Marketing refers to the process of ascertaining consumers’ needs and supplying various goods and services to the final consumers or users to satisfy those needs.
Traditional Concept of Marketing
Traditionally, marketing means selling goods and services that have been produced. Thus, all those activities which are concerned with persuasion and sale of goods and services, have been called marketing.
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.
Modern Concept of Marketing
The modern concept of marketing considers the consumers’ wants and needs as the guiding spirit and focuses on the delivery of such goods and services that can satisfy those needs most effectively. Similarly, in modern marketing sense, the term market has a broader meaning. It refers to a set of actual and potential buyers of a product or service.
What is Marketing
Marketing is a broad concept that starts with identifying consumer needs, then plan the production of goods and services accordingly to provide them the maximum satisfaction. Phillip Kolter defines marketing as, “a social process by which individual groups obtain what they need and want through creating offerings and freely exchanging products and services of value with others”.
Market Offering: are some combination of products, services, information, or experiences offered to a market to satisfy consumer needs or wants. They are not just limited to physical products; they can also include services such as intangible like activities or benefits offered for sale.
Important features of Marketing:
- Needs and Wants: The process of marketing helps individuals and groups in obtaining what they need and want.
- Creating a Market Offering: Market offering refers to a complete offer for a product or service, having given features like size, quality, taste, etc; at a certain price; process of purchasing, available at a given outlet or location and so on.
- Customer Value: A product will be purchased by customers only if it is perceived to be giving greatest benefit or value for the money. The job of a marketer, therefore, is to add and convey this value of the product to the probable customers, so they may prefer the particular product against competing items.
- Exchange Mechanism: The process of marketing works through the exchange mechanism. The individuals (buyers and sellers) obtain what they need and want through the process of exchange.
Objectives of Marketing:
- Provide satisfaction to customers.
- Increase in demand
- Provide better quality product to the customers
- Create goodwill for the organisation
- Generate profitable sales volume
Importance of Marketing:
- Marketing helps business to keep pace with the changing tastes, fashions, preferences of the customers. Additionally, it also helps the business in meeting competition most effectively.
- Marketing helps the business in increasing its sales volume, generating revenue and ensuring its success in the long run.
- Marketing also contributes to providing better products and services to the consumers and improve their standard of living.
- Marketing helps in making products available at all places and throughout the year.
- Marketing plays an important role in the development of the economy. Various functions and sub-functions of marketing like advertising, personal selling, packaging, transportation, etc. generate employment for a large number of people, and accelerate growth of business.
Difference between Marketing and Selling
The terms ‘marketing’ and ‘selling’ are related but not synonymous. ‘Marketing’ emphasises on earning profits through customer satisfaction. In marketing, the focus is on the consumer’s needs and their satisfaction. ‘Selling’ on the other hand focuses on product and emphasises on selling what has been produced. Hence, Selling is a small part of the wide process of marketing.
|Marketing includes selling and other activities like various promotional measures, marketing research, after sales service, etc.||Selling is confined to persuasion of consumers to buy firm’s goods and services.|
|It starts with research on consumer needs, wants, preference, likes, dislike etc., and continues even after the sales have taken place.||Selling starts after the production process is over and ends with the handing over the money to the seller by the buyer.|
|Priority is needs of buyer.||Priority is the seller.|
|Focus is on earning profit through maximisation of customers’ satisfaction.||Focus is on earning profit through maximisation of sales.|
|It is an integrated approach to achieve long term goals like creating, maintaining and retaining the customers.||All activities revolve around the product that has been produced.|
Functions performed in Marketing
- Marketing Research – Gathering and Analysing Market Information
- Marketing Planning
- Product Designing and Development
- Standardisation and Grading
- Packaging & Labelling
- Pricing the Product
- Promotion of the Product
- Storage and Warehousing
- Physical Distribution
- After-Sale Services/ Customer Support Services
Marketing Management Philosophies
The concept or philosophy of marketing has evolved over a period of time as follows:
The Production Concept
- During the earlier days of industrial revolution, the demand for industrial goods started picking up but the number of producers were limited. As a result, the demand exceeded the supply. Selling was not an issue.
- It was believed that profits could be maximised by producing at large scale, thereby reducing the average cost of production.
- It was also assumed that consumers would favour those products which were widely available at an affordable price.
- Thus, availability and affordability of the product were considered to be the key to the success and hence greater emphasis was placed on improving the production and distribution efficiency.
The Product Concept
- Mere availability and low price of the product could not ensure increased sale as customers started looking for products which were superior in quality, performance and features.
- Therefore, the emphasis of the firms shifted from quantity of production to quality of products.
- Hence, product improvement came to be considered as the key to profit maximisation of a firm.
The Selling Concept
- With the passage of time, supply of goods improved resulting in increased competition among sellers.The product quality and availability did not ensure the survival and growth of firms.
- This led to greater importance to attracting and persuading customers to buy the product.
- Hence, the focus of business firms shifted to pushing the sale of products through aggressive selling techniques.
The Marketing Concept
- In Selling Concept, making sale through any means became important but in long-term it was realised that the customer satisfaction matters the most and this gave way to new paradigm of Marketing Concept.
- This assumes that in the long run an organisation can achieve its objective of maximisation of profit by identifying the needs of its present and prospective buyers and satisfying them in an effective way.
- In this, customer’s satisfaction becomes the focal point of all decision making in the organisation.
The Societal Marketing Concept
- The marketing concept cannot be considered as adequate if we look at the challenges posed by social problems like environmental pollution, deforestation, shortage of resources, population explosion and inflation.
- The societal marketing concept holds that the task of any organisation is to identify the needs and wants of the target market and deliver the desired satisfaction in an effective and efficient manner so that the longterm well-being of the consumers and the society is taken care of.
- Thus, the societal marketing concept is the extension of the marketing concept as supplemented by the concern for the long-term welfare of the society.
There are large number of factors affecting marketing decisions. Some of these are controllable factors like brand-name, location, price, where to advertise etc and others are non-controllable factors like government taxes, policy, inflation etc. Thus, from a number of alternatives available a firm chooses a particular combination to develop a market offering. The combination of variables chosen by a firm to prepare its market offering is also called marketing mix.
Definition: The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market.
Elements of Marketing Mix:
The marketing mix consists of various elements, popularly known as four Ps of marketing. These are:
- Product means goods or services or ‘anything of value’, which is offered to the market for sale.
- Price is the amount of money customers have to pay to obtain the product.
- It depends on costs of production, segment targeted, ability of the market to pay, supply – demand and a host of other direct and indirect factors.
- Place refers to the point of sale.
- In every industry, catching the eye of the consumer and making it easy for them to buy it is the main aim of a good distribution or ‘place’ strategy. Retailers pay a premium for the right location.
- Promotion of products and services include activities that communicate availability, features, merits, etc. of the products to the target customers and persuade them to buy it.
In services marketing, an extended marketing mix is used, typically comprising 7 Ps.
- Including the original 4 Ps and
- Process, People, and Physical evidence.
Occasionally service marketers will refer to 8 Ps, comprising these 7 Ps and Performance.
Robert F. Lauterborn proposed a 4 Cs classification in 1990. His classification is a more consumer-orientated version of the 4Ps. It includes:
- Product → Commodity
- Price → Cost
- Promotion → Communication
- Place → Channel