Tuesday, January 29, 2013

The Scope of Marketing

 
It is common knowledge that marketing has lately developed into a separate discipline that is being taught at universities now. When did it really come into existence? This century, last century, or in the Middle Ages? – Wrong on all three counts.
 
 
The transfer of goods from one person to another was probably one of our earliest social acts. Whether through violence or barter, this transfer established that few people can satisfy all their desires alone. The inability to produce everything desired creates reliance on others for both necessities and luxuries. As societies grow more complex, so does the transfer of goods.
The basic motive for trading is that someone has something you want more than what you already have. When that someone is willing to exchange what you want for what you have, a mutually satisfactory transaction can be arranged. Generally speaking, then, trade is the exchange of surplus items for shortages of items. The reasons for having surplus items range from geographic and resource variations to division and amount of labor, skill variation, and differences in taste. One group or person may create a surplus of some product in the hope of profitably exchanging it for other products.
 
 
As society and production expanded, so did the limits of trade, the range of goods, and the distance between the traders. It became increasingly difficult for the producers to locate each other and arrange mutually satisfactory exchanges without the help of intermediaries or "middlemen." These intermediaries, in the role of bringing together interested parties, must perform a variety of tasks which can be called marketing.
 
As defined by the American Marketing Association, marketing is "the performance of business activities directed toward, and incident to, the flow of goods and services from producer to consumer or user " Marketing, therefore, is made up of such physical activities as transporting, distributing, storing, and selling goods, and of the decisions which must be reached by individuals or groups who want to move goods from production to use. Of course, not all producers engage in every marketing activity. The local carpenter in Guatemala or the supermarket manager in Japan does not do product planning; most retail stores around the world have few or no storage facilities. However, most products are repeatedly subjected to all marketing operations. In addition to an analysis of these activities, marketing involves understanding the consumer circumstances and attitudes that determine why certain people want certain products.
 
 
Marketing trends, activities, and organizations are constantly changing and developing. In the role of bringing together interested parties, the intermediary may also be involved in grading, financing, assembling, packaging, refining, or altering the form of the goods Indeed, a large portion of the working population in many countries is involved in some form of marketing. In West Germany today, for example, manufacturing and the marketing activities of retail and wholesale trade account for one-third of the national income, while twenty-five percent of the work force is engaged in full-time marketing activities.
 
 
The contribution of marketing to society is a subject of controversy among economists. Contributions such as refining, transporting, assembling, and packaging are considered productive; speculating, storing, accepting commissions, and merchandising activities such as advertising are considered parasitic and of little value to society
The general belief is that prime costs of distribution should be eliminated and supplemental cost excesses should be reduced. Supplementary costs of distribution such as packaging, storing, and selling are generally considered to be continuations of the production process, and are thus acceptable as an added value to the product. In the free enterprise system, the full range of marketing activities operates with little control. Other more controlled economies regulate and limit some of these functions.
 
 
Capitalist economies do acknowledge that marketing has its excesses, as in cases where a product is stored for an undue period of time merely to raise the price. Consumerism has arisen out of a belief that consumers have rights which are often abused. People like consumer advocate Ralph Nader have fought to have laws enacted which would protect these rights.
On the whole, however, functions can continue only if they perform a service and fulfill a need. If unnecessary marketing activities raise the cost of goods above that of the competition, the product will be priced out of the market. The corollary to this is that marketing functions will only produce a profit—the basic motive for doing business—if they provide a service worth the money. It is argued that almost all marketing activities thus contribute to the real value of a product. Whether or not this is true, the aim of this text is to explore those marketing activities and functions which do exist and which are practiced.
 
 
The following questions face those involved in marketing: How should the product be designed? How should it be packaged? What retail and/or wholesale channels should be used? Is advertising advisable? If so, how much and what kinds? What prices should be set? Will it sell, and to whom?
Although marketing activities have expanded tremendously in the past hundred years, there was little formal study of them until the past few decades. Today, there are many publications on the various aspects of marketing and colleges give courses and degrees in this field. Marketing research has developed into a highly specialized activity employing tens of thousands of people around the world. There is general agreement among marketing people that, in many cases and countries, marketing activities account for more than half the cost of the product to the consumer. In many countries, those engaged in marketing activities outnumber those engaged in manufacturing or production.
 
We have noted that, in general, marketing directs the flow of goods and services from producers to consumers or users. Marketing is not confined to one particular type of economy; goods in all but the most primitive societies must be marketed. Indeed, a broader concept of marketing does not limit its application to business enterprises. Schools, hospitals, libraries, and many other services must also be marketed to be used.
 
Ref : Marketing Basics.

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