what is marketing?

what is marketing?

1. As a discipline, marketing is in the process of transition from an art which is practised to a profession with strong theoretical foundations

   • ‘What is marketing?’ save perhaps to suggest that it is a newly emerging discipline inextricably linked with manufacturing. But this latter link is of extreme importance because in the evangelical excess of its original statement in the early 1960s, marketing and production were caricatured as antithetically opposed to one another.

2. Marketing as a managerial orientation

   • If we trace the course of economic development we find that periods of rapid growth have followed changes in the manner in which work is organized, usually accompanied by changes in technology. Thus from simple collecting and nomadic communities we have progressed to hybrid agricultural and collecting communities accompanied by the concept of the division of labour.
   • Thus the first half of the twentieth century was characterized in the advanced industrialized economies of the West by mass production and mass consumption – usually described as a production orientation and a consumer society.

3. Marketing myopia – a watershed

   • Levitt proposes four factors which make such a cycle inevitable: 1 A belief in growth as a natural consequence of an expanding and increasingly affluent population. 2 A belief that there is no competitive substitute for the industry’s major product. 3 A pursuit of the economies of scale through mass production in the belief that lower unit cost will automatically lead to higher consumption and bigger overall profits. 4 Preoccupation with the potential of research and development (R&D) to the neglect of market needs (i.e. a technology push rather than market pull approach).
     • Belief number two has never been true but, until very recently, there was good reason to subscribe to the other three propositions.
     • contagion or bandwagon effect will be initiated as consumers seek to obtain supplies of the new product and producers, recognizing the trend, switch over to making the new product in place of the old. The result is exponential growth.

4. Life cycles and evolution

   • Derek de Solla Price cites a number of ways in which an exponentially growing phenomenon will seek to avoid a reduction in growth as it nears its ceiling. Two of these, ‘escalation’, and ‘loss of definition’, seem particularly relevant in an economic context. In the case of escalation, modification of the original takes place at or near the point of inflection and ‘. . . a new logistic curve rises phoenix-like on the ashes of the old’. In other words, the cell modifies itself so that it can prosper and survive despite the constraints which had impeded its immediate predecessor. In marketing, such a phenomenon is apparent in a strategy of product rejuvenation in which either new uses or new customers are found to revitalize demand.

5. The marketing function

   • the size and nature of the marketing function will vary enormously according to the nature of the company or organization and the markets which it serves. Basically, the marketing function is responsible for the management of the marketing mix which, at its simplest, is summarized by the four Ps of product, price, place and promotion.

6. Marketing misunderstood

   • The solution proposed is the adoption of a marketing orientation which puts the customer at the beginning rather than the end of the production–consumption cycle. To do so requires a fundamental shift of attitude on the part of all those concerned with production and consumption.
     • Unfortunately, while this concept seems both simple and obvious to those who have subscribed to it there is ample evidence that it is widely misunderstood and hence misapplied.

7. Relationship marketing

   • The dominant marketing management paradigm founded on the manipulation of the mix began to be questioned in the 1970s as it provided an inadequate explanation of the marketing of services. Such a challenge was unsurprising given that services had become the largest sector in the advanced industrial economies. Specifically, services marketing calls for recognition of both buyer and seller in the exchange process.

8. Summary

   • Adam Smith observed in his Wealth of Nations (1776), ‘Consumption is the sole end and purpose of production’. Having stated the obvious the remainder of his great work is devoted wholly to issues of improving supply with no consideration of demand per se. As we have seen, it is only with the stabilization of populations in advanced economies, and the continuous and accelerating improvements in productivity attributable to technological innovation, that a preoccupation with supply side problems has given way to demand side considerations.

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