Meaning and Definition of Marketing
People or organisations engaged in vast number of activities Formally or Informally relating to exchange of goods and services that could be called Marketing. Marketing deals with identifying and meeting human and social need or it can be defined as "Meeting needs profitably"
In other words " Marketing refers to any actions a company takes to attract an audience to a company's product or services through high-quality messages. Marketing aims to provide independent value to prospects and consumers through content, with the long-term goal of demonstrating product value, building brand loyalty and ultimately increasing sales."
Dr. Philip Kotler Defined Marketing as, "The science and art of exploring,creating and delivering value to satisfy the need of a target market at a profit."
Nature of Marketing
Marketing is a Human Activity: It is human being who initiates marketing activities to satisfy his diverse wants. As the time passes by with development initiatives, wants of human being multiply. Since every individual cannot produce everything of his own, he needs to get the same from others who possess it in exchange of some thing, which may be goods or service or even money as a common medium of exchange as we do today. Thus, Marketing centers round human activities to satisfy their ever changing wants
Marketing is Consumer-oriented: Marketing always starts with consumers and ends with consumers. Before producing a product, the producer must conform to the needs of the consumers with regard to the product. There was a time when whatever produced, could easily be sold and that was known as "Seller's Market" as opposed to the present day "Buyer's Market". Today, the products which are produced not in conformity with the taste, habit. fashion choice and customs of the consumers, are not likely to get market response and virtually will remain unsold. Consumer as end-user of the product has the final say as to what type of product he prefers given his socio-economic status. In this context, the 20st Century American writer cum entrepreneur rightly said "Don't find customers for your products, find products for your customers".
Marketing is both Art as well as Science: Some experts opine that Marketing is an Art, since major emphasis is on constant practice for successful marketing of a product or service. Contrary to this, there are some other experts who observe Marketing as a Science, as marketing is based on certain rules and principles. To them, Social and Behavioural Sciences are the most important scientific study areas to examine consumers' behaviour for successful Marketing of a product. But in reality, both the schools of thought are correct in their observations and so it can fairly be said that Marketing is both Arts and Science. Because, elements of both the disciplines of Arts and Science are present in Marketing practices.
It is a Process of Exchange: Initially, people did not have to buy anything as their wants were limited and life was simple. They used to produce everything they needed or procured them from nature. But gradually their wants multiplied and they had to exchange goods for goods from each other as their personal initiatives. That was the age of Barter System and the process of exchange started there. Gradually exchange became commercialized and the monetary system as a common medium of exchange came up. In the process, as the people became more and more civilized and the economy expanded, we have come to the state of today. Thus, the concept of Marketing evolved when the process of exchange started. Without exchange, there can be no marketing. In today's marketing environment, exchange process implies transactions between buyer and seller. It also involves exchange of technology, exchange of information and exchange of ideas.
It creates Utility: In Economics, utility means want satisfying capacity of a thing. A particular item of product is demanded if it has the capacity to satisfy human wants of any form. The process of marketing, which starts from planning and designing a particular product to suit the needs of customers, in fact creates utility for which the customer demands it. Utility is the inherent quality of a product for which consumers demand it.
Marketing is Dynamic: Since consumers' preferences for goods and services are subject to change with the time and pace, no static marketing strategy suits the market conditions. Therefore, each producer adapts himself to suit the changing needs of the society with the passage of time. Moreover, considering socio-economic status of the consumers, a marketer often needs to use multiple marketing strategies in different places simultaneously at the same time. For example, Rural Marketing requires strategies distinct from Urban Marketing practices.
Marketing is Goal Oriented: Every marketing effort aims towards achievement of certain goals. The ultimate aim is to achieve organization's objectives by popularizing the product through market expansion. To achieve this, offering quality products at competitive prices to suit all pockets of consumers becomes a challenging job. Thus, the main thrust of marketing is to popularize the product by reaching out to the maximum buyers ensuring quality.
It is Nerve Centre of a Business Enterprise: Marketing Division of an enterprise is responsible to prepare Sales Budget for a future activity period on the basis of sales estimate. Based on this sales estimate, Production Budget, Material Budget, Cash Budget and all other budgets are prepared. It is the Marketing Division which determines how much to produce and sale. Therefore it can fairly be said that Marketing is the nerve centre on which all other departmental activities of an enterprise are based. In a sense, it is the pivot of an organization.
Function of Marketing
Some important marketing function are discussed below:
Study Consumers' Needs: Needs of consumers in the present day situation are not static, they change over time. So it becomes imperative for the producers to study and examine the needs of consumers by taking various factors into consideration. Predicting consumers' needs for future period before the consumer themselves know what they are going to use is the order of modern marketing strategies.
Study Consumers' Behaviour: Consumers belong to diverse groups of society and are influenced by heterogeneous factors. Their buying behaviors are also influenced by numerous socio-economic factors. Therefore, before pushing a particular product into the market, it becomes prudent to study consumers' behaviour by the marketers. Such practice allows market segmentation to establish target market.
Product Planning and Development: Scope of Marketing Function also extends to Product Planning and Development. Indeed, it is a very crucial issue which the Marketing Division of an organization takes care of. Basically it is concerned with getting ideas with new product, screening them and translating them into tangible shapes through systematic Research and Development and then producing the product as per market estimate for sale to earn profit.
Branding of Products: While developing a new product, it becomes essential to brand it and the Marketing Division of the organization has to take care of it. Branding of a product implies the process of stamping the product with some identified name or mark or a combination of both. It is the process of assigning or giving some unique identification to the product which can clearly distinguish it from similar other products rolling in the market.
Packaging of Product: Function of Marketing also extends to packaging of product. Packaging implies using rapping materials around a consumer item for safety, attraction and ease of use and transportation of the product. In fact, packaging is linked with product planning or an integral part of product planning.
Selecting appropriate Channels of Distribution: Still another important Marketing Function is to select the most effective and viable channels for distribution of the products. Although there are various channels of distribution, every channel is not suitable for all types of products. There are some products which are meant for direct sale to the end-users and do not require market intermediaries. But there are others which penetrate into market through intermediaries. Selling Agents, Stockiest, Whole sellers and Retailers are the usually found market intermediaries for distribution of products.
Selection of Market Territory: In cases where the span of market is very large, it becomes essential for the Marketing Manager to divide the whole market into various territories for better management and to ensure timely availability of the products in the market. Each territory is managed by a Territory Manager to take care of every matter pertaining to marketing of the product for smooth functioning & Determining Pricing Policy of the Product: Pricing is the act of computing the money value of a product at which it should be sold in the market. The scope of marketing function extends to that level also. In fixing the price of a product, the marketer not only takes care of his cost of production but also ensures that the price is competitive enough as compared to the similar other brands in the market. In fact, pricing policies differ from product to product.
Sales Promotion: It is an important tool of Management which lubricates the marketing efforts. Promotion helps to accelerate consumer demand for a product.
Determining the Financial Requirements: Marketing is also concerned with finance. Like all other activity departments, Marketing Division also determines its financial requirements to meet expenses relating to packaging, advertising, sales promotion, market research, etc. For this, periodical budgets are prepared by the Marketing Manager in consultation with his other departmental functionaries.
After Sales services: Some products which are durable in nature require after sale services.The Marketing Division of a company must ensure such services to the buyers whenever so required. To ensure such services, the Marketing Division requires stock of trained persons in the line of product.
Scope of Marketing
By Scope of Marketing we mean everything that can be marketed. Marketing today covers a wide range of activities in its scope. In this context, the modern marketing philosopher Philip Kotler pointed out ten types of entities which the today's marketers are involved with. These are discussed below:
Goods: Marketers produce goods for re-sale. Goods are tangible objects and cover a wide range of products. This is the largest segment of marketing entity world over. The marketable goods may be either consumers' goods or producers' goods. Consumers' goods are those which are directly used by consumers to meet their needs. These are both durable and non-durable by nature. For example, food items, cloths, soap, pen, car, computer, refrigerator, furniture, mobile hand set, T. V. set, etc. Producers' goods on the other hand are those used by manufacturers for producing some marketable goods. For example machine & equipments, raw-materials and fuel. Thus, the scope of marketing covers a range of tangible goods.
Services: Services include promotion of economic activities offered by a business to its client. Service marketing includes numerous activities like tele-communication services, medical services, legal services, retail banking, etc. Moreover, transport & communication, computer services and consultancy services are all included in this marketing segment. With expansion of service sector, economy also expands. It is important to mention that the Service Sector of Indian contributes significantly to the economy.
Events: The scope of marketing also extends to Event Marketing. Event marketing is the experiential marketing of a brand, service, or product through promotional events. It is the act of designing or developing a themed activity, occasion, display, or exhibit (such as a sporting event, music festival, fair, or concert) to promote a product, cause, or organization. Events can also be trade shows, company anniversaries, entertainment award shows, local festivals, health camps, and so on. In other words, Event Marketing is a promotional strategy that involves face-to-face contact between companies and their customers at special events like concerts, fairs and sporting events. It is a kind of buyer-seller meet to reach out customers through direct hand-to hand sampling or interactive displays. Event Marketing is most relevant in case of B2B and B2C type businesses; where companies sell their products mostly to other companies or customers.
According to the Event Marketing 2019: Benchmarks and Trends Report- most marketers believe that event marketing is the single-most effective marketing channel for achieving business goals. Experience: Marketers who put the customer at the center of their marketing strategy and focus on improving the customer experience through engagement, practice customer Experience Marketing. The goal is to stop selling products and services and start meeting customer expectations and delivering personalized experiences. They develop and design their future products on the basis of customers' experiences and expectations. Thus, they market their customers' experiences. This type of marketing is called Experience Marketing. It is observed that the companies that have the ability to listen to their customers and treat them well, win because they deliver the experiences customers want; they also succeed as a result of their exceptional customer experience.
Person: Person marketing is the use of efforts designed to attract the attention, interest, and preference of a target market toward a person. Today, with rise in testimonial advertising, celebrity marketing has become a business. All popular personalities such as film stars, TV artists, and sportspersons have agents and personal managers. They also tie up with Public Relations (PR) agencies for better marketing of their own-self.
Places: Place marketing, also known as Place branding refers to promotion of a particular place to attract business and tourism of different types. There are many instances where places become focal point of marketing. For example, to promote Tourism, to attract business houses for investment, place marketing becomes essential. All over the world, countries, states, cities are competing for attracting business and tourism income. This has made it imperative that a place differentiate itself from all others and promotes its unique characteristics. Strategic branding of places to promote tourism is a notable marketing practice. Arunachal Pradesh's promotion as "The Land of Downlit Mountains", Assam's "The Awesome Assam", Karela's "God's own country" and "Incredible India" campaigns are the glaring examples of strategic branding of places for their effective marketing.
Properties: Property Marketing is still another area of marketing. Properties are marketed through intermediaries like "Brokers". When it comes to marketing, properties are basically categorized in two broad heads as Real Properties and Financial Properties. Real properties refer to ownership of real estates like land, building and other assets attached to the same, belonging to a person or an entity. Financial properties on the other hand include financial securities like shares and bonds.
Organizations: This type of marketing basically works towards image building of an organization. Organizations actively work to build image in the minds of their target public. The Public Relations department plays an active role in marketing an organization's image. The goodwill of an organization promotes its trust and reliability. This also helps the companies in the smooth introduction of new products in the market.
Information: In a broad sense, marketing in the context of information products and services, may be defined as a concept of sensitively serving and satisfying the information needs of all those who are involved in education, scholarship, research and development, business, trade and industry etc. Educational institutions, encyclopedias, non-fiction books, specialized magazines and newspapers market various types of information for their target groups. The production, packaging, and distribution of information are a major industry.However, in the present day of information technology, strategy for information marketing is fast changing.
Idea: Idea Marketing refers to the marketing activities that seek to gain market share for a concept, philosophy, belief or issue. The Computer Software developed by software companies to meet their clients' needs is a common example of Idea Marketing. Computer software developing industries are constantly bringing out new ideas which are fast changing the style of functioning of the new generation industrial houses world over. Moreover, the policies sold by Insurance companies are the concepts and also come under the arena of Idea Marketing.
Importance of marketing
The importance of marketing as an activity area cannot be overstated. In fact, marketing functions are not only important to the business concern, but is also to the society and the economy as a whole. The following are the importance of marketing highlighted below:
Meets Consumers' Needs: As marketing brings out various types of products in to the market, the consumers' needs are satisfied. It is through marketing practices of various business houses that the consumers are able to know about the availability of a product in the market, its price, quality, size, etc. Moreover, the consumers get to know about the similar other products available in the market and find an opportunity to choose among alternatives in their buying decisions. Thus, marketing highly serves the cause of consumers' needs.
Helps to Improve Standard of Living of People: By standard of living we mean the level of wealth, comfort, material goods, and necessities available to the people living in a certain geographic area, usually a country. As the economic condition of people improves, they desire to have various types of better quality goods and services which they could not afford earlier. As marketing brings out those desired goods and services, the consumption habit of people improves leading to improvement in their standard of living
Expands Consumer's Knowledge: Market information about numerous products is made available by the marketers through various advertising media. Such information significantly helps the consumers to expand their knowledge about the range of various products and their features to arrive at a buying decision.
Increases Employment Opportunities: As marketing practices cover a wide range of activities like transportation, warehousing, grading of products, advertising, financing insurance coverage, etc; bulk of people get employed through all such activities. This creates generation of higher income for the people engaged in all such areas of marketing practices. Generates New Income: It is obvious that as marketing activities gear up, generation of
new income takes place through creation of new employment avenues. This new income generation gives rise to economic activities in numerous ways through its multiplier effects in the economy.
Works for Economic Stability: Sustaining Economic Stability is a crucial issue for every country. Economic instability leads to inflation or deflation. In developing countries, inflation is common phenomenon. There are various factors responsible for such a menace in an economy. The most prominent reason being disequilibrium between demand and supply of goods and services in the market. As income level of people increases, the supply of goods and services must also increase, otherwise price will go up. If it happens consistently, it will result in inflation; which means fall in the purchasing power of money.
In maintaining economic stability of a country, Marketing can play a very important role supported by Government's Fiscal and Monetary policies. By maintaining a balance between demand for and supply of goods and services, marketing practices can significantly contribute towards maintaining stability of the economy.
Boots up Company's Turnover and Profit: Effective marketing practices can help reach out to larger number of customers through expanded market area. This obviously enhances company's turnover significantly. Increased turnover leads to higher utilization of plant capacities without increasing its fixed costs. Thus the average cost per unit of output comes down resulting in higher profit margin for the company. Further, as the cost per unit comes down, the company can lower the price to further grasp the new market and as a result, its total profit increases manifold.
Helps in Company's Decision Making: Marketing division of a company knows about the trend of customers' behaviour at any time; as only they are in touch with the customers. It is only the Marketing Division which can say what to produce, when to produce and how much to produce. Based on estimates of the Marketing Division, production targets are fixed and accordingly, all other budgets are prepared. Thus, in arriving at the company's short and long term decisions, Marketing Division is at the focal point.
Branding of Product: Branding of products is adopted by many reputed enterprises make their products popular among their customers and for many other benefits Marketing manager has to take decision regarding the branding policy, procedures and implementation programs
Enhances Government Revenue: As more and more goods and services are sold in the market, it enhances Government revenue in numerous ways. In addition to the Central and State Goods and Service Taxes (CGST and SGST), income of the entrepreneurs are also taxed under the Income Tax Act 1961. Thus, income of the Government increases through marketing efforts.