introduction to fundamentals of marketing

 

Introduction to fundamentals of marketing

 

fundamentals of marketing

 

Today both our economic growth rate and birth rate have slowed down. We are faced with rising cost of living, constant threat of high inflation, and increased government regulations. Some, if not all of our industries are faced with intensive foreign competition, and many of our businesses have to contend with periodical shortages. People’s value is changing. There is a growing demand for better quality of life. We are concerned about our social and economic changes pose major challenges to business in general and marketing in particular. A good course in marketing should change with time to reflect these social and economic challenges, and to offer strategic guide to marketing executive. In that regards this article shall look at the recent developments and new concepts that reflect the emerging societal orientation in marketing.

This article the fundament of marketing is intended for use as the basic introductory course in marketing. It should be for students who plan to specialize in marketing as a career

 

Nature and scope of marketing

 

In a business firm, marketing personnel generate revenue that financial people manage, and production people use in creating products. The challenge that faces marketing is to generate those revenues by satisfying consumer’s wants at a profit and in a socially responsible manner.

 

The societal dimension of marketing

 

But marketing is not limited to business. That is, whenever you try to persuade somebody to do something for example donate to the red cross vote for your candidate in an election, accept a date with you (or may be even marry to you), you are engaging in a marketing. This marketing has broad social meaning. In fact, the societal view is more truly descriptive of marketing today.

Any interpersonal relationship involving (for example, a transaction) is marketing. In other words, the essence of marketing is a transaction exchange intended to satisfy human needs or want. Marketing consists of all activities designed to facilities that exchange.

 

Business dimensions of marketing

 

A systems definition of marketing is the creation and delivery of a standard of living. In this sense marketing involves;

1.      Finding out what consumer wants

2.      Planning and developing a product that satisfies those wants and needs

3.      Determining the best way to price, promote, and distribute the product

 

Stated more formally, marketing is defined as a total system of business activities designed to plan, price, promote , and distribute want or need satisfying goods/ services to present and potential customers. This definition has several significant implications: firstly, it is a managerial, systems definition. Second, the entire system of business activities must be market or customer oriented. Customer wants/ needs must be recognized and satisfied effectively. Thirdly, the definition suggests that marketing is a dynamic, total, integrated business process rather than fragmented functional activities, nor it is exactly the sum of several. Rather, it is the result of an interaction of many activities. Fourthly, the marketing programmed starts with a product idea and does not end until customers wants or needs are completely satisfied, which may be some time after the sale is made. Finally, the definition implies that to be successful, marketing must maximize profitable sales over the long run. Thus customers must be satisfied in order for the company to get the repeat purchase that ordinarily determines success or failure of the business.

 

Historical development of marketing

 

Marketing develops s a society and its economy develop. The need for marketing arises and grows a society moves from an economy of agriculture and self sufficiency to an economy built around division of labor, industrialization and urbanization.

In an under develop or agrarian economy, people are largely self sufficient. They grow their own food, make their own clothes and build their own house and tools. In this scenario, there is no marketing because there is no exchange. As time passes however, the concept division of labor begins to evolve. People concentrate on producing products in which they excel in them. For this reason they usually produce more than they need of some products, and less of others. Whenever people make more than they want or want more than they make, the foundation is laid for trade, and trade exchange is the heart of marketing. At first the exchange process is a simple one. The emphasis is largely on the production of basics, which usually are short supply. Little or no attention is devoted to marketing, and exchange is very local, i.e., among neighbors or perhaps among neighboring village.

The next step in the evolution of marketing begins when small producer begin to manufacture goods in larger quantity in anticipation of the future orders. In this process, further division of labor occurs, and again a type of business develops to help sell the increased output. In other to facilitate communication and buying and selling activities, the various interested parties tend to settle near each other. Trading centers are thus formed.

 

Importance of marketing

 

Today, most nations have recognized the importance of marketing regardless of the degree of their economic development or political philosophy. Economic growth in developing nations depends upon her ability to develop effective distribution systems to handle her raw materials and upon her agricultural and industrial output.

 

Importance of marketing in an economy (an American example)

 

It is in the United States that marketing has developed to the greatest extent. Aggressive marketing practices have been largely responsible for high material standard of living in the united state. Today through mass low cost marketing the Americans enjoy products that once were considered luxuries and still are so classified in many countries. Even nonprofit organization (for example, universities, churches, political parties, and hospitals) is recognizing that marketing can aid them in dealing with their various customers or their target markets.

In the United States, modern marketing came of age after World War 1, when the word surplus and overproduction became an important part of economics vocabulary. Since about 1920, except  during world war 2 and immediately after the war, a strong buyers market as existed in united states. That is, the available supply of products has far surpassed effective demand. There has relatively little difficulty on producing most products. The real problem has been in marketing them. During the time of inactive buying moments like recession periods, business people soon realize that it is a showdown marketing that forces cutbacks in production. It becomes evident that nothing happens until somebody sells something.

 

The importance of marketing in the business world might be more easily understood in quantitative terms. Between one fourth and one third of civilian work force is engage in marketing activities. This includes all employees in retailing, wholesaling, transportation, warehousing, and the communications industries. It also include the people employed in marketing department of manufacturers, as well as those engage in marketing activities for financial, services, agriculture, mining, and other so called none marketing industries. Furthermore, over the past century, jobs in marketing have increased at a much more rapid rate than jobs in production. The great increase in the number of marketing workers is a reflection of marketing’s expanded role in the economy and the increased demand for marketing services.

 

Another measure of the importance of marketing is its cost. In America today, on the average, about 50 cent of each dollar that is spent at the retail level goes to cover marketing costs. These costs should not be confused with marketing profits, however nor should it be assumed that products and services would cost less if there were no marketing activities.

 

Importance of marketing in a firm

 

 

In whatever prevailing economic condition, marketing consideration is critical factor in planning and decision making. According to the national association of manufacturers:

“in this exciting age of change, marketing is the heart beat of many operations, and therefore, it must be considered a principle reason for corporate existence, that the modern concept of marketing recognizes its role as a direct contributor to profit, as well as sales volume. No longer can a company making furniture just figure out how many chairs/table it can produce and then go ahead and turn them out. To endure in this highly competitive market, a company must first determine what it can sell, how much it can sell, and what approach must be used to entice wise customers. Therefore, the president cannot plan; the production manager cannot manage; purchasing agent cannot purchase; chief financial officer cannot budget; and the engineer and designer cannot design until the basic market determinations have been made.”

 

Many organizational departments in a company are essential to its growth, but marketing is still the sole revenue producing activity. The fact sometimes seems to be taken for granted by production manager who use these revenues and by financial executives who are responsible for managing them.

 

The marketing concept

As business people have begun to recognize that marketing is important to the success of a firm, an entirely new way of business thinking has evolved. It is called the marketing concept, and it is based on three fundamental beliefs:

1.     That all company planning and operations should be customer oriented

2.     That profitable sales volume should be the goal of the firm, and not just volume for the sake of volume alone

3.     That all marketing activities in a firm should be coordinated organizationally. In its fullest sense, therefore, marketing concept is a philosophy of business which states that customers want/need satisfaction is the economic and social justification for a firm’s existence. Consequently, all company activities must be devoted to finding out what customer’s wants/need and then satisfying those wants/needs, while still making a profit over the long run. The marketing concept also calls for a management orientation regarding what business a firm or a company is in.

 

The business firm may be said to be in

When you ask a company marketing manager, “what business he/she is in?” the typical answer you will receive is ,”we make this,” or “we sell that.” But with an understanding of the new marketing concept, these managers should start thinking in terms of benefits or needs and wants they are satisfying that is their business. Customers buy what the need rather than physical product. For example, they buy beauty and hope not cosmetics. By understanding, a company is jnown to be marketing assortment of benefits rather than mere physical product.