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Introduction to Marketing

Patanjali Company

Marketing is an ancient art and has, since the day of Adam and Eve, been  practiced in one form or the other. In the modern world, Marketing is everywhere; most of the task we do and most of the things we handle are linked to marketing. Marketing is an activity. Marketing activities and strategies result in making products available that satisfy customers while making profits for the companies that offer those products. Your morning tea, your newspaper, your breakfast, the dress you put on for the day, the vehicle you drive, the mobile in your pocket, the quick lunch you have at the fast food joint, the PC at your desk, your internet connection, your e-mail ID almost everything that you use and everything that is around you, has been touched by marketing. Marketing has its imprint on them all depending on the product and the context/experience the imprint may be visible or subtle. But it is very much there. Marketing permeates most of your daily activities. Marketing is an omnipresent entity.

  Learning Objectives

  • To understand the concept of Marketing in the present era
  • Define marketing and the utility it creates for the customers
  • Trace the origin of marketing and explain how it has evolved during the years
  • To understand the Role of Marketing and the strategic marketing planning
  • To understand different approaches of market
  • To able to differentiate between selling and marketing

Meaning of Market and Marketing:

A market is any such person, group or organization which has existing or potential exchange relationship. It starts with customers and ends with customers. Creation of superior customer value and delivering high levels of customer satisfaction are at the  heart of present day marketing. Companies today, needs to understand customer needs, study completion, develop and offer superior value at reasonable price, and make the product available to customer at convenient place. Only then their products will be in demand and sell consistently.

Marketing deals with customers. It is delivery of customer satisfaction at a profit. The twofold goal of marketing is to attract new customers by promising superior value and to keep current customers by delivering satisfaction.

     Definition of Marketing:

  The concept of market has undergone significant changes over the years,           commensurate with the changes in the structure and scope of markets.

This definition implies that wherever there is a buyer of a product or service, there is a market. It succeeded in changing the view that market is a place. Further this definition also indicates that market refers to the existence of buyers of a product or service, that when these things get exchanged, the marketing process commences.

This concept of market focuses on a situation where all buyers and sellers would be able to communicate with one another; they would also be capable, of exchanging products with each other. It could also be inferred from the definition that buyer-seller interaction is crucial to market.

                  MARKETING

Marketing refers to the various groups of activities that take place in a market. These activities are either planned or spontaneous. For example, production, assembling, distribution and storage could be planned, consumption is often spontaneous.

According to Dahl and Hammond

the purpose of production, assembling, storage, and transportation was consumption. All these steps from production to ultimate consumption were included in the term marketing. Hence, marketing is a set of activities without which what is produced cannot reach the ultimate consumer. Hence it might be said that the importance of these activities is the study of marketing.

 

Kotler

“Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.”

To him, to define a marketing situation there should be two or are parties with potential interest, capable of communicating with each other and each possessing things of value to the other. From this definition is could be noted that marketing consists of a number of facilitating activities.

Selling is the process by which the salesman tries to dispose of the product at the best possible price. Marketing is much ore comprehensive and aims at maximizing the returns to the producer, at an affordable price to the consumer. Marketing starts with production and ends with the customer finally purchasing the product. Kaddar‟s definition is very clear in pointing out that selling is just one activity in the marketing chain of activities.

     According to Philips:

Marketing was all the activities necessary to place tangible goods in the hands of the customer and includes only such activities as would involve a charge in the form of the goods. This definition is narrow in the sense that it excludes creation of place and time utility and such efforts as to inform the prospective buyers to motivate them.

When marketing is viewed as a process of moving goods and transferring rights of ownership with or without changes in the physical form of product, it involves several functions relating production to consumption

  Evolution of Marketing:

Marketing is as old as human civilization. Even in the earliest stage of human civilization exchange was taking place, though, without any consideration. The evidence of this could be noted from the anthropological studies. The number of excavations that have taken place around the world has also confirmed this. However in those days, the exchange was not so well organized or structured. This was because, there was very little surplus and efforts to create surplus was not even realized. When groups of human beings started living in batches, there arose the need for exchange within the group or among the groups. Historical evidence indicated that this took place in a very crude barter term. This was the earliest seed for modern marketing.

Role of Marketing:

According of Mc Carthy, an effective macro market system is a necessary ingredient for economic development. To peter Drucker, marketing may be the key to growth is less developed nations. Marketing can enable fuller utilization of resources and facilitates integration of countries and continents. For Nurkse marketing carries with it the solution to break through the vicious circle of poverty in very country. Hence, in every developing and less developed country efforts should be made to reorganize the marketing system.

It is well known that producers and consumers are separated from each other on several counts. Marketing should enable removing these separations. This could be understood by analyzing Mc Carthy‟s view point.

  1. Spatial separation: This refers to the geographical separation between the producers and consumers. Producers have several compelling reasons to locate their operations in a particular place. But the consumers are wide This separation could be avoided with a well knit logistic function. That is, by ensuring that the products reach the consumers at the right time, at right price in right shape and at right place. Simply this means if marketing can ensure time utility, place utility and form utility through its performance, then the spatial separation would disappear.
  1. Separation in time: One of the basic functions of producers is to determine the time when the product/service is required by the consumers. If it does not reach the consumer at the time of need, it loses its appeal to consumers. Generally producers over come this problem by using various rigorous forecasting and estimation techniques. Similarly by a well-planned inventory management, produces can easily manage demand and
  1. Separation of information: Most of the ills in marketing are caused by lack of information. Marketing information could be relating to various aspects like, product functioning or use, availability, price, etc. it is always said that the basis reason for market imperfection is deliberate information lack out. Selective information sharing is viewed as a marketing tactic. The more the consumers are ignorant the more the producer benefits. Hence if marketing ensures flow of relevant and useful information to the consumers at the right time, it would help to narrow the separation of intended of benefits and realized

    Difference between Selling and Marketing:

  Selling is an important activity of Marketing. It consists in transferring goods             and services to the customers. The main emphasis in selling is on profit maximization through sales volume. Marketing on the other hand is a broader area and its functions as a whole aim at customer satisfaction and profits through such customer satisfaction. Again, in Marketing, the selling efforts are customer – oriented but in selling the efforts is company oriented.

The concept of selling assures that consumers if left alone will not buy enough of the company‟s products. Thus goods are already produced and an aggressive selling and promotion effort has to be perused]. The customers‟ demand on the other hand determines production in marketing. Thus, in selling the focus in on products while in marketing the focus is on customer needs.

Different between selling and marketing:

Selling Marketing
1.      Selling starts with the seller and is preoccupied all the time with the needs of the seller.

2.      Selling starts with the corporation‟s existing activities and products.

 

3.      Selling emphasizes saleable surpluses within the corporation; seeks to convert products‟ info „cash emphasizes getting rid of the stocks; concerns itself with the tricks and techniques of getting the customers to part with their cash for the products available with the salesman.

4.      Selling over emphasizes the exchange aspect without caring for the value satisfactions inherent in the exchange.

 

5.      Views business as a good producing process.

6.      The seller determines what „product‟ is to be offered.

 

7.      The „product‟ precedes the marketing

efforts becomes the consequence of the product on hand.

 

8.      In selling, packaging is essentially seen as a mere protection or a mere container for the product.

9.      Cost determines price.

 

10.  Transpiration, storage and other distribution functions are perceived as mere extensions of the production function.

11.  The emphasis is one somehow selling‟ there is no coordination among the different functions of the total marketing task.

12.    Different department of the business operate as separate watertight compartments.

13.    In firms practicing „selling‟ production is the central function; sales are a subordinate or secondary function.

14.    Selling views the customer as the list link the business.

1.      Selling starts with the seller and is preoccupied all the time with the needs of the seller.

2.      Selling starts with the corporation‟s existing activities and products.

 

3.      Selling emphasizes saleable surpluses within the corporation; seeks to convert products‟ info „cash emphasizes getting rid of the stocks; concerns itself with the tricks and techniques of getting the customers to part with their cash for the products available with the salesman.

4.      Selling over emphasizes the exchange aspect without caring for the value satisfactions inherent in the exchange.

 

5.      Views business as a good producing process.

6.      The seller determines what „product‟ is to be offered.

 

7.      The „product‟ precedes the marketing

efforts becomes the consequence of the product on hand.

 

8.      In selling, packaging is essentially seen as a mere protection or a mere container for the product.

9.      Cost determines price.

 

10.  Transpiration, storage and other distribution functions are perceived as mere extensions of the production function.

11.  The emphasis is one somehow selling‟ there is no coordination among the different functions of the total marketing task.

12.    Different department of the business operate as separate watertight compartments.

10.  In marketing, it is seen from the point of view of the customer; it is designed to provide the maximum possible convenience and satisfaction to the customer.

11.  Consumer determines price; price determines costs.

12.  They are seen as vital services to be provided to the customer-not grudgingly, but in the most willing manner.

 

13.  The emphasis is on an integrated approach; through an integrated strategy covering product, promotion, pricing and distribution.

14.  All department of the business operate in close integration with the sole purpose of producing consumer satisfaction.

 

Introduction

  • It is an Indian FMCG company. Manufacturing units and headquarters are located in the industrial area of Haridwar while the registered office is located at Delhi.
  • The company manufactures mineral and herbal products. It also has manufacturing units in Nepal under the trademark Nepal Gramudhyog and imports majority of herbs in India from Himalayas of Nepal.
  • According to CLSA and HSBC, Patanyali is the fastest growing FMCG company in India. Ramdev baba has stated in his interview with CNN-News18 that profit from Patanjali Products goes to charity.

Timeline

  • 1997: In 1997, Patanjali Ayurved Limited

(PAL) started as a small pharmacy in Haridwar, by P.P. Swami Ramdev JiMaharaj.

  • 2006 : Established as a Pvt Ltd. company . Acharya Balkrishna established Patanjali Ayurved Limited as a formal privatecompany on 13th January 2006 along with Baba Ramdev.
  • 2010: The world’s largest food park opened On 5 January 2010, the world’s largest food park opened 20km from the holy city of Haridwar, Uttarakhand, India. The INR 500 cr Patanjali Food and Herbal Park is spread across ~95 acres in first phase; and has generated direct employment for 7,000 people. The construction started in February 2009 and was completed in a record time of less than a year
  • 2012 : Hit revenues of Rs. 450 cr, 450 stores

MARKETING MIX MODEL

  • PRODUCT

All Existing Products and herbal products for different diseases.

  • PRICE

Value Based Pricing ,Alignment of cost customers & competitors.

  • PLACE

Franchise Stores, Super/Hyper markets & Online marketplace

  • PROMOTION

Yoga Shivir, Youtube, Social media ,Free media promotions

SEGMENTATION

  • Demographic basis —Age groups from 15-64
  • Psychographic basis —Personality, lifestyle and class

TARGETING

  • 75% of the world’s population uses herbal care products
  • 65% of India’s rural population uses Ayurveda remedies
  • Trend shift towards natural herbal products

POSITIONING

  • Ayurvedic products are positioned as products who can treat diseases with zero side effects
  • Juices and food products are portrayed as a healthy way of life

 

MARKETING AND BRAND BUILDING

 

ONLINE & OFFLINE SHOPPING EXPERIENCE

  • Authentic and trained sales consultants
  • Customers problems solved on 1:1 interaction e
  • Easy to navigate website UI with full details
  • HD resolution photos and videos of products
  1. YOGA SHOWS

 

  • Pan India Yoga Shows
  • Broadcasted in 170 countries
  • 3 books and 2 video CDs

 

PERSONAL BRANDING

  • Cult personality and charisma of Baba Ramdev
  • 535 branches of Patanjali Yog Ashram

ADVERTISEMENTS\

  • Commercials on Star TV and ZEE TV
  • Simple ads to disseminate info -INFOMERICALS
  • No false promises
  • Spending is only 1-1.5 % of revenues turnover

SOCIAL MEDIA

  • 500kfollowers on twitter
  • 6 million Facebook page likes
  • 50k subscribers for YouTube channel
  • 11 million views on YouTube channel
  • Language —Hindi and English
  • Regular updates and replies

DISTRIBUTION AND SUPPLY CHAIN

  • Patanjali tied up with Future Group in 2015
  • Products to be sold in 245 Future Group stores pan India
  • Expected sales are 8 crores per month via these stores

Supplier

  • Collect RM from rural households
  • Some money given to villages for building roads, schools etc.

Producer

  • Demand for different item 1s placed at Haridwar
  • Items delivered to distribution centers through Patanjali’s own transport

Consumer

  • Products available at distribution centers/retail outlets
  • Certified doctors also available at Chikitsalyas

BRANDING STRATEGY

 Patanjali says: “Pick our product – it is the same product with no harmful chemicals. Plus by buying our products, you are ensuring the money you spend stays in India’. And

that additional value proposition is true for all their products and that is the reason they have branded every product as a “Patanyjali product”. , Patanjali can simply offer a “no chemicals & swadeshi alternative” to the people who have got used to this new product

Loyal Community

While one might be tempted to believe that Patanjali has grown exponentially within such a short span of time, the fact is that it is aresult of around 20 years of relentless work around Yoga and Ayurveda by Ramdev. In those 20 years Ramdev has built a extremely loyal community of followers.

Smart pricing

Yet another reason for Patanjali’s success is the thrift it practices. “Our profit margins are miniscule because the main aim is not to make profit,” said Ramdev. “Profiting from patients 1s against the philosophy of Ayurveda, so we aim at minimum profit from our health products. Our input costs are low because we source directly from farmers, avoiding middlemen.” Salaries are also modest. “Humare yahaan crore ki salary paane waala koi vyakti nahee hai.

Company Analysis

STRENGTHS

  • 100% natural products .
  • Brand image of the trust
  • Considered socially responsible for health of the society
  • Established distribution network in urban areas
  • WEAKNESS
  • Low export levels
  • Strong competitors and availability of substitute products
  • Less expenditure on marketing and promotional activities
  • Less distribution network in rural areas

 

THREATS

  • Political Interference ¢ Removal of import restrictions
  • Controversies

OPPURTUNITIES

  • Changing lifestyle and rising income levels
  • Change in trend of becoming more health conscious and using more organic products
  • Large domestic market
  • Rural market to be tapped

Patanjali’s Key To Success

  1. Increasing number of health-conscious people: In recent times, people have become more health conscious which is evident from the fact that many companies are investing money in organic and Ayurvedic products.
  2. Less price: Patanjali products are available at an attractive discount as compared to

their competition. The company sources products directly from farmers and cuts on middlemen to boost profits

  1. Word-of-mouth promotion: Advertising and promotions typically account for 12-20% of revenue expenditure by consumer goods companies. When a new company gets into the business, this spending is significantly higher. During the introduction stage, Patanjali followed a unique word-of-mouth publicity modeland the entire revenue was without any advertising. It was because of the brand loyalty of its customers that the word-of-mouth promotion proved so successful for the company.

Conclusion

Swadeshi factor:- Patanjali is happy to co-exist with indigenous companies, multinational ones are a different matter. “Humara ek simple funda hai: MNCs ko replace karna (We have a simple

principle: we want to replace MNCs),” said Ramdev.“We don’t want to put anyone down, but we would like to instil swadeshi pride so that Indian money does not go out of the country.

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