CBSE Class 12 Business Studies Revision Notes Marketing 

Marketing

 

Marketing is a social 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.

All the modern definitions of marketing are based on the philosophy that satisfaction of consumer is the basic purpose of business.

Features of Marketing:

1. Needs and Wants: Marketing involves identification of needs and demands of customers and then developing a product or service that satisfies those needs or wants.

2. Market Offering: Market offering refers to the complete offer for a product or service including its features, quantity, quality, benefits etc. at a given price.

3. Customer Value: A customer buys a product or service if he feels that its benefits are more than the cost.

4. Exchange Mechanism: Marketing involves exchange of goods or services for money or anything of value. 

Marketing concepts or philosophies:

1. Production concept: Firms following production concept focus on reducing the cost of production by means of large-scale production and distribution. 

2. Product concept: Firms following the product concept focus on producing products of good quality as they feel that customers will buy only high-quality products.

3. Selling concept: Firms following the selling concept believe that a customer will buy a product only when he is persuaded and convinced to buy by undertaking aggressive selling and promotional efforts.

4. Marketing concept: The marketing concept focuses on consumer satisfaction. Firms following marketing concept produce and sell according to the wants and needs of customers.

5. Societal Marketing concept: The focus of societal marketing concept is on consumer satisfaction as well as social welfare.

Functions of Marketing:

1. Gathering and analysing market information: This is necessary to identify the needs of the customers and take various decisions for the successful marketing of the products and services.

2. Market planning: It involves developing appropriate marketing plans so that marketing objectives of the organisation can be achieved.

3. Product designing and development: Another important marketing activity or decision relates to product design (i.e. its shape, style etc.) and development.

4. Standardisation and grading: Standardisation refers to producing goods of predetermined specifications.

 Grading is the process of classification of products into different groups, on the basis of some of its important characteristics such as quality, size, etc.

5. Packaging and labelling: Packaging refers to the act of designing and producing the container or wrapper of a product. It helps in protection and promotion of the products.

Labelling refers to designing the label to be put on the package. Labels are useful in providing information about the product.

6. Branding: Branding refers to the process of giving a name or a sign or a symbol etc., to a product.

7. Customer Support Services: Customer support services (after sales services, handling customer complaints, procuring credit services, maintenance services, technical services) aim at providing maximum satisfaction to the customers, which is the key to marketing success.

8. Pricing: Fixing the price of products is an important function of marketing. Various factors that should be considered before fixing the price of a product are its costs, demand, competition, government policy, marketing objectives and marketing methods.

9. Physical Distribution: Another important function of marketing is to make the goods and services available at right place, at right time to right people.

10. Transportation: Transportation helps in movement of goods from manufacturers to consumers.

11. Warehousing: Warehousing helps in proper storage of goods until they are sold. 

12. Promotion: It refers to informing the potential customers about a product and persuading them to buy it. Elements of promotion are advertising, personal selling, sales promotion and public relations. 

Marketing Mix: 

Marketing mix refers to the set of tools used by the firm to pursue its marketing objectives in the target market.

Main elements or components of marketing mix are

1. Product: Product mix involves the decisions regarding the product such as quality of product, design of product, branding, labelling, packaging etc.

2. Price: Price mix involves the decisions relating to fixing the price of a product

3. Place/physical distribution: Place mix involves decisions relating to making the firm’s products available to the target customers.

4. Promotion: Promotion mix refers to decisions relating to activities involving informing the potential customers about a product and persuading them to buy it. 

Product Mix

Important Product Decisions:

1. Branding: Branding refers to the process of giving a name or a sign or a symbol etc., to a product.

2. Labelling:  Labelling refers to designing the label to be put on the package. Labels are useful in providing information about the product. 

Functions of Labelling:

1. It helps in describing the product and specify its contents.

2. It helps in promotion of the products.

3. It helps in identifying the product or brand.

4. It helps in grading the products into different categories.

5. It helps in providing information required by law.

3. Packaging: Packaging refers to the act of designing and producing the container or wrapper of a product. 

Functions of Packaging:

1. It provides protection to the product.

2. It helps in identification of product.

3. It helps in promotion of product.

4. It facilitates use of the product.

Levels of Packaging:

1. Primary package – It includes immediate package of a product. for example, toothpaste tube.

2. Secondary package -It refers to additional layers of protection that are kept till the product is ready for use, e.g., a tube of shaving cream usually comes in a card board box.

3. Transportation package- It refers to further packaging necessary for storage, identification or transportation.

Price Mix

Price mix - involves decisions regarding the setting of price of the product.

Factors affecting the price of a product:

1. Cost: The price of a product should at least cover its cost.

2. Demand: If demand for the product is higher, high price may be fixed. 

3. Competition: If the competition is high, lower price should be charged.

4. Marketing methods: If a business is using many marketing methods and providing services, then it will charge a higher price.

5. Government: Maximum selling price of some products like essential goods and drugs are fixed by the government.

6. Pricing objectives: A firm may have various objectives: 

• Sales maximization - lower price will be set

• Increase in market share – lower price will be set

• Becoming quality leader - generally higher price will be set

Place Mix or Physical Distribution

Channels of distribution refers to the medium through which product is passed from the manufacturer to the consumers. 

Types of channels of distribution: 

1. Direct or zero level channel - In this, product is sold by the manufacturer to the consumer directly without the help of any intermediaries.

2. Indirect channel - In this, product is sold by the manufacturer to the consumers with the help of intermediaries.

• One level channel - In this channel, only one intermediary (i.e. retailer) is involved between the manufacturer and the consumers. 

• Two level channel - In this channel, two intermediaries (wholesaler and retailer) are involved between the manufacturer and the consumers.

• Three level channel - In this channel, three intermediaries (agent, wholesaler and retailer) are involved between the manufacturer and the consumer.

Components of physical distribution

1. Transportation: Transportation helps in movement of goods from manufacturers to consumers. It helps in removing place gap.

2. Warehousing: Warehousing helps in proper storage of goods until they are sold. It helps in removing time gap.

3. Order processing: Order processing should be accurate and fast.

4. Inventory control: Optimum level of inventory should be maintained.

Promotion Mix

Promotion refers to informing the potential customers about the product and persuading them to buy the product. 

Tools of promotion mix

1. Advertising: Advertising is a paid form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor.

Features of Advertising:

1. It is a paid form of communication.

2. It is an impersonal method of promotion where there is no there is no direct face-to-face contact between the prospect and the advertiser.

3. It is undertaken by some identified individual or company.

2. Personal selling: Personal selling involves face-to -face contact between the seller and prospective customer with an intention to sell product. 

Features of Personal Selling:

1. It is a personal form of communication.

2. It allows salesperson to develop personal relationships with the prospective customers. 

3. Sales promotion: Sales Promotion refers to the short-term incentives given by the firm to increase its sales.

Techniques of sales promotion include samples, discounts, product combination etc. 

4. Public relations: Public relation involves programmes designed to promote the image of the organisation.

It is done through

• News / newsletters

• Press releases

• Annual reports

• Speeches

• Organising events, conferences, seminars etc.