I UNIT MATERIAL

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I Unit
Marketing Management
Need , Wants and Demand:
A human need is a state of felt deprivation of some basic satisfaction. People require
foods, clothing, shelter, safety, belonging, esteem etc. these needs exist in the very nature
of human beings.
Human wants are desires for specific satisfiers of these needs. For example, cloth is a
needs but Raymonds suiting may be want. Whilepeople’s needs are few, their wants are
many.
Demands are wants for specific products that are backed up by an ability and willingness
to buy them. Wants become demands when backed up by purchasing power
Products, Value, Satisfaction, Exchange and Transactions:
Products are defined as anything that can be offered to some one to satisfy a need or
want.
Consumers choose among the products, a particular product that give them maximum
value and satisfaction. Value is the consumer’s estimate of the product’s capacity to
satisfy their requirements
Exchange is the act of obtaining a desired product from someone by offering something
in return. A transaction involves at least two thing of value, conditions that are agreed to,
a time of agreement and a place of agreement
Market:
Market is a place where buyers and seller together and exchange their goods and services
for money and money worth.
A public place where buyers and sellers make transactions, directly or via intermediaries.
A market consist of all the existing and potential consumers sharing a particular
need or want who might be willing and able toengage in exchange to satisfy that need or
want
Definition:
“It is a place or area of potential exchange” ---- Phillip Kotler

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MARKETING
Marketing is a crucial function in any business or organisation, and is increasingly important in
the modern globalized economy. Marketing is the action or business of promoting and selling
products or services, including market research and advertising. 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 at large. Marketing is based on
thinking about the business in terms of customer needs and their satisfaction
Marketing is the management process responsible for identifying, anticipating and satisfying
customer requirements profitably. An understanding of what customers need and value, is central
to marketing. Learning your customers' needs and how you can add value through marketing
activities paves the way for a successful business in the long term.
The activities of a company associated with buying and selling a product or service. It includes
advertising, selling and delivering products to people. People who work in marketing
departments of companies try to get the attention of target audiences by using slogans, packaging
design, celebrity endorsements and general media exposure. The four 'Ps' of marketing are
product, place, price and promotion.
Definitions:
“Marketing is the science of meeting the needs of a customer by providing valuable products to
customers by utilizing the expertise of the organization, at same time, to achieve organizational
goals”. ------- American Marketing Association
“Marketing is meeting the needs and wants of a consumer” -- Andrew Cohen
Importance of Marketing:
Marketing process brings goods and services to satisfy the needs and wants of the people.
It helps to bring new varieties and quality goods to consumers.
By making goods available at all places, it brings equipment Distribution.
Marketing converts latent demand into effective demand.
It gives wide employment opportunities
It creates time, place and possession utilities to the products.
Efficient marketing results in lower cost of marketing and ultimately lower prices to
consumers.
It is vital link between production and consumption and primarily responsible to keep the
wheel of production and consumption constantly moving.
It creates to keep the standard of living of the society

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Marketing Functions:
The ultimate aim of marketing is exchange of goods and services from producers to consumers in a way that
maximizes the satisfaction of customer’s needs. Marketing functions start from identifying the consumer needs
and end with satisfying the consumer needs. The universal functions of marketing involve buying, selling,
transporting, storing, standardizing and grading, financing, risk taking and securing marketing information.
However, modern marketing has some other functions such as gathering the market info and analyzing that info.
Market planning and strategy formation. To assist in product designing and development also comes under the
marketing functions. The marketing functions have been discussed here briefly
1. Selling:
It is core of marketing. It is concerned with the persuasion of prospective buyers to actually
complete the purchase of an article. Setting pays an important part in realizing the ultimate aim
of earning profit. Selling is enhanced by means of personal selling, advertising, publicity and
sales promotion.
2. Buying
It involves what to buy, what quality, how much, from whom, when and at, what price. People in
business buy to increase sales or to decrease costs. Purchasing agents are much influenced by
quality, service and price. The products that the retailers buy for resale are determined by the
need and preferences of their customers.
3. Transportation
Transport is the physical means whereby goods are moved from the places where they are
produced to those they are needed for consumption. Transportation is essential from the
procurement of raw materials to the delivery of finished products to the customers places.
Marketing relies mainly on railroads, tracks, waterways, pipelines and air transport. The type of
transportation is chosen on several consideration such as suitability, speed and cost.
4. Storage
It involves the holding of goods in proper condition from the time they are produced until they
are needed by consumers (in case of finished products) or by the production department (in case
of raw materials and stores). Storing protects the goods from deterioration and helps in carrying
over surplus for feature consumption or use in production. Goods may be stored in various
warehouses situated at different places. Storing assumes greater importance when production is
seasonal or consumption may be seasonal. Retail firms are called “stores”.
5. Standardization and Grading
The other activities that facilitate marketing are standardization and grading. Standardization
means establishment of certain standards or specifications for products based on intrinsic
physical qualities of any commodity. This may involved quantity (weight or size) or it may

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involve quality (colour, shape, appearance, material, taste, sweetness etc). Government may also
set some standards e.g., in case of agricultural products. A standard conveys a uniformity of the
products.
“Grading means classification of standardized products into certain well-defined classes or
groups.” It involves the division of products into clauses made up of unit processing similar
characteristics of size and quality. Grading is very important for “raw material” (such as fruits
and cerials), mining products” (such as coal, iron-ore and mangenese) and “forest products”
(such as timber). Branded consumer products may bear grade levels, – A B C.
6. Financing
It involves the use of capital to meet financial requirements of the agencies dealing with various
activities of marketing. The services of providing the credit and money needed to meet the cost
of getting merchandise into the hands of the final user is commonly referred to as finance,
function in marketing. In marketing, finances are needed for working capital and fixed capital,
which may be secured from three sources – onward capital, bank loans and advances, and trade
credit (provided by the manufactures to wholesaler and by the wholesaler to the retailers).
7. Risk Taking
Risk means lose due to some unforeseen circumstances in future. Risk-bearing in marketing
refers to the financial risk inherent in the ownership of goods held for an anticipated demand,
including the possible losses due to a fall in price and the losses from spoilage, depreciation,
obsolescence, fire and floods or any other loss that may occur with the passage of time. From
production of goods to its selling stage, many risks are involved due to changes in marker
conditions, natural causes and human factors. Changes in fashions or interventions also cause
risks. Legislative measures of the government may also cause risks.
8. Market Information
The only sound foundation, on which marketing decisions may be based, is correct and timely
market information. Right facts and information reduce the aforesaid risks and thereby result in
cost reduction. Business firms collect, analyze and interpret facts and information from internal
sources, such as records, sales people and findings of the market research department. They also
seek facts and information from external sources, such as business publications, government
reports and commercial research firms. Retailers need to know about sources of supply and also
about customers buying motives and buying habits. Manufacturers need to know about retailers
and about advertising media. Firms in both these groups need information about competitors
activities and about their markets. Even ultimate consumers need market information about
availability of products, their quality standards, their prices, and also about the after-sale service
facility Common sources for consumers are sales people, media advertisements, colleagues etc.
It may be noted that in addition to the mentioned jobs, the marketing manager is also involved in
product planning, pricing of products, selection of distribution channels, framing of marketing
objectives, environmental scanning, target market selection, market programming and
developing marketing strategy.

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MARKETING CONCEPTS
Every company can have different ideas or philosophy. For example, a particular company can
have its idea or philosophy that if the production is done on a large scale, the cost would be less
and the product would be sold automatically. In this way, such a company will concentrate
mainly on the large scale production of goods. Similarly, some other company can have a
different idea. It may have an idea that if the quality of the product is improved, there will be no
difficulty in selling the product.
Under the marketing management philosophy, we shall study the following five concepts:
(1) Production Concept
(2) Product Concept
(3) Selling Concept
(4) Marketing Concept
(5) Societal Marketing Concept
1. Production Concept (before 1930)
Those companies who believe in this philosophy think that if the goods/services are cheap and
they can be made available at many places, there cannot be any problem regarding sale. Keeping
in mind the same philosophy these companies put in all their marketing efforts in reducing the
cost of production and strengthening their distribution system. In order to reduce the cost of
production and to bring it down to the minimum level, these companies indulge in large scale
production.
This helps them in effecting the economics of the large scale production. Consequently, the cost
of production per unit is reduced.
The utility of this philosophy is apparent only when demand exceeds supply. Its greatest
drawback is that it is not always necessary that the customer every time purchases the cheap and
easily available goods or services.
2. Product Concept: (1930- 1940)
Those companies who believe in this philosophy are of the opinion that if the quality of goods or
services is of good standard, the customers can be easily attracted. The basis of this thinking is
that the customers get attracted towards the products of good quality. On the basis of this
philosophy or idea these companies direct their marketing efforts to increasing the quality of
their product.
It is a firm belief of the followers of the product concept that the customers get attracted to the
products of good quality. This is not the absolute truth because it is not the only basis of buying
goods. The customers do take care of the price of the products, its availability, etc. A good
quality product and high price can upset the budget of a customer. Therefore, it can be said that
only the quality of the product is not the only way to the success of marketing.
Where the product has quality customer response is more. Here no need of promotion activities.
The main concept involved in this is “GOOD WINE NEEDS NO BUSH”.
This concept called “Marketing Myopia”(Prof. T. Levitt)

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3. Selling Concept: (1940-1950)
Those companies who believe in this concept think that leaving alone the customers will not
help. Instead there is a need to attract the customers towards them. They think that goods are not
bought but they have to be sold.
The basis of this thinking is that the customers can be attracted. Keeping in view this concept
these companies concentrate their marketing efforts towards educating and attracting the
customers. In such a case their main thinking is ‘selling what you have’. This concept offers the
idea that by repeated efforts one can sell-anything to the customers. This may be right for some
time, but you cannot do it for a long-time. If you succeed in enticing the customer once, he
cannot be won over every time.
On the contrary, he will work for damaging your reputation. Therefore, it can be asserted that
this philosophy offers only a short-term advantage and is not for long-term gains.
4. Marketing Concept (1950 after)
Those companies who believe in this concept are of the opinion that success can be achieved
only through consumer satisfaction. The basis of this thinking is that only those goods/service
should be made available which the consumers want or desire and not the things which you can
do.
In other words, they do not sell what they can make but they make what they can sell. Keeping in
mind this idea, these companies direct their marketing efforts to achieve consumer satisfaction.
In short, it can be said that it is a modern concept and by adopting it profit can be earned on a
long-term basis. The drawback of this concept is that no attention is paid to social welfare.
5. Societal Marketing Concept
This concept stresses not only the customer satisfaction but also gives importance to Consumer
Welfare/Societal Welfare. This concept is almost a step further than the marketing concept.
Under this concept, it is believed that mere satisfaction of the consumers would not help and the
welfare of the whole society has to be kept in mind.
For example, if a company produces a vehicle which consumes less petrol but spreads pollution,
it will result in only consumer satisfaction and not the social welfare. Primarily two elements are
included under social welfare-high-level of human life and pollution free atmosphere. Therefore,
the companies believing in this concept direct all their marketing efforts towards the
achievement of consumer satisfaction and social welfare. In short, it can be said that this is the
latest concept of marketing. The companies adopting this concept can achieve long-term profit.

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Difference between Marketing and Selling
S.No Selling Marketing
1 Selling starts with the seller. Marketing starts with the buyers.
2. Selling emphasizes on profit Marketing emphasizes on identification of a market
Opportunity.
3. Selling views business as a “Goods
producing processes”.
Marketing views business as a customer satisfying
process.
4. It over emphasizes the ‘exchange’ aspect It concerns primarily with the ‘vale satisfactions’
5. Seller’s convenience dominates the
formulation of the ‘marketing mix’.
Buyer determines the shape of the ‘marketing mix’.
6. The firm makes the product first the then
decides how to sell it and make profit.
The customer determines what is to be offered as a
‘product’ and the firm makes a ‘total product offering’
that would match the needs of the customers.
7. Seller’s motives dominate marketing
communications.
Marketing communications acts as the tool for
communicating the benefits/ satisfactions of the
product to the consumers
8. Costs determine price. Consumer determines price.
9. There is no coordination among the
different functions of the total marketing
task.
Emphasis is on integrated marketing approach
10 ‘Selling’ views the customer as the last
link in the business.
‘Marketing’ views the customer as
the very purpose of the business
Marketing Mix
Marketers use different tools in order to get the desired response from the customers or best
satisfy their needs. These tools are known as The Marketing Mix. Marketing Mix is probably the
most famous term in marketing. Marketing Mix is a combination of marketing tools that a
company uses to satisfy their target customers and achieving organizational goals. McCarthy
classified all these marketing tools under four broad categories:
 Product
 Price
 Place
 Promotion
These four elements are the basic components of a marketing plan and are collectively called 4
P’s of marketing. 4 P’s pertain more to physical products than services. Below is an illustration
for marketing mix. The important thing to note is that all these four P’s (variable) are
controllable, subject to internal and external constraints of marketing environment. Marketers,
using different blends of these variables, can target different group of customers having different
needs. So, a customer may call marketing mix “the offering”.
Product
Product is the actual offering by the company to its targeted customers which also includes value
added stuff. Product may be tangible (goods) or intangible (services).
While formulating the marketing strategy, product decisions include:
 What to offer?
 Brand name
 Packaging

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 Quality
 Appearance
 Functionality
 Accessories
 Installation
 After sale services
 Warranty
Price
Price includes the pricing strategy of the company for its products. How much customer should
pay for a product? Pricing strategy not only related to the profit margins but also helps in finding
target customers. Pricing decision also influence the choice of marketing channels. Price
decisions include:
 Pricing Strategy (Penetration, Skim, etc)
 List Price
 payment period
 Discounts
 Financing
 Credit terms
Using price as a weapon for rivals is as old as mankind. but it’s risky too. Consumers are often
sensitive for price, discounts and additional offers. Another aspect of pricing is that expensive
products are considered of good quality.
Place (Placement)
It not only includes the place where the product is placed, all those activities performed by the
company to ensure the availability of the product tot he targeted customers. Availability of the
product at the right place, at the right time and in the right quantity is crucial in placement
decisions.
Placement decisions include:
 Placement
 Distribution channels
 Logistics
 Inventory
 Order processing
 Market coverage
 selection of channel members
Promotion
Promotion includes all communication and selling activities to pursuade future prospects to buy
the product. Promotion decisions include:
 Advertising
 Media Types
 Message
 Budgets
 Sales promotion
 Personal selling
 Public relations
 Direct marketing

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As these costs are huge as compared to product price, So it’s good to perform a break-even
analysis before allocating the budget. It helps in determining whether the new customers are
worth of promotion cost or not.
It often takes time and requires market research to develop a successful marketing mix. You
should not depend on one mix always try new mixes. While designing the mix, make changes to
all mixes in such a way that all conveys the same message. Don’t confuse your customers by just
changing one variable and keeping the rest same.
Limitation of Marketing Mix
Marketing mix (4 P’s) was more useful in early 19′s when production concept ws in and physical
products were in larger proportion. Today, with latest marketing concepts, marketing
environment has become more intergrated. So, in order to extend the usefulness of marketing
mix, some authors introduced a fifth P and then seven P’s (People, Packaging, Process). But the
foundation of Marketing Mix still stands on the basic 4P’s.
Role of Marketing Department in an organization:
While understanding that “it depends” is not a suitable answer for any direct question, the
following are my thoughts on 9 core activities / responsibilities a Marketing Department must
handle. They are not listed in any particular order, as they all should be accomplished if an
organization wants to grow the value of its business.
1) Focus on the Customer.
Marketers should spend time listening to their customers (and prospective customers) in order to
understand their needs and wants regarding a particular product or service. Soliciting thoughts
and input from internal stakeholders such as Sales and Customer Service is also appropriate, as
these departments are typically closest to the customer.
2) Monitor the Competition.
Learning about, and understanding the competitive landscape is also an important function of the
Marketing Department. Marketers should be the “go to people” within an organization to answer
the following types of questions: Who is the competition (both direct and indirect)? What do
they communicate? Which customers do they serve? Why do customers choose the competitor
versus you?
3) Own the Brand.
The perceptions and feelings formed about an organization, its products / services, and its
performance is what is known as its “brand.” The Marketing Department is responsible for
creating meaningful messages through words, ideas, images, and names that
deliver upon the promises / benefits an organization wishes to make with its customers.
Furthermore, the Marketing Department is responsible for ensuring that messages and images are
delivered consistently, by every member of the organization.
4) Find & Direct Outside Vendors.
Internal Marketing Departments do not create magic alone. Therefore, Marketing needs to source
and oversee a group of outside resources (a.k.a. “partners”) such as copywriters, graphic
designers, web designers, database specialists, and printers so that a company can get the most
“bang” from its marketing efforts.

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5) Create New Ideas.
Whether it’s customer acquisition campaigns, keep-in-touch programs, new product promotions,
retention efforts, or something in between, the Marketing Department should ultimately be
responsible for developing new ideas that generate revenue for the company. This does not mean
that the Marketers have to come up with every idea on their own; however, they need to identify,
cultivate, and work with others (see point #4) to execute programs that will create revenue.
6) Communicate Internally.
It is important that the Marketing Department communicates with all departments inside an
organization. Since any employee (regardless of position) can support (or damage) a brand, value
proposition or even specific program initiatives, the Marketing Department needs to take
responsibility for disseminating information throughout the organization (this includes internal
education and training when appropriate).
7) Manage a Budget.
Establishing and communicating messages to the marketplace costs money. Therefore,
Marketing Departments should be responsible for estimating the anticipated expenditures
associated with marketing activities. Once set, Marketers should be held responsible for meeting
all budget projections.
8) Understand the ROI.
Since marketing activities are an investment — an investment in time, money, and effort — they
should be monitored and measured against specific concrete goals and objectives. Marketing
Departments should constantly ask themselves…”What’s my expected return?” Answering this
simple, yet often overlooked question will result in better, more accountable decisions.
9) Set the Strategy, Plan the Attack, and Execute.
One of the key activities for a Marketing Department is to integrate an organization’s goals,
strengths, channels of distribution, competitive environment, target markets, pricing, core
messages, and products into one cohesive document known as the Marketing Strategy.
As part of the strategy, the Marketing Department should also develop the list of tactical ideas
such as direct mail, print advertising, and search engine optimization that will enable the
organization to communicate its message to customers and prospects. With a strategy
and tactical ideas in hand, the Marketing Department is now ready to take on the responsibility
of executing the programs and initiatives to drive sales and revenue for the organization.
Whether you are part of a Fortune 500 corporation, a regional manufacturer, a local distributor,
an independent professional service provider, or somewhere in between, marketing is a critical
component necessary to increase the value of your business.

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MARKETING ENVIRONMENT
Introduction:
A variety of environmental forces influence a company’s marketing system. Some of them are
controllable while some others are uncontrollable. It is the responsibility of the marketing
manager to change the company’s policies along with the changing environment.
“Surrounding which influence a particular activity” is called Environment.
The market is also influenced by a number of forces which are part of the marketing
environment
Marketing Environment a force and actors that effect the ability of a company to develop
and maintain successful relationships with its target customers
The organisations which are producing a number of products, services are influenced by a
group of factors which are operating within and outside the organisation.
The different forces of environment provide a number of opportunities and threats to the
organisation. Hence a marketer must develop marketing mix decisions as per the changes
in the marketing environment
According to Philip Kotler, “A company’s marketing environment consists of the internal
factors & forces, which affect the company’s ability to develop & maintain successful
transactions & relationships with the company’s target customers”.
The Environmental Factors may be classified as:
1. Internal Factor
2. External Factor
External Factors may be further classified into:
External Micro Factors & External Macro Factors
Company’s Internal Environmental Factors:
A Company’s marketing system is influenced by its capabilities regarding production, financial
& other factors. Hence, the marketing management/manager must take into consideration these
departments before finalizing marketing decisions. The Research & Development Department,
the Personnel Department, the Accounting Department also have an impact on the Marketing
Department. It is the responsibility of a manager to company-ordinate all department by setting
up unified objectives.

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External Micro Factors:
1. Suppliers: They are the people who provide necessary resources needed to produce goods &
services. Policies of the suppliers have a significant influence over the marketing manager’s
decisions because, it is laborers, etc. A company must build cordial & long-term relationship
with suppliers.
2. Marketing Intermediaries: They are the people who assist the flow of products from the
producers to the consumers; they include wholesalers, retailers, agents, etc. These people
create place & time utility. A company must select an effective chain of middlemen, so as to
make the goods reach the market in time. The middlemen give necessary information to the
manufacturers about the market. If a company does not satisfy the middlemen, they neglect
its products & may push the competitor’s product.
3. Consumers: The main aim of production is to meet the demands of the consumers. Hence,
the consumers are the center point of all marketing activities. If they are not taken into
consideration, before taking the decisions, the company is bound to fail in achieving its
objectives. A company’s marketing strategy is influenced by its target consumer. Eg: If a
manufacturer wants to sell to the wholesaler, he may directly sell to them, if he wants to sell
to another manufacturer, he may sell through his agent or if he wants to sell to ultimate
consumer he may sell through wholesalers or retailers. Hence each type of consumer has a
unique feature, which influences a company’s marketing decision.
4. Competitors: A prudent marketing manager has to be in constant touch regarding the
information relating to the competitor’s strategies. He has to identify his competitor’s
strategies, build his plans to overtake them in the market to attract competitor’s consumers
towards his products.
Any company faces three types of competition:
a) Brand Competition: It is a competition between various companies producing similar
products. Eg: The competition between BPL & Videcon companies.
b) The Product Form Competition: It is a competition between companies manufacturing
products, which are substitutes to each other Eg: Competition between coffee & Tea.
c) The Desire Competition: It is the competition with all other companies to attract
consumers towards the company. Eg: The competition between the manufacturers of TV
sets & all other companies manufacturing various products like automobiles, washing
machines, etc.
Hence, to understand the competitive situation, a company must understand the nature of
market & the nature of customers. Nature of the market may be as follows:
I. Perfect Market
II. Oligopoly
III. Monopoly
IV. Monopolistic Market
V. Duopoly
5. Public: A Company’s obligation is not only to meet the requirements of its customers, but
also to satisfy the various groups. A public is defined as “any group that has an actual or
potential ability to achieve its objectives”. The significance of the influence of the public on

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the company can be understood by the fact that almost all companies maintain a public
relation department. A positive interaction with the public increase its goodwill irrespective
of the nature of the public. A company has to maintain cordial relation with all groups, public
may or may not be interested in the company, but the company must be interested in the
views of the public.
Public may be various types. They are:
a. Press: This is one of the most important group, which may make or break a company. It
includes journalists, radio, television, etc. Press people are often referred to as
unwelcome public. A marketing manager must always strive to get a positive coverage
from the press people.
b. Financial Public: These are the institutions, which supply money to the company. Eg:
Banks, insurance companies, stock exchange, etc. A company cannot work without the
assistance of these institutions. It has to give necessary information to these public
whenever demanded to ensure that timely finance is supplied.
c. Government: Politicians often interfere in the business for the welfare of the society &
for other reasons. A prudent manager has to maintain good relation with all politicians
irrespective of their party affiliations. If any law is to be passed, which is against the
interest of the company, he may get their support to stop that law from being passed in
the parliament or legislature.
d. General Public: This includes organisations such as consumer councils,
environmentalists, etc. as the present day concept of marketing deals with social welfare,
a company must satisfy these groups to be successful.
External Macro Environment:
These are the factors/forces on which the company has no control. Hence, it has to frame its
policies within the limits set by these forces:
1. Demography: It is defined as the statistical study of the human population & its distribution.
This is one of the most influencing factors because it deals with the people who form the
market. A company should study the population, its distribution, age composition, etc before
deciding the marketing strategies. Each group of population behaves differently depending
upon various factors such as age, status, etc. if these factors are considered, a company can
produce only those products which suits the requirement of the consumers. In this regard, it
is said that “to understand the market you must understand its demography”.
2. Economic Environment: A company can successfully sell its products only when people
have enough money to spend. The economic environment affects a consumer’s purchasing
behavior either by increasing his disposable income or by reducing it. Eg: During the time of
inflation, the value of money comes down. Hence, it is difficult for them to purchase more
products. Income of the consumer must also be taken into account. Eg: In a market where
both husband & wife work, their purchasing power will be more. Hence, companies may sell
their products quite easily.
3. Physical Environment or Natural Forces: A company has to adopt its policies within the
limits set by nature. A man can improve the nature but cannot find an alternative for it.
Nature offers resources, but in a limited manner. A product manager utilizes it efficiently.
Companies must find the best combination of production for the sake of efficient utilization

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of the available resources. Otherwise, they may face acute shortage of resources. Eg:
Petroleum products, power, water, etc.
4. Technological Factors: From customer’s point of view, improvement in technology means
improvement in the standard of living. In this regard, it is said that “Technologies shape a
Person’s Life”.
Every new invention builds a new market & a new group of customers. A new technology
improves our lifestyle & at the same time creates many problems. Eg: Invention of various
consumer comforts like washing machines, mixers, etc have resulted in improving our
lifestyle but it has created severe problems like power shortage.
Eg: Introduction to automobiles has improved transportation but it has resulted in the
problems like air & noise pollution, increased accidents, etc. In simple words, following are
the impacts of technological factors on the market:
a) They create new wants
b) They create new industries
c) They may destroy old industries
d) They may increase the cost of Research & Development.
5. Social & Cultural Factors: Most of us purchase because of the influence of social &
cultural factors. The lifestyle, values, believes, etc are determined among other things by the
society in which we live. Each society has its own culture. Culture is a combination of
various factors which are transferred from older generations & which are acquired. Our
behaviour is guided by our culture, family, educational institutions, languages, etc.
The society is a combination of various groups with different cultures & subcultures. Each
society has its own behavior. A marketing manager must study the society in which he
operates.
Consumer’s attitude is also affected by their society within a society, there will be various
small groups, each having its own culture.
Eg: In India, we have different cultural groups such as Assamese, Punjabis, Kashmiris, etc.
The marketing manager should take note of these differences before finalizing the marketing
strategies.
Culture changes over a period of time. He must try to anticipate the changes new marketing
opportunities.
INDIAN MARKET & ITS ENVIRONMENT
It is difficult to analyze the environmental factors affecting Indian market. Ours is a vast country
with various religions, caste, sub-caste, languages, culture, etc. Each of these factors operates at
different levels & art different places.
1. Vast Market: The Indian market is the second largest in the world considering its
population. If consumption is considered, it has one of the lowest levels of consumption.
Hence, it can be said that majority of the market for various products has been left untapped.
Region-wise, the Indian Market can be broadly classified into Four Parts:
a. Northern Market
b. Southern Market
c. Western Market

15. 15
d. Eastern Market
2. Rural Market: Majority of the Indians live in rural areas. Hence, rural markets have a
significant influence on the company’s marketing strategy
3. Cultural & Religion: India is a country with many religions each religion has its own
culture & most of the Indians are religious. The culture affects the habits of people. Hence, it
has to be considered before deciding what is to be sold.
Eg: Jainism completely prohibits the consumptions of meat. Hence, it is difficult to sell meat
where Jains are living
4. Economic Conditions: India is one of the fastest developing countries. The standard of
living is increasing every year. This indicates that the marketing opportunities in our country
are vast.
5. Government: We are following the policy of mixed Economy i.e., Market is neither totally
free (Capitalism) nor it is fully controlled (Socialism). The government encourages
consumerism & hence he marketers are gradually accepting the marketing concept.
6. Intermediaries: Our country has two types of distribution system. They are:
a. Public distribution system, where essential commodities are directly sold to the
consumers through government agencies.
b. Open distribution system, where the products are sold in the open market. The open
distribution system in our country is the traditional one. The chain of distribution is once
of the most efficient chains of the world. Wholesalers, retailers, brokers, etc are the
intermediaries operating in our country.
7. Press: Press in our country is not as sophisticated as in the developed countries. Most of the
newspapers & magazines are controlled by big business houses.
8. Technology: Most of the company/companies in our country import the technology from
other countries. Investment in research is one of the lowest in the world.
Rural Marketing Challenges & Opportunities:
Majority of Indians live in villages & most of them are farmers. Rural markets in our country are
changing rapidly. Many companies have not tried to find out the needs of rural consumers.
Hence, many rural markets have been left untapped.
Problems of Rural Marketing:
About 80% of villages do not have proper infrastructural facilities like transportation,
communication, etc. People in the rural market purchase in small quantities; usually, they behave
as group. Hence, it is difficult to influence their behavior to deliver a product directly to the rural
consumers; a company has to incur double the cost of what it incurs in case of urban consumers.
Illiteracy among villagers makes it difficult to promote products. Most of them purchase because
of their belief.