What is marketing? Concepts and Evolution

Since the Industrial revolution in late 1700 till mid 1950s, the firms were primarily focused to large scale production of standardized goods i.e they emphasized on producing goods only to find people to purchase them. There was least emphasis on user needs and wants. After 1950s, manufacturers shifted their focus on understanding needs & wants, offering customization, prioritizing quality over quantity. When products are offered keeping user needs and wants at center, is what forms the foundation of marketing.

“Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy and individual and organization objectives.” – American Marketing Association

Core concept

Below flowchart helps to put all the pieces together. They forms the core elements of marketing.

As the flow suggests, the marketing activities commences through identifying needs and wants of certain group of users that creates a demand in the marketplace. An offering in terms of a product or services satisfies the demand. On the other side, consumers find value through the product/services.

Needs– The basic requirements of daily living. Example- The needs of commuting from places to places.

Wants– The wish or desirableness of individuals, but not falls under the category of needs.. Example- Want of having car to satisfy the need of commute.

Demand– When needs and wants are fulfilled by the buyers ability to pay, willingness to buy, a demand is created. Hence 3 basic components of demand are- Existence of needs/wants, buyer’s ability to pay, buyer’s willingness to buy. Example- Demand of car

Product and Service– These are the offerings / solutions that satisfy a need or wants. Products are tangible, while services are intangible. Example- Car is a product that helps meet the need of commute, while transportation services takes care of same need.

Value– Consumer’s / user’s perception of product’s ability / capacity to satisfy a need / wants. They are the perceived benefit out of any product/service. This is measure by, Value = perceived worth – money spent. Value is essentially function of Quality, Service, Price (known as “value triad”).

Satisfaction– This is defined by the extent a product’s performance meets up to the user’s expectation. The customers are dissatisfied, satisfied and delighted when product’s performance doesn’t meet, meets or exceeds customer’s expectation.

Exchange– In marketing, exchange is the process of giving and receiving of value. When exchanges are fulfilled within boundaries of agreed terms and condition,a transaction has happened.

Market– Market or marketplace is the virtual or physical places where buyers & sellers meet with the intent of exchanging values. Marketers are the professionals involved in formulating & implementing strategies to promote their products or services in the marketplace.

Evolution of marketing concept

Marketing as a concept has evolved over time since Industrialization era. However, modern marketing theories happened to be linked since the age of Production era, when producing goods in high volume in order to lower the cost through benefiting from scale of production. The primary example of Production era is mass production by Ford motor company during early 1900s. Then during 1930s, came the selling era which meant producers will produce goods only to find customers through sales promotion. This was more kind of push type of marketing where producers try to influence customers to buy their product. Marketing era started post World War-II, with the development of technology, more customization was in offer for the customers. And then, most recently with advent of digital world, marketing went rampant digitalization leading to Digital marketing. As this also refers to mass usage of social media as a platform to marketing, this can be referred as Societal marketing.

Traditional concepts of marketing

Production concept– The implied theory here is that, customers prefer products which are low priced, easily available. That drives the focus on high production efficiency leading to low cost and high distribution coverage leading to wide availability.

Product concept– The key drivers are – Quality, Performance, Features of products.

Selling concept– Customers will not normally buy the products unless promoted through advertising, sales promotion, salesmanship efforts are taken to convince them.

Marketing concept– The focus is on identifying customer needs and wants, offering solution targeted to specific group of people. Customer satisfaction drives the profitability.

Distribution concept– The primary focus is on maximizing sales figure through increasing ease of accessibility. Distribution channels plays most important part rather production or after-sales activities.

Utility creation concept– Proponent of the concept- Richard Buskirk. The value of any products are driven by 4 types of utility- Form, Place, Time and Possession. Form utility denotes that product’s value is derived from Product’s form. Place utility emphasizes on making the product available where customers want them to be. Time utility derives value from making the product available when customers want them. Possession utility comes from having the ownership of the product.

Societal marketing concept– Welfare of customer and society in long run is the focus of this concept.

Emerging concepts of marketing

Niche marketing– This is about being a specialist product or service provider in a particular segment.

Mass marketing– Sales are driven by using tools of mass advertisement, mass promotion and distribution.

Strategic marketing– This come through insights from analysis of internal and external environment in order to decide strategy for future marketing.

Holistic marketing– Holistic marketing brings together the design, develpoment, & implementation of marketing programs, processes & activities to attain best solution. This has 3 primary components- Integrated marketing, Internal marketing, Performance marketing.

Integrated marketing– This calls for major components of marketing such as products, services, communication, channels should work hand in hand.

Internal marketing– All depts in an organization should coordinate for an effective marketing strategy.

Performance marketing– This primarily focuses on driving revenue growth by increasing sales through brand reputation & customer loyalty, community, environment, ethical & legal aspects. Performance marketing also includes Socially responsible marketing that primarily focuses on community, environment, ethical & legal aspects of marketing.