Marketing: Meaning Of Marketing, Terms Used And Functions Of Marketing

The objective of all business enterprise is to satisfy the needs and wants of the society. Marketing is, therefore, a basic function of all business firms. When a salesperson sells washing machines, a doctor treats a patient or a Government asks people to take their children for polio drops, each is marketing something to meet the targets.
Traditionally, small firm owners do not give as much importance to marketing as to other functions such as accountancy, production and selling. Training programmes, enterprise development and the current thrust for competitiveness have now given high priority to promoting marketing awareness among small business owners, and marketing is now assuming its rightful place along with other business functions.
Meaning And Definition Of Marketing
Marketing, can be defined as the process of communicating the value of a product or service to customers.
Marketing is also the process by which companies create customer interest in products or services. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves.
According to American Marketing Association, 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.
It can also be seen from the social angle as societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others.
Marketing is based on thinking about the business in terms of customers’ needs and their satisfaction. Marketing differs from selling in the sense that selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. It is not concerned with the values that the exchange is all about. And it does not, as marketing invariable doess, view the entire business process as consisting of a tightly integrated effort to discover, create, arouse and satisfy customers’ needs. In other words, marketing has less to do with getting customers to pay for your products and services and more to do in developing a demand for that product and service in order to meet and fulfill the customer’s needs.
Terms Used In Marketing
The following are the common terms used in marketing:
1. Needs: These are basic human requirements. They are the basic forces that motivate a person to think about and do something/take action. Needs are things which are essential for you irrespective of the financial situation/conditions. These are the things you have to take care first and only then come other things which you can do without.
2. Wants: These are things which you wish to have but they are not above your Needs. For example a car is a want when compared to your child’s school fees or eductaional savings. You can live your life without car but child’s education is vital and cannot be compromised.
3. Demand: This is the want for a specific product backed by an ability to pay.
4. Products: These are the goods and services offered to the buyer by the marketer or seller.
5. Exchange: This means the act of obtaining a needed/wanted object by offering something in return. Exchange is a value creating process because it leaves both parties better off (win-win situation).
6. Transaction: A transaction is an exchange between two things of value on agreed conditions and a time and place of agreement. To make successful transaction a marketer should understand what each party expects from transaction.
7. Market: A market is a place which allows the purchaser and the seller to invent and gather information and lets them carry out exchange of various products and services. In other words, the meaning of market refers to a place where the trading of goods takes place. The place can be a market place or a street market. The market functions so that the satisfaction of the buyers and sellers during transaction can be ensured.
Goals Of Marketing System
Marketing affects so many people in so many ways. The following are the goals of marketing system according to kotler and Armstrong (1987):
1. Maximize consumption
2. Maximize consumer satisfaction
3. Maximize life quality
4. Maximize life quality
5. Maximize profit
1. Maximize Consumption: Many business executives believe that marketing job should stimulate consumption, and also create maximum consumption, which will in turn create maximum production, employment and wealth. The assumption is that the more people consume the products the happier they are.
2. Maximize Consumer Satisfaction: The second goal suggested for marketing system is maximizing consumer’s satisfaction, not consumption. However, a lot of problems are associated with measurement of human satisfaction. These are:
(i) Nobody has figured out how to measure the total satisfaction created by a particular product marketing activity.
(ii) The satisfaction that individual consumers got from the “goods” of a product or service must be offset by the “bad” such as pollution with environmental damage.
(iii) The satisfaction people get from consuming certain goods such as status goods, depend on few other people having these goods.
3. Maximize Choice: The goals of marketing system should be to maximize product variability and consumer choice. The system would enable the consumer to find those goods that exactly satoisfy their tastes. Consumers would be able to maximize their life styles and therefore their satisfaction.
4. Maximize Life Quality: The goal of marketing system should be to improve the quality of life, quantity, availability and cost of goods, the quality of the physical environments and the quality of the cultural environment. This means that the marketing system is not the amount of direct consumer’s satisfaction they create but also by the impact they have on the quality of the physical and cultural environment.
5. Maximize Profit: Marketing is successful only when it is capable of maximizing profitable sales and achieving a long-run customer satisfaction.
Functions Of Marketing
In order for marketing bridge to work correctly providing consumers with opportunities to purchase the products and services they need; the marketing process must accomplish the following important functions:
1. Buying: It involves what to buy, what quality, how much, from whom, when and at what price. People in business buy to increase sales or decrease costs. Purchasing agents are much influenced by quality, service and price. The products that the retailers buy for resale are determined by the need and preferences of their customers.
2. Selling: Selling is providing a way to give your customer what he wants. You can do this in any number of ways. You can sell your product directly to the customer, or sell it at wholesale prices to retailers. You may sell a product made especially for sale to other businesses.
3. Financing: Financing refers to how your business will obtain the money it need to start operations and stay operable. This function encompasses investors, financing, budgeting anf other financial concerns that your business may have. It also refers to how a customer will pay for the goods or services that you are selling.
4. Storage: It involves the keeping of goods in proper condition from the time they are produced until they are needed by consumers (in case of finished products) or by the production department (in case of raw materials and stores). Storing protects the goods from deterioration and helps in carrying over surplus for future consumption or use in production. Goods may be stored in various warehouses situated at different places. Storing assumes greater importance when production is seasonal or consumption may be seasonal. Retail firms are called “stores”.
5. Transportation: This is the physical means whereby goods are moved from the places where they are produced to where they are needed for consumption. Transportation is essential for the procurement of raw materials to the delivery of finished products to the customers places. Marketing relies mainly on railroads, tracks, waterways, pipelines and air transport. Any type of transportation that is choseb is based on several consideration such as suitability, speed and cost.
6. Processing: Processing involves turning a raw product, like wheat, into something the consumer can use – for example, bread.
7. Promoting: A product or service is useless to your business if no one knows about it. The promotional aspect of marketing refers to the efforts you make to get the word out about what you are selling. This function also encompasses the art of convincing individuals that your product is necessary, better than those other competitors offer and is of good quality.
8. Market Information: The only sound foundation on which marketing decisions may be based is correct and timely market information. Right facts and information reduce any form of risks and thereby result in cost reduction. Business firms collect, analyze, interpret facts and information from internal sources, such as records, sales people and findings of the market research department.
They also seek facts and information from external sources, such as business publications, government reports and commercial research firms. Retailers need to know about sources of supply and also about customers buying motives and buying habits. Manufacturers need to know about retailers and about advertising media. Firms in both os these groups need information about competitors activities and about their markets. Even ultimate consumers need market information about availability of products, their quality standards, their prices, and also about the after-sale service facility the manufacturer or seller offers. Common sources for the information needed by the consumers are sales people, media advertisements, colleagues, etc.
Importance Of Marketing In Small Business
Since marketing is consumer oriented, it has a positive impact on the business firms in these ways:
1. It enables the entrepreneurs to improve the quality of their goods and services.
2. Marketing helps in improving the standard of living of the people by offering a wide variety of goods and services with freedom of choice, and by treating the customer as the most important person.
3. Marketing generates employment both in production and in distribution areas. Since a business firm generates revenue and earns profits by carrying out marketing functions, it will engage in exploiting more and more economic resources of the country to earn more profits.
4. A large scale business can have its own formal marketing network, media campaigns, and sales force, but a small unit may have to depend totally on personal efforts and resources, making it informal and flexible. Marketing makes or breaks a small enterprise. An enterprise grows, stagnates, or perishes with the success or failure, as the case may be.
History Of Marketing
Marketing is a relatively young discipline. Some, however, argue that it has been around for a long time. Trade and payment in money, goods and services have been around for many thousands of years.
Barter or counter trade is becoming popular in business again. Have a look at this barter example: Some chemical companies often accept non-monetary payment and as such they want to be paid with nothing but chemical. Some argue that marketing has been in existence whenever and whatever there have been buyers and sellers i.e. a market.
Some marketing tools such as advertising have been around for hundreds and even thousands of years. The Ancient Greeks used advertising for commercial purposes. The traders hired ‘criers’ to promote their products. Their advertising prepositions were sometimes surprisingly similar to today’s television advertisements. But There are, however, a few select brands which have been around for a few hundred years for example: Guinness since 1759 and Pears since 1789. There were many famous brands created during the 19th century. Some have survived. But in reality few brands succeeded in the long term. Fewer still survive two centuries of change.
The great marketing graveyard in the sky is littered with once famous brands which were regularly bought by legions of ‘loyal’ customers. Where are they now? Why have they gone? What caused their demise? Why do you think these once famous and successful brands eventually failed?
There are many underlying change factors such as fashion or technology, which if ignored, can affect a market or even, kill off a brand. Everything changes – including lifestyles, values and attitudes.
Do you think that society reflects advertising or advertising reflects society?
Advertisements can give an insight – particularly into how fashions, values and attitudes change. Whichever way you look at it ‘change’ affects markets. The management of change makes new demands on marketing managers.
Constant Change In Marketing
Change has been constant throughout the history of marketing. Markets change constantly. The only certainty is change. Everything changes – customers grow old, develop new tastes, new values, earn different amounts, prioritise ‘new’ needs, competitors emerge, laws and regulations change, and technology sends out shock waves of change. Nothing stays the same.
The world and marketing are changing. They wil contine to change. Today’s winners may be tomorrow’s losers.
Guess what percentage of the world’s 500 successful companies in 1957 still exist today? 33% or just one third of the companies which were at the top of the business league table in 1957 still survive today, success is momentary. There is not time to rest on one’s laurels as continual success requires continual monitoring and responses to change – often before the change actually occurs.
The rate of change accelerated when television burst into the scene in the 1950s. Today’s computers, satellite, cable, multimedia, and virtual reality networks are also changing markets, and the way we buy, the way we sell, the products and services we want, the way we communicate and deliver and even pay for tomorrow’s brands.
The discipline of marketing involves much more than just advertising or selling. Today’s marketing requires constant research into customers, competition, communications, distribution, channels, product development, pricing etc. In addition to continual improvement in customer care, customer retention and product design, today’s marketers look towards long term changes and future market trends, lifetime customer relationships, as well as addressing the short term promotional campaigns.
So marketers are surrounded by change. Back in 500 AD, Heraclitus the Greek philosopher, spotted it and commented, ‘You cannot step twice into the same river for fresh waters are ever flowing in upon you.’ Change is constant.
Although contact between the Nigerian area and Britain dates back to the sixteenth century, it was not until the mid-nineteenth century that Britain finally decided formally to colonize Nigeria. Throughout the pre-colonial and colonial periods, trade was the most important determinant of Anglo-Nigerian relations. In promoting her economic interest, Britain used both force and diplomacy in gradually bringing the different parts of Nigeria under its rule between 1861 and 1903.
Marketing in the colonial period can be traced to importation of finished goods from abroad to Nigeria. The major importer of these goods was the foreign merchant houses for example The United Africa Company (UAC).
Some of these imported goods were consumer goods and the people of Nigeria were ready to accept these goods. It was the beginning of Nigeria preference to imported goods.