Chapter Fifth

1. Chapter Fifth Introduction to Business (ITB) MAKRETING By: Musa Farooqi

2. What is Marketing? • Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer • Marketing includes all efforts to create customers for the product maximum satisfaction to them • Marketing is the process of determining consumers demand for a product or service, motivating its sale and distributing it to ultimate consumers at a profit By: Musa Farooqi

3. What is Marketing? According to the above definitions, the marketing concept has three components • Customerorientation: i.e. production of goods according to the customer wants • Integrationofmarketingactivities: i.e. putting together marketing activities such as buying, selling, advertising, pricing etc • Profitorientation: i.e. earning of profit By: Musa Farooqi

4. Classification of Markets On the basis of different approaches, market has been classified into various ways which are under mentioned • Market according to geographical area: Markets on the basis of area covered are classified into (a) local markets (b) regional markets (c) national markets (d) international markets By: Musa Farooqi

5. Classification of Markets • Markets on the basis of position of sellers: By keeping the position of sellers in the market, the markets are classified as under • Primary market: it is the market where in the farm products are sold by the primary producers to the wholesalers or their agents • Secondary market: it is the market where wholesalers sell goods to the retailers for onward selling it to the consumers • Terminalmarket: it is the market where the purchase is the finalized by the consumers from the retailers By: Musa Farooqi

6. Classification of Markets • Market on the basis of volume of business transacted: on the basis of volume of business transacted, the markets are classified into (a) whole-sale market (b) retail markets • Wholesale markets: Wholesale market as the name signifies is the market where in the goods are sold in bulk to the dealers • Retail market: In case of retail market, the goods are sold in small quantity directly to the consumers By: Musa Farooqi

7. Classification of Markets • Market on the basis of nature of transaction: On the basis of nature of transactions, the market are classified into (a) spot market (b) Future market • Spot Market: The sport market is the cash market. The goods in the sport market are physically transferred from seller to the buyer • Future Market: in the future market, the purchase or sale of the commodity call for delivery some months in the future. Actually delivery of goods is rarely made By: Musa Farooqi

8. Classification of Markets • Capital Markets: capital markets are classified as under • Money Market: Money markets are those institutions which provide short term funds to the business • Share market: These are the organized markets for the purchase and sale of shares of the joint stock companies • Foreign exchange market: These markets trade foreign currencies By: Musa Farooqi

9. Function of Marketing Following is the marketing function • Merchandizing functions • General functions • Sales functions Merchandizing functions are further sub-categorized as followings • Buying • Assembling • Standardizing and grading • Storing • Transportation • Market research By: Musa Farooqi

10. Function of Marketing Buying Buying is the first most important step in the process of marketing. It is the process of acquiring goods at the right price, at the right time, in right quantity and quality and from a right source of supplier. The profits of the business, to large extent, depend upon efficient buying. Assembling Assembling means collection of goods from various places in small quantities and making them available in sufficient quantities at some central places. In most of the agricultural as well as industrial raw materials, assembling is done by middlemen. The assembled goods are bought by manufacturers and wholesalers By: Musa Farooqi

11. Function of Marketing Standardizing and grading If the goods are properly standardized according to their size, shape, color, design, material and graded according to their quality and characteristics, they can be bought and sold by reference to their standards and grades on telephones, telegrams. The standardized goods can be purchased and sold easily. Standardization and grading of goods are thus helpful in marketing Branding Branding means giving a trade bane to a particular goods so that the consumer is easily able to distinguish it from other products in the same line. For example, soap may be branded as (i) Lux (ii) Rexona (iii) Dettol etc By: Musa Farooqi

12. Function of Marketing Storing Most of the goods are produced in anticipating of demand by the manufacturers. The manufacturers, wholesalers hold sufficient stocks to sell as and when needed by the consumer. Storing of goods helps in regulating the prices of the products by creating time and place utility Transportation Transportation gives place utility to the product making it available at the place where it is demanded or consumed. The main modes of transport are (1) land transport (2) water transport (3) air transport Market research Efficient sale depends upon the market research. Market research for a good helps the supplier in finding out the quality and quantity of goods wanted by the customers, the time when the customers want it, the attitude of the customers towards price, discovering potential markets for products etc By: Musa Farooqi

13. Function of Marketing General Business functions are further sub-categorized as followings • Financing • Risk taking Financing Financing involves the use of capital for maintaining inventory and providing of marketing services. A marketing concern finances its activities from two sources (i) owned capital (ii) borrowed capital. The manufacturers need financed for keeping sufficient stock of goods in anticipation of demand. The manufacturers also make sale on credit to the middlemen. The wholesalers need financed for storing sufficient quantity of goods and sometimes making payments to the procedures. The retailers also require funds for selling goods on credit to the trusted consumers. The main problems involved in marketing finance include finding the sources, terms of credit, cost of credit and collection of debts By: Musa Farooqi

14. Function of Marketing Risk bearing Risks are possible due to changes in demand and supply conditions of the goods, loss in storage, transport and other natural calamities. The risks in marketing cannot be avoided. However, they can be reduced. The successful marketer is that who takes a calculated risk or tries to transfer the risks or eliminates the risks By: Musa Farooqi

15. Function of Marketing Sales functions are further sub-categorized as followings • Pricing • Selling Pricing The pricing decisions should be based on a number of considerations. Price of goods should be set at a point which covers all direct and indirect costs of a business and also yields profit. The reaction of the competitors, the elasticity and inelasticity of demand for good, the discount offered by other manufacturers of the same class, sale made on cash or credit basis, the policy of the state etc are to be carefully examined by a seller to survive and prosper By: Musa Farooqi

16. Function of Marketing Selling Selling comprises of all personal and impersonal activities finding, securing, and developing a demand for a given product or service and in communicating the sale of it. With the manifold increase in the volume production of goods, selling of goods at profitable price is now a problem with the producer. The main elements involved in selling are (a) product planning and development (b) establishing contact with buyers (c) creation of demand (d) negotiations with the prospective buyers to settle terms, and (e) entering into a contract for the transfer of goods from the seller to the buyer By: Musa Farooqi

17. Marketing Mix and Its components The variables, such as price, promotion, and service, managed by an organization to influence demand for a product or service Components or elements of marketing mix The most popular elements of marketing mix is called 4 P,s which are under mentioned • Product • Price • Place • Promotional By: Musa Farooqi

18. Marketing Mix and Its components Product The product is the physical product or service offered to the consumer. In the case of physical products, it also refers to any services or conveniences that are the part of offering. It is the product which is ultimately delivered to the consumer. The word product covers good, service or an idea. The product strategy invoices the decisions of what type of good, in what quality and for whom the goods or service are to be offered for sale. Product strategy also invoices making decisions about the quality of the product, design, trade mark, package etc. product planning also includes making decisions about the production of new goods, making research and development programmes. If the business is to stay, prosper and earn profit, then right product has to be developed after careful consideration of the needs of the consumers to whom it is to be sold By: Musa Farooqi

19. Marketing Mix and Its components Price Pricing decisions should take into account profit margins and probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing. Price is a strong element in the marketing mix. It has a direct impact on the customer, the business and the economy. To the consumer, the price is a major indicator of the quality of good and an important factor in making decision about its purchase. For the business, the price at which the product or service is sold represents the sole mean of recovering costs and making profit, price level, in general, has far reaching effects on the national economy. It influences wages, interests rates, employment and the policy of the government. It is the kind of competition in the market for the good. Generally, the price should be such which yields fair profit to an enterprise and is justifiable to the consumer also By: Musa Farooqi

20. Marketing Mix and Its components Place Place or placement decisions are those associated with channels of distribution that serve as the means for getting the product to the target consumers. The distribution system performs transactional, logistical and facilitating functions. Distribution decisions include market coverage, channel member selection, logistics and levels or service. This element of marketing is concerned with all those activities which are needed to move the product or service from the seller to the buyer. By: Musa Farooqi

21. Marketing Mix and Its components The place strategy ensures that the products are available to the consumers at the right time when they are needed, time utility, at the place where they are demanded , place utility, in the form or shape in which they are required, form utility, and the ownership of the good is transferred with less financial risk , possession utility. A product reaches customers through a channel of distribution. Sometimes a channel system is quite short. It may run directly from a producer to a final customer. Often, it is more complex involving many kinds of middlemen, manufacturers, wholesalers, retailers,. The success of business greatly depends on the selection of channel most appropriate to the business By: Musa Farooqi

22. Marketing Mix and Its components Promotion Promotion decisions involve advertising, public relations, media types etc. In a competitive world of today, the goods produced by business are not sold by themselves. They are to be introduced to the consumers. The purpose of promotion is to compete, create stimulate demand and persuade target consumers to buy them. The promotional strategy covers three basic activities (1) advertising (2) personal selling and (3) sales promotion. Advertising is a mass paid information. The aim of advertising is to communicate information to selected selection of the public about the product created knowledge and awareness of the good and induce feelings for the purchase of the good. By: Musa Farooqi

23. Marketing Mix and Its components Product Quality, modification, development, after sales service Price Cost, competition, market, demand Place Agencies, wholesales, retailers, direct sale Promotion Advertising, brand image, corporate image ,public relations By: Musa Farooqi

24. The End Of Fifth Chapter Thank You By: Musa Farooqi