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Marketing: An Overview
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. (Approved July 2013)
Marketing deals with identifying and meeting human and social needs. One of the shortest denitions of marketing is “meeting needs protably.”
Evolution of Marketing
- The Product Concept
The concept started in early 1880s focusing on two dimensions: Product and Reasonable Price.
In this pre-industrialization era, where there were very few industries, organizations basically focused on making products with good features and to set prices that are reasonable and affordable as well. It was organizations’ perception that this will be profitable for them and never focused on promotion to let their customers know about their offerings as they had the concept that it’s the customer who will come to them to purchase.
Moreover, as industries and production was less, there were no channels to supply and distribute the manufactured goods. Thus the supply was less while the demands were high but as the companies were few in number, they felt edge and never made efforts to supply products to customers.
As a result, customers became frustrated, got fed up of long travelling, its cost and non-accessibility of products because consumers started thinking that although the products are of low prices but when the transportation cost adds to it, the price increases ultimately.
At that time, industrialization started in late 1890s and so number of industries started increasing. Due to increasing competition, the already established industrialists became alert and started thinking about the ways to stay in market successfully. As a result, the factor of accessibility became prominent as consumers wanted the products that are easily accessible for them. To compete, companies started doing pearl production to make it possible for them to distribute product everywhere. This gave rise to another concept; production concept.
- Production Concept
Here the focus was availability of product so companies started doing production in bulk quantity and distribute widely. Organizations focused on having distributions channels as well. Due to bulk production, another factor automatically came under control i.e. economies of scale was achieved as per unit cost decreased. Here customers had three benefits: a. Product availability and distribution b. Good quality product
c. Low prices
As a result, organizations achieved profitability. These concepts always changed due to consumers and their expectations.
Now the production was bulk, prices were good but the profitability again started going low. The reason was WW1 which started in early 1900s where in 1914 economies got great depression due to which economies got flat, purchasing power of customers decreased and spending and consumption patterns changed. People started saving than spending so organizations got severe loss coz the products were available in bulk but there were no customers to purchase them.
So the companies united, discussed and decided that if customers will not come to purchase, we will go to them and will sell our product to them. This gave rise to a new concept called Selling.
- Selling Concept
Here companies started selling things which they had in bulk, not the ones consumers want. Here two things were focused:
a. Promote product extensively
b. Sell product to each individual
Through this concept, everything got back to normal again but the scenario changed once again as Pakistan’s carpet and football sales declined, In Europe dry milk sales went down and American petroleum products fall. On searching for the reasons, companies came to know that customers got aware that in making footballs and carpets children are used (child labor issue), Nestle dry milk effected health of many children in Kenya and petroleum products declined because the petroleum had particles destroying ozone layer. Thus consumers said we will not buy products from companies that harm our environment, society and health by practicing unethical and immoral behaviors. As a result, the definition of marketing changed:
“ Identify the needs, wants and demands, fulfill and satisfy the by considering the benefit of society not the profitability of organization”. This concept emerged with the name of Societal Marketing.
- Societal Marketing
Now the products made should have concern about the society. Any material that is prohibited, non biodegradable or having alcohol (for Muslim countries) cannot be produced by companies. That’s why we see products having the word “eco friendly” etc.
Everything was smooth but again something went wrong. Pepsi Cola International was doing business in India. Indians said you make so much profit here from our people and labor but what benefit you give in return to them who work for you? and to the country? You should invest some part of your profit in our society for its betterment and run aiding campaigns. This gave rise to a new concept called Cause- Related Marketing.
- Cause Related Marketing
Under this concept, companies started donating for different causes of society like educating children especially girls, donating blood and facilitating hospitals etc. Here companies appeal other people to donate too and focus on the marginal groups and their problems of the society. So, through this companies started sharing their profit with society.
- Social Marketing
Another Concept emerged too called social marketing where companies do not work for generating profits and money. These are completely non- profit organizations. Apart from these, two other concepts started.
- De-marketing
Today organizations intentionally want to reduce the demand like Wapda says “ Bijli Bachao”, Cigrette companies say “ Tambakunoshi sehat k lie muzir hy” and put cancer picture on their product’s inner flap. Companies do so due to government intervention and pressure or when supply decreases and demand increases.
- Negative Marketing
It is when customers start talking against a company’s products and spread negative word of mouth.
The Marketing Concept and Social Responsibility
CSR is a set of actions of a company that changes business operations to improve, maintain, or mitigate a company’s impact on society and the environment. Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.
CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time addressing the expectations of shareholders and stakeholders.
Marketing has a very wide scope it covers all the activities from conception of ideas to realization of profits. Some of them as discussed as below:
1. Study of Consumer Wants and Needs
Goods are produced to satisfy consumer wants. Therefore study is done to identify consumer needs and wants. These needs and wants motivates consumer to purchase.
2. Study of Consumer behavior
Marketers perform study of consumer behavior. Analysis of buyer behavior helps marketer in market segmentation and targeting.
3. Product planning and development
Product planning and development starts with the generation of product idea and ends with the product development and commercialization. Product planning includes everything from branding and packaging to product line expansion and contraction. It includes the activities of product research, marketing research, market segmentation, product development, determination of the attributes, quantity and quality of the products.
4. Pricing Policies
Marketer has to determine pricing policies for their products. Pricing policies differ from product to product. It depends on the level of competition, product life cycle, marketing goals and objectives, etc.
5. Distribution
Study of distribution channel is important in marketing. For maximum sales and profit goods are required to be distributed to the maximum consumers at minimum cost. Decision regarding selection of most appropriate channel of distribution like wholesaling, distribution and retailing is taken by the marketing manager and sales manager.
6. Promotion
Promotion includes personal selling, sales promotion, and advertising. Right promotion mix is crucial in accomplishment of marketing goals. Advertisement decisions like scope and time of advertisement, advertisement message, selection of media, etc comes into marketing.
7. Consumer Satisfaction
The product or service offered must satisfy consumer. Consumer satisfaction is the major objective of marketing.
8. Marketing Control Marketing audit is done to control the marketing activities 9. Branding: Branding of products is adopted by many reputed enterprises to make their products popular among their customer and for many other benefits. Marketing manager has to take decision regarding the branding policy, procedures and implementation programs. 10. Packaging: Packaging is to provide a container or wrapper to the product for safety, attraction and ease of use and transportation of the product. 11. Sales Management : Selling is a part of marketing. Marketing is concerned about all the selling activities like customer identification, finding customer needs, persuading customer to buy products, customer service, etc. 12. Finance : Marketing is also concerned about the finance, as for every marketing activity be it packaging, advertising, sales force budget is fixed and all the activities have to be completed within the limit of that budget. 13. After Sales services : Marketing covers after sales services given to customers, maintaining good relationships with customers, attending their queries and solving their problems.
The Basic Functions of Marketing
Grading and Standardizing - Many products are graded in order to conform to previously determined standards of quality. For example, when you purchase US No. 1 Potatoes, you know you are buying the best potatoes on the market.
