Marketing

Marketing and its philosophies and functions, the marketing mix, classes of products, branding, packaging and labelling, pricing, channels of distribution and promotion.

Key ideas

Marketing is a social process in which people get what they need by creating and freely exchanging things of value.
Philosophies: production (cheap, widely available), product (best quality), selling (push the buyer), marketing (satisfy customer needs) and societal marketing (needs plus society’s long-term welfare).
The marketing mix is the four Ps: product, price, place (channels and physical distribution) and promotion.
Consumer products are convenience, shopping or speciality products; industrial products are materials and parts, capital items, and supplies and services.
A brand name can be spoken; a brand mark is a symbol that cannot; a brand given legal protection is a trademark.
Packaging has three levels (primary, secondary, transportation) and identifies, protects, eases use and promotes; a label describes, grades and gives information the law requires.
Channels: zero level (maker to consumer), one level (through a retailer), two level (wholesaler and retailer), three level (agent, wholesaler and retailer).
Promotion uses advertising (paid, impersonal, by an identified sponsor), personal selling, sales promotion (short-term offers) and public relations.

Remember

Price after a discount	list price − discount% of the list price
Consumer’s price, two level channel	maker’s price × (1 + w ÷ 100) × (1 + r ÷ 100)
Cost per 100 g with a quantity gift	price ÷ (new weight ÷ 100), where new weight = weight × (1 + gift% ÷ 100)
Instalment under 0% finance	price ÷ number of instalments
Factors affecting price	cost, utility and demand, competition, government regulation, pricing objectives, marketing methods
Physical distribution	order processing, transportation, warehousing, inventory control

Watch out

Adding the wholesaler’s and retailer’s margins together instead of applying them one after the other.
Confusing the selling concept (push the product) with the marketing concept (start from what customers need).
Calling a toothpaste tube a secondary package: the immediate container is the primary package.

Worked example

A two level channel: the maker sells a product to the wholesaler at ₹530; the wholesaler adds 5% and the retailer adds 25%. What does the consumer pay?

Working: 530 × 1.05 × 1.25

Answer: ₹695.62