Nature and Scope of Marketing

The term “Marketing “is derived from “Market”, which can be defined as – “a place where buyers and sellers gather to buy and sell the products”. But Marketing is not only about selling; because in order to sell the product we must know the needs (basic requirements) of the customers.

“Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and services of values with others.” – ‘Social Definition’

“Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy individual and organizational goals.” – ‘The American Marketing Association.”

Learn about the nature and scope of marketing.

Nature and Scope of Marketing

Nature and Scope of Marketing – With Conclusion

ADVERTISEMENTS:

Thus Marketing is all about identifying the needs of the customers and satisfying those needs profitably with the help of the product.

For example – Procter & Gamble (P&G) has identified that people need tasty but low calorie food and introduced Olestra (Oats).

Definition:

ADVERTISEMENTS:

The main aim of marketing is to identify the meeting the human and social needs profitably with the help of product. The product offered by an organization must be considered as a solution by the customers.

Marketing people are involved in marketing ten types of entities given as follows:

ADVERTISEMENTS:

(i) Goods – Goods can be defined as anything which tangible which can be offered to the customers in order to satisfy their wants, (e.g., Maggi noodle)

(ii) Services – Services can be defined as anything which can be offered by one party to another which is intangible, variable and perishable in nature, (e.g., medical services, defense, etc.)

(iii) Experiences – Experience can also be marketed as a product. By using several services and goods, a firm can create stage and market experiences, (e.g., Walt Disney World’s Kingdom represents experiential marketing – Customers visit a fairy kingdom, a pirate ship, or a haunted house)

(iv) Events – Marketers promote and market time-based events as well, (e.g., Sports events like IPL etc.)

(v) Persons – Incidentally through our actions or inactions each one of us as individual are marketing ourselves and at marketing efforts are supplemented by family and friends. Celebrity or famous personality marketing is a major business. Today every film star has an agent or a public relation officer in order to get help for marketing, (e.g., Sachin Tendulkar)

(vi) Place – Places-cities, states, regions and nations-compete actively to attract tourists, companies etc., (e.g., tour packages etc.)

(vii) Properties – Properties are bought and sold and this requires marketing. Properties are intangible rights of ownership of either real property (e.g., real estate) or financial property (e.g., stocks and bonds).

(viii) Organization – Organizations actively work to attract their stakeholders. They work to build a strong and positive image in the minds of their stakeholders with the help of public relations, (e.g., Free dental checkup campy by Colgate and Indian Dental Association).

(ix) Information – Information can be produced and marketed as a product, (e.g., Research and Development services, Encyclopedias)

ADVERTISEMENTS:

(x) Idea – Ideas can also be produced and marketed as well. In fact, idea generation is the first step of the new product development. Every market offering includes a basic idea, (e.g., Business ideas, etc.)

Conclusion:

The target audience for all above entities which can be considered as a product can be any stakeholder. A stakeholder can be referred as anyone who is directly or indirectly associated with the organisational business. Thus, customers, employees, shareholders, dealers, distributors, agents, research agencies and other service providers can be considered as stakeholders of an organization.

Nature and Scope of Marketing – Used in Two Ways: Old or Narrow and New or Broad Ways

Marketing intends to satisfy and delight the customer. The activities of marketing must be directed and focused at the customer. Marketers can remain in the customer’s mind only if the latter is provided value for what he spends. The customer focus can optimise costs for the customer while allowing the organization to focus on its core competencies.

ADVERTISEMENTS:

Today’s customer makes constant trade-offs between quality, price and benefits. Thus, marketers must allow customers to dictate product specifications and quality standards. Marketing efforts must be directed at meeting customer needs, not market shares. For this, marketers must track customer needs on a continuous basis.

Business activities are classified into two parts:

1. Production

2. Distribution

ADVERTISEMENTS:

The term nature and scope of marketing is used in two ways – one is old or narrow and the other is new or broad. In old or narrow sense marketing includes activities involved in the flow of goods and services from producers to customers. In the broad sense, marketing activities get started even before the production is undertaken.

For example, designing the product according to the tastes and requirements of consumers. It also includes sales promotion work after taking decision regarding the packaging and trademark of the product.

In this regard, Stanton has remarked, “As the marketing activities do start even before actual production is undertaken, similarly marketing activities do not cease with the ultimate sale of the product.”

It is necessary to keep the consumer satisfied for further sale of the product. In order to achieve this end, the consumers are provided not only the guarantee regarding product but aftersales service also.

In broad sense, “Marketing is the process of discovering and translating the consumer needs and wants into product and service specifications, creating demand for these products and services and then, in turn, expanding this demand.”

Marketing analysis is the beginning of planning as well as the control of work schedule in which the desired exchanges are made so as to fulfill the objective of personal and social profit.

ADVERTISEMENTS:

Marketing includes the provisions of cheap and better products to society. It plays an important role in maintaining the high standard of living of the society.

Its scope includes the under-mentioned activities:

1. Consumer Research:

Research is the process of gathering, recording and analyzing relevant facts about any problem. Marketing research is concerned with all those factors that have impact on the marketing of products and services.

It deals with product planning and development, pricing policies, advertisement and sales promotion, distribution structure, strengths and weaknesses of competition, buyer’s behaviour, etc. By conducting research, the risk of loss can be reduced in purchasing, pricing, forecasting and in facing competition.

2. Determination of Product Policies:

Product planning is the starting point of the entire marketing activities of a concern. It refers to establishing a product, which is in line with market needs. Product development begins with the conception of idea to its successful commercialization.

It involves decisions regarding colour, shape, quality, size, etc. in order to arrive at a balance of products, which will give optimum profit to manufacturers and maximum satisfaction to the consumers.

3. Determination of Distribution Channel:

ADVERTISEMENTS:

A channel of distribution for a product is the route taken by which the title of the goods moves from producer to consumer. The determination of distribution channel is very important in marketing management. It is a bridge to cover the gap between producers and consumers.

4. Promotional Decisions:

One of the important requirements of modern marketing is promotional decisions regarding product without which it is difficult to sell the product in the market.

Advertisement and other means of promotion are resorted to in order to increase the sale of the product. The firm has to arrange for the training of the salesmen. The decisions regarding all such activities come under the purview of marketing.

There are four basic components of promotion mix:

(i) Advertising

(ii) Personal selling

ADVERTISEMENTS:

(iii) Sales promotion

(iv) Publicity

5. Determination of Pricing:

Pricing decisions are the most important decisions to be taken by business and industrial enterprises. Price must be determined after considering many factors altogether, such as cost of production, cost of transport, cost of distribution, cost of advertisement, demand of the product and competition scenario in the market, etc.

According to Cundiff and Still, “Price policies provide the guidelines within which pricing strategy is formulated and implemented.”

6. Aftersales Service:

The basis of modern marketing is to keep consumers satisfied. For it, aftersales services are provided to them. Aftersales services include the free repair within guarantee period and the replacement of the product and money back guarantee facility.

Thus marketing includes every activity that has to do with the movement of goods from the point where they are produced to the point where they are consumed. It includes the study of advertising, sales policies, pricing, product planning and the analysis of the market in terms of its present and potential consumers.

Nature and Scope of Marketing – 5 Key Points

1. Marketing is Customer Oriented:

ADVERTISEMENTS:

Marketing begins and ends with the customer. The job of the marketing is not only to satisfy the consumer but even to delight him/her. All the activities of an organization must be directed and focused towards the consumer.

The organizations cannot ignore emerging technologies, materials, instruments and new ways of organizing the things but with the considerations of consumers. Therefore, marketers must allow their customers to dictate product specifications and standards regarding quality. The job can only be performed if consumers’ needs are continuously monitored.

2. Marketing is the Delivery of Value:

When a consumer derives satisfaction from a particular product on the basis of product’s overall capacity and performance is known as value in consumer’s perception. The consumers today make a trade-off between cost and benefit of the product and they consider the product’s value and price before making a decision.

At times they will have to give up a particular product to obtain the other one since first one involves a big cost. Thus, he will choose the product that gives him more value per rupee. According to De Rose, “Value is the satisfaction of customer requirements at the lowest possible cost of acquisition, ownership, and use”. Thus, the organization’s strategies must be aimed at delivering greater customer value than that of their competitors.

3. Marketing is a Network of Relationships:

The customer is at the centre-stage and focus of all marketing activities. From 1990s onwards the focus is not only to identify the needs and delivers it to customers but is shifting towards relationships marketing. The marketers who are smart enough maintain their relationships by delivering high quality products in time, better services and fair prices in comparison with their counterparts.

4. Marketing as a Separate Discipline:

There used to be the days when marketing was treated as a part of economics. But now it is recognized as a full-fledged separate discipline. With the emergence of marketing concept, the issues of green marketing and environmental protection have come up and regarding that various laws have been framed.

When we talk of knowing consumer behavior, it leads us to entirely a new world of human behavior and for that matter; a marketer must possess the knowledge of psychology. Therefore, marketing has emerged as separate discipline and got its strengths from the related areas like law, psychology, anthropology, sociology and statistics etc.

5. Marketing is Business:

When it is said that marketing is business, the contention is that the all activities starts from marketing i.e.; through knowing consumer and end up on the consumers i.e.; knowing consumer dissonance. It means the entire business revolves round the marketing.

According to Peter F Drucker, “Marketing is so basic that it cannot be considered as a separate function. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view. Business success is not determined by the producer but by the customer”. So, business seeks customers because they are the business providers and ultimately marketing is business.

Nature and Scope of Marketing – Explained!

Nature of marketing can be studied under the following terms which will explain it in a better manner:

1. Marketing is a Science as Well as an Art:

A science is something that is done in a systematic manner following certain standard processes. Science is a systematic body of knowledge regarding a particular subject. Marketing too has a very systematic approach and practices. Right from developing a new product or service, understanding needs and wants through research, segmentation, targeting, positioning, pricing etc. or taking feedback from customers, everything is done in a systematic manner.

Marketing is a never ending process. At every stage of the process a marketer undertakes research to offer excellent products to customers, thus proving that marketing is based on scientific practices.

Art is the expression of human imagination and skill, it has an emotional connect. In Marketing we see this aspect in areas of customer relationship, product positioning, advertising, packaging, pricing etc. The process of segmentation, targeting and positioning is done in a systematic manner, but it also possesses creativity in communicating the message to the customer.

This creativity and emotional connect makes marketing an art. How effectively the marketer segments, targets and places the product in the minds of customers depends on the systematic process adopted and the creative skills applied. Either it is packaging of a product or placing products on the shelves, everywhere, we can see the application of science and art.

2. Marketing is Customer Oriented:

The key objective of marketing is to provide goods and services as per the needs of the customers. Before developing and providing a product, marketers try to find out, what exactly customers are looking for? Based on the findings, the product is created and provided to customers.

Once customer consumes or experiences the product or service, the marketer again does research about the performance of the product and service. So Marketing is totally customer oriented, which starts with customers and ends with customer.

3. Marketing Involves Human Actions:

Humans are an integral part of all marketing activities. Right from marketing research, product development, delivery consumption, post consumption etc. Humans help to satisfy other human beings needs and wants. Without proper human actions marketing would be impossible.

4. Marketing is an Exchange Process:

By exchange we mean transfer of something for one party to another. Every stage of marketing is an exchange and therefore we can rightly say that marketing is an exchange process. There is exchange between buyers and sellers, sellers offer products and buyers give money in exchange for the products. There is exchange of ideas and views between Company and Customer, Marketer offers some benefits in exchange for customer feedback.

Advertising agencies offer their services in return for money. There is an exchange of ideas, communication, money, products, experiences, technology etc. between all stakeholders and the Marketer.

5. Marketing is Strategy:

Strategy is a plan of action to achieve long term or overall goals. Marketing involve short term and long term goals. Every function of marketing needs a systematic plan of action. Questions such as, “What to Produce”, “What to Sell”, “When to Sell”, “Whom to Sell to”, etc. is answered only thorough strategy of the Organization.

6. Goal Oriented:

The main goal of marketing is customer satisfaction, all activities or functions of marketing are undertaken for achievement of one major goal that is customer satisfaction. To achieve the major goals many smaller goals need to be addressed by marketing. Therefore it is rightly said that Marketing is Goal Oriented.

Nature and Scope of Marketing – In India (With Examples)

Nature:

Marketing is ever evolving process. Every time we feel to have understood the market, it changes color like a chameleon. Relaxed and compassionate marketer is expected to get bewildered. Marketing is amazingly creative process, where a person could unleash his full imagination to explorer marketing opportunities, but at same time it could be dangerous if got caught in fanciful dreaming.

Some key points highlighting the nature of marketing could be as follows:

1. Marketing is a complex process

2. Marketing is dynamic and ever evolving.

3. Marketing demands integrated and coordinated efforts.

4. Marketing is full of creativity and innovation.

5. Marketing is value driven and customer focused process.

6. Marketing is about being empathetic and sacrificing. That is why an author has articulately compared marketing as ‘Gardening’.

Scope:

Marketers and people related to marketing always relate marketing to goods and services but the horizon of marketing touches other verticals also such as experiences, events, persons, places, properties, organizations, information and ideas. Marketing concepts can be used effectively to market these entities.

1. Goods:

They are tangible in nature and are offered to market to satisfy a need or want. For example, FMCG products and other tangible offerings.

2. Services:

Services can be defined as any performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product. Services include the work of hotels, airlines, banks, insurance companies, transportation corporations etc. as well as professionals like lawyers, doctors, teachers etc.

Many market offerings consist of a variable mix of goods and services. At the pure service end would be psychiatrist listening to a patient or watching movie in a cinema hall; at another level would be the landline or mobile phone call that is supported by a huge investment in plant and equipment; and at a more tangible level would be a fast food establishment where the consumer consumes both a good and a service.

3. Experiences:

It is a satisfaction a customer gets after being part of a place For example water parks, zoos, museums etc. provide the experiences which are not the part of routine life. There is a market for different experiences such as climbing Mount Everest or Kanchenjunga, travelling in Palace on Wheels, river rafting or a trip to Moon.

4. Events:

Marketers promote time-based, theme-based or special events such as Olympics, company anniversaries, sports events (Samsung Cup, India Pakistan Cricket Series), artistic performances (Lata Mangeshkar live concert, Jagjit Singh live concert), trade shows (International Book Fair at Pragati Maidan, Automobile fair), award ceremonies (Filmfare awards, Screen awards), beauty contests (Miss World, Miss Universe, Miss India, Miss Chandigarh), model hunts (Gladrags Mega Model) etc.

There is a whole profession of event planners who work out the details of an event and stage it. In India event management companies are growing and in case of organizing Miss World at Bangalore and World Cricket Cup (Hero Cup) they won the acclaim from all over the world. Our Election Commission Organizes biggest event in the world.

Elections for the upper house in the largest democracy in the world. Other notable example is organizing of ArdhKumbh and MahaKumbh at Hardwar, Ujjain, and Nasik etc. during different years.

5. Persons:

Celebrity marketing has become a major business. Years ago, someone seeking fame would hire a press agent to plant stories in newspapers and magazines. Today, most of cricket players like Sachin Tendulkar, Saurav Ganguly, Rahul Dravid etc. are drawing help from celebrity marketers to get the maximum benefit.

Even the TV channel “Star Plus” focused more on Amitabh Bachchan to promote their program Kaun Banega Crorepati and this program turned around fortunes of both Star Plus and Amitabh Bachchan. Even in the 14th Lok Sabha election BJPs’ election strategy revolves around Mr. Atal Bihari Vajpayee, that’s power of personality. Mr. Shiv Khera is busy in building his business empire and is busy telling others how to achieve this or that through books and lectures.

6. Places:

Places, cities, states, regions and whole nation compete actively to attract tourists, factories, company headquarters and new residents. India and China are competing actively to attract foreign companies to build their production hubs. Cities like Bangalore, Hyderabad and Gurgaon are promoted as center for software development.

Bangalore is regarded as software capital of India and Hyderabad is emerging as the hub of biotechnology industry. Gurgaon and Noida are competing for call centers to open their offices. Kerala, Himachal Pradesh, Uttarkhand and Rajasthan. They are also aggressively promoting themselves to attract local as well as foreign tourists.

Due to its cost effectiveness and competitive ability of Indian doctors coupled with ancient therapies, India is fast emerging as country that can provide excellent medical treatment at minimum cost. If developed properly, Bihar has strong potential to emerge as ultimate destination for Buddhists.

7. Properties:

Properties include all immovable assets such as land, building etc. and also movable such as share and debentures. Then there are company such as Mantri and Brigade who build and sell property. Property dealers in India work for property owners or seekers to sell or buy plots, residential or commercial real estate. Brokers and sub-brokers buy and sell securities on behalf of individual and institutional buyers.

8. Organizations:

Organizations actively work to build a strong, favorable image in the mind of their publics. We see advertisements of Reliance Infocomm, which is trying to provide communication at lower rates, Dhirubhai Ambani Entrepreneur program is trying to promote entrepreneurship among the Indians.

Companies can gain immensely by associating themselves with the social causes. Universities and colleges are trying to boost their image to compete successfully for attracting students for admissions by mentioning their NAAC grades in the advertisements and information brochures.

9. Information:

This is one of the oldest form of marketing, in the form of newspaper and then with the evolution television and radio and now internet. Wikipedia is one of the best examples of information marketing. Magazines such as Fitness and Muscle provide information about staying healthy, Business India, Business Today and Business World provide information about business activities that are taking place in various organizations.

Outlook Traveler provides information about various national and international tourist destinations. There are number of magazines which are focused on automobiles, architecture and interior designing, computers, audio system, television programs, etc. which cater to the information needs of the customers.

We buy CDs and visit internet sites to obtain information. In fact, production, packaging and distribution of information is one of the society’s major industry. More and more companies are using professional research agencies to obtain the information they need.

10. Ideas:

Film makers, marketing executives and advertising agencies continuously look for a creative spark or an idea that can immortalize them and their work. Idea here means the social cause or an issue that can change the life of many. Narmada Bachao Andolan was triggered to bring the plight of displaced people and to get them justice.

Endorsement by Amitabh Bachchan to Pulse Polio Immunization drive and pledge by Aishwarya Rai to donate her eyes after her death gave immense boost to these programs. Various government and nongovernment organizations are trying to promote a cause or issue which can directly and indirectly alter the life of many. For example, Traffic police urges to not to mix drink and drive, central and state government urging individuals not to use polyethylene as carrying bags for groceries.

Nature and Scope of Marketing

It is typically understood that marketing is the task of creating, promoting and delivering goods and services to consumers and businesses.

In fact marketing process can be applied for the below ten types of entities:

1. Goods – Ex. Food, Commodities, Clothes etc.

2. Services – Ex. It includes the work of airline, hotels, car rental firms, barbers and beauticians.

3. Experience – Ex. Spending a week at a Cricket camp playing with some retired Cricketers.

4. Events – Ex. Organization of Sports activities, Miss World contest etc.

5. Persons – Ex. Sachin Tendulkar, Shahrukh Khan, Mukesh Ambani etc.

6. Places – Ex. Shiridi, Prayag, Haridwar etc.

7. Properties – Ex. Financial properties like bonds and stocks. Real property like the real estate.

8. Organizations – Ex. Taj Mahal, Lucknow Universities, Lal Quila etc.

9. Information – Ex. Purchase of C.D and visit of Internet.

10. Ideas – Ex. Every market offering includes a basic idea at its core. Fairness cream Fair and Lovely carries the idea of more beauty among women that could bring success and recognition.

Nature and Scope of Marketing – In Commercial Organisations and Businesses

Marketing is a potential force that commands high significance for the society as a whole. The main object of production, nowadays, is distribution of goods and service through marketing and to make as much profit as possible. So far, much of our discussions of marketing has implicitly centred around the role of marketing in commercial organisations.

But the development of a marketing orientation is not just restricted to businesses. On the contrary, marketing is relevant to any organisation, whether it is a non-profit-making body, a public sector organisation, a commercial business or an industrial conglomerate. Marketing concerns itself with understanding what customers want and attempting to match these wants to the products or services that the organisation is supplying.

In the business environment these customers pay directly for goods and services. In other areas, such as – health and education, there is no direct purchase, but the users of these services are customers nevertheless. Developing a marketing orientation will enable public sector organisations to meet the needs of these ‘customers’ more effectively and thus improve organisational performance.

(i) Marketing Research:

Marketing Research is the systematic search for and analysis of facts related to a marketing problem.

It helps in analysing buyer habits, relative popularity of a product, effectiveness of advertisement media etc. Its major aim is to provide timely and accurate information for effective decision making.

(ii) Product Planning and Development:

Product planning and development involves a number of decisions regarding the features of the product. It is necessary to plan and develop products which meet the specifications of the customers.

(iii) Buying and Assembling:

Purchasing involves determination of requirements, finding the source of supply, placing orders and receiving goods.

Assembling means collection of goods already purchased from different sources at a common point.

Raw materials are purchased and assembled to produce goods and services.

(iv) Selling:

Selling is an important aspect of marketing under which ownership of goods is transferred from the seller to the buyer.

Sale may take the form of:

(a) Negotiated Sale:

This is where the buyer negotiates the terms of sale with the seller. It may take the following forms:

(i) Sale by inspection – The seller invites the customer for inspection of the goods being offered. On satisfactory completion of inspection the sale takes place.

(ii) Sale by sample – The seller provides the potential customer with the sample of goods being offered. On acceptance of the sample sale order is placed.

(iii) Sale by description – The seller describes the specifications of his offerings either on quotation or a catalogue. The customer may place order if he feels the specifications satisfy his needs.

(iv) Sale by brand – Such a sale happens in case of popular brands where sale is due to brand loyalty and awareness.

(b) Auction Sale:

In this kind of sale the best bidder will be the buyer of the product being auctioned.

(v) Standardisation, Grading and Branding:

Standardisation means setting up of specification of a product or service. Grades of products are based on these specifications and standards. Brand names are given to products by their manufacturers to convey to the customers that these goods conform to certain well defined standards. These activities promote sale of products.

(vi) Packaging:

Packaging is primarily done to protect the goods from damage in transit and to facilitate easy transfer of goods to customers.

It is also used by manufacturer to establish his branded products as distinct from those of his competitors.

(vii) Warehousing:

A kind of arrangement made for storing goods in godowns which may be owned or hired.

(viii) Transportation:

This activity entails transporting of goods or product by one’s own or hired transport.

(ix) Sales Management:

This includes:

(a) Recruitment of a sales force or sales staff.

(b) Training and development of the sales staff.

(d) Fixing incentives for the sales staff.

(e) Feedback of sales staff and getting confidential report.

(x) Financing:

Budgeting is estimation of the finances whereby a company could calculate the cost per unit and the sale price per unit.

(xi) Pricing:

Pricing includes the technique by which the price is fixed and increased or decreased.