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marketing, the sum of activities involved in directing the flow of goods and services from producers to consumers. Marketing’s principal function is to promote and facilitate exchange. Through marketing, individuals and groups obtain what they need and want by exchanging products and services with other parties. Such a process can occur only when there are at least two parties, each of whom has something to offer. In addition, exchange cannot occur unless the parties are able to communicate abou
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  marketing , the sum of activities involved in directing the flow of goods and services from producers toconsumers. Marketing’s principal function is to promote and facilitate exchange. Through marketing, individuals and groups obtain what they need and want by exchanging products and services with other parties. Such a process can occur onlywhen there are at least two parties, each of whom has something to offer. In addition, exchange cannot occur unlessthe parties are able to communicate about and to deliver what they offer. Marketing is not a coercive process: allparties must be free to accept or reject what others are offering. So defined, marketing is distinguished from othermodes of obtaining desired goods, such as through self-production, begging, theft, or force.Marketing is not confined to any particular type of  economy ,because goods must be exchanged and therefore   marketed in all economies and societies except perhaps in the most primitive. Furthermore, marketing is not afunction that is limited to profit-oriented business; even such institutions as hospitals, schools, and museums engagein some forms of marketing. Within the broad scope of marketing, merchandising is concerned more specifically withpromoting the sale of goods and services to consumers (i.e., retailing) and hence is more characteristic of free-market economies.Based on these criteria, marketing can take a variety of forms: it can be a set of functions, a department within anorganization, a managerial process, a managerial philosophy, and a social process. The evolving discipline of marketing The marketing discipline had its srcins in the early 20th century as an offspring of  economics .Economic sciencehad neglected the role of middlemen and the role of functions other than  price  in the determination of demand levels   and characteristics. Early marketing economists examined agricultural and industrial markets and described them ingreater detail than the classical economists. This examination resulted in the development of three approaches to theanalysis of marketing activity: the commodity, the institution, and the function.Commodity analysis studies the ways in which a product or product group is brought to  market .A  commodity   analysis  of milk, for example, traces the ways in which milk is collected at individual dairy farms, transported to and   processed at local dairy cooperatives, and shipped to grocers and supermarkets for consumer purchase. Institutionalanalysis describes the types of businesses that play a prevalent role in marketing, such as wholesale or retailinstitutions. For instance, an  institutional analysis  of clothing wholesalers examines the ongoing concerns that   wholesalers face in order to ensure both the correct supply for their customers and the appropriate inventory andshipping capabilities. Finally, a  functional analysis  examines the general tasks that marketing performs. For   example, any marketing effort must ensure that the product is transported from the supplier to the customer. In some  industries this transportation function may be handled by a truck, while in others it may be done by mail or e-mail,facsimile, television signal, the  Internet ,or airline. All these institutions perform the same function.As the study of marketing became more prevalent throughout the 20th century, large  companies — particularly mass   consumer manufacturers — began to recognize the importance of  market research ,better product design,effective  distribution ,and sustained communication with consumers in the success of their brands. Marketingconcepts and techniques later moved into the  industrial -goods sector and subsequently into the services sector. Itsoon became apparent that organizations and individuals market not only goods and services but also ideas (socialmarketing), places (location marketing), personalities (celebrity marketing), events (event marketing), and even theorganizations themselves (public relations). Roles of marketing As marketing developed, it took a variety of forms. It was noted above that marketing can be viewed as a set offunctions in the sense that certain activities are traditionally associated with the exchange process. A common butincorrect view is that selling and  advertising  are the only marketing activities. Yet, in addition to  promotion ,    marketing includes a much broader set of functions, including  product development ,  packaging ,pricing,   distribution, and  customer service . Many organizations and  businesses  assign responsibility for these marketing functions to a specific group ofindividuals within the organization. In this respect, marketing is a unique and separate entity. Those who make up themarketing department may include brand and product managers, marketing researchers, sales representatives,advertising and promotion managers, pricing specialists, and  customer service  personnel.As a managerial process, marketing is the way in which an organization determines its best opportunities in themarketplace, given its objectives and resources. The marketing process is divided into a strategic and a tacticalphase. The strategic phase has three components — segmentation, targeting, and  positioning  (STP). The   organization must distinguish among different groups of customers in the market (segmentation), choose whichgroup(s) it can serve effectively (targeting), and communicate the central benefit it offers to that group (positioning). The marketing process includes designing and implementing various tactics, commonly referred to as the “marketingmix,” or    the “4 Ps”: product, price, place (or distribution), and promotion. The marketing mix is followed by evaluating, controlling, and r evising the marketing process to achieve the organization’s objectives ( see below   Marketing-mix   planning ).   The managerial philosophy of marketing puts central emphasis on customer satisfaction as the means for gaining and keeping loyal customers. Marketers urge their organizations to carefully and continually gauge target customers’ expectations and to consistently meet or exceed these expectations. In order to accomplish this, everyone in all areas  of the organization must focus on understanding and serving customers; it will not succeed if all marketing occursonly in the marketing department. Marketing, consequently, is far too important to be done solely by the marketingdepartment. Marketers also want their organizations to move from practicing transaction-oriented marketing, whichfocuses on individual exchanges, to relationship-driven marketing, which emphasizes serving the customer over thelong term. Simply getting new customers and losing old ones will not help the organization achieve its objectives.Finally, marketing is a social process that occurs in all economies, regardless of their political structure andorientation. It is the process by which a  society organizes and distributes its resources to meet the material needs of   its citizens. However, marketing activity is more pronounced under conditions of goods surpluses than goodsshortages. When goods are in short supply, consumers are usually so desirous of goods that the exchange processdoes not require significant promotion or facilitation. In contrast, when there are more goods and services thanconsumers need or want, companies must  work  harder to convince customers to exchange with them. The marketing process The marketing process consists of four elements:  strategic marketing analysis ,  marketing-mix   planning ,  marketing implementation ,and  marketing control .    Strategic marketing analysis MARKET SEGMENTSThe aim of marketing in profit-oriented organizations is to meet needs profitably. Companies must therefore firstdefine which needs — and whose needs — they can satisfy. For example, the  personal transportation market consists   of people who put different values on an automobile’s   cost ,speed, safety, status, and styling. No single automobilecan satisfy all these needs in a superior fashion; compromises have to be made. Furthermore, some individuals maywish to meet their personal transportation needs with something other than an automobile, such as a motorcycle, abicycle, or a bus or other form of  public transportation .Because of such variables, an automobile company must   identify the different preference groups, or segments, of customers and decide which group(s) they can targetprofitably.MARKET  NICHES  Segments can be divided into even smaller groups, called subsegments or niches. A  niche  is defined as a smalltarget group that has special requirements. For example, a bank may specialize in serving the  investment  needs ofnot only senior citizens but also senior citizens with high incomes and perhaps even those with particular investmentpreferences. It is more likely that larger organizations will serve the larger market segments (mass marketing) andignore niches. As a result, smaller companies typically emerge that are intimately familiar with a particular niche andspecialize in serving its needs.MARKETING TO INDIVIDUALS   A growing number of companies are now trying to serve “segments of one.” They attempt to adapt their offer  and  communication  to each individual customer. This is understandable, for instance, with large industrialcompanies that have only a few major customers. For example, The  Boeing Company  ( United States )designs its   747 planes differently for each major customer, such as  United Airlines ,Inc., or  American Airlines ,Inc. Servingindividual customers is increasingly possible with the advent of  database  marketing, through which individualcustomer characteristics and purchase histories are retained in company  information systems .Even mass-   marketing companies, particularly large retailers and catalog houses, compile comprehensive data on individualcustomers and are able to customize their offerings and communications.POSITIONINGA key step in marketing strategy, known as positioning, involves creating and communicating a message that clearlyestablishes the company or brand in relation to competitors. Thus,  Volvo Aktiebolaget  (Sweden) has positioned its   automobile as the “safest,” and Da imler-Benz AG (Germany), manufacturer of Mercedes-Benz vehicles, has positioned its car as the best “engineered.” Some products may be positioned as “outstanding” in two or more ways. However, claiming superiority along several dimensions may hurt a compan y’s credibility because consumers will not believe that any single offering can excel in all dimensions. Furthermore, although the company may communicate aparticular position, customers may perceive a different image of the company as a result of their actual experiences with the company’s product or through word of mouth.   Marketing-mix planning Having developed a strategy, a company must then decide which tactics will be most effective in achieving strategygoals. Tactical marketing involves creating a marketing mix of four components — product, price, place, promotion — that fulfills the strategy for the targeted set of customer needs. PRODUCT   Product development The first marketing-mix element is the product, which refers to the offering or group of offerings that will be madeavailable to customers. In the case of a physical product, such as a car, a company will gather information about thefeatures and benefits desired by a target market. Before assembling a product, the marketer’s role is to communicate customer desires to the engineers who design the product or service. This is in contrast to past practice, whenengineers designed a product based on their own preferences, interests, or expertise and then expected marketers tofind as many customers as possible to buy this product. Contemporary thinking calls for products to be designed based on customer input and not solely on engineers’ ideas.  In traditional economies, the goods produced and consumed often remain the same from one generation to thenext — including food, clothing, and housing. As economies develop, the range of products available tends to expand,and the products themselves change. In contemporary industrialized societies, products, like people, go through life
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