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.
Meaning of Marketing
Modern marketing has two different meanings in the minds of people who use the term.
One 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.
And a solution had to be found.
Thus arose the need for marketing;
- knowing what the customer wants before planning to make it, offering products which the customer wants to buy, not produce which we find convenient to manufacture;
- organizing a distribution system which matches customer’s habits – not the habits of our industry; and
- taking production and distribution decisions based on the feedback from the marketplace.
One can be successful in marketing by giving the customer what they want at the right price and making it available at the right place and in the right quantity. Marketing is a planned selling effort. It helps to increase the pace of selling in tune with the speed of manufacture.
Contemporary literature describes marketing variously as ‘a function,’ ‘an orientation,’ ‘an approach or attitude,’ ‘philosophy of business,’ and ‘ a technique or discipline.’ In fact, it is all of these.
The American Marketing Association defines marketing as ‘those activities which direct the flow of goods and services, from production to consumption.’
Marketing is also defined as ‘the set of human activities directed at facilitating and consummating exchanges.’
Marketing is the management function which organizes and directs all those business activities involved in assessing and converting customer purchasing power into effective demand for a specific product or service, and in moving the product or service to the final consumer or user to achieve the profit target or other objectives set by a company.
In practice, this usually entails the following tasks :
- Developing and implementing advertising and sales promotion plans.
- Maintaining the personal selling effort at a high level of performance and cost-efficiency.
- Providing the planned degree of service to customers.
- Identifying opportunities in the market and producing sales forecasts as a basis for production planning.
- Ensuring that the physical distribution of goods meets the needs of company strategy.
- Initiating and coordinating new-product innovation and developments.
- Developing a profitable product range, ensuring that the product mix is optimum to achieve corporate objectives.
- Reviewing product pricing and initiating necessary changes.
Of course, these tasks’ relative importance differs from business to business, depending on its size, complexity, and the nature of market conditions within which it operates.
On the other hand, Philip Kotler defines marketing as “a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.” This is a more comprehensive definition, and we will follow this definition throughout our discussion.
In essence, marketing covers all those activities involved in providing customer satisfaction and making a profit for the manufacturer who uses available resources to the maximum.
Marketing STARTS with the customer – what HE wants to have and ENDS with the customer – giving him what HE wants.
The AMA (American Marketing Association) is a prestigious and influential organization in the USA and 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 in 2004;
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and 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. They also put it in front and regarded it as the main force behind the marketing activities. See, the third change comes very quickly.
And it is rightly so. Businesses have found out that customers 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 concisely and outrageously; 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 activities that marketing makes to communicate with customers to indicate product’s or service’s value.
Marketing’s universal functions 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 extensive. 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 uses 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 comprises government agencies who provide funds, citizens living around the university 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 when one social unit (person or organization) strives to exchange 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, marketing’s fundamental task is to generate consumer interest for goods and services. Increased consumer interest in goods and services increases demand and 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, 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. Marketing has often been blamed for developing materialistic attitudes, fads, product obsolescence, a reliance on gadgets, conspicuous consumption, superficial product differences, and wasting resources.
Marketers counter these allegations by saying that they merely respond to people’s desires and make the best goods and services they can at the price people will pay.
Marketing plays an important role in improving 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, alcohol abuse, and other public interest issues. 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 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 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 that suggests that company strategy should revolve around serving important consumer groups’ needs.
Second, marketing provides inputs to strategic planners by identifying attractive market opportunities and 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 to 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.” The marketing department defines its mission, products, and markets and 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 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.
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 support 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. The different departments can work together to accomplish the company’s overall strategic objectives.
Impact of Marketing – Marketing is Exciting and Dynamic.
It would help if you realized that marketing is exciting, fascinating, stimulating, and always dynamic. Numerous activities are involved in it, not only advertising, selling, publicity, and public relations. Great marketing achievements may be experienced by companies one year to meet equally sizable defeats the following year.
Every organization’s ability to survive is affected by marketing. Knowledge of marketing principles, concepts, and theories helps marketers cope with today’s dynamic, complex environment in which major and unpredictable changes often occur, and this is an ongoing process.
Marketing accounts for a large part of everyone’s budget. You will be surprised to know that marketing costs are estimated to comprise 50 percent or more sales. On average, fifty paise out of every taka spent to go to cover costs arising from such activities as marketing research, branding, packaging, transportation, warehousing, merchandising, advertising, personal selling, and public relations publicity.
Marketing also influences our quality of life. Increased consumer awareness about such issues as energy conservation, nutrition, and physical fitness and safer products contribute to the well-being of society of which we are apart. Marketing, in achieving these desirable ends, plays a significant role.
Because of its diversity and the numerous challenges, rewarding career opportunities exist in marketing. No business discipline has many different career possibilities as marketing.
It is known from different studies that approximately one out of three jobs is directly or closely related to marketing. The types of organizations with entry-level positions in marketing include, among others, business firms such as manufacturers, service firms, wholesalers, retailers, advertising agencies, consulting firms, and private and public nonprofit organizations such as hospitals, the performing arts, charities, special interest groups, and government agencies.
Conclusion – Marketing touches all of us every day in every sphere of our lives.
Marketing means working with markets to bring about exchanges for the purpose of satisfying human needs and wants. We can also put it in this way: marketing is a total of business activities designed to plan, price, promote, and distribute want-satisfying products to target markets to achieve organizational objectives. Marketing, therefore, serves to satisfy the objectives of both the parties – market and the marketer.
Marketing touches all of us every day in every sphere of our lives. How it influences us is important from a marketing perspective. Marketers face different demand states of their products. Each of the demand states calls for different marketing activities that a marketer should be aware of.