Business Studies · Ch 10 — Marketing
Summary
Summary
- Market and Marketing: In the traditional sense, a 'market' is the place where buyers and sellers gather to exchange goods and services. In the modern marketing sense, it is the set of actual and potential buyers of a product or service. Marketing itself is the performance of business activities that direct the flow of goods and services from producers to consumers — it is not merely a post-production activity; it includes activities performed before goods are produced and continues after they are sold.
- Functions of Marketing: The important functions of marketing are Gathering and Analysing Market Information, Marketing Planning, Product Designing and Development, Standardisation and Grading, Packaging and Labelling, Branding, Customer Support Services, Pricing of Products, Promotion, Physical Distribution, Transportation, and Storage or Warehousing.
- Role of Marketing: By adopting a marketing orientation, an organisation — whether profit-making or non-profit — can achieve its goals more effectively. Marketing also acts as a catalyst in a country's economic development and helps raise people's standard of living.
- Marketing Mix: The set of marketing tools a firm uses to pursue its objectives in a target market, classified into the four Ps — Product, Price, Place, and Promotion — which are combined to create a market offer.
- Product: A mixture of tangible and intangible attributes capable of satisfying a customer's need. Products are broadly classified into consumer products (purchased by the ultimate consumer, further split by shopping effort into Convenience, Shopping, and Speciality Products, and by durability into Durable, Non-durable, and Services) and industrial products (used as inputs to produce other products, classified into Materials and Parts, Capital Items, and Supplies and Business Services).
- Packaging and Labelling: Packaging is designing and producing the container or wrapper of a product; it has three levels — Primary, Secondary, and Transportation Packaging — and performs functions such as product identification, protection, facilitating use, and promotion. Labelling is designing the label put on the package; it describes the product, helps identify and grade it, aids in its promotion, and provides information required by law.
- Pricing: Price is the amount of money paid by a buyer (or received by a seller) for a product or service. It is an effective competitive weapon and the single most important factor affecting a firm's revenue and profits. The price of a product is determined by six factors: Product Cost, the Utility and Demand, the Extent of Competition, Government and Legal Regulations, Pricing Objectives, and the Marketing Methods Used.
- Physical Distribution: Covers all activities required to physically move goods from manufacturers to customers — its main components are Order Processing, Transportation, Warehousing, and Inventory Control.
- Promotion: The use of communication to inform potential customers about a product and persuade them to buy it, through four tools — Advertising, Personal Selling, Sales Promotion, and Publicity — used in different combinations depending on the market, the product, the budget, and the objectives of promotion.
- Advertising: The most commonly used promotional tool — a paid, impersonal form of communication by an identified sponsor. Its merits are Mass Reach, Enhancing Customer Satisfaction and Confidence, Expressiveness, and Economy. It also faces objections — that it Adds to Cost, Undermines Social Values, Confuses the Buyers, and Encourages the Sale of Inferior Products — though most of these criticisms are not fully true.
- Personal Selling: The oral, face-to-face presentation of a message to one or more prospective customers for the purpose of making a sale. It plays an important role for businesses (as an effective, flexible promotional tool that builds lasting customer relationships), for customers (by helping identify needs and providing expert advice), and for society (by converting latent demand into effective demand and creating employment). …