Justify the following:
1) Marketing is significant to consumers.
Marketing is significant to consumers because of the following reasons:
a) Promotes Product Awareness:
Through different marketing activities, companies promote their products and services. This helps consumers to know about different products and services available in the market.
b) Provides Quality Products
There is increasing competition in the market. It creates moral pressure on the businesses to provide quality goods to the consumers.
c) Provides Variety of Products
Marketing creates awareness among the consumers about the product. At the same time, it attracts the consumers to buy the same.
d) Helps in Selection:
Marketing helps the consumer to choose the best products and services from the different options available.
e) Consumer Satisfaction:
Marketing leads to consumer satisfaction through honest advertising, assurance of quality products, and availability of innovative products. Thus, marketing takes every effort to satisfy the consumer.
f) A regular supply of goods:
Through efficient distribution channels of marketing regular supply of goods is possible. It helps to maintain the balance between demand and supply. It results in stable prices.
2) Promotion plays an important role in marketing.
(a) Promotion means any type of marketing communication used by business enterprises to inform and persuade potential buyers to buy the products or services. In promotion merits of products, services, brand benefits, etc. are explained to the potential buyers to attract them towards the products. The promotion mix comprises of different tools such as advertising, sales, promotion, direct marketing, personal selling, publicity, etc.
(b) Business enterprises make use of a combination of all or some of these five methods for the promotion of their products and services as per the need of the business. Promotional activities help the organization to increase brand awareness in the market. In brief, promotion is concerned with informing the customers about the products of the firm and persuading them to buy the products.
(c) Promotional strategy to be used in the organization depends on the various factors such as budget, the message it wants to communicate, and the target market. Promotion is an important element of marketing that creates brand recognition and ultimately increases sales.
(d) Business enterprises through promotion attract consumers to buy and taste the products. The promotion mix to be used will depend upon the nature of the product, type of customers, stage of demand, degree of competition, etc. Promotion helps business organizations to enhance sales. Increase in sales, increase profit for the organization. If the increased profit and income is reinvested in the business, it will earn more and more profits in the future. Promotion helps the organization to create awareness about existing products, new arrivals, and the company selling certain products in the market. It creates a brand image among buyers. Business organizations also use the promotion to build customers’ layout base. This in turn expands sales and profits.
3) The market can be classified on the basis of competition.
Ans: The market is classified on the basis of competition as follows:
(a) Perfect market:
A type of market in which large numbers of buyers and large numbers of sellers exist to buy and sell the homogeneous products at the prevailing market price is called a perfect market. In this market, all buyers and all sellers have equal access to all information and have perfect knowledge about the market conditions. Neither a single buyer nor a single seller can influence the price. One uniform single price prevails in the market. This model of a perfect market is frequently used in economic analysis.
(b) Imperfect market:
A type of market which has distinct features of market imperfection such as a single seller, imperfect knowledge of market conditions on the part of buyers or sellers, failure to make adjustment in demand and supply, etc. is called an imperfect market, e.g. monopoly market.
The imperfect market is further sub-divided into the following categories :
The word monopoly is the combination of two words, viz. mono’ means one and ‘poly means the seller. Accordingly, a market structure that is characterized by a single seller selling a unique product in the market is called a monopoly. In a monopoly, the seller faces no competition as he is the sole seller of goods with no close substitute. He controls the entire supply and enjoys the power of setting the price for his goods. He is a price maker.
A market situation in which two suppliers dominate the entire market for a commodity or service. In this market, there are two sellers, who either sell a homogeneous product or differentiated product. They enjoy a monopoly in the product produced and sold by them.
Oligopoly is a state of limited competition in which the market is shared by a limited number (few) of producers or sellers producing and selling either a homogeneous product or a differentiated product.
The market situation in which there is only one buyer substantially controls the market as the major and single purchaser of goods and services offered by many producers or sellers, is called a monopsony market, e.g. labor market, a firm is the sole purchaser of a certain kind of labor.
4) Marketing helps in increasing consumer awareness.
(a) Many companies undertake different marketing activities to promote their products and services. Marketing makes consumers aware of the different products, brands, features, and usefulness of the products and services available in the market. Marketing facilitates consumers to make the right decisions on the purchases of the right products and services.
(b) Marketing helps society by educating consumers and by giving information about new products and services available in the market and their usefulness. Marketing identifies and satisfies the requirements of consumers by providing relevant information, goods, and services to the people as per their demand and preferences. Marketing provides information to consumers to make the right decisions.
(c) On the basis of marketing information, consumers can compare products’ features, availability, price, and other essentials and choose the right products at the right price. Marketing also helps to improve the quality of life of the consumers. Marketing helps to create awareness about the existing products, new products entering the market, and the company selling specific products in the market. This in turn helps to raise awareness among the potential and prospective consumers. Marketing also creates a brand image among consumers.
(d) The business organizations use marketing to create awareness among the consumers regarding major changes such as mergers and transfer of ownership that influence product offerings or ways to improve quality. Thus, marketing creates awareness among the consumers about the products available in the market and attracts the customers to buy the same.
5) There is a need for branding to get recognition among consumers.
(a) A name, design, term, symbol, sign, numeral or combination of them given to the product to identify the goods or services of the one manufacturer and to differentiate them from those of competitors, is called a brand. Branding, therefore means, giving a distinctive identity to a product. Bata, Surf, Coca-Cola, 501 soap, 50-50, etc. are some of the well-known brands. A registered brand is called a trademark. Trademark cannot be copied by other firms. Branding is done mostly for manufactured goods.
(b) Brands are very effective for wide publicity. It helps to sample. Effectively established brands increase the value of the business in the industry. A good brand expands the business and create a positive impact on the business and the customers. The customers attracted to the products are assured dependability and loyalty by using branded products. Strong branding helps to generate new customers and maintain existing and regular customers.
(c) Branding helps the products and producers to get recognition among the consumers. Branding facilitates advertising and price control. Branded goods enjoy a wider market as the necessity or personal inspection or sample is avoided. By registering his brand, a businessman can protect his products from imitation.
(d) Branding helps to get new business and increase brand awareness in the market. It creates trust in the mind of consumers, potential consumers, and people. The consumers prefer to do business with a company that has a professional brand name in the market.