Components of marketing
Marketing is the totality of activities involved in the transfer of products and services from the producer to the consumer. The different components of marketing are called elements of marketing. They are: market, customer, demand and marketing process. They play essential role in marketing.
Market is a convenient place where sellers and buyers meet and exchanged products and services for their mutual transaction. Buyers and sellers interact directly or indirectly to exchange their goods and services in terms of monetary value. The word market is derived from latin word ‘mercatus’ which means trading place where buyers and sellers exchange goods and services. Modern concept of market states that meeting of mind is essential than face to face meeting of people. Buyers and sellers can interact with each other with the use of modern means of communication i.e internet, fax, e-mail, telephone etc. The various concepts of market are as follow:
Concept of market
According to this concept, market is a place where buying and selling of goods and services takes place. There are some comfortable place where sellers and customer meet together and goods & services are exchanged for money. This is traditional concept and gives importance to place. For example: Shanischare Bazar, krishithok etc.
This concept of market states that market is a place where commodity is found. It gives priority to the buying and selling activity of the products or services. This concept of Market focuses more on commodity of product without priority on any particular place or area.
3. Exchange concept:
According to exchange concept market is an exchange process. This concept gives priority to direct and indirect meeting between the buyer and seller having their free relationship. It highlights to the exchange activities that takes place between product or services of seller and money of the buyer.
According to this concept, price making forces of demand and supply tend to operate within certain area freely through the means of transportation and communication. Informed buyers and seller can establish close and continuous relation to carry on exchange of goods and services without face to face meeting. They can use modern means of communication like internet, fax, telephone, etc. It is also known as region concept of market.
This concept of market is also called customer concept. Aggregate demand by potential buyer for any product is known as market. It gives more priority to the aggregate demand of any product or service. According to this concept market means a group of people that have the need to satisfy, have money and will to spend it to satisfy their want.
This is modern concept of market where internet services are used seller can inform about the product with the help of internet services. Buyers can get product of producer from any corner of the world easily. It refers to an electronic exchange environment based on the information and communication. Here, face to face meeting isn’t essential. This concept is also known as cyber concept.
Types of market:
Market can be classified on the different basis:
a) On the basis of Geographical Areas:
On the basis of geographical area market can be classified into the following four types:
- Local market:
When production, buying and selling activities are performed in a local area it is called local market. Goods are produced by local producer and are consumed by local people. Especially perishables products like meat, fish, vegetable, fruits etc are traded in local market. Also market of bricks, sand etc comes under this market.
2. Regional market:
When the market is extended at regional level, it is known as regional market. For example: special types of boots used in Himalayan region, curd of bhaktapur, special type of ornaments used by tharu women etc belong to regional market.
When buying and selling activities are confined within the boundary of nation, it is called national market. Goods can be produce at any place of the country but are sold nationwide for example: market of rumpum, noodles gold star shoes, Dhaka clothes etc.
When buying and selling activities are done with more than one nation, it is known as international market. It is also known as global market. Goods and services produced in a country are sold globally. For example: Market of Samsung product, Adidas etc.
- On the basis of subject matters of sales:
On the basis of what is being sold the market can be classified into the following four types:
When physical product are bought and sold, it is known as commodity market. The commodity concept of market gives emphasis on the commodity or physical product. For example; Clothes market, carpet market, garment market, Vegetable market etc.
The market in which services are provided rather than physical goods, it is service market. In this market the customer do not get the physical product but they get certain types of services for their satisfaction. The consumer get satisfaction after the use of services. For example; service that we get from hotel, hospitals, transportation etc.
3.Money market/Financial Market
The market in which there is money or financial instrument transactions made is known as money market. In such type of market money, shares, debentures treasury bills are exchanged. Generally, banks financial institution perform monetary transaction. They accept deposit, provide loan, transfer fund, etc.
4. Labor market:
There is needed of different kind of manpower i.e. skilled, semiskilled unskilled, workers in an organization. It develops nation employers and employees get together in particular place and employees are selected on the basis of requirement of organization. In, Nepal people get employment in different countries like Qatar, Malaysia, Dubai, etc through the labour market.
On the basis of competition:
In this market, there is single seller and large number of buyer. The market where production, distribution, price determination activities are performed by a single person or a company. The seller is price marker. Nepal oil corporation, Nepal Electricity Authority, etc have monopoly power in Nepal.
2.Perfect competition market:
The market in which there are large number of buyers and sellers and homogeneous product are bought and sold is called perfect competition market. The price of the product is determined by an interaction of buyers and sellers. The price of the product is same in the entire market.
3.Imperfect competition market:
The market in which there are large number of buyer and seller selling different product is called imperfect competition market. There is no perfect competition between buyers and sellers. Buyers are not aware of the product and price in this types of market.
On the basis of volume of Business
The quantity of products and services bought or sold in the market is known as volume of business. According to the volume of business the market can be classified into following two types.
When goods are bought or sold at a large quantity is known as wholesaler market. Wholesalers buy goods from producer or agent in large quantities and sell them to retailers. There is direct relationship between producers and wholesalers in wholesale market. Purchase from producer, bulky buying, reselling, low price are the main features of wholesale market. There is involvement of producer, business users and retailer in such market.
When goods and services are sold from retailer to final consumer is called retail market. Here, goods are sold for ultimate consumption. A retailer purchase goods in large quantity from whole seller or producer then sells smaller quantity to ultimate consumer. Consumer purchased required quantity of product from retailer for personal consumption or family members.
- On the basis of control
On the basis of controllability market can be classified into following two ways.
1.Controlled market/ Regulated market
The market which is regulated by government or any organization is called controlled market. The price of the goods, production quantity, volume of supply, quality of goods, entry system in market etc are determined by government or trade association. Foreign exchange market, market of petroleum products are example of controlled market in Nepal.
2.Uncontrolled market/ Unregulated market
The market which is not regulated by government, any organization or association is uncontrolled market. The market is freely functioning. They are free to determine the price, production of goods, sale of products in market. In this market price and quality depend on competition.
- On the basis of delivery goods:
On the basis of delivery market can be classified into following two types:
The market in which there is immediate transaction goods and services in spot, it is spot market. In this type of market transfer of ownership between buyers and sellers takes place immediately. Also the buyer pays the price of goods immediately. It is also known as cash market or physical market.
The market in which there is agreement between buyer and seller to sell goods and services in future, it is future market. There is no transfer of ownership between buyer and seller immediately. In this type of market agreement is made at present but transfer of ownership performed in future. Payment price, discount, commission, delivery time etc. are fixed in the agreement in future market.
- On the basis of sellers’ position:
On the basis of sellers’ position market can be classified into following three types:
In this market, producer sells goods to consumer directly. Here, the seller position is in first place. In this market buyers and sellers often negotiate and transact the business directly without any intermediaries. For example: farmer selling goods to manufacturing industry.
The market in which seller position is in second place is called secondary market. Goods are first sold by producer to wholesaler and then wholesaler to retailer. In this market the consumers buy goods from secondary seller. For example sell of shares by a shareholder is through stock exchange.
The market in which seller position is in last place is called terminal market. This is the stages where seller sells goods to buyer for the last time. Goods sold by the retailer to final consumer is terminal market.
# Features of Nepalese market:
1.Difficulty in physical distribution:
Nepal’s geographical condition is quite difficult. Road transportation hasn’t reached in many parts of hilly and Himalayan region. Thus, there is difficulty in distribution of goods and services in different parts of the country.
2.Long distribution channel:
Due to poor economic condition, difficulty in physical distribution, lack of storage facility etc. Nepalese producer can’t sell goods to consumers directly. There is always involvement of wholesaler and retailers which makes cost of goods higher. Both producer and consumers are exploited due to involvement of middleman. Producer sells goods at lower price and consumers pay higher price for the same goods.
3.Less effective promotional tools:
Many of Nepalese people are poor and illiterate. Illiterate people can’t use print media that is newspaper and magazine. The other means of advertisement like Radio, TV, Internet, etc are not affordable by poor people.
4.Covers small area:
Nepal is small country with less number of people. Therefore, Nepalese market is smaller in comparison to other market of developed nation. Few producers can easily fulfill the needs and wants of customers. So, foreign producers are not willing to invest for mass production and promotion in Nepal.
5.Lack of organized market:
Nepalese market lacks of organized market. There is no unity between producers, distributors and consumers. They operate individually in the market. This has reduced the productivity of producer while the consumers have to pay high price for the goods and services. Government agencies are also found passive in managing organized market.
6.Provision of standard:
There is no provision of standard for different product in our country. Though there is provision of NS standard, the government agencies are not monitoring the market. Lack of provision of standards consumer couldn’t get the high quality of product a service.
- Purchase related with basic good:
Most of the Nepalese people are poor. The purchasing power of Nepali people is low. They demand more for basic goods i.e. necessaries for life. The demand for luxurious goods is low in Nepalese market.
Buyers are the one who purchases goods and services either for personal consumption or for reuse and resell purpose. Costumers are regarded as king of business. The customer is the one side of exchange relationship hence center point of marketing activities. All activities of business are directed towards satisfaction of customer’s needs and wants.
Classification of Buyers
Buyer can be classified as follows:
- Individual Buyers
- Institutional Buyers
- Individual buyers:
The buyer who purchase goods either for personal consumption or consumption for other people is known as individual buyer. Individual buyers also known as non-institutional buyers. Unlimited consumption is the main intention of individual buyers. They usually purchase goods from retailer. Food grains, vegetable, medicines, clothes etc are purchased by individual buyer.
Features of Individual buyers
The main features of individual buyers are as follows:
Individual buyer purchase goods and services for consumption, not for resell purpose. They purchase either for personal or consumption for other people. The motive behind their purchase is final consumption.
2.Number of buyers:
There are large number of individual buyers who purchase goods in small quantity frequently. Individual buyers are high in number.
3.Knowledge about the product and market:
Individual buyer don’t have perfect knowledge about the product they are buying in market. The lack of knowledge about the different aspects of marketing activities they take suggestion from friends, family members, neighbors, etc.
Individual buyer usually purchase goods in lesser quantity. They purchase to fulfill their current needs.
Buying method of individual buyer is quite simple. They needn’t have to consider about their budget limit, legal restriction or other formalities. The individual buyer can purchase products easily according to their needs.
6. Purchase through retailer:
Individual buyer purchase goods through retailer in small quantity.
- Institution buyers:
The buyer who purchase goods for resale purpose or reuse or production of finish product is in institution buyer. Institutional buyers are also known as organizational buyers. Raw materials, stationary, fabricating materials, operating supplies, installations (plant and machinery) etc can be taken as examples. Institutional buyers include producer, wholesaler, retailer, service institutions, government institutions, etc.
The main features of institutional buyers are as follows:
Institutional buyer purchase goods for resale purpose, reuse or to make other products and services and conduct the organization operation. They do not buy for personal use.
2.Number of buyers:
The number of institutional buyer are few. They purchase in large quantity which involves high cost. These types of buyers have to follow certain rules and regulation of buying.
3.Knowledge of market:
Institutional buyer have perfect knowledge about the product. They are well informed about the alternative sources of supply of competitive products, price and quality of goods. Minor mistake in buying involves high cost.
Institutional buyer need to consider their budget limit before making purchase. Budget limit depends on the economic condition of the firm and demand of the market.
# Buying motive:
The reason why consumer purchase goods is called buying motive. There are different buying motives of different people. The needs, wants, preferences and desires affect buying motive. Buying motive can be classified as follows:
a) Emotional motive:
The motive related with emotion, feeling and attitude is called emotional motive. It includes fear, love and affection, curiosity, fashion, etc.
Different buyers purchase goods or services due to fear. Fear of death, poverty, future etc. are the main motives of buyers. People purchase life insurance policy, medicines, weapons, door lock, bank lockers etc because of fear.
2.Love and affection:
Due to the regular contact with the family members or others members of society develop love and affection to each other. Buyers may purchase goods and services because of love and affection with their family members, friends, neighbor, etc. buying of Baby food, dolls, costly ornaments etc. are purchase in buying motive due to love and affection.
People are curious by nature they want to know something more. They buy goods to satisfy their curiosity. They like to use, see, experiences new things. For this purpose, they purchase newspaper, smoking, alcoholic drink, visit new place, etc.
Some buyers are fashion conscious. They buy the products and services getting influenced by the fashion motives. The goods that use by movie stars, favourite sportspersons want to buy more people.
People become monotonous doing their daily work. To take break from their daily life routine. They like to visit new places, watch movies, buying cards, TV, DVD etc. This is called recreational market.
b) Prestige motive:
Some people buy goods to promote their self-image and protection of their ego. This is called prestige motive. It can be classified as below:
People always wants praise from other. They try to prove themselves more powerful, strong, rich, etc. To fulfill the motive, people purchase expensive goods, live in standard hotel, use high quality of cosmetic, etc. Such buying of motive of people is vanity motive.
Pride is one of the major buying motive of individual buyers. People purchase product for the satisfaction of self-respect and self-image. They purchase goods according to the heel of their social class. They demand for higher level expensive goods and services to maintain their status in society.
Emulation motive also one of the major buying motive of individual buyer. When buyer purchase better quality goods than their competitor, then it is called emulation motive. Purchase of high quality T.V in locality, use of expensive ornaments, etc comes under emulation.
- Rational motive:
When buyer purchase goods considering necessities, purchasing power, price of product, product utility, proper testing, observing and comparing etc is called rational motive. Buyer analysis advantages and disadvantages of the product before making purchase. It is based on sound judgement. Rational motive has classified as below:
Rational buyer tries to purchase goods and services which are available at lower price. If they find goods at cheaper rate, they buy the product. It is profitability motive. They try to get more profit and discount when they purchased products or services.
Nowadays, people have become health conscious. They give major importance to their health so their buying motive are often govern by health related factors. They buy healthy fruits and vegetables, pure drinking water, materials for physical exercise, medicine, etc.
The buyer purchase goods and services that provide more satisfaction. They try to purchase products or services that have higher utilities. For this, they visit different shops seeking comparatively satisfactory products or services.
Security is a key necessity of human being. People purchase goods and services regarding personal and property security motive. Purchase of life insurance policy, deposit money in bank, weapon purchase comes under security motive.
- Comfort, Pleasure and convenience:
Buyers always seek more comfort, pleasure and convenience. They want to make their life easier. They demand products and services that aid luxury to their life. For this, they purchase washing machine, sofa, LED TV, refrigerator , car, comfortable house etc.
- Patronage motive:
Some buyers are loyal towards specific brand or store. Buying from such shops gives them more satisfaction. This is called patronage motive. Patronage motive are as follows:
- Brand loyalty:
Buyers have special attraction towards certain brand of product. This is the brand loyalty. They buy goods of particular brand. It is one of the important motives that create willingness to buy particular brand or product.
- Store loyalty:
Some buyers purchase goods only from a particular store because of comfortable place, quality goods, quality services, lower price etc. This is the store loyalty. It create willingness to buy products and services from a particulars store.
# Buying process of individual buyer:
The major steps of buying process of an individual buyers are mention as below:
- Need recognition:
Need recognition is the first and most important steps of a consumer buying process. The starting point of buying process is a perceived want or desire unit and unless the need is fulfilled, the person is tension charged or feels restless. There are bundles of human desire but only the most urgent want are fulfilled because of limited budget.
- Information search:
Information search is the second step. After need is recognized, the buyer goes for collecting information where the product is available. He/she gets information through family members, friends, neighbor, advertisement, etc.
- Evolution of alternatives:
It is the third step of consumer buying process. Evolution is the mental trial of the product or services. The buyer assigns relative value to different products based on accumulated information. The buyer makes his mind to accept or reject a given product or services. Product characteristics, brand images, conveniences, facilities and concessions are taken into account while evaluating the product.
- Purchase decision:
It is the fourth step of consumer buying process because it completes the exchange process. After evaluation of alternatives, purchase decision should be taken. Purchase maybe a trial or adoption. Trial purchase are done for non-durable items while adoption purchase is done for durable items.
- Post- purchase behavior:
It is the final step of consumer buying process. Post purchase experience maybe a set of positive or negative feelings. Positive feeling or satisfaction will result in repeat purchase, negative feeling or dissatisfaction result in anxiety. If the product provides utility as expected, the consumer become satisfied otherwise they become unsatisfied. The marketers can reduce negative attitudes towards brand through personal relation, warranties, service after sales and so on.
# Buying process of institution buyer:
Institutional buying process is a complex system which goes through different stages. The major steps of institutional buying process are mention below:
- Need recognition:
Need recognition is the first step of institutional buying process. In this step the institution recognizes a need that can be made by purchasing of goods and services. An organization recognizes a need when there is a shortage of raw materials, materials, break-down of machines, or a new product have been chosen.
- Need description:
It is the second steps of Institutional buying process. In this step the organization ascertain the general characteristics, quality and quantity of needed goods and services. The department that makes use of these items should give details of quality and quantity in a prescribed manner to the purchase department.
- Preparing product specification:
It is the third step of Institutional buying process. The department using the product must prepare accurate statement of specification of needed item. If there is slight mistake, whole purchase procurement go waste.
- Search for suppliers:
Search of suppliers is the fourth step of organizational buying process. At this step the organization tries to find the best suppliers or vendors from the potential suppliers. If the item is of routine type, there is no special search effort since it can be bought from regular supplier. If it is new, extensive search for potential suppliers is the most.
- Analysis of proposals:
It is the fifth step of institutional buying process. After analyzing the list of potential suppliers, the organization invites the qualified suppliers to submit proposals. The buyers need to see specific terms of the proposals made by each supplier. The buyers look at the terms and conditions of the proposed suppliers.
- Selection of suppliers:
Selection of suppliers is the sixth step of institutional buying process. At this step the organization must select an appropriate supplier. The buyer must select the supplier whose terms and conditions are looks feasible. The buyers look at the reliable and economical sources of supply.
Placing the purchase order:
It is the seventh step of institutional buying process. At this stage, the buyer places official order to the vender. In the purchase order the terms and conditions of purchase like packaging, mode of transport, delivery place, mode of payment etc should be mention. The order is processed, shipped out, inspected and paid for.
- Post purchase evaluation:
It is the final step of institutional buying process. Here, both product and suppliers are evaluated. If the buyer is convenient towards the terms and conditions of supplier, it makes repeat purchase. If not it goes for another supplier.
Factors affecting individual buying decision:
Individual or non- institutional buying decision affected by various factors mention below:
- Personal factors:
The personal factors or demographic factors influences the consumers’ buying decision. The major factors are:
Buyers buying decision is affected by their age. Buyers like different goods as per their age and decide to buy accordingly. Children demand toys, teenagers demand sports materials and delicious food item, select fashionable goods and old consumers give importance to quality, durability and discount on goods and services.
Family life cycle stage:
Life cycle stage of family also influences consumers’ buying behavior. It includes young singles, married couples with children and older adults without children. Nowadays, the stages are growing like unmarried couples, couples marrying later on life, childless couples, single parent etc on which marketers have gave attention.
Life style of people influences the consumers’ buying decision. It is a person’s pattern of living. There are differences in hobbies, shopping, sports, social events, interest on food, families, fashion and opinions about themselves, social issues, business, product etc.
It influences to great extent on buying decision. There are different occupations like farmer, engineers, teachers, managers etc. who demand products according to their needs.
Buying decision of customers affected by self-image. Self-image of every customers isn’t similar. They purchase according to their image. For example a certain customer having a image of certain hero in a film may desire to buy clothes which suit hero.
Buying decision is also affected by gender. Female spend more time to purchase and are not affected by advertisement. They give importance to price, quality and warranty of products. While male are affected by advertisement. Male give importance to brands and shop rather than quality.
The economic variations like inflation, depression etc. compels marketers to change their strategies to capture the existing market.
Personal income denotes the ability of purchasing power of a customer. If income level of a customer is high the purchasing power and willingness to purchase become high. They choose the high quality of goods and services. Also they take quick buying decision. Individuals having low income buy low quality of product and services.
Family income of an individual also effect his/her buying decision. An individual usually lives in a family. Expenses of all the members of a family managed by guardians of the family. Thus, the income level of a family affects the purchasing decision of an individual. Change in income of family change the purchasing power of an individual.
Liquid assets such as cash balance, bank balance, stock of gold, silver, shares, debentures, bond etc. affect the individuals buying decision. Consumers having such liquid assets have higher purchasing power.
Credit facilities also influences purchasing power of an individual buyer. Availability of the credit facility increases the spending level of a consumer. Not availability of credit facility the spending level of a consumer deceases.
The price level of a market also affects the buying decision of an individual. If the price level of products and services become high the consumers will decrease their buying activities. When the price level of goods and services decreases individual buyers take the quick buying decision.
Individual buying decision is also affected by cultural factors. Culture is the way of living, certain believes practices, norms, practices, values etc. that one perceives.
It is a set of people’s behaviors, values, preservations and wants learnt from family, social and institutional members. Cultural values and ethics keeps on changing and differs according to place or region. So, marketers need to adjust to the differences in order to get better result in marketing.
A culture consist of smaller culture group which are groups of people which share values based on common life experiences. This sub culture also includes nationalities, religion, social groups, and geographical regions. They greatly affect customer’s preferences.
The social factors includes family, reference groups, opinion leaders, and social class that influence customer’s behavior.
The personal values, attitudes and buying habits are influence by family, the members of family play the role of initiator, influencer, decider, purchaser and user in the buying process. Therefore, the marketers will be interested in the roles and influence of the husband, wife and children on the purchase of products.
Reference groups are those persons whose values, attitude or behavior influence. Reference group could be friends, family members, co-workers, celebrities, sports person, leader, etc. People buy goods looking at their behavior, attitude, etc.
Social class is determined by income, authority, power, ownership, lifestyle, education, consumption patterns, occupations, type and place of residence of individual members. It can be classified as: lower, middle and high class. Upper class people usually demand high class product while lower class demand necessaries for life.
Roles and status:
Buying pattern of individual also demands on his or her role on family, club, organization to which he belong. For example: a person work in as a principal in school plays different role as son, husband, father etc. Therefore, his buying behavior is influence by different roles he plays.
Psychological factors play important role in buying decision of consumers. The main Psychological factors that affected in personal buying decision are mentioned below:
Perception means knowledge, idea about the product or situation received by a person. Different people perceive the same situation differently. Consumers’ behavior is guided by perception. Perception can be illustrated by the example of coke while many perceive this as a drink while other perceive it as a health damager.
A person behavior changes over a time when he or she is experienced of many situations. Learning therefore in the change of behavior of persons arises from experiences. In marketing, brand loyalty and brand images are learnt by a person through trial and error and change in person’s behavior is brought by the practice or past experience.
It is a thought or conception build up by the individual about any goods, services, brand, person, company or organization etc. Buying decision is also affected by someone’s feeling. For example: If someone believes Hulas product is best quality, he/she purchase that product.
It is a state of mind or feeling that interacts with perceptions, thinking and reasoning. Attitude makes the person decide to buy or not to buy the products or services. The marketers price to fit his or her product into the existing attitude of consumer rather than changing their attitude.
It is a power that directs consumer to buy the goods and services. People done their activities according to their motivation. Motivation arises from needs such as need of hunger, thirst or psychological needs such as need of recognition, esteem or belonging.
DEMAND: Concept of Need, Want and Demand
Human needs represent the state of self- deprivation of an individual. The starting point of marketing is human needs. Human needs can be psychological, social, cultural and individual. There are unlimited human needs. Different new inventions are invented to fulfill the human needs. People make different efforts to meet their needs.
Wants are desires for specific satisfiers of needs. To satisfy unlimited needs a person desire for different product and services. The desire to satisfy the need is called want. Wants depend on the culture, social status and individual personality.
A demand is a human wants with ability to pay and willingness to pay price for a specific goods or services. A person wants only those goods which provide him/her maximum satisfaction.
Creation of Demand
Creation of demand is the act of converting needs and wants into demands. It is a process of motivating potential customers to make them actual customers. A consumer should have motivated to creating demand. Demand creation is not easy work. It requires a skillful balance of creativity insight and rigor. For selling process creation of demand for goods and services is very important. The main methods for creation of demand of a customer are mentioned below.
Advertisement is an important method of demand creation. It is a non- personal communication process where the customers are given information about new goods and services to arise curiosity in them for buying the product and service. It provides detail information about product and services like quality of goods, design, variety, discount, service and other features in newspapers, radio, television internet, booklets, pamphlets etc.
Personal selling is one of the important method of demand creation. Personal selling is oral communication with the potential customer for the purpose of selling goods and services.
Sales promotion is an important and popular methods of sales promotion. It is a demand stimulating activity. Sales promotion activities are display and decoration of products, trade fair, exhibition, free distribution of sample, gifts program, discount on additional purchase etc. It helps to increase sales volume of the organization.
Publicity is also an important methods of demand creation. It is an act of disseminate information or promotional materials to attract public about organization and products and services. It can be done through press conference, news broadcasting, mass meeting, articles and publications.
Concept of marketing process
The process of the analyzing the opportunities in the markets , selecting target markets and development of the marketing mix, selection of competitive advantages factors are called the marketing process. The marketing process is mention under:
1.Locating marketing opportunities:
This is the first step of marketing process. It introduces new opportunities to the firm for a competitive existence in the market. A change of technology provides opportunities for new product. The increase in consumers’ purchasing power may provide the opportunity of marketing luxury products and services. Similarly socio- cultural dynamism may bring new demand.
2.Identification of the target market:
This is the second step of marketing process. A firm must identify its target customers and total market. The total market of the products and services should be divide into smaller market segments having similar characteristics such as similar income group, age group etc.
3. Develop marketing Mix:
It is a set of controllable marketing variables. The firm blends such variables to produce and satisfy the wants of the target. After the opportunities have been identified, analyzed and assessed the marketing manager develops alternative marketing mix for each market segment. Now, the firm has to develop several strategies options and then to analyze the viability of the options in the term of long term profitability and survival of the organization.
4.Select competitive advantage factors and achieve growth:
A firm must deliver superior value to customers to outperform its competitor. An organization gains profit when it delivers better products and services than other competitors.
Structure of the Marketing Process
Persons involved in marketing build marketing process structure. They conduct different activities. Those important persons are:
Suppliers and Processors:
The process of marketing begins with the suppliers. It supplies the various input to the firm and the customers. They supply raw materials, labor, capital, technology and information for production on time.
- Factory, mine, and processors supply raw materials.
- Employment exchanges and manpower agencies supply workers.
- Manpower agencies supply labors.
- Research firm supplies information.
- Consulting firm supply technology.
- Bank, finance companies supply capital.
The function of firm is to convert its inputs into useful products and services. It adds values to the product n four ways:
- First, they develop useful and efficient products for customers.
- Second, they provide various services after sales, such as delivery, installation, advice, warranty and so on.
- Third, they use competent salespersons to communicate, promote and sell the products.
- Finally, they create images of the product which deliver a high level of satisfaction to buyers.
They are the part of the marketing process. They buy from the same suppliers and processors. They influence the firm in the following ways:
- It influences the price of input because they buy from the same suppliers and processors.
- It influences the sales, market share, price, revenue, and the cost of the firm as they also sell to the same market and customers.
Marketing intermediaries help to facilitate the flow of goods between the place of production and the market. Marketing intermediaries are agents, distributors, dealers and retailers.
- They search for potential buyers for the product.
- They take the title of ownership of the product.
- They maintain a communication link between the firm and the marketplace.
Customers are the main target of the marketing process. All the activities of the organization in the marketing are targeted to fulfill the wants and desire of customers. Customers are of two categories-institutional and non-institutional. Institutional buyers are manufactures, resellers, government agencies, and social institutions. Non- institutions customers are known as consumers.
Facilitating institutions play a key role in marketing process. Examples of such institutions are transport companies, insurance companies, market research agencies and advertising agencies,etc. The functions of the facilitating institutions are as follows:
- Transport companies physically move the product from one place to other place.
- Insurance companies provide cover for loss in transit or storage.
- Market research agencies provide vital information to the firm about demand, product trends, consumer needs etc.
- Advertising agencies design and implement the firm’s promotion campaigns.