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.
Marketing is part of the management process responsible for identifying, anticipating, and satisfying customer requirements profitably.
Let’s try to understand the definition of marketing and also get a sense of its importance, reach, and radius in business, corporations, organizations, and your life.
What is Marketing?
The AMA (American Marketing Association) is a prestigious and influential organization not just in the USA but also in the international arena.
The definition of marketing in 1964 was; “The process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges that satisfy individual and organizational objectives”.
It was until AMA approved and punished another on 2004;
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
In October 2007, they published a new one;
Marketing is 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 three definitions are not that different, but there is a significant difference between them. I like to call them the generation gap.
The first definition of AMA “create exchanges that satisfy individual and organizational objectives” indicates that marketing is there for creating exchanges for the involved parties to serve their purpose.
They forgot about you and me; the customer’s benefit or value. They also somehow put a boundary to the marketing functions; “process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas.”
In the second definition, they include us-the customers’ value but “in ways that benefit the organization and its stakeholders.” Here they showed the Extend of the marketing activities; “function and a set of processes for creating, communicating, and delivering value.”
The third definition of marketing by AMA is to be the most precise one of the closet on. Well, they put values of customers and society at equals to the organization’s objectives. Also, they put it in front and regarded it is as the main force behind the marketing activates. See, the third change comes very quickly.
And it is rightly so. Businesses have found out that it is customers who are the only reason for the success, not the large capital or the product/service they produce. For some of them, it had to be found in a hard way.
We can say that marketing is all about delivering customer value, and the businesses should be too. Businesses in trying to get customers’ attention and marketing include all those activates.
The marketing guru of Silicon Valley; Regis McKenna, defined marketing in a very short and outrageous way;
Marketing is everything
A bold statement from Regis McKenna’s but take a look again, and it’s very true. Marketing functions are not fixed on just products, pricing, promotion, and distribution. It is all the activates that affect how your customer perceives your company.
So in that sense, everything is marketing. Marketing is for understanding what the customer needs, and then to provide it requires marketing to go beyond the marketing department.
And at the end, we are defining marketing like this-
Every action of an organization; either orbits around, depends on, forced by the activates that marketing makes to communicate with customers for indicating product’s or service’s value to them.
The universal functions of marketing are buying, selling, transporting, sorting, standardization and grading, financing, risk-taking, and market information.
- Selling: The selling function involves promoting the product. It includes the use of personal selling, advertising, and other mass-selling methods.
- Transportation: The transporting function is the movement of goods from one place to another.
- Sorting: The sorting function involves holding goods until customers need it.
- Standardization and Grading: The standardization and grading involve sorting products according to size and quality. This makes buying and selling easier because it reduces the need for inspection and sampling.
- Financing: The financing provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products.
- Risk-Taking: It involves bearing the uncertainties that are part of the marketing process. A firm can never be sure that customers will want to buy its products can also be damaged, stolen, or outdated.
Who Performs Marketing Functions?
Marketing functions are all part of the marketing process and must be done by someone.
None of them eliminated. In a planned economy, some of the functions may be performed by government agencies. Others may be left to individual producers and consumers.
In a marketing directed economy, marketing functions are performed by producers, consumers, and a variety of marketing specialists.
Scope of Marketing
The definition of marketing stated earlier suggests that the scope of marketing is extremely wide. Marketing involves determining needs and wants, demand, and produce products to satisfy them through exchange processes.
Under the expanded notion of marketing, individuals, social organizations, political parties, educational institutions, charities, and many other organizations are engaged in marketing. We will now look at the broad dimensions of marketing and the business dimensions of marketing to understand what marketing encompasses.
Marketing from a General Perspective
Traditionally, marketing is regarded as an activity performed by business organizations. However, marketing can also be performed by other types of organizations and even by individuals. For example, a political party makes use of marketing when it persuades voters to vote for its candidate.
University graduates can use marketing principles to maximize the effectiveness of their search for a job. Against this backdrop, there exists a wide variety for marketers, what they are marketing, and what are their potential markets.
In addition to a wide variety of items generally considered as goods and services, ideas, persons, places, and organizations are also marketed.
In this general perspective, markets cover more than the direct consumers of products. For example, in addition to its students, a public university’s market is composed of government agencies who provide funds, citizens living around the university who may be affected by university activities, and alumni who support various university programs.
A company’s markets include government agencies, environmentalists, and shareholders. Thus, any individual or group with whom a person or organization has an existing or potential exchange relationship can be regarded as a market.
Marketing can occur at any time one social unit (person or organization) strives to exchange something of value with another social unit. Thus, the essence of marketing is a transaction or exchange. In this broad sense, marketing consists of activities designed to generate and facilitate exchanges intended to satisfy human needs or wants.
Marketing from the Business Perspective
In a society, organizations and individuals are involved in and exposed to various marketing activities. These organizations may or may not be profit-oriented, although they may face some marketing problems.
However, the popular notion of marketing does not provide a conceptual framework for practical purposes. Marketing should be visualized as a whole to get maximum return out of the investments in marketing activities.
So, we need to define marketing from a business viewpoint that will guide managers in business and nonprofit organizations in carrying out their marketing tasks.
Our definition of marketing – applicable in a business or a nonprofit organization-is as follows: Marketing is a total system of business activities designed to plan, price, promote and distribute want-satisfying products to target markets to achieve organizational objectives. This definition has the following significant implications:
- The entire system of business activities should be customer-oriented. Customers’ wants must be recognized and satisfied.
- Marketing should start with an idea about a want-satisfying product and should not end until the customers’ wants are completely satisfied, which may be some time after the exchange is made.
Importance of Marketing
It is important to study marketing for several reasons. Marketing stimulates demand, costs a large part of sales, employs people, supports industries, affects all consumers, and plays a major role in daily lives.
Since marketing stimulates demand, a fundamental task of marketing is to generate consumer interest for goods and services. Increased consumer interest in goods and services increases demand and hence increases the Gross National Product (GNP) of a country.
A large portion of sales revenue goes to cover marketing costs. These costs should not be mistaken as marketing profits, nor should it be
assumed that the elimination of marketing activities would lower prices. Amount spent to cover various marketing costs is justified because marketing performs very important functions to bring goods and services from producer to consumer who is separated from each other.
A sizable portion of a country’s civilian labor force is engaged in marketing activities. This includes people employed in the retailing, wholesaling, transportation, warehousing, and communications industries, and those involved with marketing and activities for manufacturing, financial, service, agricultural, mining, and other industries.
In the USA, for instance, about 17 million people work in retailing, 6 million in wholesaling, and 4 million in transportation. And projections indicate that future employment in marketing will remain strong.15
Some industries run on the support of marketing activities, such as advertising and marketing research.
Total annual U.S. advertising expenditures exceed $ 100 billion. Many agencies, including Young & Rubicam, J. Walter Thompson, McCann-Erickson and Ogilvy & Mather, have worldwide billings of $1 billion or more. Approximately $1.8 billion is spent yearly in the United States on marketing research.
People are consumers of various goods and services produced in society.
Knowledge of marketing makes consumers better informed, more selective, and more efficient. Consumers can establish effective channels of communication with organizations and can get complaints resolved more easily and favorably.
An understudying of the role of marketing lead the consumers toward forming consumer groups. These consumer groups often have a significant influence on the activities of marketers.
Marketing has a strong influence on the beliefs and lifestyles of the members of society. Often, marketing has been blamed for developing materialistic attitudes, fads, product obsolescence, a reliance on gadgets, conspicuous consumption, and superficial product differences, and wasting resources.
Marketers counter these allegations by saying that they merely respond to the desires of people and make the best goods and services they can at the price people will pay.
Marketing plays an important role in improving the quality of life.
For example, marketers encourage companies to make safer products such as low-nicotine cigarettes. Marketers create public service messages on energy conservation, cures for diseases, abuses of alcohol, and other issues of public interest. They also help new goods, ideas, and services to be accepted and assimilated by people.
Knowledge of marketing is also valuable for those not directly involved with marketing.
For example, marketing principles can be utilized by doctors, lawyers, management consultants, financial analysts, research and development personnel, economists, statisticians, city planners, nonprofit institutions, and others.
Each of these professions and organizations requires an understanding and satisfaction of the patient, client, consumer, taxpayer, or contributor needs. And many of them are new undertaking marketing research, advertising, and so on.
Role of Marketing in Economic Development
The main purpose of markets and intermediaries is to make the exchange easier and allow greater time for production, consumption, and other activities, including recreation.
An effective marketing system is necessary for economic development. Improved marketing may be the key to growth in less-developed nations.
Without an effective marketing system, the less developed nations may not be able to escape the “vicious circle of poverty”.
Many people in these nations can’t leave their subsistence way of life to produce for the market because there are no buyers for what they produce. And there are no buyers because everyone else is producing for their own needs.
As a result, distribution systems and intermediaries do not develop.
Breaking this vicious circle of poverty may require major changes in the marketing systems that are typical in less- developed nations. Without an effective marketing system, people can’t leave their subsistence way of life.
Marketing means delivering the goods and services that customers want and need. It means getting products to them at the right time, in the right place, and at a price, they’re willing to pay.
So, effective marketing is needed to link producers and consumers.
Marketing Role in Strategic Planning
Marketing plays an important role in strategic planning in the sense that consumers’ needs and the company’s ability to satisfy them to guide the company mission and objectives
Most company strategic planning deals with marketing variables such as market share, market development, and growth. In most cases, it is very difficult to isolate strategic planning from marketing planning.
Virtually, strategic planning is often referred to as strategic marketing planning. Marketing plays a key role in the company’s strategic planning in several ways.
First, marketing provides a guiding philosophy- the marketing concept – which suggests company strategy should revolve around serving the needs of important consumer groups.
Second, marketing provides inputs to strategic planners by helping to identify attractive market opportunities and by assessing the firm’s potential to take advantage of them.
Finally, within individual business units, marketing designs strategies for reaching the unit’s objectives.
Marketing and the Other Business Functions
Opinions vary about the role of marketing in a company. One view is that marketing bears equal importance like any other function. Another view is that marketing is the most important of all the functions of a company.
To quote Peter Drucker, “The business aims to create customers”. It is the marketing department that defines the company’s mission, products, and markets and to direct other functions performed to ensure customer satisfaction.
Astute marketers are inclined to put the customer at the center of the company. They believe that a company must attract and hold customers for being successful.
Promises must be made to attract the customers, and they can be retained by providing satisfaction. Marketing offers the promise and ensures its delivery.
Marketing plays a coordinating role in helping ensure that all departments work together to ensure consumer satisfaction.
Conflicts between departments regarding marketing issues can happen.
Business functions differ in their objectives and activities. Production is concerned with suppliers, finance is interested in stockholders and sound investment, and marketing focuses on products, pricing, promotion, and distribution.
All the different functions of a company must be carried out harmoniously to generate value for consumers.
But in reality, this is not always the case, and conflicts between the departments are not rare.
The marketing department operates from the consumer’s standpoint. But to ensure consumer satisfaction, it wants other departments to work in a way not considered comfortable by them.
Marketing activities can increase purchasing costs, disrupt production schedules, increase inventories, and create budgetary problems. In practice, other departments may be unwilling to be subservient to the marketing department.
Thus, marketing management can best gain support for its goal of consumer satisfaction by working to understand the company’s other departments.
Marketing managers must work closely with managers of other functions to develop a system of functional plans under which the different departments can work together to accomplish the company’s overall strategic objectives.