What is marketing?
Almost every marketing
textbook has a different definition of the term “marketing.” The American
Marketing Association (AMA) uses the following: “The process of planning and
executing the conception, pricing, promotion, and distribution of ideas, goods,
and services to create exchanges that satisfy individual and organizational
objectives.” From this definition, we see that:
Marketing involves an
ongoing process. The environment is “dynamic.” This means that the market tends
to change—what customers want today is not necessarily what they want tomorrow.
This process involves both planning and implementing (executing) the
plan.
Some of the main issues
involved in marketing include:
Marketers help design
products, finding out what customers want and what can practically be made
available given technology and price constraints.
Marketers distribute
products—there must be some efficient way to get the products from the factory
to the end-consumer.
Marketers also promote
products, and this is perhaps what we tend to think of first when we think of
marketing. Promotion involves advertising—and much more. Other tools to promote
products include trade promotion (store sales and coupons), obtaining favorable
and visible shelf-space, and obtaining favorable press
coverage.
Marketers also price
products to “move” them. We know from economics that, in most cases, sales
correlate negatively with price—the higher the price, the lower the quantity
demanded. In some cases, however, price may provide the customer with a “signal”
of quality. Thus, the marketer needs to price the product to maximize profit and
communicate a desired image of the product.
Marketing is applicable
to services and ideas as well as to tangible products. For example, accountants
may need to market their tax preparation services to consumers.
The
marketing vs. the selling concept. The traditional selling concept
emphasizes selling existing products. The philosophy here is that if a product
is not selling, more aggressive measures must be taken to sell it—e.g., cutting
price, advertising more, or hiring more aggressive salespeople. When the
railroads started to lose business due to the advent of more effective trucks
that could deliver goods right to the customer’s door, the railroads cut prices
instead of recognizing that the customers ultimately wanted transportation of
goods, not necessarily railroad transportation. The marketing concept, in
contrast, focuses on getting consumers what they seek, regardless of whether
this entails coming up with entirely new products.
Product,
place
(distribution), promotion, and price represent the four variables
that are within the control of the firm. In contrast, the firm is also faced
with uncertainty from the environment.
