What is Marketing?

Marketing is the social process by which individuals and organizations obtain what they
need and want through creating and exchanging value with others. Continuous exposure to
advertising and personal selling leads many people to link marketing and selling, or to think
that marketing activities start once goods and services have been produced. While marketing
certainly includes selling and advertising, it encompasses much more. Marketing also
involves analyzing consumer needs, securing information needed to design and produce
goods or services that match buyer expectations and creating and maintaining
relationships with customers and suppliers. The following table summarizes the key
differences between marketing and selling concepts.

Selling Vs. Marketing

Point of difference Selling Marketing

Starting point Factory Marketplace
Focus Existing products Customer needs
Means Selling and promoting Integrated marketing
End Profits through volume Profits through satisfaction

The difference between selling and marketing can be best illustrated by this popular customer
quote: ‘Don’t tell me how good your product is, but tell me how good it will make me’.

The American Marketing Association, the official organization for academic and
professional marketers, defines marketing as:

Marketing is 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

Another definition goes as ‘ … process by which individuals and groups obtain what they
need and want through creating and exchanging products and value with others’. Simply put:
Marketing is the delivery of customer satisfaction at a profit.

The notion of exchange as central to marketing is reinforced by many contemporary

definitions such as ‘marketing is the process of creating and resolving exchange
relationships’ and ‘marketing is the process in which exchanges occur among persons and
social groups’. The essence of marketing is the exchange process, in which two or more
parties give something of value to each other to satisfy felt needs. In many exchanges,
people trade tangible goods for money. In others, they trade intangible services.

Exchanges in marketing are consummated not just between any two parties, but
almost always among two or more parties, of which one or more taken on the role of
buyer and one or more, the role of seller. A common set of conditions are present in the
marketplace, viz.,

1) Buyers outnumber sellers

2) Any individual buyer is weaker than any individual seller economically, but
3) The total economic power of even a fraction of the buyers is enough to assure the
existence of, or to put out of business, most sellers or groups of sellers, and
4) Consequently, the sellers compete to sway the largest number of buyers they can to
t h e i r , rather than another seller’s (competitor’s) offerings. Finally a n d
intriguingly,
5) The sellers in their attempt to meet competition and attract the largest number of
buyers, are influenced as well, regularly modifying their behaviours so they will
have more success, with more buyers, over time.

The expanded concept of marketing activities permeates all organizational functions.

It assumes that the marketing effort will follow the overall corporate strategy and will
proceed in accordance with ethical practices and that it will effectively serve the interests of
both society and organization. The concept also identifies the marketing variables – product,
price, promotion and distribution – that combine to provide customer satisfaction. In addition,
it assumes that the organization begins by identifying and analyzing the consumer segments
that it will later satisfy through its production and marketing activities. The concept’s
emphasis on creating and maintaining relationships is consistent with the focus in business
on long-term, mutually satisfying sales, purchases and other interactions with customers and
suppliers. Finally it recognizes that marketing concepts and techniques apply to non-profit
organizations as well as to profit-oriented businesses, to product organization and to service
organizations, to domestic and global organizations, as well as to organizations targeting
consumers and other businesses.

The following list consists of some MARKETING MYTHS. Tick the myths you thought
about marketing before reading this section? Add some new myths you might have
discovered.
 Marketing and selling are synonymous
 The job of marketing is to develop good advertisements
 Marketing is pushing the product to the customers
  Marketing is transaction-oriented than relationship-oriented
 Marketing is a short-term business strategy
 Marketing is an independent function of a business
 Marketing is part of selling

Evolution Of Marketing

As noted earlier, exchange is the origin of marketing activity. When people need to
exchange goods, they naturally begin a marketing effort. Wroe Alderson, a leading
marketing theorist has pointed out, ‘It seems altogether reasonable to describe the
development of exchange as a great invention which helped to start primitive man on the
road to civilization’. Production is not meaningful until a system of marketing has been
established. An adage goes as: Nothing happens until somebody sells something.

Although marketing has always been a part of business, its importance has varied
greatly over the years. The following table identifies five eras in the history of marketing: the
production era, the product era, the sales era, the marketing era and the relationship
marketing era.
The Evolution Of Marketing

Era Prevailing attitude and approach

Production  Consumers favor products that are available
and highly affordable
 Improve production and distribution
 ‘Availability and affordability is what the
customer wants’
Product  Consumers favor products that offer the most
quality, performance and innovative features
 ‘A good product will sell itself’
Sales  Consumers will buy products only if the
company promotes/ sells these products
 ‘Creative advertising and selling will overcome
consumers’ resistance and convince them to
buy’
Marketing  Focuses on needs/ wants of target markets and
delivering satisfaction better than competitors
 ‘The consumer is king! Find a need and fill it’
Relationship marketing  Focuses on needs/ wants of target markets and
delivering superior value
 ‘Long-term relationships with customers and
other partners lead to success’
In the production era, the production orientation dominated business philosophy.
 Indeed business success was often defined solely in terms of production victories. The
focus was on production and distribution efficiency. The drive to achieve economies of
scale was dominant. The goal was to make the product affordable and available to the
buyers. In the product era, the goal was to build a better mouse trap and it was assumed that
buyers will flock the seller who does it. However, a better mousetrap is no guarantee of success
and marketing history is full of miserable failures despite better mousetrap designs.
Inventing the greatest new product is not enough. That product must also solve a perceived
marketplace need. Otherwise, even the best-engineered. Highest quality product will
fail. In the sales era, firms attempted to match their output to the potential number of customers
who would want it. Firms assumed that customers will resist purchasing goods and services
not deemed essential and that the task of selling and advertising is to convince them to buy.
But selling is only one component of marketing. Next came the marketing era during which
the company focus shifted from products and sales to customers’ needs. The marketing
concept, a crucial change in management philosophy, can be explained best by the shift
from a seller’s market – one with a shortage of goods and services – to a buyer’s market
– one with an abundance of goods and services. The advent of a strong buyer’s market
created the need for a customer orientation. Companies had to market goods and services,
not just produce them. This realization has been identified as the emergence of the marketing
concept. The keyword is customer orientation. All facets of the organization must contribute
first to assessing and then to satisfying customer needs and wants. The relationship
marketing era is a more recent one. Organization’s carried the marketing era’s customer
orientation one step further by focusing on establishing and maintaining relationships with
both customers and suppliers. This effort represented a major shift from the traditional concept
of marketing as a simple exchange between buyer and seller. Relationship marketing, by
contrast, involves long-term, value-added relationships developed over time with customers
and suppliers. The following table summarizes the differences between transaction marketing
(i.e. exchanges characterized by limited communications and little or no on going relationship
between the parties) and relationship marketing.

IMPORTANCE OF MARKETING
Marketing is important to the business, consumer as well as the society. This is evident from the
following points.

(a) Marketing helps business to keep pace with the changing tastes, fashions, preferences of the
customers. It works out primarily because ascertaining consumer needs and wants is a regular
phenomenon and improvement in existing products and introduction of new product keeps on
taking place. Marketing thus, contributes to providing better products and services to the
consumers and improve their standard of living.

(b) Marketing helps in making products available at all places and throughout the year.
We are able to get Kashmir shawls and Assam Tea all over India and get seasonal fruits like
apple and oranges round the year due to proper warehousing or proper packaging. Thus,
marketing creates time and place utilities.

(c) 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.

(d) Marketing helps the business in increasing its sales volume, generating revenue and ensuring
its success in the long run.

(e) Marketing also helps the business in meeting competition most effectively.