This section is an overview of the concepts and decisions covered under the term 'marketing'. We will first develop a definition of marketing and explain each element of the definition. Then we look at some of the reasons why people should study marketing. We introduce the marketing concept and consider several issues associated with implementing it. Next we define and discuss the major tasks associated with marketing strategy: market opportunity analysis, target market selection, marketing mix development, and management of marketing activities.
If you ask several people what marketing is, they will respond with a variety of descriptions.' Marketing encompasses many more activities than most people realise. Since it is practised and studied for many different reasons, it has been, and continues to be, defined in many ways, for academic, research, or applied business purposes. According to the U.K. Chartered Institute of Marketing,
Marketing is the management process responsible for identifying, anticipating and satisfying consumers' requirements profitably.
A rather different definition has been developed by the American Marketing Association (AMA):
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 organisational goals.
These definitions are mostly accepted by academics and marketing managers. They emphasise that marketing focuses on planning and executing activities to satisfy customers' demands. Whereas earlier definitions restricted marketing as a business activity, this definition is broad enough to indicate that marketing can occur in non-business organisations.
Although the above definitions are acceptable, we believe that marketing should be defined still more broadly. A definition of marketing should indicate that marketing consists of activities performed by individuals and organisations. In addition, it should acknowledge that marketing activities occur in a dynamic environment. Thus we define marketing as follows:
Marketing consists of activities that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, distribution, promotion, and pricing of products (goods, services, and ideas).
In this definition, an exchange is the provision or transfer of goods, services, and ideas in return for something of value. Any product may be involved in a marketing exchange. We assume only that individuals and organisations expect to gain a reward in excess of the costs incurred. So that our definition may be fully understood, we now examine each component more closely.
Marketing products effectively requires many activities. Some are performed by producers; some are accomplished by intermediaries, who buy products from producers or from other intermediaries and resell them; and some are even performed by purchasers. Marketing does not include all human and organisational activities, but only those aimed at facilitating and expediting exchanges.
All organisations perform marketing activities to facilitate exchanges. Businesses as well as non-business organisations, such as colleges and universities, charitable organisations, community theatres, and hospitals, perform marketing activities. For example, colleges and universities and their students engage in exchanges. To receive instruction, knowledge, entertainment, a degree, the use of facilities, and sometimes room and board, students give up time, money, and perhaps services in the form of labour; they may also give up opportunities to do other things. Likewise, many religious institutions engage in marketing activities to satisfy their "customers". Even the sole owner of and worker in a small corner shop decides which products will sell, arranges deliveries to the shop, prices and displays products, advertises, and serves customers.
For an exchange to take place, four conditions must exist. First, two or more individuals, groups, or organisations must participate. Second, each party must possess something of value that the other party desires. Third, each party must be willing to give up its "something of value" to receive the "something of value" held by the other party. The objective of a marketing exchange is to receive something that is desired more than what is given up to get it, that is, a reward in excess of costs. Fourth, the parties to the exchange must be able to communicate with each other to make their something of value available .
Figure 1 illustrates the process of exchange. The arrows indicate that the parties communicate that each has something of value available to exchange. Note, though, that an exchange may not necessarily take place just because these four conditions exist. Nevertheless, even if there is no exchange, marketing activities still have occurred. The something of value held by the two parties are most often products and/or financial resources, such as money or credit. When an exchange occurs, products are traded for other products or for financial resources.
An exchange should be satisfying to both the buyer and the seller. In fact, in a study of marketing managers, 32 percent indicated that creating customer satisfaction was the most important concept in a definition of marketing. Marketing activities, then, should be orientated towards creating and maintaining satisfying exchange relationships. To maintain an exchange relationship, the buyer must be satisfied with the good, service, or idea obtained in the exchange; the seller must be satisfied with the financial reward or something else of value received in the exchange.
The marketing environment consists of many changing forces: laws, regulations, political activities, societal pressures, changing economic conditions, and technological advances. Each of these dynamic forces has an impact on how effectively marketing activities can facilitate and expedite exchanges. For example, the development and acceptance of facsimile (fax) machines has given businesses another vehicle through which to promote their products. Some office suppliers and restaurants send advertisements about their goods and services to businesses and individuals through their fax machines.
Marketing means more than simply advertising or selling a product; it involves developing and managing a product that will satisfy certain needs. it focuses on making the product available at the right place, at the light time, and at a price that is acceptable to customers. It also requires transmitting the kind of information that will help customers determine whether the product will in fact be able to satisfy their needs.
We already have used the word product a number of times. For purposes of discussion, a product is viewed a being a good, a service, or an idea. A good is a physical entity one can touch. A compact disc player, a bar of soap, and a kitten in a pet shop are examples of goods. A service is the application of human and mechanical efforts to people or objects in order to provide intangible benefits to customers. Services such as air travel, dry cleaning, hairdressing, banking, medical care, and child care are just as real as goods, but an individual cannot actually touch them. Ideas include concepts, philosophies, images, and issues. For instance, a marriage counsellor gives couples ideas and advice to help improve their relationships. Other marketers of ideas include political parties, churches, and schools.