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MARKETING MECHANICS (A text book of Marketing

Management)


ii

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iii

MARKETING MECHANICS

A textbook of Marketing Management

Shivakumar Upavasi (Teaching Faculty,

Department of PG studies in Commerce,

SKNG Government First Grade College, Gangavthi-583227)

EDUCREATION PUBLISHING (Since 2011)

www.educreation.in


iv

Date of Publication : 06-July-2015

No of Pages : 366

ISBN : 978-93-85247-26-2

Copyright © : Author

DTP : Sateesh Managore

______________________________________________________________

Publisher : EDUCREATION PUBLISHING RZ 94, Sec 6, Dwarka, New Delhi - 110075

Shubham Vihar, Mangla, Bilaspur, CG –

495001

www.educreation.in

Contact address of the

author : Opp to Kondamme school,

Vijayanagar colony,

Gangavathi-583227.

Dist : Koppal,

State : Karnataka.

Country : India

Contact No: 9916136755

[email protected]

[email protected]

For all judiciary matters JMFC, Gangavthi only


mailto:[email protected]

mailto:[email protected]

v

“I am dying for you

and you are

Living for me in my eternal life.”

This Book Is Dedicated To My Mother.


vi


vii

Preface

As an academician it is my ethical responsibility to contribute my

experience and knowledge to the following subject. The following book

will be a landscape in focusing on those thrust areas of Marketing

Management that are crucial and significant in studying the subject

applications effectively. The important topics that are newly introduced

in this book are

1. Behavioural Economics and Entrepreneurial Marketing

2. Green Marketing

3. Corporate Governance and Global value chains of the Global

scenario.

4. Antidumping law of WTO-Article VI

5. Stakeholders (Inter and Intra) of societal marketing

6. Consumerism

7. Strategies of customer retention

8. Service values

9. Classification of products

10. Value Engineering and Value types.

Two sections are specially introduced in each chapter as Marketing Mail

and Marketing Reports to provide subject knowledge with a Global

perspective for the students. In view of this most of the reports from

websites of various departments of Government of India, WTO,

UNCTAD, ILO etc. have been presented to provide evidence for

studying Marketing Management subject with international standards.

The section of case studies will provide students a good

foundation to understand things thoroughly and deeply about the

concerned subject. Apart from this additional topics and supplementary

reading shall be helpful to improve the domain with extra information.

Most of the work in this book is presented referring the research carried

out by the researchers of Marketing Management worldwide. And with

utmost faith as the author of this book it is my belief that the reader’s

community shall be capable in turning this book as a milestone.


viii

Acknowledgements

I would like to express my sincere gratitude to my senior faculty

members and students of our department. It is my duty to thank all those

who have helped a lot to contribute for the following subject. Most of the

articles displayed on the internet were very useful for reference and in

view of this I shall extend my complements to the researchers.

Apart from this, I would like to thank leading newspapers of

India-The Economic times, Business Line, The Indian Express and other

papers whose reports were very useful in producing the book. It is my

duty to thank the Government of India for furnishing a lot of information

on the web and in the same way the websites of UNO, UNCTAD, IMF,

ILO and UNICEF were also very useful for collecting global facts and

figures.

Finally, I shall be thankful for the DTP work and the Publisher

and without their efforts, this work was not a possible task. Hoping that

my hard work and sincere efforts towards this academic contribution will

be useful for the reader.

Author

Shivakumar Upavasi


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Contents List

Topic Page

Chapter 1: Marketing 01-28

Nature, Meaning, Definition, Scope And Characteristics

02

Core Concepts Of Marketing 05

Marketing Approaches 06

Marketing Environment 12

Marketing Philosophy 14

The Marketing Process- Challenges and Opportunities 16

Marketing Functions 18

Points to be remembered 19

Exercise 22

Assignments 22

Marketing Mail 23

Marketing Reports 25

Chapter 2: Holistic Marketing- Meaning

& Definition 29-65

Meaning & Definition

30

Theory Of Cognitive Dissonance 32

Integrated Marketing 33

Internal Marketing 37

Ethics In Business And Corporate Governance 40

Corporate Social Responsibility 45

Societal Marketing 48

Stakeholders Inter & Intra 51


Exercise 60

Assignments 60

Marketing Mail 61

Marketing Reports

63


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Chapter 3: Marketing Relationship With Other

Disciplines

66-94

Introduction

67

Entrepreneurship 67

Entrepreneurial Marketing 68

Marketing And Finance 70

Economics 71

Behavioural Economic 73


Exercise 77

Assignments 77

Marketing Mai 78

Marketing Reports

81

Chapter 4: Market Segmentation 95-112

Introduction

96

Meaning and Definition 96

Over Segmentation 98

Niche Marketing 100

The Process Of Segmenting The Market 103

Geography 103

Demography 104

Objectives Of Market Segmentation 106

Scope And Significance of Market Segmentation 106


Exercise 108

Assignments 108

Marketing Mail 109

Marketing Reports

109

Chapter 5: Product Management 113-148

Introduction

114

Meaning, Definition And Characteristics 114

Product Standardization 114

Product Adaption 115

Product Mix 116

Product Positioning 118

Product Life Cycle 121

Strategies Of Product Life Cycle 123


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Brand Management 124

Corporate Branding 128

Supplementary Reading-Marketing Mix 129


Exercise 134

Assignments 134

Marketing Mail 134

Marketing Reports 135

Suggested Reading-New Product Development

139

Chapter 6: Promotional Mix 149-168

Introduction

150

Definition And Meaning 150

Scope Of Promotional Mix 150

Significance Of Promotional Mix 152

To Develop A Promotional Mix- 5 Steps 154

Characteristics Of Pricing 156

Significance Of Price 156

The Three Different Perspectives Of Price 158

Pricing Strategies 160


Exercise 162

Assignments 162

Marketing Mail 162

Marketing Reports

163

Chapter 7: Marketing channels 169-197

Introduction

170

Electronic Distribution Channels 173

Supply Chain Management 174

Online Marketing 178

Marketing Information System 179

Retail Management 180

Marketing Intermediaries 184

Logistics Management 188


Exercise 191

Assignments 191

Marketing Mails 192


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Marketing Reports

194

Chapter 8: Consumer Behaviour 198-214

Introduction

199

Theories Of Human Psyche 199

Buying Motives 206

The Buying Process 207

Consumer Buying Motives-Model 208


Exercise 208

Assignments 208

Marketing Mail 209

Marketing Reports

210

Chapter 9: Planning and Forecasting 215-229

Introduction

216

Module Of A Marketing Plan 217

Types Of Plans 219

Corporate Strategy 220

Short Term Plans And Long Term Plans 220

Segmental Steps In Planning 221

Forecasting 221

Forecasting Techniques 223

The Values Of Forecasting 224

Points To Be Remembered 225

Exercise 226

Assignments 226

Marketing Mail 226

Marketing Reports

227

Chapter 10: Value and Retention 230-257

Customer Value Management

231

What Is A Value? 232

Customer Values 232

Value Engineering 240

Objectives Of Value Engineering 240

Customer Acquisition and Product Implementation 241

Value Chains 242

Cultural Values And Beliefs 243


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Customer Retention 245

Strategies For Customer Retention 247

Point To Be Remembered 248

Exercise 250

Assignment 250

Marketing Mail 251

Marketing Reports

253

Chapter 11: Service Marketing 258-350

Introduction

259

Add Industry Standards To Service Marketing 260

Significance And Scope Of Service Marketing 262

Careers And Opportunities 263

The Life Cycle Of Service Marketing 264

Service Marketing And Economy 264

Model Of A Service Continuum 266

Types Of Values (Service Values) 268

Processing Tools For Service Products 269

Market Survival 270

Points To Be Remembered 272

Exercise 272

Assignments 273

Marketing Mail 273

Marketing Reports

274

Important Topics 290-324

Green Marketing

290

Consumerism 296

Franchising 299

Classification of Products 301

Marketing Research 304

Marketing Careers and Opportunities 307

The Indian Rural Market 312

The Global Scenario

315

Case Studies 325-350

Case-1

325

Case-2 326

Case-3 328


xiv

Case-4 329

Case-5 331

Case-6 333

Case-7 334

Case-8 335

Case-9 336

Case-10 340


xv

Abbreviations

AMA American Marketing Association

AFP Agence France-Presse

B2B Business to Business

BOP Balance Of Payments

BSNL Bharatia Sanchar Nigam Limited

C2C Customer to Customer

C&F Clear and Forward

CSRC Corporate Social Responsibility and Corporate

Citizenship

C2P Consumer to Product

EE Eastern European

EU European Union

EXIM BANK Export and Import Bank

ERP Enterprise Resource Planning

FMCG Fast Moving Consumer Goods

GI Geographical Indicators

HUL Hindustan Unilever Limited.

IOSCO International Organization of Securities Commissions

ILO International Labour Organization

LOC Line Of Credit

ISO-3100 International Organization for Standardization

MFN Most Favoured Nations

NEET Not in Education, Employment, or Training

OECD Organization for Economic Cooperation and

Development

NGO Non-Government Organization


xvi

PPP Purchasing Power Parity

R&D Research and Development

SME Small and Medium Enterprises

TV Television

TRIPS Trade-Related Aspects of Intellectual Property Rights

UNCTAD United Nations Conference on Trade And Development


Marketing Mechanics

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Chapter

______________________________________________________

Marketing

Nature, Meaning, Definition, Scope and Characteristics.

Core Concepts Of Marketing.

Marketing Approaches.

Marketing Environment.

Marketing Philosophy.

The Marketing Process- Challenges and Opportunities.

Marketing Functions.

Points to be remembered.

Exercise.

Assignments.

Marketing Mail.

Marketing Reports.

01


Shivakumar Upavasi

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MARKETING

Nature, Meaning, Definition, Scope and Characteristics.

You purchase a new ring- tone to your mobile by pressing some number

on your hand set and who sells it is paid by your currency account

followed by a product delivered to you. Every product you buy for your

need adds a value for an exchange and provides satisfaction. In all the

phases of life as a consumer, buying of products is essential to satisfy our

needs. It is not a question of force we purchase products but it is our

needs that can be divided into several types. In view of this the

consumption of a number of products is due to improvement of standard

of life. The civilized societies have been claiming standard products

which can maximize their utility at affordable prices. To serve consumer

needs in a unique way, the process of providing goods and services has

been identified as marketing. Even though the basic nature of marketing

is to promote goods and services to its needy consumers at an affordable

price and place but it is a vast industry followed by its applying statistics.

What do you mean by marketing?

Basically products differ as goods and services which are sold for a profit

motto by the seller to the buyer. In general selling of products is not

marketing but it in one of the activities of marketing. The modern

markets are consumer sovereign and studying of consumer needs is very

essential. The activities of marketing include understanding consumer

needs, developing such products based on their needs, promoting them to

potential markets and hence reaching the needy consumers in a better

and convenient way. Marketing implies to develop the civilized societies

by offering carriers and opportunities in sales, accounting,

administration, education, finance and advertising are few of them to list.

The broader meaning of marketing is to understand consumer needs and

convert them into opportunities followed by creating a value for an

exchange to its customers.

What are the characteristics of marketing?

It is a planned activity to meet out the obligation of a needy

consumer systematically.

The task of marketing process does include studying of consumer

needs, designing need based products, strategies to promote such

products and hence creating markets by dividing the market into

potential groups. (Market segmentation).


Marketing Mechanics

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To support the marketing obligations, it is the duty of a marketer to

support the moral standards of a society in terms of business ethics

and corporate governance.

Giant marketing companies build global brands to increase their

market share, and to provide service for their loyal customers

globally.

Customer adds a value for an exchange by consuming the product of

his choice.

Marketing is a department in an organization which is the pulse of

the business.

Products may be categorized on the bases of specific attributes like

quality, quantity, price etc.

Marketing as an industry had created numerous opportunities in

sales, accounting, administration, logistics, packing, retailing etc.

Goods & services are promoted by means of channels either directly

or indirectly.

Marketing is an exciting subject to study for researchers,

academicians, students and marketing managers.

Define Marketing

Let us analyze the following.

The significance of marketing is in delivering such products to the

consumer that is needful for them at an affordable price.

The supply of goods and services to improve the standard of living

by creating employment opportunities with a motto of making profit

through their business from individuals and organizations refers to

marketing.

By adding a value for an exchange to the consumer in terms of utility

and status in the society.

Marketing is a planned activity of pursuing consumer needs

followed by developing and promoting of such products at an affordable

price in creating a value for an exchange, subject to its consumption.

Scope of marketing.

The scope of marketing is very wide compared to the statistics of its

applications and their significance. The use of resources like men, money

and material has developed huge businesses, where companies are using

marketing tools to boost their sales with advanced strategies. Activities

like market research, innovative products, eco-friendly products,

entrepreneurship are common terms associated to marketing and its

allied services. In spite of supplying goods and services the marketing


Shivakumar Upavasi

4

realities are working to create carriers and opportunities for those, who

are seeking employment.

Industries like Banking, Insurance, Automobiles, Hotels,

Airlines, Advertising, Retailing, Logistics etc. have separate marketing

departments to promote their products. The marketing team plays a

significant role in designing new products, creating special segments,

pricing products, promoting products and all that is associated to earn

revenue on sales. The communication is strong with the company affairs

in the market related to sales and profit by virtue of marketing

department involvement among markets.

What is Management?

Management is systematically assigning the skillful work into the

efficient hands for the sake of getting anticipated results in the form of

value chains followed by the sequences, periodically.

Now what is Marketing Management?

The overall process of managing the marketing activities such as

studying of consumer needs, designing new products, creating new

markets, adding a value for an exchange of products, creating

employment opportunities in a systematic and scientific way as directed

by ERP (Enterprise Resource Planning) where all the activities are

followed in a sequence in Marketing Management, with social

responsibility of the society.

Marketing Management helps the marketing firms to plan their

work systematically such as allocation of resources like men, money and

material that are basically needed to start the task.

Management is important in deciding two things

Who will do this work?

When and how, he will do this work?

Business Managers need to possess matured knowledge to overcome

problems like inflation, recession, Government Law and Policy,

competitors, substitute products, flow of funds and supply of human

resources to achieve success at a competitive edge.


Marketing Mechanics

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Core concepts of Marketing.

The core concepts of marketing include all those activities of

marketing which define marketing as a particular discipline and its vital

role in the success of the organization that we call as integrated services.

Every organization has divided the nature of works like research &

development, finance, marketing, inventory and so on to attain accurate


Shivakumar Upavasi

6

progress in a stipulated period of time, where success depends upon the

integrated services of allied departments.

Marketing Approaches.

What is an approach?

Approach is coming closer or it is the beginning of an action.

The activities of marketing constitute of four important phases.

The real challenge for a marketer is, “how to sell”?

A hawker sells his goods and a company also does it even

though both are indulging themselves in selling, the ways of approach

are different and so the customers and so the markets. By analyzing the

following situation we can reach to a consideration.

How to approach the customer? Define your business to industry standards so that you can reach the

valuable customers.

List out the potential customers and their socio- cultural and socio-

economic status to deal with them at their expectations.

Your business premise is a key to your success.

Communication skills, body language, postures, facial expressions,

seating arrangement, dress code, business hours, time for a

transaction, feedback, personal relations and all things related to

business shall matter.

When once there is a successful approach, what matters is the way

you convince?

Get into a negotiation led by your product theme.

Technicalities will mind much because the effect of technology is

rapid in changing and smartness in adopting it.

If products are marketed online, use tools like social network,

company blogs, product feedback, study customers likes and dislikes

before promoting a product. Apply advanced strategies to reach-out

Product

Approach

Market

Approach

Consumer

Approach

Promotion

and Pricing

Approach


Marketing Mechanics

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the customers through groups formed in social networks. Provide

better payment and delivery options, flexible business hours, use

references and hence reach out the valuable customer.

The value of an exchange you provide to a customer plays a

significant role in promotion of products.

Use advanced tools like event management and auctioning to reach-

out the customers for your products.

Who is my customer?

Choose customers form specific segments.

Better decide, what are the attributes of your product that can attract

potential customers?

Study the customer’s nature whether they are rational thinkers.

Scan the socio-cultural and socio-economic environment.

Use demography & geography as tools for market segmenting to

study non-behavioral characteristics.

Specify customer such as regular, accidental, occasional,

unpredictable, profit motto, stock-motto etc.

Study about the price what they can afford.

Brand loyalty can encash good business.

Customer feedback is necessary to attend grievances.

Communication with customers establishes long term relations with

the product.

Product Approach.

Product – Items which are tangible or intangible in nature consisting of

specific attributes that may provide utility on consumption and they may

be differentiated into goods and services which are ready for sale at a

fixed price.

What are goods?

Goods – Tangible items either raw or in finished form have specific

attributes that are classified under individual type among groups of a

class and may provide utility by consumption.

Service – Intangible in nature to be consumed in a stipulated period of

time that may derive utility and they are perishable in nature.

Commodity: Any kind of product that creates demand in the market or it

is in scarcity of the user then the product itself becomes a commodity.

Gold ore – good (raw)


Shivakumar Upavasi

8

Gold coin – product (finished)

Gold ETF – service industry (exchange traded fund)

Gold biscuit – commodity (product in demand)

(Examples to understand products and its types)

Type of products:

1. Essential products – products like food grains, edible oil, FMCG

products, medical products, building materials, transportation

vehicles etc.

2. Inessential products – luxurious goods like jewelry, highly paid

cosmetics, costly cars, snacks, soft drinks, star hotel services etc.

How to select a product?

The marketing organizations take initiative in studying market

conditions and decide about products depending on.

1. Consumer segments based on geography.

2. Purchasing power and demography.

3. Socio-cultural and Socio-economic conditions.

4. Trends & fashion.

5. Consumer psyche.

6. Innovative technology.

7. Pricing strategies.

8. Promotion equation.

9. Substitute products market performance.

10. Brand loyalty.


Marketing Mechanics

9

How to sell a product?

MARKET APPROACH

What is a market?

The potential to create an activity of sales either physically or through

mode of online communication where buyers and sellers commence for

an exchange.

Crucial elements of the market.

1) Buyer

2) Seller

3) Marketer

Who is a buyer?

Any individual or group both organized and unorganized, who by virtue

of a purchase represents a special buying motive behind it.

Decide well in advance, what types of products are needed by the

consumers?

What is the market share of your product?

Product engineering – product design.

Product packing – attractive and flexible

Promotion and pricing strategies that can work-out for your special

segment.

Special offers and discounts for consumers and display incentives

for retailers

Incentives on sales target for sales team


Shivakumar Upavasi

10

Who is a seller?

Any individual or group who sells a product with a motto of making

profit either produced by him or sold on behalf of the producer.

Who is a marketer?

Any person who promotes products for serving consumer needs either

produced by him or by the producer for a motto of profit and service.

Marketing intermediaries.

Individuals or organizations indulged in activities of sales, promotion,

distribution and dumping of products to the targeted markets on behalf

of the provider of goods for a special commission on sales.

Marketing intermediaries

1) Brokers

2) Agent – individual

3) Clearing & Forward Agent – firms

4) Super Stockiest

5) Distributors

6) Wholesalers

7) Retailers

8) Promotion portals – websites

Types of market

A market can exist only when a buyer and a seller are able to carry on

their transactions. Let us analyze the customers and variety of products,

they buy and their area of operation.

Buying a t-shirt and jeans pant on the Flip-kart website – electronic

market or non-physical market.

Purchasing a sheep in a live stock market – physical market.

So, two types of market can exist where the transaction between the

buyer and seller takes place directly (physical market) and indirectly

(non-physical).

FMCG –Fast moving consumer goods have a high volume of sales

and the value of each unit is low but the repurchase is fast.

Examples - soap, shampoo, biscuits, chocolates, soft drinks etc.


Marketing Mechanics

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