Tag: Industrial Law Notes

Market Research

It is important for businesses to know and understand preferences of their consumers. Conducting research is one of the best ways of achieving customer satisfaction, reduce customer churn and elevate business.

Benefits of an Efficient Market Research

• Make well-informed decisions: The growth of an organization is dependent on the way decisions are made by the management. Using market research techniques, the management can make business decisions on the basis of obtained results that back their knowledge and experience. Market research helps to know market trends, hence to carry it out frequently to get to know the customers thoroughly.
• Gain accurate information: Market research provides real and accurate information that will prepare the organization for any mishaps that may happen in the future. By properly investigating the market, a business will undoubtedly be taking a step forward, and therefore it will be taking advantage of its existing competitors.
• Determine the market size: A researcher can evaluate the size of the market that must be covered in case of selling a product or service in order to make profits.
• Choose an appropriate sales system: Select a precise sales system according to what the market is asking for, and according to this, the product/service can be positioned in the market.
• Learn about customer preferences: It helps to know how the preferences (and tastes) of the clients change so that the company can satisfy preferences, purchasing habits, and income level. Researchers can determine the type of product that must be manufactured or sold based on the specific needs of consumers.
• Gather details about customer perception about the brand: In addition to generating information, market research helps a researcher in understanding how the customers perceive the organization or brand.
• Analyze customer communication methods: Market research serves as a guide for communication with current and potential clients.
• Productive business investment: It is a great investment for any business, because thanks to it they get invaluable information, it shows researchers the way to follow to take the right path and achieve the sales that are required.

Product research

A product is any object which has an identifiable physical existence. According to Philip Kotler “A product is a bundle of physical service and provides satisfaction to the buyer.” Product planning is the starting point of all marketing decisions. Products which are marketed include physical goods, services, and ideas.

Physical goods are consumer, consumer-durable and industrial goods and services are of varied types, i.e., courier, Air lines, transport, communication and hospitality and tourism etc. Idea can be thought, patent and information etc.

Product research is essentially concerned with satisfying the need of the consumer in the best possible way by giving him the most optimum product. Product research would set out to position the product on its attributes in a manner that the desired benefits are perceived by the customer.

Product Research Product research includes the study of the following dimensions:

1. Raw Materials used in various proportions in the final mix.
2. Attributes of the product.
3. Saleable points of the product.
4. Product Planning.
5. Product Appraisal.
6. Product Classification.
7. Product Design.
8. Product Development.
9. Product Branding or Trademarks.

Product research should cover the decision-making on the following:

1. Which product should the company produce?
2. Should company expand or simplify the product line?
3. What brand, package and label should be used for each product?
4. How should the product be designed?
5. How should the product be priced?
6. In what quantities should each item be produced?

Sales Research

Marketing management depends heavily on Sales Control Research (Sales Research) for formulating marketing policies, planning and controlling marketing operation. Sales Control Research is the identification and measurement of all those variables which individually and in combination have an effect on sales.

Sales Control Research comprises substantial proportion of research work conducted by various companies’ marketing research departments. This encompasses the marketing studies pertaining to sales forecasting, market potentials, market share analysis, and determination of market characteristics and sales analysis.

Marketing intelligence is responsible for examining published information maintaining full records of sales and customer activity by the maintenance of company records and by means of field research and information supplied by salesmen and advertising agencies provides a balanced information flow to formulate suitable and effective marketing strategies.

Market analysis is undertaken to reveal a set of geographical sales potential the maximum possible sales opportunities, for all sellers of product or service in a specific area. Market potentials refer to total sales possibilities and sales forecast refers to possible units of sale of a product by a seller.

It may be noted that market potential is not the same thing as sales potential and sales forecast. Generally, the industry sales forecast will be less than its sales potential. Likewise, a company’s sales force cost will be less than its sales potential. The former is a point estimate of the future sales, while the latter represents a boundary condition which the sales might reach in an ideal solution.

In the latter sense, sales potential is to firm what market potential is to an industry or product class: both represent maximum demand response and are boundary conditions. Depending upon the sales potential existing in each sales territory, we can design the trade channels keeping in view the sales potential figures.

Consumer/Customer Research

Customer research focuses on understanding your customers by focusing on exploring their attitudes, needs, motivations and behavior as the relate to your business. This ultimately helps you better identify, understand, analyze and retain your customers.

1. Primary Customer Research

Primary research is any type of research that you conduct directly with your target customers. Its greatest advantages are that you can target it to groups or segments of your customers and specifically tailor the content to your research needs. Primary customer research includes:

Online surveys. Increasingly popular and relatively low cost, online surveys are widely used by retailers to capture insights from existing and potential customers. They can be conducted using your own customer database, or you can use third-party consumer survey panels that include your customers. If you use a consumer research panel you will have to include a question to identify your shoppers.

Mail surveys. Once the gold standard, mail surveys have fallen out of favor for quicker, less expensive options. Printed surveys are mailed and sent back in a pre-paid envelope. Response rates (the proportion of people sending back a completed survey) are often very low and the turn-around time for mail surveys to be returned is long.

Telephone interviews. Although they provide faster feedback than mail surveys, the effectiveness will be limited by the available phone numbers, particularly since you can’t solicit to cell phone numbers without permission. In addition, potential customers are often wary of being called and may be reluctant to give anything other than short answers.

Face-to-face surveys (often store exit interviews). Personal interviews conducted face-to-face (often as the customer exists the store) can be on the more expensive side, but they can also provide detailed insights from your customers. They require coordination with Store Operations, which might require more up-front time for planning.

Focus groups. Focus groups bring together a small group of consumers to discuss their opinions about products, brands, shopping and other relevant subjects. You might think of them as customer panel research. They’re a good way to get a sense of customer preferences and attitudes. However, because a focus group involves only a small number of customers, it can be challenging to apply the results to your entire customer base.

Online bulletin boards. With this consumer research example, customers opt into a three-day “group conversation” led by a professional moderator who poses questions to participants and probes answers for more details. This is an effective tool to drill down into specific issues, but is based on a small sample.

Ethnographic. This type of customer research involves observing customers in their actual environment, which might be their home, a store or online. Watching how consumers behave provides many insights, but can leave questions unanswered.

Sales data. You can analyze your transactional data to glean insights on customers. It’s a form of customer behavior research, and it can be conducted in conjunction with other types of customer market research to give you a comprehensive analysis of your customers. Learn more about customer analytics and analysis.

Customer quizzes. Another increasingly-popular survey tactic is to place a short pop-up survey on your website. This can help confirm a hypothesis you have about your target market or help define a product issue. Remember to keep it short pop-up surveys are most successful when you stick to one question.

2. Secondary Customer Research

Secondary research is data that has been compiled and organized by a third party, typically data aggregators or large customer market research companies who focus on specific industries and types of data. This includes “syndicated research,” which is research that is independently conducted, published and sold by a market research firm.

Secondary research typically measures consumer attitudes, product and brand preferences, media consumption habits, and demographic and lifestyle characteristics. It’s usually based on large research projects conducted on a national level. The results aren’t limited to your customers, although you can select demographics and other data to help you mirror your customers as much as possible.

Some secondary customer research examples include industry trends by retail-specific market research companies, such as NPD; media consumption reports by data aggregators, such as Simmons; and shopping behavior tracking by retail specialists, such as Kantar.

Since the same research results can be purchased by several companies, the cost of performing secondary research can be less expensive. These reports are useful for tracking consumer trends and providing comparisons. However, they don’t provide the same level of actionable insights on your customers as primary research, which is designed to find the “why” of a purchase and to project what could occur in the future.

3. Quantitative Customer Research

When conducting primary customer research, you can gather two basic types of information: qualitative or quantitative.

Quantitative research provides statistical information on your customers for example, the age of your customers, where they shop and whether they are aware of your brand. The most common tool used for quantitative research today is online surveys. The goal is to reach enough customers to make the results statistically reliable so you can project them across your entire customer base and have confidence in the results.

4. Qualitative Customer Research

Qualitative research examines people’s feelings and attitudes towards your product or service, and what motivates them. Focus groups are the most common tool used for qualitative research.

These are more-in-depth interviews that are open-ended and have a smaller number of participants than quantitative research. While the interviews provide in-depth information, the results should be used directionally since they aren’t broad enough to project across your entire customer base.

It’s wise to consider using a professional moderator for qualitative research. This person can help keep the conversation on track and help ensure that all participants have been heard, preventing the conversation from being dominated by a few.

Production Research

The purpose of production research is to gather information on the content of production related issues. The methods of production research could be primary research; this means researching via books and setting up focus groups to gather people’s opinions. Through this type research information is gathered to support producers to make informed decisions.

Production research is essential when planning to develop a new game idea. Production research helps to provide content, research commercial viability and plan the post production process. To perform production research the developer or producer will employ trained researchers to gather the suitable information for the area they are looking for e.g., financial or locations. Production research also includes advertising and where it might be placed to gain the best possible reaction from the audience. It will help to gain information on income and outgoing costs.

Income: The Company can gain income by hosting publicity stunts, sponsorship and merchandise. Celebrities can help to advertise products globally as they are well known in many parts of the world to get the advertising wider spread.

Outcome: The costs include the price to advertise and the distribution amongst appropriate media.

The micro environment of the organisation consists of those elements which are controllable by the management.

Normally the micro environment does not affect all the companies in an industry in the same way, because the size, capacity, capability and strategies are different. For example, the raw material suppliers are giving more concessions to large sized companies. However, they may not give the same concessions to small companies.

Like the same, the competitors do not mind about the rival company if it is compared to the small, but he will be very much conscious if the rival him is large. Sometimes micro environment of the various firms in an industry is almost the same. In such a case, response of these firms to their micro environment may differ as each firm will attempt to achieve a higher success level.

Micro Environment of Business

1. Competitors:

The competitive environment consists of certain basic things which every firm has to take note of. No company, howsoever large it may be, enjoys monopoly. In the original business world a company encounters various forms of competition. The most common competition which a company’s product now faces is from differentiated products of other companies.

For example, in the Colour Television Market, Philips TV faces competition from other companies like Videocon, Onida, BPL and others. This type of competition is called brand competition. It is found in all durable product markets.

The consumer wants to purchase a two-wheeler, the next question in his mind is with gear or without gear, 100 cc or more than that, self starter or kick starter, etc. This type is otherwise known as ‘Product form competition’.

Philip Kotler is of the opinion that the best way for a company to grasp the full range of its competition is to take the viewpoint of a buyer. What does a buyer thinks about that which eventually leads to purchasing something? So, tracing of the consumer mind set will help to retain the market share for all the firms.

2. Customers:

According to Peter. F. Drucker, “There is only one valid definition of business purpose, that is to create a customer.” The business enterprises aim to earn profit through serving the customer demand. It now thinks more in terms of profitable sale rather than more sales volume for its sake. Today marketing of a firm begins and also ends with the customers.

Now a days, a business firm to be successful, must find customers for its products. This is the reason the customers thus constitute the most important element in the micro environment of business. Products sales depend mainly on the degree of consumer satisfaction.

In fact, this is a reason that gives more importance to customer satisfaction surveys. Now every business firm set-up systems to regularly watch customer attitude and customer satisfaction, because today it is universally accepted that the satisfaction of customers is the base for company’s success. Normally the customers are not in a same group, they are individuals, business enterprises, institutions and government.

From the company’s point of view it is always better to have customer from various groups and legions for that easily sustains demand for the company’s product.

3. Suppliers:

Regarding the suppliers, the organisation can think of availing the required material or labour according to its manufacturing programme. It can adopt such a purchase policy which gives bargaining power to the organisation.

According to Michael Porter, “the relationship between suppliers and the firm epitomises a power equation between them. This equation is based on the industry conditions and the extent to which each of them is dependent on the other.”

Suppliers are either individuals or business houses. They combined together; provide resources that are needed by the company. Now the company necessarily should go for developing specifications, searching for potential suppliers, identifying and analysing the suppliers and thereafter choose those suppliers who offer best mix of quality, delivery reliability, credit, warranties and obviously low cost.

The development in the supplier’s environment has a substantial impact on the operations of the company. In recent trends companies can lower their supply cost and increase their product quality.

4. Public:

Literally word ‘public’ refers to people in general. According to Philip Kotler, “A public is any group that has an actual or potential interest in or impact on a company’s ability to achieve its objectives.” The environmentalists, consumer protection groups, media persons and local people are some of the well-known examples of publics.

The company has a duty to satisfy the people at large along with competitors and the consumers. It is an exercise which has a larger impact on the well-being of the company for tomorrow s stay and growth. Create goodwill among public, help to get a favourable response for a company. Kotler in this regard has viewed that.

“Companies must put their primary energy into effectively managing their relationships with their customers, distributors and suppliers. Their overall success will be affected by how other publics in the society view their activity. Companies would be wise to spend time monitoring all their public understanding their needs and opinions and dealing with then constructively.”

In the modern business public have assumed important role and their presence in the micro environment of business.

5. Marketing Intermediaries:

Market intermediaries are either individuals or business houses who come to the aid of the company in promoting, selling and distributing the goods to the ultimate consumers. They are Middlemen (wholesalers, retailers and agents), distributing agencies, market service agencies and financial institutions. Most of the companies find, it is too difficult to reach the consumers. In such a cases the agents and distribution firms help to reach the product to the consumer.

Any type of intermediary the company must take into active consideration, the following aspects:

(i) The company has also to constantly review the performance of both middlemen and others helping its efforts periodically. If necessary, it may take recourse to replacement of those who no longer perform at the expected level.

(ii) Middlemen come into being to help overcome the discrepancies in quantities place, time, assortment and possession that would otherwise exist in a given condition.

(iii) It is advantageous and also efficient to work through the established Marketing channels instead of creating one and thus going for experiments.

(iv) The manufacturer has to decide the most cost-effective method of intermediaries to reach the product to consumer that will help to increase the profit.

6. Workers and Their Union:

As per the production function theory, the labour gets more importance. He is also one of the pillars of the company. The organised labours is highly secured their position compare to unorganised workers So, the workers now prefer to join labour unions which invariably resort to collective bargaining and thereby makes them less vulnerable to employer’s exploitation.

On the other hand, Trade Unions are a major component of a modern business. Trade Union of workers is an organisation formed by workers to protect their interests, improve their working conditions etc.

All Trade Unions have objectives or goals to achieve, which are contained in their constitution, and each has its own strategy to reach those goals Trade Unions are now considered a sub-system, which seeks to serve the specific sub-group’ s interest (i.e. workers’) and also considers itself a part of the organisation.

From the point of view of the company, industrial relation is more important to improve the company, otherwise conflict between labour and management leads to Sick Unit.

Marketing activities are a significant factor that determines the success of your business. In other words, it is never enough to have a great product or service for most organizations and businesses. Without efficient marketing activities, your brand would not be known, and your business would slowly go under the radar.

Marketing activities refer to the things an individual or organization undertakes to boost sales and also to improve its brand. Marketing activities are the set of processes for creating effective communication, exchanging, and delivering offerings that would add value to the customer.

The objectives of digital marketing activities can be combined in the following three main categories:

• Get new customers.
• Keep the customer, from leaking out to competitors
• Grow the customer, by studying their needs and providing solutions to them in the form of new products and services

1: Market research

Some organizations do not carry out market research, which is among the core marketing activity, and it is easy to dismiss it. But you should know that without proper market research, your marketing strategies would not be effective in most cases. So, you need market research, no matter the size of your business, and you would make it your priority when you understand its importance. So, here are some points about the importance of marketing research:

Spot opportunities: Market research can enable you to identify the people that need your product and services. in addition, You would know where you can reach them and the best marketing channels to use. Knowing about your customers and potential customers, such as their demographics, age group, working status, would go a long way in simplifying your marketing activities.

Lowers the risk of failure: According to statistics, 50% of the business does not survive past the 5th year. This is because of a lack of market research. When you carry out market research, you would be able to identify loopholes and bottlenecks. You would know how to get a steady stream of income through new customer acquisition and how to sustain your customers as well.

Product testing: Market research activity can enable you to test new products and services before launching them. This means you would be able to ascertain what your customers think about your products and services before making the final version. This can save you cost and enhance productivity.

2: Select the Customer Segment market

Marketing has become customer-centric. Therefore, you must be able to determine and select your customer segment for the products and services you offer. You can easily create customized products and services for your customers when they are properly segmented. Customer segmentation would also enable you to determine the best channels to carry out your marketing, which can save you cost in the long run.

3: Select product and services

If you must generate more leads and boost sales, you must offer the right products and services. Therefore, It is crucial to understand what the customer needs to enable you to offer them the right products and services. People easily forget or fail to know that without adding values to customers, your business cannot attract new or retain old customers. So, you must offer the right solutions to add value to your customers.

Business is very competitive today, and there are far more products in the market than buyers. Therefore, entrepreneurs and marketing teams must cultivate the habit of offering the right solutions to the customers. Right products and services go a long way to determine the success of your marketing campaign. Before you decide on marketing your products, you should ask yourself the following question.

• What kind of products and services excites you, benefit, and you enjoy?
• Would you appreciate the products and services you want to sell?
• Would you purchase the products and services you plan on selling?
• Can you confidently sell the same products and services to your children, mother, father or other loved once?
• Can you sell this product for an extended period?
• Can you be proud of the product you intend to offer?

4: Build Customer Experience

You may offer the right products and services and still not meet your target without the right customer experience. Therefore, organizations and businesses that focus on customer experience can greatly reduce Churn. Additionally, you would increase revenue and achieve higher profits with the right customer experience marketing activity.

Customer relationship is about how you handle and communicate with individual customers. While Customer experience can create an emotional attachment to your brand and encompasses the entire customer journey to impact every area of your organization or business. Because happy customers would remain loyal and recommend your brand. Consider the following in other to create an excellent customer experience

• Understand who your customers are
• Develop a customer experience vision for your brand
• Create an emotional connection between your brand and your customers
• Endeavor to capture customer feedback in real-time
• Develop your marketing team
• Be unique ( Your logo, slogan, website, colors and lots more)
• Pay attention to employee feedback
• Give back to your customers through discounts and special offers
• Measure return on investment

5: Set Product distribution channels

A product distribution channel is the routes, intermediaries, and chains through which your services or goods would pass through to get to the final consumers and end-users. Also, distribution channels could be or a combination of retailers, warehouses, stores, wholesalers, social media, or e-commerce stores on the internet.

There are direct and indirect distribution channels. A direct channel allows end-users and consumers to buy the products and services directly from the manufacturers, while an indirect distribution channel enables the end-users to purchase the products and services from retailers and wholesalers.

Understanding and setting the correct distribution channel for the products and services you are marketing is necessary for the success of your marketing strategy. Moreover, you should evaluate the end-user, cost, and how quickly the goods would get to the final consumer in other to set your distribution channel.

6: Promotional

Promotions are the activities a marketing team carries out to communicate the brand, service, or product to the masses. In other words, the essence of promotion is to make people aware of or familiar with your brand and products in preference of others.

Promotion is an active process in marketing that needs to be closely monitored in other to obtain the best result.

In short, promotion is the voice of your company sent out to the masses, and it has a lot of benefits which includes:

• Increase your brand awareness
• Generate leads, build sales and improves profitability
• Provide the correct information
• Increases traffic
• Create harmony and emotional attachment for your brand

7: Pricing

Without a good pricing system, people would not buy your products and services no matter what you offer. So, you need to study your customers, review the pricing system of your competitors and set a price that makes sense for everyone involved. Remember that while setting the price, you must consider your distributors and retailers because they play a vital role in the supply chain process.

Furthermore, Product availability, customer demand, and other external factors play a significant role in charging customers on goods and services. Therefore, price is very important in the marketing process. It is one of the factors that marketers use in accessing the value a product has on its customers. Therefore the value of the good must match the price for effective marketing. 

8: Customer Service

Effective customer service plays a big role in individual customer experience. So, if you want to ensure excellent customer service, then you must understand what the customer wants. You must answer their query as fast as possible, and you must give them adequate information about your products and services.

Customers these days are looking for friendly and hassle-free services, Therefore, businesses must be customer-centric in other to boost sales.

Marketing refers to activities a company undertakes to promote the buying or selling of a product or service. In 2017, The New York Times described it as “the art of telling stories so enthralling that people lose track of their wallets.”

It is one of the primary components of business management and commerce. Marketers can direct their product to other businesses (B2B marketing) or directly to consumers (B2C marketing). Regardless of who is being marketed to, several factors apply, including the perspective the marketers will use. Known as market orientations, they determine how marketers will approach the planning stage of marketing.

The marketing mix, which outlines the specifics of the product and how it will be sold, is affected by the environment surrounding the product, the results of marketing research and market research, and the characteristics of the product’s target market. Once these factors are determined, marketers must then decide what methods will be used to promote the product, including use of coupons and other price inducements.

The term marketing, what is commonly known as attracting customers, incorporates knowledge gained by studying the management of exchange relationships and is the business process of identifying, anticipating and satisfying customers’ needs and wants.

Definition

Marketing is defined by the American Marketing Association as “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”. The term developed from the original meaning which referred literally to going to market with goods for sale. From a sales process engineering perspective, marketing is “a set of processes that are interconnected and interdependent with other functions of a business aimed at achieving customer interest and satisfaction”.

Philip Kotler defined marketing as “Satisfying needs and wants through an exchange process”. and a decade later defines it as “a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others”.

The Chartered Institute of Marketing defines marketing as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably”. A similar concept is the value-based marketing which states the role of marketing to contribute to increasing shareholder value. In this context, marketing can be defined as “the management process that seeks to maximise returns to shareholders by developing relationships with valued customers and creating a competitive advantage“.

Marketing is a tricky topic to define and frame in. The Marketing studies or field has rapidly moved and reached a very high level but still defining is into some fixed variables is just impossible. Marketing is defined as the process responsible for identifying, anticipating, and satisfying customer requirements profitably.

Modern marketing has two different meanings in the minds of people who use the term.

Meaning of marketing conjures up the terms “selling, influencing, persuading” thought by many persons and always viewed and discussed as a business activity. They mistakenly think of marketing only as selling and promotion tasks, but only two of several marketing functions.

Unfortunately, the other meaning of marketing is weaker in the public minds; it is the concept of sensitively “serving and satisfying human needs.”

Here, we shall accept the second meaning since a company’s success depends to a great extent on identifying consumer needs, developing good products, and pricing, distributing, and promoting them effectively, which this meaning focuses on.

Now the question may come to your mind, is that why we have accepted the latter meaning. We are sure that you will be able to get the answer automatically as we proceed with our discussion in this lesson.

Marketing is still misunderstood by many marketing professionals, even in the developed world. The activities of marketing are obvious to everyone.

Some of the company functions, which are obviously marketing activities, include selling, market research, advertising, etc. All of these have been around for a long.

The word marketing, which describes the above as part of one operational function (marketing), is relatively recent in its modern usage.

Marketing is a comparatively new field. The formal study of ‘exchange processes and relationships’ which is called marketing started in the 1920s. To give you a clearer idea about marketing, let us take a look at the historical process.

The need for marketing evolved as a historical process. In the early stages of civilization, each person produced whatever he needed for himself.

Later came the age of specialization, and each person made a set of one item and then exchanged the excess with the others for items that he needed. This was the barter stage.

From there, civilization moved to the local market stage, where people brought their produce to a particular spot and exchanged goods there.

In remote villages of a 3rd world country, local bazaars are the meeting points where commodities are exchanged on certain days of the week. In more advanced communities, the temporary bazaar has evolved into a permanent feature with stalls and shops.

Later still, a need for money economy arose. The person who made the bullock cart could not exchange this one piece for the different items that he needed from different people.

There had to be a common denominator and so a medium of exchange developed. This medium was beads at one time, cows at another and many other items, until now we use money as a medium of exchange.

With the Industrial Revolution, which gave a fillip to the means of production of goods, the speed of selling could not keep pace with the speed of manufacture. Large quantities of stock started piling up.

Marketing Features

Customer focus:

The marketing function of a business is customer-centred. It makes an attempt to study the customer needs, and goods are produced accordingly. The business existence depends on human needs. In a competitive market, the goods that are best suited to the customer are the ones that are well-accepted. Hence, every activity of a business is customer-oriented.

Customer satisfaction:

A customer expects some services or benefits from the product for which payment is made. If this benefit is more than the amount paid, then the customer is satisfied. In the long run, customer satisfaction helps to retain market demand. It helps achieve organizational objectives. Customer satisfaction can be enhanced by providing value-added services, which includes providing additional facilities at little or no extra cost.

Objective-oriented:

All marketing activities are objective-oriented. Different objectives are fixed at different levels, but the main objective is to earn profit from business along with the satisfac­tion of human wants. Marketing activities undertaken by sellers make an attempt to find out the weaknesses in the existing system, and measures are taken to improve the shortfalls so that the objectives are achieved.

Continuous and regular activity:

Marketing is an activity designed to plan, price, promote and distribute products. At the same time, it also addresses both the current and future consumers. Thus, it is a continuous process. A marketer has to consistently monitor environment. This helps in coming up with new products.

Marketing environment:

Economic policies, market conditions, and environmental factors, such as political, technological, demographic and international, influence marketing activities. Marketing activities are inseparable from such environmental factors. A successful marketer needs to adapt to these changing factors and adjust marketing strategies to suit new market developments.

Marketing mix:

A combination of four inputs constitutes the core of a company’s marketing system product, price, place, and promotion. Marketing mix is a flexible combination of vari­ables. They are influenced by consumer behaviour, trade factors, competition and government regulatory measures.

Integrated approach:

The marketing activities must be co-ordinated with other functional areas of an organization. Functions such as production, finance, research, purchasing, storekeeping and public relations (PR) are to be integrated with marketing. This will help in achieving organiza­tional objectives. Otherwise, it will result in organizational conflicts.

Commercial and non-commercial organizations:

With the societal marketing concept gaining importance, social marketers are finding useful new ways of applying marketing principles. Com­mercial organizations are also adopting cause-related marketing to strike long-term relations with consumers.

Business organizations such as educational institutions, hospitals, religious institu­tions and charitable trusts have also found meaningful applications of marketing. Thus, marketing is applicable to both business and non-business organizations.

Precedes and follows production:

Identifying consumer needs and wants is the primary task of a marketing manager. Production activities are adapted to these consumer needs. Thus, marketing precedes production. Marketing helps in the distribution of the goods which follows production. Hence, production and marketing activities are closely related to each other.

Advantages

Marketing Stabilizes the Economic Conditions:

Marketing not only sets the economy revolving but also provides steady and stable economic conditions where all are happy. It bridges the gap between producer and consumers. It is a connecting belt between the two wheels of the economy of a nation, i.e., the production and the consumption. Marketing by balancing production with consumption, provides stable prices, full employment and a strong economy.

Marketing Acts as a Basis for Making Decisions:

An entrepreneur is confronted with many problems as to what, how, when, how much and for whom to produce? In the past, there were lesser problems on account of local markets and direct link between the producers and the consumers. But in modern times, marketing has become very complex and tedious. It has emerged as a new specialized activity along with production. As a result, producers are largely dependent upon marketing mechanism to decide which, how when and how much to produce.

Marketing Provides Maximum Satisfaction of Human Wants:

It serves as an effective link between the business and the society, removes hindrances of knowledge, educates people, cultivates their minds, lures them to buy the best and thus enables ultimately to get maximum satisfaction.

Marketing Provides Gainful Employment Opportunities:

Marketing creates a climate for more production and services. It also results in more social overhead as more roads, more warehousing facilities, more transport and communication, more banks, more training and technical institutions, more manpower is needed for the same and the avenues of employment increase. Moreover, marketing is a complex mechanism involving a number of functions and sub-functions which call for different specialized personnel for employment. It is estimated that 30 to 40 per cent of total population is engaged in direct or indirect marketing activities.

Marketing Raises the Standard of Living:

With the provision of more items of necessities, comforts and luxuries, cheaper as well as costly and with more services and amenities as its disposal, the community enjoys a higher standard of living. Even the poorer sections of society find many more things within their reach because of lowering of costs of commodities and services. Paul Mazur says “marketing is the delivery of a standard of living to society”. Prof. Malcom Me Nair added further that “marketing is the creation and delivery of standard of living to society.”

Marketing Increases the National Income:

National income is the sum total of goods and services that a nation possesses. The net effect of all marketing efforts is a rise in production of existing industries, investment in new industrial units and provision of more services. The nation becomes richer with the increase in its national income and there is a rise in per capita income. The economy rises from underdeveloped stage to developing stage and then marches towards a developed economy.

Marketing Facilitates Exchanges in the Ownership and Possession of Goods and Services:

It creates time, place and possession utilities for the goods and services. It is helpful to both producers and consumers. Producers come to know about the specific needs and preferences of the people and the customers about the products that manufacturers can offer.

Marketing Widens the Market:

Marketing draws out the hidden wants of consumers, creates new demand, locates the untapped areas and finds out the possibilities of selling new products. It thus enlarges the market and enables the producers to increase production and earn more profits.

Disadvantages of Advertising

Multiplication of Needs:

Advertising compels people to buy things they do not need as it is human instincts, to possess, to be recognized in the society, etc., are provoked by advertiser in order to sell products. At times, various types of appeals are advanced to arouse interest in the product. Sentiments and emotions are played with to gain customers.

Product Proliferation:

Critics state that advertising encourages unnecessary product proliferation. As it leads to the multiplication of products that are almost identical, resulting in wastage of resources which could otherwise have been used to produce other products.

Increased Cost:

It is much debated whether advertising induces additional cost upon a product which the community has to pay. In a sense, it is true since expenses on it form a part of the total cost of the product. But at the same time, it would be unjust to infer that if the advertising costs were cut down the goods would necessarily be cheaper. Advertising is, one of the items of costs but it is a cost which brings savings in its wake on the distribution side.

Wastage of National Resources:

It is objected that advertisement is that it is used to destroy the utility of goods before the end of their normal period of usefulness. Now models of automobiles with nominal improvements are, for example, advertised at such high pressure that the old models have to be discarded long before they become useless, not that merely, the most-advertised products are delicate, fragile, and brittle.

Barriers to Entry:

Advertisements promote industrial concentration to a greater or lesser degree. The extent of such concentration may vary with the character of the individual trade, the advertisability of the product and the technical conditions of its production. Although, studies on this subject are not conclusive. The evidence of positive association between advertising and concentration is weaker than can be expected.

Consumer’s Deficit:

Advertising creates desires as consumers have low purchasing power. It leads to discontentment. Such discontent is obviously not very desirable from the point of view of society, particularly if it affects a large majority of people. But it is important if it acts as a spur to social change.

Misrepresentation of Facts:

A major drawback of advertising is misrepresentation of facts regarding products and services. Advertisers usually misrepresent unreal/false benefits of a product and make tall claims to excite people to indulge in actions leading to their benefit, but opposed to consumer’s self-interest.

Deferred Revenue Expenditure:

It is a deferred revenue expenditure, as the results are not immediate. As advertising occupies a substantial portion of the total budget of the organisation. Hence, investing a large sum in it does not necessarily yield immediate results thus limiting its utility.

This model is more consumer oriented and this focus has led to a primary use in niche marketing. This does not exclude it for use in products serving a mass market however. This alternate marketing mix is made up of four key variables:

• Consumer
• Cost
• Communication
• Convenience

1) Consumer (and Product)

Here, instead of beginning the story with a product itself, the focus is on selling only what the customer specifically wants to buy. This means that it becomes an absolutely vital activity for the marketer to spend time studying these consumer wants and needs in-depth. Only this detailed understanding will allow a company to sell with accuracy what the customer will buy.

At the core of any marketing effort is the product itself. This however, is just one piece of the puzzle. The product must be something that the customer finds desirable and there must be something unique about it that sets it apart from all the rest of the competition. The most effective way to achieve this is to first find the right untapped market, and then develop the product instead of trying to fit a ready-made product into a market. Product testing, therefore, becomes a key element of both the product variable and the customer variable. The understanding should be of what the product can give the customer both in the eyes of the manufacturer and in the eyes of the consumer.

2) Cost (and Price)

When understood correctly, the cost variable gives more detailed information about the customer than the price variable does. A good way to understand the difference in price and cost is given here. Price is the amount of money that a consumer will be willing to pay to acquire a good or service. On the other hand, cost is the amount that goes into the production of a good or service. This is the sum of the value of all inputs to production such as land, labor, capital and enterprise.

Within the total cost to satisfy a customer need, price becomes one of the many factors. Other factors may include the cost of time to acquire the product, the cost of conscience when it comes to consuming the product, the total cost of ownership, the cost to change to a new product and the cost of not selecting an alternative.

There is a common misconception among marketing professionals that the main motivation for a product purchase is the price. Though price-based positioning may provide some initial success, in the long term, this turns out to be a less successful move. If the product is given a price that undercuts cost to gain the market, then the company will be at a disadvantage. If the product is priced at a premium without understanding its value to a customer, it will never be purchased.

Instead, a focus on cost to satisfaction will mean that there is more important information being taken into account than just the purchase price. A focus on this C will help find ways to actually increase the price of the item while decreasing the cost to satisfaction through measures that have a minimal influence on the company’s bottom line.

3) Communication (and Promotion)

Promotion to be a manipulative factor driven only by the seller. Instead, he viewed communication as a more cooperative activity and driven more by the consumer of a product.

A traditional marketing mix uses promotion as a tool to put information about the product in front of the customer. Promotion and its methods continue to evolve with new avenues and means to reach the consumer. Though these methods of promotion remain effective, a niche marketing focus needs a bit more.

Communication will work toward creating a meaningful relationship with the customer with a focus on what they need and what their lifestyle is. The focus is wider and more inclusive of the different form’s communication can take. There is more of a give and take between buyer and seller. Looking at advertising as this form of communication can help a marketer understand their market better and increase sales and customer loyalty.

4) Convenience (and Place)

The proliferation of online marketplaces, credit cards, catalogues and cell phones has made the provision of products to the customer a whole new ball game. A customer is not bound to actually go to a physical location to meet a need and there is an endless variety of places online to do so. This means that a marketer needs to be aware of how a particular customer group likes to make their purchases in order to make it convenient for them to buy. While place from the 4P model took into account the traditional value chain involved in getting a product into a customer’s hand, the convenience variable considers much more.

Advancements in technology have considerably facilitated globalization. In fact technological progress has been one of the main forces driving globalization. Technological breakthroughs compel business enterprises to become global by increasing the economies of scale and the market size needed to break even.

Technological advancements reduce costs of transportation and communication across nations and thereby facilitate global sourcing of raw materials and other inputs. Patented technology encourages globalization as the firm owning the patent can exploit foreign markets without much competition.

Information technology has led to the emergence of the global village. For example, the World Wide Web has reduced the barriers of time and place in business dealings. Buyers and sellers can now make transactions at any time and any part of the globe. Technological change also affects investments.

Earlier, high technology production was limited to rich countries with high wages. Now technology is easily transferable to developing countries where high tech production can be combined with low wages. A large number of firms in advanced countries are now outsourcing labour intensive services from developing countries like India.

Technology has enabled globalization in almost every single facet. If you are interested in a great book on this there is one called “Connectography: Mapping the Future of Global Civilization”.

Technology is the vital force in the modern form of business globalization. Technology has revolutionized the global economy and has become critical competitive strategy. It has globalized the world, which drive all the countries to more ethical standards. This paper attempts to show how Technology revolution is sweeping the globe and the transition from manual to electronic delivery of services both in public and private sector leads to advancement of business community throughout the world.

Globalization has lead to new markets and information technology is one of the technologies fostered to the new market in this increasing competitive world. Technology has helped us in overcoming the major hurdles of globalization and international trade such as trade barrier, lack of common ethical standard, transportation cost and delay in information exchange, thereby changing the market place. Technology has enabled the software experts to work collaboratively over the network with companies from around the world. The technological advancement has helped a lot in creation and growth of global market.

Multinational Corporations (MNC) can be seen as a central actor in globalization. Markets have become global at a rapid pace, as indicated by several kinds of trade extended to foreign countries. The innovation in host country is often undertaken by MNC based in one country and due to the technological advancement MNC(s) have expanded to other countries by some kinds of FDI also facilitating the movement of research and development.

The researchers have analyzed that though the technology has globalized the business but economically well developed countries have been more benefited. While technology has created many opportunities for global networks of tasks it is important to look at the friction in the system to understand the limitations. The sources of friction are many and could bring the system to its knees. Companies and countries that want to thrive in this era of globalization will seek to mitigate the abuses, while dealing with the friction.

A competitive environment is the dynamic external system in which a business competes and functions. The more sellers of a similar product or service, the more competitive the environment in which you compete. Look at fast food restaurants – there are so many to choose from; the competition is high. However, if you look at airlines servicing Hawaii, very few actually fly to the islands.

Direct competitors are businesses that are selling the same type of product or service as you. For example, McDonalds is a direct competitor with Burger King. Indirect competitors are businesses that still compete even though they sell a different service or product. The products or services offered by indirect competitors tend to be those that can be substituted for one another. Again, considering travel, you have the option to travel by plane, train, or car. Therefore, airlines are also competing with train lines and buses (assuming the travel does not go overseas).

Examples

There are several examples of competitive business environments. The first that comes to mind is smart phones. How many choices do you have when it comes to buying a smart phone? They seemed to have multiplied overnight! That is an extremely competitive business environment.

Companies are constantly trying to one-up the latest best-selling model – a good indication of a competitive environment. Additionally, prices of comparable smart phone models are relatively close.

Another competitive business environment is the automobile industry. Again, almost every company produces a car in every category. Therefore, when someone is looking at buying a new hybrid sedan or full-size truck, they have so many options to choose from. Obviously, the automobile industry can be segmented in economical and luxury brands, but when comparing within the same segment, there is significant competition.

A social audit is a formal review of a company’s endeavors in social responsibility. A social audit looks at factors such as a company’s record of charitable giving, volunteer activity, energy use, transparency, work environment, and worker pay and benefits, to evaluate what kind of social and environmental impact a company is having in the locations where it operates.

Social audits are optional. Companies can choose whether to perform them and whether to release the results publicly or only use them internally.

A social audit is an internal examination of how a particular business is affecting a society. It serves as a way for a business to see if the actions being taken are being positively or negatively received and relates that information to the company’s overall public image.

A social audit examines issues regarding internal practices or policies and how they affect the identified society. The activities included tend to pertain to the concepts of social responsibility. This can include activities affecting the financial stability of a region, any environmental impact resulting from standard operations and issues of transparency in reporting.

There is no standard regarding what must be considered as the society during the audit. This allows a business to expand or contract the scope based on its goals. While one company may wish to understand the impact it has on a small-scale society, such as a particular city, others may choose to expand the range to include an entire state, country or the world as a whole.

Principal Objectives of Social Audit

1. The extension, development and improvement of the company’s business and building up of its financial independence.
2. The payment of a fair and regular dividend to the shareholders.
3. The payment of fair wages under the best possible conditions to the worker.
4. The reduction of prices to the consumers.

Secondary Objectives of Social Audit

1. Provision of a bonus to the workers.
2. Assist in promoting the amenities of the locality.
3. Assist in developing the industry in which the firm is a member.
4. Promote education, research and development in the techniques of the industry.

From these objectives, we can infer that social audit is really an extension of the principle of public disclosure to which corporations are subject.

Need for Social Audit

Each business enterprise is not only connected with internal public but intimately connected with external public also. The modem corporations are more powerful and command huge resources. This power should not be used indifferently, irresponsibly or in an antisocial way. Its activities can create much impact on the society. As such its impact over society cannot be ignored or taken lightly. Its behavior not only affects the society but also creates problems to the Government. Thus, social audit has become the need of the day.

“This is a matter not of ambition”, Prof. Galbraith says “but of necessity”.

1. Components:

Social components are a concern with the relationship of the company with society and the employees working in it. The social component is concerned with the general working conditions of employees, their rights, and the initiative taken by the organization for the betterment of the society and the local community.

2. Economic Components:

Economic indicators of the organization must be audited, and required actions should be should if there is a case of any irregularity.

3. Health and Educational Components:

The measurement of the health and educational facility in the organization. Whether the required safety and health measures are taken by the organization in the workplace.

4. Environmental components:

Whether the production process or working procedure is harmful to the environment. Whether the working process of the organization is polluting the environment and what measures are taken by the organization to minimize the impact on the environment.

5. Political Components:

The political environment in the organization is audited, which is the analysis of the relationship between management and employees, and manager and workers of the organization.

Introduction to Values in Business:

The value systems in societies differ considerably because the value systems are built through centuries. Japanese and Chinese ethical values differ considerably to Indian ones.

The main issues in ethics are:

(1) The academic discipline of business ethics requires approval and support of industry in those countries.

(2) Equal treatment of technical and human resources in management. In Japan human resource is given more weightage.

(3) Social justice and efficiency should go hand in hand.

(4) In Japan ethical managements already in place since last two decades with emergence of large business houses and MNCs. In China the importance of business ethics is felt and being practiced under the conditions of contemporary market economy.

(5) Japanese consumers are more willing to support business that were identified as socially more responsible than Chinese.

(6) Chinese value economic aspects of business organisation whereas Japanese considered more about business conforming to legal and ethical standards.

(7) The culture has profound base on ethical management in each country.

Table 10.1 below gives the cultural differences between US, Japan and Indian in a tabular form.

Some of the ethical values noticed in different countries are:

Indian Value System:

India has a place of pride in a strong ethical base. It needs to be rekindled by proper education to our young and budding managers. Indian ethico-moral discussions go back to three and half millennia when Vedas specified the ground rules of human existence and living. The ethical discussions and teaching continued all through Indian history though India was ruled by different emperors and foreign rulers.

The Upanishads, Puranas and Smritis continued the traditions. The values were put for popular use in great epics of Mahabharata and Ramayana. Bhagavad-Gita puts ethics in a clear and concise way.

The epics give human dilemmas in every walk of life and attach importance to values in dealing all such issues. Kautilya’s Arthashastra, Vishnu Sharma’s Panchatantra, Hitopadesha, Neetishastra, Katha Saritsagar, Neeti Shataka, Somadev Neeti Sootra and many more works stress Indian ethos in different ways.

Perhaps to attract readers these works are in story form, ornate, colourful and poetic giving an unparalled practical ethical values in them. The current ethical behaviour of Indian is an intimate mix of good textures of values taken from Vedantic, Jaina, Buddhist, Sikh and Sufi traditions. In recent past we have also added western values.

About 2½ millennia ago the roots of western ethical values started in Greece from Socrates, Plato and Aristotle. At about the same time Chinese got ethical base in Confucius. The Vedantic ethical values are spiritual, sacred and simple. The entire value system is put as ‘Dharma’ or righteousness in all what one does.

Some of ethical Vedantic principles as applied to modern business are:

1. Treat people decently. Respect all stakeholders’ opinions, background, privacy dignity and desire to grow.
2. All people are having egos and selfish nature. Respect diversity.
3. Companies or business is created to serve people and all stakeholders.
4. Some are more intelligent and powerful but protect the weak.
5. Look inside sitting alone and think is it right? Is it fair? Will it do good to all?
6. Be good, do good to as many and as much.
7. Mahabharata sums up importance of ethical behaviour in a sloka.

Ethical behaviour is important for a man. When a man goes down in ethical values, he will have no use of his money or his relatives and he has no reason to live.

As noted above, ethics was and is a traditional subject in India. Vedantic ethics had spiritual approach, which is summed up in its entirety (what you do not wish unto you do not do it to others). Business ethics is a new branch of study giving ethic plus business combination in decision making processes in industry and commerce.

Indian ethos was introduced in daily walk of life for everyone by various methods. Religious teachings, listening to Puranas, Kathas, Bhajans, Yoya, Pooja, Yajyas and the like are some examples where these remind time and again the essence of ethical behavior in a society. Over the centuries many of these became mechanical and ritualistic and lost the ethical touch in them.

Two other religions which had their origins in India are Jainism and Buddhism. Buddhism and Jainism stress the ethical behavior and non-violence in more stringent manner to the society. In fact ‘The Digambar’ sect of Jainism advocated no attachments of possession to any worldly goods.

Indian ancient texts give guidelines to ethical behaviour of a man in his daily life since days of Veda. The same principles apply to modern day business.

Some of the important ethical lessons are:

1. Foundation for a healthy business is sound morals and ethics.
2. For managers to be good decision makers and to stand up to temptation and pressures, he should have his own peace of mind, strength of will and ethics.
3. Selfishness and greed are source of evil that reduces ethical standards in an organisation.
4. Ethical levels should be built up from top down to curb lies, hurting, cheating or unethical acts.

Indian Values:

Indian culture is much diversified because of varieties of customs, beliefs and many gods. It is difficult to find single culture at one place. Hinduism has much type of worship and festivals.

In tradition Indian has Vedantic, Buddhist, Jaina and Sikh traditions. India has also welcomed and absorbed good ethical lessons from Christian, Islamic and Parsi religions. The culture has enriched with diversity of outsiders. It is now a unity in diversity.

The important Vedantic values in Indian society valid even today are:

1. Showing respect to elders specially teachers
2. Not showing emotion outward
3. God fear in all walks of life. In any function Pooja or offering to God is made first before the work begins.
4. Marriage is made in heaven and is considered lifelong bond. Some consider it as bond even after death.
5. In recent years Indian household look western. These are outward looks, whereas the Vedantic culture flews in hearts and actions. Similarly Indian ethos had many changes when foreigners ruled India for many centuries but Vedantic identify and ethos remained intact.
6. Indian ethos were built and perfected long before others evolved them. Hence India contributed immensely in teaching ethical lessons to outside world with its classical books. The ethical thought process in Vedantic ethos starts with Vedas, Upanishads, Smritis and Puranas. These were told in many ways with day to day life in epics Ramayana, Mahabharata and Gita. The ethical values were told in story form in Panchatantra, Hitopdesha, Katha- Saritsagaf, Bhoja prabhand, Chanakya Neeti, Bliagavata, Sooktimuktavali, Neeti Shastra, Neeti Shataka Manusmuti and the like.
7. Sacred simplicity of four goals to a man.

a) Dharma – Righteousness

b) Artha – Creation of wealth

c) Kama – Desires and needs

d) Moksha – Liberation of the spiritual core.

The ethos in work life are:

a) Man’s inner strength. Simple living

b) Holistic relationship between man and nature

c) Cooperation with each other

d) Yoga and meditation. That is excellence and concentration.

e) Spirit of sacrifice.

Internal orientation towards work as worship.

A holistic grasp of Indian values is stated by great Poet Kalidasa as Satyam-Shivam-Sundaram. The meaning and connection is shown in Fig. 10.1 below.

In Indian Vedantic system personality types have been suggested based on set of attributes.

The classification are:

a) Daivi or good attributes give Sattwa type of personality.

b) Rajas personality shows an angry and always busy type.

c) Tamas is always thinking negative doing such harmful work.

The classification of three types of personalities show hereunder the attributes of each type.

Indian army has set itself high ethical standards in its policies and operations. These are built and perfected over for centuries. These apply to business environment.

Doing business on the international plane presents many challenges because of a variety of factors which differ from one market to the other. These differences are basically informed by the environment of the host country, which is often times different from that at home. One of the environmental factors that present such a challenge is culture. Culture can be defined as complex construct that embodies a people’s knowledge, morals, art, beliefs, customs, laws and other capabilities gathered by a community over time. The culture of the host country strongly impacts on the performance of a firm that engages in international business. Notable aspects of culture central to the conduct of international business include the social structure, religion, language and education. G4S, a company that has established itself in international business has had its fair share of challenges in this area.

Explanation:

• Doing business on a global basis the main aspect of a successful business relationship has very little to do with the agreement or the contracts. It is based more on inter-personal relationships
• The impact of foreign culture on business has brought different people in connect with other cultures of the world and it gives them an understanding of different cultures and behavior of the people globally
• The effect of globalization has created more avenues for business in the country in the areas of marketing, sales, distribution, and transfer of technology from across the borders

Social structure has to do with how society is socially organized. It could be looked at from the individual-group dimension, or from the social stratification dimension. Some societies consider an individual the pillar of social organization This is the scenario G4S encountered when it entered the American and most Western markets. The challenge here was how to instill a sense of teamwork among employees. It was an uphill task for managers who had been socialized to believe in the superiority of teamwork, as individuals compete against each other for results. On the Japanese market however, the firm found that emphasis was on group, rather than individual performance. Though this is said to be the driving force behind the company’s success in Japan, it is vilified for imbedding creativity, and is touted as a stumbling block to dynamism. This, indeed, is a challenge the firm has had to deal with.

Social stratification has to do with placing members of society in certain classes. There are those in the lower, middle and upper classes. Many times, this is borne out of one’s family background, income or occupation. Those from the lower class only hope to move from that class to the upper one through a process called social mobility, which is in most cases done through education and job opportunities. When opportunities for mobility are suffocated, there is likely to be conflict between the classes; and in the job situation, between management and employees. Some societies have room for social mobility, while others do not. A country like Britain has less social mobility. As a result, there is always simmering tension between management and workers, which the firm has had to deal with from time to time. When industrial disputes become frequent, the firm finds doing business in the country quite expensive. Such a problem is not common in America, where social mobility is easy.