: Demands are wants for specific products backed by the ability and
willingness to pay for them.

• Nature: Not all wants transform into demands. Only when a person has the
financial means and the desire to purchase a product does a want turn into a
demand.

• Marketing Perspective: Successful businesses not only identify wants but also
assess the economic capability of consumers, thereby forecasting demands
accurately.

Example:

• Need: Communication and staying connected.

• Want: Desiring a smartphone with a high-quality camera and long battery life.

• Demand: Wanting the latest iPhone model and having the funds to purchase
it.
 Need Want Demand

THE SCOPE OF MARKETING

To be a successful marketer, one must have a clear understanding of the essence

of marketing, what can be marketed, and how marketing works

What is Marketing?

Marketing is about identifying and meeting human and social needs in a way
that harmonizes with the goals of the organization. When Google recognized that
people needed to more effectively and efficiently access information on the internet,
it created a powerful search engine that organized and prioritized queries. When
IKEA noticed that people wanted good furnishings at substantially lower prices, it
created knockdown furniture.

What is Marketed?

Marketing is ubiquitous—it permeates all aspects of the society. Specifically,

marketing typically involves different domains: goods, services, events, experiences,
persons, places, properties, organizations, information, and ideas.
a) Goods: Physical goods constitute the bulk of most countries’ production and
marketing effort. Examples are: car, refrigerators, television sets, food

products, machines etc.

b) Services: As economies advance, a growing proportion of their activities is
focused on the production of services. Examples are: services include the work
of airlines, hotels, car rental firms, barbers, beauticians etc. and professionals
such as, Accountants, bankers, lawyers, engineers, doctors etc.

c) Events: Marketers promote time-based events, such as trade-shows, artistic

performance, Asian Games, Sport-events etc.
d) Experiences: When we go to a particular amusement park, we get a chilling
experience that is marketed. For examples: travels, climbing Mount Everest etc.

e) Persons: Celebrity marketing is a major source of business nowadays. The

different renowned personnel takes the help of different marketers to get
popular. Different artists, singers, CEOs, physicians, and high-profile lawyers
take the help of social media platforms to get in the spotlight.

f) Places: Different places in a country are attractive destinations for many

tourists. It's an important source of income. It is not only about tourists.
Different cities as well as countries battle among themselves to get the attention
of factories, company headquarters, and new residents. And this is well done
by different marketing platforms. In the software world, Bangalore is termed
the Silicon Valley of India, and in the tourism industry, Kerala is marketed as
God’s own country.
g) Properties: Properties are intangible ownership of either real property or
financial property. The different properties are bought and sold through
different marketing platforms. For example, the Grow app is an app to promote
mutual funds and stocks. Different real estate properties are marketed through
different marketing platforms. Different stocks are marketed by banks and
investment companies to both institutional and individual investors.

h) Organizations: Different organizations nowadays are brands in themselves. For

example, when we talk about Amazon or TCS, there is an image created in our
mind because we see them marketed all around us. We remember different
companies through their taglines.

i) Ideas: Ideas include platform or issues aimed at promoting a benefit for a

customer. Every market offering includes a basic idea. Social marketers are
busy promoting such ideas as “Friends Don’t Let Friends Drive Drunk”.
IMPORTANCE OF MARKETING

Marketing is the backbone of any successful business. It plays a vital role in

building a brand, attracting customers, and ensuring long-term sustainability.
Effective marketing strategies not only drive sales but also help businesses establish a
strong presence in the competitive landscape. Below are the key reasons why
marketing is indispensable:

• Sales & Revenue Growth

• Brand Awareness
• Competitive Advantage
• Response to Competitors

Sales & Revenue Growth

Marketing directly contributes to increasing sales and revenue by promoting

products and services to potential customers. A well-planned marketing strategy
helps businesses reach their target audience, communicate the value of their offerings,
and influence purchasing decisions.

• Coca-Cola’s Share a Coke campaign replaced its logo with popular names on
bottles, encouraging customers to find their name or gift a Coke to a friend.
This personalized approach increased customer engagement and boosted sales
in multiple countries.
• Impact: The campaign resulted in a 7% increase in consumption among young
adults and revitalized Coca-Cola’s brand presence.
Brand Awareness

A strong brand identity sets a business apart from its competitors. Marketing
efforts such as advertising, content marketing, and public relations ensure that
customers recognize and remember a brand. Brand awareness builds trust, which is
crucial for customer loyalty and long-term business success.

• CRED, a fintech platform, ran highly engaging ads during IPL featuring
celebrities. The humorous and unexpected nature of these ads generated
massive buzz.
• Impact: The campaign led to a 700% increase in Google searches for CRED and
positioned it as a premium brand in the digital payments sector.

Competitive Advantage

In a crowded market, businesses need to stand out. Marketing helps companies

identify their unique selling proposition (USP) and communicate it effectively. By
highlighting what makes their product or service different, businesses can attract
more customers and gain an edge over competitors.
 • Toyota showcased its vehicle durability through the famous Monkey Test ad,
where a Toyota car’s automatic wipers responded to monkeys jumping on the
windshield. This campaign humorously demonstrated the vehicle’s robustness
and advanced technology.
• Impact: The ad reinforced Toyota’s reputation for reliability, making it a
preferred brand for durability-conscious consumers.

Response to Competitors

In today’s fast-changing business environment, companies must stay alert to

their competitors’ moves. Marketing helps businesses analyze competitor strategies,
identify market trends, and respond with innovative solutions.

• Pepsi has consistently challenged Coca-Cola with creative advertising. One of

the most famous campaigns featured a young boy standing on two Coke cans
to reach a Pepsi button in a vending machine, indirectly implying Pepsi’s
superiority.
• Impact: The campaign grabbed massive attention and reinforced Pepsi’s
youthful, rebellious brand image.
MARKETING MIX

Marketing mix is the set of tactical marketing tools that the firm blends to
produce the response it wants in the target market. The marketing mix consists of
everything the firm can do to influence the demand for its product. The many
possibilities can be collected into four groups of variables the four Ps.

Marketing mix is about putting your product or service in the right place at the
right time for the right price.

i. Product:

Product means the goods-and-services combination the company offers

to the target market. Thus, a Ford Escape consists of nuts and bolts, spark plugs,
pistons, headlights, and thousands of other parts. Ford offers several Escape
models and dozens of optional features. The car comes fully serviced and with
a comprehensive warranty that is as much a part of the product as the tailpipe.

ii. Price

Price is the amount of money customers must pay to obtain the product.
Ford calculates suggested retail prices that its dealers might charge for each
Escape. But Ford dealers rarely charge the full sticker price. Instead, they
negotiate the price with each customer, offering discounts, trade-in
allowances, and credit terms. These actions adjust prices for the current
competitive and economic situations and bring them into line with the buyer’s
perception of the car’s value.

iii. Place

It includes company activities that make the product available to

target consumers. Ford partners with a large body of independently owned
dealerships that sell the company’s many different models. Ford selects its
dealers carefully and strongly supports them. The dealers keep an
inventory of Ford automobiles, demonstrate them to potential buyers,
negotiate prices, close sales, and service the cars after the sale.
 iv. Promotion

It means activities that communicate the merits of the product and

persuade target customers to buy it. Ford spends more than $1.5 billion each
year on U.S. advertising to tell consumers about the company and its many
products. Dealership salespeople assist potential buyers and persuade them
that Ford is the best car for them. Ford and its dealers offer special
promotions—sales, cash rebates, and low financing rates—as added
purchase incentives.

MARKETING ENVIRONMENT

A company’s marketing environment consists of the actors and forces outside

marketing that affect marketing management’s ability to build and maintain
successful relationships with target customers. Like Xerox, companies constantly
watch and adapt to the changing environment.

The marketing environment consists of a microenvironment and a macro

environment. The microenvironment consists of the actors close to the company that
affect its ability to serve its customers - the company, suppliers, marketing
intermediaries, customer markets, competitors, and publics. The macro environment
consists of the larger societal forces that affect the microenvironment - demographic,
economic, natural, technological, political, and cultural forces. We look first at the
company’s microenvironment.

Micro Environment

Marketing management’s job is to build relationships with customers by

creating customer value and satisfaction. However, marketing managers cannot do
this alone. Marketing success requires building relationships with other company
departments, suppliers, marketing intermediaries, competitors, various publics, and
customers, which combine to make up the company’s value delivery network.

a) The Company

In designing marketing plans, marketing management takes other

company groups into account—groups such as top management, finance,
research and development (R&D), purchasing, operations, and accounting.
All of these interrelated groups form the internal environment. Top
management sets the company’s mission, objectives, broad strategies, and
policies. Marketing managers make decisions within the strategies and
plans made by top management.
b) Supplier

Suppliers form an important link in the company’s overall customer

value delivery network. They provide the resources needed by the company
to produce its goods and services. Supplier problems can seriously affect
marketing. Marketing managers must watch supply availability and costs.
Supply shortages or delays, labour strikes, and other events can cost sales
in the short run and damage customer satisfaction in the long run. Rising
supply costs may force price increases that can harm the company’s sales
volume. Most marketers today treat their suppliers as partners in creating
and delivering customer value.

c) Marketing Intermediaries

Marketing intermediaries help the company promote, sell, and

distribute its products to final buyers. They include resellers, physical
distribution firms, marketing services agencies, and financial
intermediaries. Resellers are distribution channel firms that help the
company find customers or make sales to them. These include wholesalers
and retailers who buy and resell merchandise.

• Physical distribution firms help the company stock and move

goods from their points of origin to their destinations.

• Marketing services agencies are the marketing research firms,

advertising agencies, media firms, and marketing consulting
firms that help the company target and promote its products
to the right markets.
 • Financial intermediaries include banks, credit companies,
insurance companies, and other businesses that help finance
transactions or insure against the risks associated with the
buying and selling of goods.

d) Competitors

The marketing concept states that, to be successful, a company must

provide greater customer value and satisfaction than its competitors do.
Thus, marketers must do more than simply adapt to the needs of target
consumers. They also must gain strategic advantage by positioning their
offerings strongly against competitors’ offerings in the minds of consumers

e) Publics

The company’s marketing environment also includes various

publics. A public is any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its objectives. We can identify
seven types of publics.

• Financial publics. This group influences the company’s ability

to obtain funds. Banks, investment analysts, and stockholders
are the major financial publics.

• Media publics. This group carries news, features, and editorial

opinion. It includes newspapers, magazines, television
stations, and blogs and other Internet media.

• Government publics. Management must take government

developments into account. Marketers must often consult the
 company’s lawyers on issues of product safety, truth in
advertising, and other matters.

• Citizen-action publics. A company’s marketing decisions may

be questioned by consumer organizations, environmental
groups, minority groups, and others. Its public relations
department can help it stay in touch with consumer and
citizen groups.

• Local publics. This group includes neighbourhood residents

and community organizations. Large companies usually
create departments and programs that deal with local
community issues and provide community support.

• General public. A company needs to be concerned about the

public’s attitude toward its products and activities. The
public’s image of the company affects its buying.

• Internal publics. This group includes workers, managers,

volunteers, and the board of directors. Large companies use
newsletters and other means to inform and motivate their
internal publics. When employees feel good about the
companies they work for, this positive attitude spills over to
the external publics.

f) Customers

As we have emphasized throughout, customers are the most

important actors in the company’s microenvironment. The aim of the entire
value delivery network is to serve target customers and create strong
relationships with them. The company might target any or all five types of
customer markets.
Macro Environment

The company and all of the other actors operate in a larger macro environment
of forces that shape opportunities and pose threats to the company. Figure shows the
six major forces in the company’s macro environment.

a) The Demographic Environment

Demography is the study of human populations in terms of size,

density, location, age, gender, race, occupation, and other statistics. The
demographic environment is of major interest to marketers because it involves
people, and people make up markets. The world population is growing at an
explosive rate. The world’s large and highly diverse population poses both
opportunities and challenges.
b) The Economic Environment

Markets require buying power as well as people. The economic

environment consists of economic factors that affect consumer purchasing
power and spending patterns. Marketers must pay close attention to major
trends and consumer spending patterns both across and within their world
markets.

Nations vary greatly in their levels and distribution of income. Some

countries have industrial economies, which constitute rich markets for many
different kinds of goods. At the other extreme are subsistence economies; they
consume most of their own agricultural and industrial output and offer few
market opportunities. In between are developing economies that can offer
outstanding marketing opportunities for the right kinds of products.

Example: Consider India with its population of more than 1.1 billion people. In
the past, only India’s elite could afford to buy a car. In fact, only one in seven
Indians now owns one. But recent dramatic changes in India’s economy have
produced a growing middle class and rapidly rising incomes. Now, to meet the
new demand, European, North American, and Asian automakers are
introducing smaller, more-affordable vehicles in India. But they’ll have to find
a way to compete with India’s Tata Motors, which markets the least expensive
car ever in the world, the Tata Nano. Dubbed “the people’s car,”
c) The Natural Environment

The natural environment involves the natural resources that are needed as
inputs by marketers or that are affected by marketing activities. Environmental
concerns have grown steadily over the past three decades. In many cities
around the world, air and water pollution have reached dangerous levels.
World concern continues to mount about the possibilities of global warming,
and many environmentalists fear that we soon will be buried in our own trash.

• Marketers should be aware of several trends in the natural

environment. The first involves growing shortages of raw materials.
Air and water may seem to be infinite resources, but some groups
see long-run dangers. Renewable resources, such as forests and food,
also have to be used wisely. Non-renewable resources, such as oil,
coal, and various minerals, pose a serious problem. Firms making
products that require these scarce resources face large cost increases,
even if the materials remain available.

• A second environmental trend is increased pollution. Industry will

usually damage the quality of the natural environment. Consider the
disposal of chemical and nuclear wastes; the dangerous mercury
 levels in the ocean; the quantity of chemical pollutants in the soil and
food supply; and the littering of the environment with no
biodegradable bottles, plastics, and other packaging materials.

• They are developing strategies and practices that support

environmental sustainability an effort to create a world economy that
the planet can support indefinitely. They are responding to
consumer demands with more environmentally responsible
products.

• On the packaging front, PepsiCo recently introduced new half-liter

bottles of its Lipton iced tea, Tropicana juice, Aquafina Flavour
Splash, and Aquafina Alive beverages that contain 20 percent less
plastic than the original packaging. SunChips come in the world’s
first 100 percent compostable package.

d) The Technological Environment

New technologies can offer exciting opportunities for marketers. For

example, what would you think about having tiny little transmitters implanted
in all the products you buy, which would allow tracking of the products from
their point of production through use and disposal? On the one hand, it would
provide many advantages to both buyers and sellers. Marketers should
monitor the following technology trends: the accelerating pace of change,
unlimited opportunities for innovation, varying R&D budgets, and increased
regulation of technological change.
e) The Political and Social Environment

Marketing decisions are strongly affected by developments in the

political environment. The political environment consists of laws, government
agencies, and pressure groups that influence or limit various organizations and
individuals in a given society.

• Increasing Legislation: Legislation affecting business around the world

has increased steadily over the years. The United States has many laws
covering issues such as competition, fair trade practices, environmental
protection, product safety, truth in advertising, consumer privacy,
packaging and labelling, pricing, and other important areas. Business
legislation has been enacted to protect companies from each other, to
protect consumers from unfair business practices, and to protect the
interests of society against unrestrained business behaviour.

• Changing Government Agency Enforcement: International marketers will

encounter dozens, or even hundreds, of agencies set up to enforce trade
policies and regulations. Indian government has established BIS, ISI,
FPO, Agmark and many others. Because such government agencies
have some discretion in enforcing the laws, they can have a major impact
on a company’s marketing performance.

New laws and their enforcement will continue to increase.

Business executives must watch these developments when planning
their products and marketing programs. Marketers need to know about
 the major laws protecting competition, consumers, and society. They
need to understand these laws at the local, state, national, and
international levels.

f) The Cultural Environment

The cultural environment consists of institutions and other forces that

affect a society’s basic values, perceptions, preferences, and behaviours. People
grow up in a particular society that shapes their basic beliefs and values. People
in a given society hold many beliefs and values. Their core beliefs and values
have a high degree of persistence.

The Socio-Cultural forces link to factors that affect society’s basic values,
preferences and behaviour. The basis for these factors is formed by the fact that
people are part of a society and cultural group that shape their beliefs and
values. Many cultural blunders occur due to the failure of businesses in
understanding foreign cultures. For instance, symbols may carry a negative
meaning in another culture.

Marketing management cannot always control environmental forces. In many

cases, it must settle for simply watching and reacting to the environment. For example,
a company would have little success trying to influence geographic population shifts,
the economic environment, or major cultural values. But whenever possible, smart
marketing managers will take a proactive rather than reactive approach to the
marketing environment.
THE MARKETING EXCHANGE

Traditionally, a “market” was a physical place where buyers and sellers

gathered to buy and sell goods. Economists describe a market as a collection of buyers
and sellers who negotiate transactions that involve a particular product or product
class (such as the housing market or the grain market).

There are five basic markets: resource markets, manufacturer markets,

consumer markets, intermediary markets, and government markets. The five basic
markets and their connecting flows of goods, services, and money are shown in
following figure. Manufacturers go to resource markets (raw material markets, labor
markets, money markets), buy resources and turn them into goods and services, and
sell finished products to intermediaries, who sell them to consumers. Consumers sell
their labor and receive money with which they pay for the goods and services they
purchase. The government collects tax revenues to buy goods from resource,
manufacturer, and intermediary markets and uses these goods and services to provide
public services. Every nation’s economy, and the global economy itself, all consist of
interacting sets of markets linked through exchange processes.

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Annexures:

Reference Books

• Kotler, P. (2010). Principles of marketing: a South Asian perspective, 13/E.

Pearson Education India
• Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015).
Marketing. Pearson Higher Education AU.
• Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of
marketing. Pearson Australia.
• Kotler, P., & Armstrong, G. (2010). Principles of marketing. Pearson
education.

Case study Links

• Kotler, P. (2010). Principles of marketing: a South Asian perspective, 13/E.

Pearson Education India.
Sample Questions:

• How does the American Marketing Association (AMA) define marketing,

and what are the key components of their definition?
• How does marketing differ from sales, and what are their distinct roles and
objectives?
• How does marketing contribute to the promotion of places and
destinations?
• Can you provide examples of successful marketing campaigns that
effectively promoted events?
• What are the key components of the marketing mix, and how do they
interact to form a comprehensive marketing strategy?
• Discuss the impact of macroenvironment factors on marketing activities of
any organisation.
• How do cultural factors impact consumer preferences and market trends?
• How do changes in consumer spending and lifestyles affect marketing
strategies and product offerings?
• What are the various types of markets?
• Define government markets and outline their unique characteristics
compared to other market types.
 • Discuss the types of resources commonly traded in resource markets and
their significance for businesses.

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