This MCQ module is based on: Marketing Concept, Functions & Philosophies
TOPIC 4 OF 9
Marketing Concept, Functions & Philosophies
🎓 Class 12
Social Science
CBSE
Theory
Chapter 2 — Marketing
⏱ ~28 min
🌐 Language: [gtranslate]
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Marketing — Concept, Scope & Management Philosophies
Marketing class 12 NCERT — meaning of marketing, the difference between marketing and selling, the five marketing-management philosophies and the twelve functions of marketing every CBSE Class 12 student must know.
2.1 Where Do Companies Do Their Business? — In the Markets or in the Society?
NCERT opens this chapter with a powerful question: a company's survival does not depend on its consumers alone. A diverse set of stakeholders — the government, religious leaders, social activists, NGOs, the media — also shape the brand. Earning their satisfaction is just as imperative, because they add to the power of the brand by word of mouth. Social concern strengthens the brand. Corporates that have embraced the deepest social values have built powerful brands and, eventually, robust customer relationships.
NCERT groups corporate social justice into two broad categories. The first covers issues that need instant humanitarian attention — child nutrition, child care, old-age homes, fighting hunger, aid to victims of natural calamities. The second covers issues that make society a pleasant place to live in the long run — health awareness and aid, education, environmental protection, women's employment and empowerment, preventing unjust discrimination (caste, community, religion, ethnicity, race, sex), eradication of poverty through employment, preservation of culture, values and ethics, and contribution to research.
📜 Procter & Gamble — Leading by Social Concern
P&G's philosophy is that it should lead the industry in implementing a global environmental programme. P&G is one of the first companies in the world to actively study the influence of consumer products on the environment and to introduce concentrated products, recycled plastic bottles and refill packages to the industry. P&G contributes to sustainable development and addresses environmental and social issues connected with its products and services.
— Adapted from Effective Executive (NCERT lebs2 Ch.10)
🎯 Learning Outcomes (NCERT)
After studying this chapter the learner should be able to: explain the meaning of marketing; distinguish between marketing and selling; list out the important functions of marketing; examine the role of marketing in the development of an economy, in a firm, in society and for consumers; explain the elements of the marketing-mix; classify products into different categories; analyse the factors affecting the price of a product; list out the types of channels of distribution; and explain the major tools of promotion — advertising, personal selling, sales promotion and publicity.
2.2 What is Marketing?
The term marketing is described by different people in different ways. Some think it is the same as shopping; whenever they go out to buy something they call it 'marketing'. Others confuse it with selling and feel that marketing starts only after a product has been produced. Still others equate it with merchandising — designing the product. All these descriptions are partly correct, but marketing is a much broader concept.
Traditionally, marketing was described in terms of its activities — the performance of business activities that direct the flow of goods and services from producers to consumers. Most manufacturing firms do not produce for their own consumption but for use by others. To move goods and services from the producer to consumers, a number of activities are required — product designing or merchandising, packaging, warehousing, transportation, branding, selling, advertising and pricing. Together, these are called marketing activities. Thus merchandising, selling and distribution are all parts of a much larger set of activities that a firm performs collectively as marketing?.
Importantly, marketing is not merely a post-production activity. It also includes activities performed before goods are produced (identifying customer needs, gathering information, designing the product, packaging, branding) and continues even after the goods have been sold (after-sales follow-up to maintain customer relations and procure repeat sales).
📘 Modern Definition (Philip Kotler)
Marketing is "a social 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."
💬 NCERT Quotes — The Marketing Mind-set
"Business is not financial science, it's about trading, buying and selling. It's about creating a product or service so good that people will pay for it." — Anita Roddick"Marketing takes a day to learn. Unfortunately it takes time to master." — Philip Kotler
2.2.1 Understanding 'Market' — Old and New Meanings
In the traditional sense, the term market refers to the place where buyers and sellers gather to enter into transactions involving the exchange of goods and services. We still use the word this way every day — a cotton market, the gold market, the share market, a national or international market, a consumer or industrial market, a retail or wholesale market.
But in the modern marketing sense, market has a broader meaning. It refers to the set of actual and potential buyers of a product or service. When a fashion designer offers a new dress, all the people who are willing to buy it and offer some value in exchange make up the market for that dress. The market for fans, bicycles, electric bulbs or shampoos similarly means all the actual and potential buyers of those products.
2.2.2 Four Important Features of Marketing
1. Needs & Wants
Marketing helps individuals and groups obtain what they need and want. A need is a state of felt deprivation; a want is a culturally shaped object that satisfies that need. Hunger (need) → dosa & rice (South Indian want) or chapatti & vegetables (North Indian want).
2. Creating a Market Offering
A market offering is a complete offer with given features (size, quality, taste), at a price, available at a given outlet. Example: a cell phone in 4 versions (memory, TV, internet, camera) priced ₹5,000–₹20,000 sold through company-exclusive shops in metros.
3. Customer Value
Buyers buy on perceived value — benefit relative to cost. The marketer's job is to add value so that customers prefer the product over competing offerings.
4. Exchange Mechanism
Marketing works through exchange. Five conditions: (i) two parties, (ii) each has something of value, (iii) ability to communicate & deliver, (iv) freedom to accept/reject, (v) willingness to transact voluntarily.
⚠️ Beyond Business — Marketing for Non-profits
Marketing is not confined only to business organisations. It is equally relevant to non-profit bodies — hospitals, schools, sports clubs, social and religious organisations. It helps them spread the message of family planning, improve literacy, raise health standards and provide medication to the sick.
2.3 What Can Be Marketed?
The list of what can be marketed today is far wider than physical goods. NCERT lists eight categories — and modern marketing literature now adds 'experiences', 'properties' and 'organisations' to this list.
| Category | NCERT Examples |
|---|---|
| Physical Products | Motorcycle, iPods, mobile phone, footwear, television, refrigerator |
| Services | Insurance, health care, BPO, security, financial services (investment), computer education, online trading |
| Ideas | Polio vaccination, HelpAge, family planning, blood donation (Red Cross), Flag Day donation (National Foundation for Communal Harmony) |
| Persons | Election candidates for various posts |
| Places | "Visit Agra — City of Love"; "Udaipur — City of Lakes"; "Mysore — City of Gardens"; "When Orissa celebrates, even the gods join in" |
| Events | Sports events (Olympics, cricket series), Diwali Mela, fashion show, music concert, film festival, elephant race (Kerala Tourism) |
| Information | Information produced and distributed by universities, research organisations, marketing-research agencies, technology providers |
| Experiences/Properties/Organisations | Theme-park experiences, real-estate properties, image-building of organisations themselves |
2.4 Who is a Marketer?
A marketer is the one who is more active in seeking the exchange. In a typical exchange, one party is more actively looking to make the deal happen — that party is the marketer; the other is the prospect. A seller searching for buyers is a marketer; a buyer searching out a scarce good is also playing a marketer's role at that moment.
A marketer's job in an organisation is to identify the needs of the target customers and to develop products and services that satisfy those needs at a price the customer is ready to pay, made available at a place the customer can access, and communicated through promotion that reaches the customer.
2.5 Marketing Management — Concept
According to the American Management Association, marketing management is "the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals." Philip Kotler similarly defines it as "the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer values of management."
A careful reading reveals three pillars:
(i) Choose a Target Market
Decide whom to serve — e.g. a manufacturer chooses to make readymade garments for children up to 5 years of age.
(ii) Get, Keep & Grow Customers
Create demand so target customers buy; keep them satisfied with the firm's products; attract more customers so the firm can grow.
(iii) Create Superior Customer Value
Develop, deliver and communicate superior values so customers are attracted; persuade prospective buyers through effective communication.
🔁 Demand Management — Not Just Demand Creation
Marketing management is generally about creating demand — but sometimes it is about restricting it. In an over-full demand situation (like India before 1991 liberalisation, when consumer-durable demand exceeded supply), the marketer reduces promotion or raises prices. In an irregular demand situation (seasonal goods like fans or woollens), the marketer changes the time pattern by offering short-term incentives. So the job is to manage demand effectively — creating, sustaining, restricting or smoothing it as the situation demands.
2.6 Marketing versus Selling
Many people confuse selling with marketing. Marketing is a much larger set of activities of which selling is just one part. Before a TV is even sold, a TV marketer plans the type and model to be produced, the price at which it will be sold and the distribution outlets through which it will be available. In short, marketing covers a whole range of activities relating to planning, pricing, promoting and distributing products that satisfy customer needs.
Selling, by contrast, is restricted to promoting goods and services through salesmanship, advertising, publicity and short-term incentives — so that the title of the product is transferred from seller to buyer. In other words, selling is about converting the product into cash; marketing is about creating customer value.
2.6.1 Seven Key Differences — Marketing vs Selling
| Basis | Marketing | Selling |
|---|---|---|
| 1. Scope | Wide range — planning, pricing, promoting, distributing | Narrow — only the act of transferring title |
| 2. Focus | Customer needs & satisfaction | Product & sales volume |
| 3. Starting point | The market — what customers want | The factory — what is already produced |
| 4. Means | Integrated marketing — product, price, place, promotion | Selling and promoting |
| 5. End | Profit through customer satisfaction | Profit through sales volume |
| 6. Time horizon | Long-term — customer for life | Short-term — close this sale |
| 7. Activities | Begins before production, continues after sale | Begins after production, ends at title transfer |
2.7 Marketing Management Philosophies — Five-Stage Evolution
What philosophy or thinking should guide an organisation's marketing efforts? The choice determines the weight given to factors such as product features, selling techniques, customer needs or social concerns. The marketing concept has evolved through five stages.
Stage 1 · Industrial revolution era
① Production Concept
Demand exceeded supply; selling was no problem. Focus: maximise production at large scale to cut average cost. Assumption: customers favour products that are widely available and affordable.
Stage 2 · Supply rises with industry
② Product Concept
Mere availability and low price could no longer ensure sale. Customers wanted superior quality, performance and features. Focus shifted from quantity to quality; product improvement became the key to profit.
Stage 3 · Crowded markets, sharp competition
③ Selling Concept
With many sellers selling quality products, attracting and persuading customers became critical. Aggressive selling and promotion — advertising, personal selling, sales promotion — was needed to push the product. Assumption: buyers won't buy enough unless coaxed. Risk: ignored long-run customer satisfaction.
Stage 4 · Mature markets, savvy customers
④ Marketing Concept
Customer satisfaction is the key to organisational success. The basic role of the firm is to "identify a need and fill it." All decisions — product features, price, place, promotion — are taken from the customer's point of view. Profit follows automatically.
Stage 5 · 21st-century — environment, ethics, equity
⑤ Societal Marketing Concept
Pure customer focus is inadequate when society faces pollution, deforestation, resource shortage, population explosion and inflation. The firm must identify customer needs and ensure long-term well-being of the consumer and society. Ethics, ecology and equity are added to the marketing concept.
2.7.1 NCERT Comparison — Five Philosophies Side by Side
| Basis | Production | Product | Selling | Marketing | Societal |
|---|---|---|---|---|---|
| Starting point | Factory | Factory | Factory | Market | Market & Society |
| Main focus | Quantity of product | Quality, performance, features | Existing product | Customer needs | Customer needs & society's well-being |
| Means | Availability & affordability | Product improvements | Selling & promoting | Integrated marketing | Integrated marketing |
| Ends | Profit through volume | Profit through quality | Profit through sales volume | Profit through customer satisfaction | Profit through customer satisfaction and social welfare |
2.7.2 The Marketing Concept Rests on Five Pillars
(i) Identify Target Market
Choose the customer segment that will be the target of marketing effort.
(ii) Understand Needs & Wants
Study what customers in the target market truly need and want.
(iii) Develop Products/Services
Build offerings that satisfy those needs — features, quality, packaging, brand.
(iv) Beat the Competitors
Satisfy needs better than competitors — superior value at the right price.
(v) Do It at a Profit
Customer satisfaction is the means; firm's profit is the end.
Activity 2.1 — Spot the Philosophy
Match each company stance below with one of the five marketing philosophies (Production / Product / Selling / Marketing / Societal):
- "We just need to make more units cheaper — customers buy whatever is on the shelf at a low price."
- "We pay our salesmen the highest commissions in the industry — we'll sell what we have made."
- "Tell me what features the customer wants in our next refrigerator and we'll build it."
- "Our shampoo bottle uses 25% recycled plastic and our profit funds rural sanitation."
- "Our LED TV has the brightest panel in its class — that's why people will choose us."
- (1) Production concept — focus on availability and affordability.
- (2) Selling concept — push the product through aggressive selling.
- (3) Marketing concept — start from the customer's expressed needs.
- (4) Societal marketing — customer + ecological + social welfare.
- (5) Product concept — superior performance and features.
2.8 Functions of Marketing — Twelve Activities of a Marketer
Marketing covers all activities required to move goods and services from producers to consumers in a way that maximises customer satisfaction. From the management point of view, twelve functions are typically performed.
| # | Function | What It Involves |
|---|---|---|
| 1 | Gathering & Analysing Market Information | Identify customer needs; analyse opportunities, threats, strengths and weaknesses; today, many firms use interactive websites and SMS polls on TV news channels to capture viewer choice. |
| 2 | Marketing Planning | Develop a plan to achieve marketing objectives. Example: a colour-TV maker with 10% share aims at 20% in three years — needs an integrated plan covering production, promotion and action programmes. |
| 3 | Product Designing & Development | Make the product attractive — cost, mileage, shape, style. A motorbike buyer looks not only at performance but also at design. |
| 4 | Standardisation & Grading | Standardisation = producing to predetermined specifications (uniformity, less inspection). Grading = classifying products by quality/size — vital for agricultural produce like wheat or oranges; helps realise higher prices for high-quality output. |
| 5 | Packaging & Labelling | "Pillars of modern marketing." Packaging protects and promotes. Lay's, Uncle Chips, Clinic Plus and Colgate owe much of their success to packaging. |
| 6 | Branding | Decide whether to sell under a generic name (Fan, Pen) or a brand name (Polar Fan, Rotomac Pen). Brand name aids product differentiation, customer loyalty and repeat sales. |
| 7 | Customer Support Services | After-sales service, complaint handling, credit, maintenance, technical help, consumer information — key drivers of repeat sales and brand loyalty. |
| 8 | Pricing of Products | Set price objectives, strategy and the actual price. Lower price → higher demand (and vice-versa). Decide pricing changes too. |
| 9 | Promotion | Inform and persuade customers using advertising, personal selling, sales promotion and publicity. Decide promotion mix and budget. |
| 10 | Physical Distribution | Two big decisions: (a) channels — wholesalers, retailers; (b) physical movement — inventory, storage, transportation. |
| 11 | Transportation | Move goods physically. Tea produced in Assam must be transported to Tamil Nadu, Punjab, Jammu & Kashmir, Haryana and Rajasthan where it is consumed. |
| 12 | Storage / Warehousing | Bridge the time gap between production and sale — irregular demand (woollens, raincoats) or seasonal supply (sugarcane, rice, wheat, cotton). Manufacturers, wholesalers, retailers all play a role. |
Activity 2.2 — Why Companies Now Run SMS Polls
NCERT notes a Hindi TV news channel that asks viewers (via SMS) which of four or five news stories should be aired as the prime-time detailed report. Which marketing function does this illustrate? Why has the internet made it cheaper than ever?
- Function illustrated: Gathering and analysing market information — direct customer feedback to shape the product (story).
- Why cheaper now: Interactive websites, social media polls, SMS short codes — all collect lakhs of data points instantly at near-zero marginal cost.
- Marketing benefit: Reduces the risk of producing what nobody wants, increases viewer satisfaction and lifts ratings.
- Caveat: Self-selecting samples are biased — only engaged viewers respond, so insights must be triangulated.
📝 Competency-Based Questions — Concept & Philosophies
Source-based scenario: Procter & Gamble (P&G) — one of the world's largest FMCG firms — has a stated philosophy of leading the industry in global environmental programmes. P&G has introduced concentrated detergents, recycled-plastic bottles and refill packs to reduce packaging waste. NCERT highlights that such firms address environmental and social issues alongside delivering customer value, embodying the modern face of marketing.
Q1. P&G's decision to use recycled-plastic bottles even when virgin plastic is cheaper best illustrates which marketing-management philosophy?
L3 ApplyAnswer: (d) — The societal marketing concept extends pure customer focus to long-term well-being of consumers and society. Recycled bottles raise cost but benefit the environment — exactly the trade-off the societal concept embraces.
Q2. Distinguish between marketing and selling using at least four bases of comparison.
L4 AnalyseAnswer: (i) Scope — Marketing covers planning, pricing, promotion and distribution; selling is only title transfer. (ii) Focus — Marketing focuses on customer needs; selling focuses on the existing product. (iii) Starting point — Marketing starts in the market; selling starts in the factory. (iv) End — Marketing earns profit through customer satisfaction; selling earns profit through sales volume. (v) Horizon — Marketing is long-term (customer-for-life); selling is short-term.
Q3. Why does NCERT say marketing is not merely a post-production activity? Justify with examples drawn from before and after the actual production stage.
L5 EvaluateAnswer: NCERT lists three pre-production activities: identification of customer needs, collection of information for product development, and designing the package and brand name. It lists post-sale activities: customer relationship management for repeat sale and after-sales follow-up. Examples — Tata Motors studies rural-mobility needs before designing a small commercial vehicle; Maruti Suzuki runs free service camps after sale to retain customers. Hence marketing wraps around production from both ends.
Q4. (HOT) "The five marketing philosophies are not stages a firm passes through — different industries today still operate at different philosophies." Build an argument with two Indian examples.
L6 CreateAnswer: Many commodity markets in India (cement, basic steel, table salt) still follow the production concept — availability and affordability are decisive. Premium consumer goods (Apple iPhones, Bose speakers) operate on the product concept — performance and features rule. Insurance and timeshare resorts still use the selling concept — aggressive personal selling. Hindustan Unilever's mass FMCG portfolio uses the marketing concept — research-driven need fulfilment. ITC e-Choupal and Tata Salt's iodisation programme are examples of the societal concept. So the philosophies coexist; firms pick the one that fits their market structure rather than progressing linearly.
🔗 Assertion–Reason Questions (Class 12 Format)
Options: (A) Both A & R true, R correctly explains A · (B) Both true, R does not explain A · (C) A true, R false · (D) A false, R true.
Assertion (A): Marketing is a much broader concept than selling.
Reason (R): Marketing covers planning, pricing, promotion and distribution, while selling is restricted to transferring the product's title from seller to buyer.
Answer: (A) — Both true; R correctly explains A. Marketing's wide scope (the four Ps) makes it broader than selling, which is just one slice — title transfer.
Assertion (A): The production concept assumes that customers will favour products that are widely available and affordable.
Reason (R): Under the production concept, demand exceeded supply, so anyone who could produce goods was able to sell them.
Answer: (A) — Both true; R correctly explains A. The historical reality of demand exceeding supply justified the production-concept assumption that availability and affordability would suffice.
Assertion (A): The marketing concept and the societal marketing concept are identical.
Reason (R): Both concepts focus on customer satisfaction as the key to organisational success.
Answer: (D) — A is false. Although both stress customer satisfaction (so R is true), the societal concept goes further by adding long-term well-being of the consumer and the wider society. Hence the two are not identical.
Frequently Asked Questions — Marketing Concept & Functions
What is marketing in Class 12 Business Studies?
Marketing is the social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others. NCERT defines it as a customer-focused activity that begins long before a product is made — with research into customer needs — and continues long after the sale through after-sales service. It covers all activities required to facilitate exchange, including product development, pricing, distribution, promotion, branding, packaging and labelling. The aim is to satisfy customer needs profitably and build long-term customer relationships.
What is the difference between marketing and selling?
Marketing and selling differ on several dimensions. Marketing starts with the customer's needs and seeks to satisfy them profitably; selling starts with the producer's product and pushes it to the customer. Marketing is a wider concept that includes product planning, pricing, distribution, promotion and after-sales service; selling is only a small part of marketing concerned with persuading buyers. Marketing earns profit through customer satisfaction, while selling earns profit through volume of sales. NCERT therefore says marketing is need-driven and long-term, while selling is product-driven and short-term.
What are the five marketing management philosophies?
NCERT lists five marketing-management philosophies that have evolved over time. The production concept assumes consumers favour cheap, widely available products. The product concept assumes consumers favour high-quality, feature-rich products. The selling concept assumes consumers must be persuaded to buy through aggressive selling and promotion. The marketing concept holds that the firm must identify and satisfy customer needs better than competitors. The societal-marketing concept adds that the firm must also preserve and enhance the well-being of society. Each stage shifts the focus closer to the customer and society.
What are the functions of marketing in Class 12 NCERT?
NCERT identifies twelve functions of marketing: gathering and analysing market information, marketing planning, product designing and development, standardisation and grading, packaging and labelling, branding, customer support services, pricing of products, promotion, physical distribution (place), transportation, and storage and warehousing. These functions cover everything a marketer does from research to after-sales service. Together they create utility — form, place, time, possession and information utility — that converts a basic product into something a customer wants to buy.
What can be marketed according to NCERT?
NCERT explains that anything of value can be marketed. This includes physical goods (cars, soaps), services (banking, telecom, healthcare), ideas (family planning, road safety), experiences (theme parks, concerts), events (cricket matches), persons (politicians, celebrities), places (tourism), properties (real estate, financial securities), organisations (NGOs, hospitals) and information (books, online courses). The marketing process applies to each — research the audience, design an offering, set a price or contribution, distribute it and promote it. Modern marketing is therefore far broader than only products.
Who is a marketer in Class 12 Business Studies?
A marketer is anyone who actively seeks a response — attention, purchase, vote, donation — from another party called the prospect. NCERT defines a marketer as a person who takes a more active part in the exchange process: a seller looking for a buyer, a politician seeking votes, an NGO seeking donations or a hospital seeking patients. Inside firms, the marketing manager and the entire marketing team — including market researchers, product managers, sales staff and advertising teams — perform marketer roles. The marketer's task is to create, communicate and deliver value to the prospect.
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