Everything you need to know about the importance and significance of marketing. Marketing is recognised as the most important or significant activity in our society.
Marketing has achieved social importance because it is entrusted with the task of creation and delivery of standard of living to society.
Marketing studies continuously consumer demand which is varied and dynamic. Marketing is the vital connecting link between producers (production) and consumers (consumption). It is primarily responsible to keep the wheels of production and consumption constantly moving or running at their optimum speed.
In this article we will discuss about the importance and significance of marketing. Learn why marketing is important for: 1. Business 2. Consumers 3. Society 4. Developing Economy 5. Individuals 6. Business Firms 7. Individual Business Enterprises 8. Developing Countries.
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Marketing is one of the most significant activities in an enterprise. It is important not just as a commercial activity in organizations; marketing has positive implications that extend beyond profit making for the enterprise.
Learn about the Importance and Significance of Marketing
Importance of Marketing – For Business, Consumers and Society
Marketing is just not selling. Marketing is neither just a business function. Marketing is a lot more complex than selling and just being a business function. In a path breaking article ‘Marketing is everything’, Regis McKenna has stated, ‘Marketing today is not a function; it is a way of doing business. Marketing is not a new ad campaign or this month’s promotion… Its job is not to fool the customers, nor to falsify the company’s image. It is to integrate the customer into the design of the product and to design a systematic process for interaction that will create substance in the relationship.’
Marketing spans across all the aspects of your business and across all customer contact points including your company’s web site, how do you answer the phones, your marketing and PR campaigns, your sales process, how your sales representatives present themselves (in person and on the phone), how you implement your products and/or services, how you manage your customers (customer service), and how you solicit customer feedback.
In fact, your business starts and ends with marketing. You need to be marketing oriented all the time to succeed and sustain in the business for a long time.
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‘The aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available.’
There have been innumerable examples of products and services, where the customers have flocked to buy the products or use the services; like Apple’s iPods, iPhones and now iPads, Sony’s Walkman, Nintendo Video Game, Toyota Lexus, Microsoft Windows etc. In the Indian context also, many products and services have made their mark among the customers. Ford Ecosport, Maruti Suzuki Baleno and Celerio, Patanjali products are excellent examples to understand how a business can be driven by identifying and fulfilling needs of the customers.
Whether you take the example of Yahoo or Google or Apple or Tata or Reliance; all the successful companies rely heavily on constant innovation and marketing of their products or services.
Importance of Marketing for Business:
Marketing is important to the business, consumer as well as the society.
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This is evident from the following points:
i. Marketing helps business to keep pace with the changing tastes, fashions and preferences of the customers. It works out primarily because ascertaining consumer needs and wants is a regular phenomenon and improvement in existing products and introduction of new products is a continuous process. Marketing thus, contributes to providing better products and services to the consumers and thereby helps them in improving their standard of living.
ii. Marketing plays an important role in the development of the economy. Various functions and sub-functions of marketing like advertising, personal selling, packaging, transportation, etc., generate employment for a large number of people, and accelerate growth of business.
iii. Marketing helps the business in increasing its sales volume, generating revenue and ensuring its success in the long run.
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iv. Marketing also helps the business in meeting competition most effectively.
v. Marketing Promotes Product Awareness to the Public.
vi. Marketing Builds up Company’s Reputation. In order to conquer the general market, marketers aim to create a brand which helps in name recognition and product recall.
This is a technique for the consumers to easily associate the brand name with the images, logo, or captions that they hear and see in the advertisements.
Importance of Marketing for Customers:
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(i) Marketing promotes product awareness to the public. Marketing creates a win-win situation for both, customers and the company. With the help of marketing, product/service awareness is generated among people thus making them capable of identifying their needs and satisfying them.
(ii) By the process of new product development marketing managers identify the needs of customers thereby finding ways to cater to them.
(iii)With the help of marketing of different products a customer can compare the competitors’ products and buy the best one among the available choices.
(iv) By the way of promotion activities conducted by marketers, customers get extra benefit for buying the products.
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(v) With the development of various new marketing concepts like Customer Relationship Marketing (CRM), customers get benefit since companies have now realised the importance of existing customers and thus try to maintain them.
Also concepts like ethical marketing have helped customers a lot. For example – an ethical company like Nokia has called off BL-5C batteries all over the world since it has a manufacturing defect.
Importance of Marketing for Society:
(i) Due to various marketing activities like advertising, personal selling, packaging, transportation etc., a large number of employment opportunities are generated.
(ii) Marketing helps to increase the national income by increasing the sales volume, thus generating revenue.
Importance of Marketing – In a Developing Economy
The importance of marketing in a developing economy has been emphasized by many authorities in recent times. A group of notable exports including Drucker and Blood from U.K. Institute of Marketing have referred to it comprehensively; Marketing would make the producers capable of producing marketable products by providing them with standards, with quality demands and with specifications for their products.
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It would make the product capable of being brought to markets instead of perishing on the way. And it would make the consumer capable of discrimination, that is, of obtaining the greatest value for his very limited purchasing power.
In an economy that is striving to break the age old bondage of man to misery want and destitution, marketing is the catalyst for the transformation of latent resources into actual resources, of desires into accomplishments and the development of responsible economic leaders and informed economic citizens.”
Marketing is a primary means for making an economy more dynamic, for causing growth. It can, thus be a cause and catalyst as well as consequence of economic development.
The broad infrastructure contributions of marketing to developing economies are:
(i) Technological contribution.
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(ii) Physical distribution contribution.
(iii) Mass communication contribution.
(iv) Cultural contribution.
(v) Government and Government agency contribution, and
(vi) Contribution of coordinated production and marketing.
The important contributions of marketing to developing economy may be analyzed more closely as follows:
(i) Economic Growth:
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Country’s economic growth may be interpreted “as a long term rise in capacity to supply increasingly diverse economic goods to its population, this growing capacity based on advancing technology and the institutional and ideological adjustments that its demands.” Marketing plays a vital role in this direction through fuller and fruitful utilization of resources.
Its contributions are:
(i) Through better procurement of raw materials machinery and other inputs.
(ii) Through better product planning and guiding production along useful channels.
(iii) Through widening of the markets for products by means of identification of consumer and as containment of their needs and preferences.
All this is affected without any change in the method of production, supply of finance, distribution of income or even any additional investment in most cases. Some experts have suggested that marketing and advertising are a luxury, which can be afforded only after economic development.
(ii) Higher Standard of Living:
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Paul Mazur feels, “Marketing was delivery of a standard of living to the society.” To raised standard of living, marketing is supposed to create the form, the time, the place and the possession utilities. It stresses on the marketing executive’s responsibilities regarding satisfying society in respect of their demand for the goods and services. The marketers are expected to provide quality products, at reasonable prices, at the needed time, in right quantity and a reasonable profit.
(iii) Agricultural Development and Farm Productivity:
In many developing countries agriculture still occupies a high degree of importance and the nation’s economic development is closely tied to agricultural development. Low farm productivity in these nations is often explained by factors such as inefficient methods of irrigation, lack of mechanization in farming, inadequate supply of fertilizer and natural disasters. But one of the most fundamental problems, which are often not recognized, is the lack of a marketing system.
According to Owens and Shaw, “Agricultural Development is first of all a human problem, not a technical problem. If all farmers have access to production inputs, the financial system, the market and agricultural knowledge then they can improve the state of agriculture. But most farmers lack access to market system and, thus lack both the resources and the incentives to modernize their production methods.”
The authors add, “Unequal access to the market is one of the reasons why the Green Revolution in India has benefited mostly the large farmers.”
Scientific marketing can promote rural development in many ways such as:
(i) Enabling the farmers to sell their products at fair price.
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(ii) Bringing to their door at reasonable prices agricultural inputs like good seeds, fertilizers, pesticides and storage facilities and equipments like tractors, trailers, harvesters, pump sets;
(iii) Facilitating their movement by supplying at moderate prices means to transport like bicycles, scooters etc., and
(iv) Making their price comfortable by providing consumer goods like better clothing, toiletries, beverages and the household durables like furniture, cooking utensils radios etc.
These last two items have been categorized by Rostow as incentive goods on the ground that “the availability of attractive, expensive consumer goods can be an important stimulus to production and productivity.”
(iv) Efficiency:
Marketing turns a static, self-restricting economy into a creative, self-propelling system. It converts latent desire into effective demand. True, it cannot come forth with creating purchasing power. But it uncovers and canalizes all such power that exists. Thus, it creates the conditions for a higher level of activity. This gives rise to entrepreneurial talent. Competition among manufacturers to take advantage of the new demand forces makes them efficient.
Drucker observed, “Marketing in an underdeveloped country is developer of standards for product and service as well as standard of conduct integrity, of reliability of foresight, and of concern for the basic long range impact of decisions on the customer, the supplier, the economy and the society.”
(v) Mass Consumption and Economies in Production:
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The marketing process is a critical element in effectively utilizing production resulting from economic growth, a balance between higher production and higher consumption. Mass production depends on mass consumption. The mass consumption is the key of economic development. Marketing has promoted consumer satisfaction thorough the production of goods and services according to the needs of consumers. Increase in demand due to rise in consumption has resulted in the expansion of production and economies of scale.
(vi) Employment:
Another important contribution which marketing makes is that it helps in sustaining and improving the employment opportunities. This is the thrust area of the developing economy because when a country advances, economically it takes more and more people to distribute goods and proportionately a lesser number to make them. That is from the employment point of view production becomes relatively less significant than marketing and the related service of transportation, finance, communication, insurance etc., which spring around it.
According to an estimate 40 per cent of the labour force in developed economies like U.S.A., U.K., Japan, Germany etc., is engaged indifferent marketing processes such as marketing research, transportation, storing, communication, wholesale and retail business, warehousing and promotional activities etc. In developing economies like India there is a great scope for increasing opportunities for employment by developing advanced marketing processes.
(vii) Export Promotion:
Export promotion is one area of industrial activity where government should try to attain the lowest form of bureaucracy, but enforce the strictest form of quality control on products leaving the nation’s shares. This is also one area of government activity where marketing plays an invaluable role. Trained marketing professional should be placed abroad to seek export opportunities as well as to conduct necessary research on the nature of the competition that the country is likely to face abroad.
(viii) Tourism:
Tourism is a marketable commodity if effectively managed, and it produces the foreign exchange crucial to a developing economy. It also facilitates a sense of international empathy to the problems of the developing economy. It provides countless entrepreneurial opportunities in inexplicable and indigenous ways, and it offers a unique marketing vehicle to test the exportability of a variety of indigenous consumer products. Marketing of tourism is more than just creating offices abroad. It is more than developing brochures on historical and cultural sites.
(ix) Education and Manpower Planning:
This is another area of development where marketing concepts and techniques could have considered impact in meeting the nation’s manpower needs. Despite the importance given to education under the umbrella of national development, the notion of using the educational system for job training seems to evoke a negative reaction in many educators. Developing economies need a wide variety of human skills to bring about economic and social development.
Much of education thrust in developing nations is restricted geographically to urban areas. Very little emphasis is placed on non-formal training programmes to increase the productivity of rural labours, farmers and the like. The rural market offers extensive opportunities for specialized educational systems. Different audiences in villages can be taught agricultural skill, the operation and maintenance of farm equipment and tools, home sanitation, first aid, maternal and child health, serving, gardening, literacy, and marketable handicrafts and skills.
(x) Entrepreneurial Growth:
“No entrepreneur, no development.” It is the ability to convert available economic resource and technology, into commercially profitable ventures that distinguishes an entrepreneur. By nature “An entrepreneur is neither technician, nor a financer, but he is considered an innovator.” He is the person who is ready to bear the risk and if given proper assistance, his productive activities will bear fruits to the economy.
“Entrepreneur is the king pin of any business enterprise, for without him the wheels of industry cannot move in the economy.” Drucker observed, “Marketing is also the most easily accessible multiplier of managers and entrepreneurs in an underdeveloped growth area.”
Research evidence supports the hypothesis that new entrepreneurs can be produced and existing entrepreneurs can be stimulated to greater efforts in their businesses via training schemes. Marketing professionals should take an active role in entrepreneurial development programme.
It is relatively easy to provide technological assistance to an entrepreneur than marketing assistance. But marketing skills are surely needed for successful entrepreneurship. Organizations dealing with entrepreneur training should have thorough market knowledge, marketing analysis capability and marketing professionals on their staff to train the potential entrepreneur.
Importance of Marketing – To the Society, Individuals and Business Firms
Marketing is recognised as the most important or significant activity in our society. Production and marketing are the two pillars of an efficient economy. Rather, production and consumption are the two wheels of an economy which are linked with by the powerful belt of marketing.
A market-oriented economy is a dynamic economy. If the levels of living are low in any country then that can be attributed to the least developed marketing system. This shows the importance of marketing. According to Peter F. Drucker, an eminent management consultant and thinker, the neglect of marketing is one of the main factors which keeps an economy underdeveloped.
Importance of Marketing to the Society:
1. Marketing Helps to Achieve, Maintain and Raise the Standard of Living and Quality of Life of the Society:
In our society, there are broadly three classes of people i.e., Upper, Middle and Lower class. However every member of the society requires certain commodities to make a decent living. A number of products and services such as toothpaste, toothbrush, talcum powder, shampoo, snow, face cream, shirts, trousers, sarees, medicines, fans, lights, air conditioners, mobile phones, motor cycles, cars, books, food grains, vegetables etc. are made available to the consumers through the process marketing. Marketing is the means through which production and purchasing power are converted into consumption.
Moreover, marketing process brings new variety of useful and quality goods to consumers. Better marketing gives room for mass production. Under mass production, cost will be low and hence, price of the article will be low. Since price is low, people can buy more goods for their money. This will result in a higher standard of living.
2. Satisfaction of Human Wants:
Marketing leads to satisfaction of human wants by maintaining a steady supply of goods and services to consumers.
3. Marketing Increases Employment Opportunities:
Marketing process increases employment opportunities. Just as every industry provides employment opportunities to thousands of skilled and unskilled labourers in various capacities, marketing also provides employment to millions of people. Marketing is a complex mechanism involving number of functions and sub-functions which call for different specialised persons for employment.
The major marketing functions are buying and selling, transport, warehousing, financing, risk-bearing, market information and standardisation. In each such function, different activities are to be performed by a large number of individuals or institutions. Industrial workers are getting continuous employment because of the effective marketing machinery.
4. Marketing Helps to Increase National Income:
The nation’s income is composed of goods and services which money can buy. Efficient system of marketing reduces the cost to the minimum. This, in turn, lowers the prices and the consumer’s purchasing power increases. This will increase the national income.
5. Marketing Helps to Maintain Economic Stability and Economic Development:
Economic stability is the sign of any efficient and dynamic economy. Economic stability is maintained only when there is a balance of supply and demand. If production is more than demand, the excess goods cannot be sold at acceptable prices.
Then the stocks of goods would be piled up and there would be glut in the market, resulting in fall in price, and depression creeps in. Similarly, if production is less than demand, prices shoot up resulting in inflation. In such a situation, marketing maintains the economic stability by balancing the two aspects — production and consumption.
6. Marketing is a Connecting Link between the Consumer and the Producer:
Marketing process brings new items to retail shops from where the consumers can have them.
7. Marketing removes imbalance of supply by transferring the surplus to deficit areas, through better transport facilities and this brings price stabilisation.
8. Marketing Helps in Creation of Utilities:
Marketing as an economic activity creates possession, place, time, and information utilities. Exchange creates ownership and possession utilities. Transport creates place utility. Storage creates time utility. Promotional activities create information utility.
Importance of Marketing to Individual/Business Firms:
1. Marketing Generates Revenue to Firms:
Profit is the core on which the whole superstructure of business is built. Marketing alone generates revenue or income to an enterprise. Functions of marketing develop and widen the markets. When markets are widened, sales increases and thus profit to the firm increases.
2. Marketing Acts as a Basis for Making Decisions:
The problems of the entrepreneur are what, how, when, how much, and for whom to produce. In the past, the producer was in direct contact with consumers. Hence, the problems were tackled very easily. However, today the producer does not have any direct contact with the consumers. Therefore, the problems of the producer become very acute and complicated.
Nowadays the problem is solved by the marketing department. The marketing department collects all information regarding what, how, when, how much, and for whom to produce and this information is passed on to the top management. The top management uses this information for decision-making.
3. Marketing Helps the Top Management to Manage Innovations and Changes:
Marketing and innovations are the two basic functions of any business. We are living in a dynamic world. There is nothing permanent except change. Change is the essence of life and change means progress. The behaviour and demand of consumers keep on changing. Hence, in order to run a business successfully, a businessman should adapt himself to the changing preferences, changing styles, changing fashions etc. and innovate new customers, new products, new markets, new methods and procedures.
Marketing helps to adapt to change and innovation. Retailers communicate to the wholesalers about consumers’ demand. Wholesalers, in turn, communicate to manufacturers about market demand. Market research also acts as a source of marketing information on consumer behaviour and market trends. Salesmen of a market- oriented concern are its ears and eyes for information feedback.
Importance of Marketing – To the Society and Individual Business Enterprises
Marketing is all around us. Our very existence, our entire economic life, our life styles are continuously affected by a wide range of marketing activities. The food we eat, the clothes we wear, the housing that shelters us, the comforts and amenities we enjoy in our home and at work places, the health and welfare activities which give us peace of mind, all these are profoundly affected each day by the marketing system.
Marketing alone can put goods and services we want and need at our doorsteps, and satisfy our varied and innumerable needs and wants. Our entire economic life shall be simply paralysed, if marketing system fails to shoulder its main responsibility, viz., discovering and serving the market demand.
Marketing has achieved social importance because it is entrusted with the task of creation and delivery of standard of living to society. Marketing studies continuously consumer demand which is varied and dynamic. On the basis of up-to-date knowledge of nature, character and magnitude of market demand, the firm produces wanted goods and services which are offered to consumers at fair prices through distribution channels.
Marketing is the vital connecting link between producers (production) and consumers (consumption). It is primarily responsible to keep the wheels of production and consumption constantly moving or running at their optimum speed.
Optimum production and optimum consumption can secure optimum standard of living in an economy. Marketing is directly responsible to maintain the equilibrium between mass production and mass consumption. Then only we will have economic stability.
Industrial revolution offered mass production in the 19th century. Marketing revolution is called upon to provide mass distribution machinery in the 20th century for effective distribution in ever-expanding markets. We have yet to evolve a smoothly operating system of physical distribution. Customer-oriented marketers can and must play an important role in mass distribution. Better marketing can raise living standards of all people in any country.
Marketing system plays a unique role in transforming the benefits of mass production in terms of rising living standards and life styles of all people through the best system of physical distribution. The No. 1 problem in our economic life today is distribution. Marketers must meet this challenge to justify their existence in our socioeconomic environment. Marketing has assumed tremendous importance to solve this burning problem of mass distribution. The problem of marketing today is greater than the problem of production.
Marketers must devise a comprehensive marketing system which would deliver (at profitable prices) all the goods we could produce or manufacture to the consumers or users. Then only the total output of agricultural and manufactured goods would rise substantially.
We live in a dynamic economy, and marketing system is called upon to maintain equilibrium between supply and demand in such an economy. If the two flows, viz., goods flow (representing supply) and the money flow (representing demand) balance each other, we have economic stability and naturally price stability, of course, at higher and higher level of national output, employment and income. This is an ideal and desirable state of national economy.
Marketers are now confronted with a challenge to ensure an expanding market that will easily absorb the mounting amount of goods and services our producers and manufacturers are able to offer us under computerised and automated systems of production. If marketers assure equitable mass distribution, the nation can have steady economic growth and dynamic expansion with economic stability.
Economic development in developing countries entirely depends upon effective system of production and distribution-the two wheels of national economy. Levels of marketing govern the levels of production. Production and distribution are two sides of the same blade. Nothing happens in our economy until somebody markets something. Thus marketing plays a critical role in our economic growth.
In underdeveloped country, marketing is the most undeveloped part of the economy. Marketing development can change the entire economic life of such an undeveloped country without any change in its methods of production, distribution of population, or of income.
Marketing gives benefits to both society and firm, and its importance to each has been growing rapidly since 1950. Let us enumerate the benefits of sound marketing system to society and firm.
A. Benefits to Society:
1. Delivery of Standard of Living:
Marketing is of critical social importance, because it has been given the responsibility and task of creating, raising and maintaining the standard of living of the society. This is the special demand of the people. Only customer-oriented business enterprise can succeed in discharging this responsibility.
2. Employment and Income:
Marketing is essential for providing increasing employment opportunities so that we can have effective demand in the market. Continuous production is governed by continuous marketing. Marketing offers employment and income to about 30 to 40 per cent of the total population. It assumes special importance in India as a major source of livelihood or gainful employment.
3. Equilibrium between Supply and Demand:
Marketing system can assure equilibrium between supply and demand through the process of equalisation and thereby we can have price stability as well as economic stability. If we have a balance between production and distribution, there will be no danger of boom and slump in our economy. If supply exceeds demand, there will be depression.
If demand exceeds supply, there will be inflation and rising prices. Marketers can indicate the precise market demand to the production managers. In essence, marketers are managers of demand. Of course, in practice, supply is adjusted with changing demands as consumer demand is not directly controllable by marketers.
4. Creation of Utilities:
Marketing as an economic activity creates time, place and possession utilities. Merchandising creates form utility. Exchange creates ownership and possession utilities. Transport creates place utility. Storage creates time utility. Promotional activities create information utility. Hence, marketing activities create or add value through form, place, time, ownership, possession and information utilities.
5. Economic Development:
Marketing development can initiate integration of agriculture and industry, can bring about maximum utilisation of present productive capacity, and can develop entrepreneur and managerial talents particularly in underdeveloped countries. Thus marketing can bring about rapid development in underdeveloped or developing countries.
B. Benefits to Individual Business Enterprises:
1. Revenue Earning:
Marketing alone generates revenue or income to an enterprise. It can generate revenue at a cost which will leave some surplus in the form of net profits. Marketing is also defined as any activity which can yield income or profit. A business must have profit out of its activities. Marketing is considered as the art of earning profit through profitable sales, i.e., sale of right products to the right people at the right price and through the right channels and by the right promotion.
In fact, this is the best description of the job of a marketer. In essence, marketing is ascertaining, creating, and satisfying the needs and wants of people, and doing it at a profit. Marketing earns profit through the creation of time, place and possession utilities.
2. Information for Decisions:
Marketing department is the main source of information to top management and production department for making overall corporate decisions and decisions on production. Social demands for goods and services are communicated to general manager and production manager only through marketing manager. Marketing information is the basis for all managerial decisions and also purchase decisions.
3. Management of Innovation and Change:
Marketing and innovation are two basic functions of any business. We are living in a dynamic world. There is nothing permanent except change. Change alone is constant. Change is the essence of life, and change means progress. Change is the common factor in planning, organising, motivating and controlling marketing activity. Marketing information system enables marketers to anticipate, meet and adapt change and creativity and accelerate condition of change, particularly in consumer demand.
Changing a business through adopting innovations, e.g., finding its new role, new customers, new products, new markets, new methods and procedures, etc., is even more important than merely operating the business more efficiently. Buyer behaviour and market demand are fluctuating and ever-changing.
A marketer is the medium for communicating to the top management changing fashions, changing preferences, changing styles, etc., and marketing communication system can easily help top management in managing profitably marketing change and innovation.
Retailers communicate wholesalers about consumer demand. Wholesalers, in turn, communicate manufacturer about market demand. Marketing research also acts as source of marketing information on consumer behaviour and market trends. Salesmen of a market-oriented concern are its ears and eyes for information feedback.
Importance of Marketing – For the Success of a Business Enterprise
Marketing plays an important role in the success of a business enterprise. Marketing is primarily concerned with movement of goods and services from the producer to the consumers in order to satisfy their needs. Marketing contributes directly to keep the wheels of the organization moving on the path to progress and prosperity.
The importance of marketing is explained as follows:
1. Marketing helps in the realization of the objectives for which the organization has been set up. In fact, effective marketing is essential for the survival and growth of the organization.
2. It helps the community to satisfy their economic and social needs and thus raise their standard of living. It ensures better deal and services for the consumers. It helps the enterprise to fulfill its social responsibilities.
3. It helps in producing those products that are needed by the consumers and community at large. It activates the production-consumption chain. Thus, it helps in an efficient and productive utilization of resources, both human and materials, eliminating wastages.
4. It helps the enterprise to adapt to the changing conditions and circumstances.
5. It provides guidance to the organization on the innovations to be adopted, enabling it to face competition more squarely.
6. It helps the enterprise in achieving the maximum efficiency, productivity and profitability with the minimum of effort and cost.
7. It ensures the economic growth of the enterprises which results in growth and economic development of the country.
Importance of Marketing – Vital Contributions of Marketing to the Firm and the Society
Marketing is one of the most significant activities in an enterprise. It is important not just as a commercial activity in organizations; marketing has positive implications that extend beyond profit making for the enterprise.
Following are the vital contributions of marketing to the firm and the society:
1. Importance to Society:
(i) Delivery of Standard of Living:
Paul Mazur has said- “Marketing is the delivery of standard of living to Society.” Marketing creates and increases demand for the new and existing products, fulfils the needs of the people and thus raises the standard of living of the people.
(ii) Provision of Employment:
According to an estimate majority of the labour force in developed economies like U.S.A., Japan, Germany, etc. is engaged in different marketing processes such as marketing research work, wholesale and retail business, transport, communications, storing and warehousing, publicity work, etc. In underdeveloped economies like India there is much scope for increasing opportunities for employment by developing marketing processes.
(iii) Decrease of Distribution Cost:
Marketing aims at reducing the cost of distribution as far as possible so that the commodities might be within the reach of maximum number of consumers. It increases the level of consumption in society.
It increases the profits of the producer which filter down to the shareholders. A part of the profit may also be utilised for further research. Thus, the society is benefited in the long run.
(iv) Increase in National Income:
A marketing system is associated with creation of increased demand for goods and services. Marketing is very wide in scope and covers a wide range of activities. These activities generate income on a large scale and contribute towards national income.
2. Importance to the Firm:
(i) Help in Business Planning and Decision-Making:
Marketing is helpful in business planning and taking various decisions regarding business. In today’s economy, production is planned according to the sales forecasts and not according to the production capacity of the firm.
A firm produces what it can sell and not how much it can produce. Thus, marketing decisions affect the overall business decisions. Activities such as planning, production, purchase, finance or design revolve around the marketing decisions.
(ii) Help in Increasing Profits:
Marketing helps in increasing the business profits by reducing the selling cost on one hand and by increasing the demand of the product through advertising and sales promotion activities on the other.
(iii) Help in Communication between Firm and Society:
Marketing provides information to the firm regarding consumer’s behavioural changes from time to time and of the competitors’ production and price policies. It helps a firm in framing its own policies and making necessary adjustments.
Marketing is a potential force that commands high significance. An increase in efficiency of marketing results in a lower cost of distribution. Low prices are a boon to the entire population. Marketing brings new varieties of useful and quality goods to consumers, thus helping to improve the standard of living.
It creates wide employment opportunities. It has converted yesterday’s luxuries into today’s necessaries. It converts latent demand into effective demand.
Importance of Marketing
1. The national income of the country is composed not of money, but of the goods and services which money can buy. Hence, any increase in the efficiency of the marketing process which result in a lower cost of distribution or production of the goods and services and lower prices to consumers will increase the national income.
2. Marketing gives employment to many people and so it helps to reduce the rate of employment.
3. A reduction in the cost of marketing is a direct benefit to the society by making the goods and services available at a reduced rate.
4. In this era of information technology, companies are advertising widely about the variety of products and services with distinctive features. Hence, marketing provides valuable information to consumers.
5. Marketing also prevents hoarding, profiteering and black marketing. For example- when one detergent company reduced its prices, all the detergent companies followed suit. Thus, now consumers are getting detergents at 45% lesser than the last two years’ price.
6. Agricultural products, vegetables, fruits, etc., are marketed through internet marketing. This helps the producers collect information about the products anywhere in the world and sell it at the best price.
7. Marketing tries to find out the right type of products, at the right place, with a right price, through the right channel.
8. Marketing also helps in innovation and product development to identify entrepreneur talent, develop the economy, stimulate consumption, to increase the standard the living of people and also act as the guardian of the price system.
9. Marketing also ensures that the society’s economic resources are channelized in the right direction. It also creates entrepreneurs and managers in the given society.
10. .Marketing acts as a “change agent” and a “value adder”, improves the standard of living of people and accelerates the pace of economic development of society.
11. Marketing also makes economic planning more meaningful and more relevant.
12. In the words of Adam Smith “The selling aspect becomes the nerve center of all human activity”.
13. According to Peter Drucker, “any organization in which marketing is either absent or incidental is not a business and should never be run as if it were one”.
Importance of Marketing
Efficient marketing is the pre-requisite for the successful operation of any business enterprise. Peter F. Drucker considers that a business enterprise is only a marketing organisation and he further points out that marketing is the distinguishing function of the business.
A business organisation is set apart from all other human organisations by the fact that it markets a product or a service. Neither Church, nor Army nor State, nor School does that. Any organisation that markets a product or a service a business. Therefore, any organisation in which marketing is either absent or incidental is not a business.
Marketing considerations are today the most critical factors in business planning. Marketing is the beating heart of a business organisation. The chief executive of a business organisation cannot plan, the production manager cannot produce or manufacture, the purchase officer cannot purchase, and the financial Controller cannot budget until the basic marketing decisions have been taken.
Many departments in a business enterprise are essential for its growth, but marketing is still the sole revenue producing activity. Marketing function is rightly considered the most important operative function of management.
Marketing is the kingpin that sets the revolving of the economy. The marketing organisation, if more scientifically organised, makes the economy strong and stable. The lesser the stress on the marketing function, the weaker will the economy be.
Under-developed marketing is a sign of under-developed economy. An under-developed economy is characterised by many shortages and is a seller’s market.
Selling effort is not needed much. As a result business firms do not feel the need for changing their marketing methods and practices. The other reasons for the unsystematic marketing in an under-developed economy are heavy dependence upon agriculture, old methods of production, over population, lower income and lower standard of living.
Since marketing is consumer oriented, it can bring about many positive changes in the under developed economies.
Marketing enables a nation to improve the quality of goods and services and consequently business values. Consumer gets the top most priority. Quality of goods, store display, advertisement, packing, etc. is all directed towards the satisfaction of the consumer.
Marketing helps in improving the standard of living of the people. Marketing provides better standard of living by offering a wide variety of goods and services with freedom of choice, and by treating the customer as the most important person. Some people define marketing as the delivery of standard of living, because it meets the consumer’s physical as well as emotional needs.
Marketing generated employment both in production and in distribution areas. A large number of people are employed by modern business houses to carry out the functions of marketing. Marketing also gives an impetus to further employment facilities.
In order to ensure the finished product reach the customer, it passes through wholesalers, and in order to man these numerous establishments, many people get employed. In the absence of marketing, the level of employment should have not increased.
Marketing helps in developing economic resources. 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.
Therefore, marketing should be given the greatest importance if the national resources are to be exploited fully. Marketing determines the needs of the customer and sets out the pattern of production of goods and services necessary to satisfy the needs of the customers. Marketing also helps to explore the export market.
Importance of Marketing – From the Viewpoint of the Firm and Society
The importance of marketing to the firm and society is discussed below:
1. From the Viewpoint of the Firm:
Marketing plays a vital role for the well-being of a firm.
The importance of marketing to a business firm is as follows:
(i) Increases Profits:
On one hand, marketing helps to reduce the selling cost and increase the business profits, while, on the other, it helps to increase the demand of the product through tools like advertising, sales promotion and publicity.
(ii) Helpful in Business Planning and Decision-Making:
It aids in the overall business planning and taking various decisions regarding production and other activities in the business. In today’s economy, production is planned according to the sales forecast and not according to the production capacity of the firm.
A firm will produce what it can sell or as much quantity as it can sell and not what and how much it can produce. Thus, marketing decisions affect the business decisions. All other activities such as planning, production, purchase, finance or design revolves around the marketing decisions.
(iii) Ensures Better Communication between Firm and Society:
Business gathers information about consumers’ behaviour and changes therein from time to time through marketing. Marketing also provides information to the firm of the competitors, price policies, production policies, advertising and sales promotion policies, and distribution policies.
It helps the firm in framing its own policies or making necessary adjustments therein accordingly. Moreover, marketing provides extensive information of the product at the introductory stage regarding its quality, price, utility and place of availability to the society. Thus, society comes to know about the new products.
Therefore, marketing is a potential force that holds high significance. Any rise in efficiency of marketing results in a lower cost of distribution. Lower prices to consumers mean a real increase in the national income. Low prices are a boon to the entire population. Marketing process put forth new varieties of useful and quality goods to consumers. This helps to improve the standard of living. Marketing provides wide employment opportunities.
2. From the Viewpoint of the Society:
Marketing plays an important role for well-being to society.
The importance of marketing to the society may be summarised under following heads:
(i) Delivers Standard of Living to the Society:
The major objective of marketing is to attain customer satisfaction, by producing goods and services according to their needs and demands and further making them available at appropriate place and price.
Marketing discovers needs and wants of the society with rising aspirations and advancement in life, produces the goods and services according to these needs, create demand for these goods and services, encourages customers to use them and thus, improves the standard of living of the society.
(ii) Protection against Business Recession:
Business slowdown causes unemployment, slackness in productivity and great loss to the economy. Marketing helps in protecting society against all the re-occurring problems. Marketing includes the discovery of new markets for the goods, modifications and alterations in the quality of product, and development of alternative uses of a product.
It reduces the cost of distribution and maintains the level of sales volume. All this protects the business and industrial enterprises against the problem of business slowdown.
(iii) Decreases Distribution Cost:
Marketing aims at reducing the cost of distribution as far as possible so that the commodities might be within the reach of maximum number of consumers. It increases the level of consumption in the society. Reduction in the cost of distribution directly reduces the price of the commodity with economies of scale. As a result, customers who were unable to purchase it due to high prices can now purchase the product.
Even if we assume that the price of the product is not reduced by a manufacturer even on the decrease in cost of distribution, it will increase the profit of the enterprise, which will be divided among its shareholders, and employees who are also consumers. Even if it is assumed that this increased profit is not distributed among stakeholders, it will be invested in research and development, which benefit the whole society.
(iv) Enhances in Employment Opportunities:
Employment opportunities are directly affected by the development of marketing. It is expected that in the under-developed countries, like India, there is great scope of increasing employment opportunities by developing marketing activities.
As per the estimate, about 40% of the labour force in developed countries like U.S.A., Japan, Canada, Germany, France, etc., is engaged in different activities of marketing such as marketing research, transport, communication, storage, warehousing, and publicity, wholesale and retail trade.
(v) Boosts the National Income:
Efficient marketing activities create maintain and increase the demand for goods and services in the society. It results in the increased level of production and utilisation of services which in turn enhance the scope of marketing. This increase contributes to the increase in the national income, which is beneficial to the society as a whole.
Importance of Marketing – In Developing Countries
The major importance of marketing in developing countries are given as under:
1. Improved Quality of Life:
The activities that marketers and others in the economy of most countries performs, precisely developed ones, help to identify and satisfy consumers’ needs. This is because most consumers can always trace their knowledge and persuasion to patronise the products they feel much dependent on such marketing dominated stimuli as advertising, personal selling, sales promotion, etc.
2. Development of Small-Scale Industries:
Expansion and growth of small-scale industries in a developing country like India leads to the growth of the economy as a whole. Marketing helps to find-out the need of the people and this need can be converted into product or service.
3. Development of Managers and Entrepreneurs:
The development of managers and entrepreneurs in the society is lead by development in marketing sector, indirectly. The latent talent of the people in the society comes-out in marketing. In a developing country like India, this type of latent talent of young people is required to be brought out for the growth of country as a whole.
4. Industrial Development:
The modern concept of marketing meant that, goods should be produced keeping in mind the needs of the consumers. Those countries who adopt this modern concept of producing those goods and services which are needed by the ultimate consumers or customers will succeed. In India, where the resources are scarce it should be looked that these resources are not wasted and are put to a better use.
5. Provide Job Opportunities:
Most well industrialised countries and emerging markets provide vast opportunities of job/work to millions of people all over the world. Investors as well as entrepreneurs have vast opportunity to expand through private endeavours in such countries.
6. Marketing Impact on People:
Beyond a doubt, all over the world marketing activities are affected by people’s beliefs, attitudes, lifestyles, consumption pattern, purchase behaviour, income, etc. Marketers help organisations and businesses to develop products, promote, price and distribute them.
7. Acceleration of Economic Growth:
Consumption is encouraged by motivating people in a country to patronise goods produced to meet their identified needs. When people buy goods that are produced in a country, there is the tendency that producers will equally increase production to meet-up with future demands.
8. Contribute to Gross National Product:
The strength of any economy is determined by its ability to generate the required income within a given fiscal year or period. Thus, such a country’s GNP must appreciate overtime. Marketing is the pivot and life-wire of any economy, because all other activities of an organisation generate costs, and only marketing activities bring in the much needed revenues.
9. Improved Quality of Product:
The importance of marketing is not being over-emphasized, because contemporary firms and multinationals have now seen the need to produce quality products. This is because they have really capitalised on quality improvement in products to enhance the dynamic consumers’ quest for goods and services.
10. Large-Scale Consumptions:
Consumption of goods on a large scale is important for rapid economic development. That consumption can be raised through marketing. Drucker coined the word ‘multiplier effect’ that means. If consumption can be raised through marketing, large-scale industries will come-up producing goods in bulk.
11. Economic Resuscitation and Business Turnaround:
Most developing economies have seen hardships, passing through one economic hardship to the next, told and untold stories of business distress or economic recession to mention a few. Marketing is the most meaningful means for achieving economic resuscitation and business turnaround strategy when such events occur.
Importance of Marketing
To manage is to plan, organise, direct and control. To manage marketing is, therefore, to plan, organise, direct and control all the marketing operations of a business unit.
Marketing is a concept which is consumer- oriented. We should not confuse it with selling. When whatever is produced is sold – it is selling. But in marketing, there is the difficult task of creating customers. When the management is to make efforts to convert potential customers into present customers, when the management is to go through series of activities to expand market for the products of the business unit – it is marketing management.
Selling whatever is produced and creating customers – then to sell; makes a considerable difference.
In marketing management, the area of the functional management is such that a large number of factors outside the control and jurisdiction of the business unit have to be managed.
Financial management plans for proper utilisation of the finance procured; personnel management plans for the men who work in the organisation, production management procures raw materials and concentrates on production more or less on pre-planned way – the factors are not so changing but marketing management is to deal with people who are scattered, whose tastes, fashions, moods, purchasing power etc., are constantly changing. There are many unforeseeable and unpredictable factors with which the marketing management has to work.
Management is, after all, a functional concept; the matter is that a business unit’s ultimate goal is to make profit which, in its turn, depends on sales and turnover. So, it is on the marketing management of a business unit that the realisation of the ultimate goal of the organisation is depending.
In the changed concept of marketing and in the changing world economy acting upon the market conditions, marketing management has been experiencing more and more complications in dealing with the marketing forces.
The importance of marketing management can well be appreciated if we take into account the fact that on the successful performance of the marketing activities the success of a business unit depends. The whole range of marketing activities – right from product planning up to the stage of finally placing the products in the hands of the consumers — is within the purview of marketing management.
All these activities are themselves very difficult to perform, they have their technicalities – product planning and development, buying, selling, advertising, packing, branding, and pricing – all these activities are individually like one managing the finance or the personnel of a business unit.
Marketing management is not only to be equipped with the intricacies of human beings as is required in case of personnel management, but also the management (marketing) must be endowed with the gift of foresightedness, which is imperative for success in marketing management.
The significance and importance of marketing management has been increasing steadily with the ever-increasing competition in the market coupled with the need for catering to the international market. Marketing management has become a tough activity and is now a science with ingredients of art inherent in it.
“Marketing management today is a subject of growing interest in all sizes and types of organisations within and outside the business sector in all kinds of countries”. (Kotler).
Importance of Marketing
Marketing, as it means today, is consumer-oriented. To serve the consumer needs after carefully and scientifically carrying on market research, the process of marketing continues.
A well-conceived plan precedes marketing. Marketing is not an economic activity that can only be considered significant for a producer; but the vital role that marketing plays today in the economy of a country establishes the fact that modern economic development is to depend much on the marketing functions of industrial units.
The role of marketing as a catalyst of economic development in a developing country like ours is very much important.
Marketing is Important, because:
1. Both agriculture and industry need marketing. In an agriculture-predominant country like India, the marketing of agricultural products occupies a vital position in the economic development of the country. Specialised marketing procedure has to be followed and here the importance of marketing cannot be over- exaggerated.
Agro-based industries depend on marketing of agricultural produces either through indigenous or organised commodity markets to develop themselves. There is, then, a very close link between agriculture and industry. Industrial products reach the agriculture population through marketing and vice versa. Marketing, thus, establishes a continuous flow of goods between the urban and rural population.
2. Marketing reaches today the remotest corner of a country. By creating customers, as marketing means today, a wide demand is created for products as a consequence of which production has to be carried-on, on a large scale. Mass production and mass distribution are the characteristics of modern economy. Marketing is the cause for making it possible.
3. Marketing benefits the society by studying customer needs, wants and desires. It is for the new concept of marketing that consumers’ interest is so much looked after and their needs are properly taken care of.
4. Today’s marketing is based on product planning and development to make merchandising more effective.
5. Marketing has made it possible to take an integrated view of business operations by indicating interdependence of different departments of a business organisation.
6. Marketing confers various social benefits such as employment, stability of price and, through advertising, education and culture.
7. Non-business institutions like schools, colleges, hospitals etc., are also benefited from the marketing operations. The principles and techniques of marketing can be applied with benefit in these institutions where marketing helps in propagating the causes of the institutions more effectively.
8. Marketing plays a special role in a developing country by promoting its economic growth through proper assessment of the country’s requirement, better planning of products and production, better procurement of inputs and distribution of goods and services.
9. In the over-all economic development of a country, marketing has a very significant role to play. It encourages export promotion and generates an atmosphere of healthy competition in both production and distribution.
10. Marketing leads to better utilisation of social resources.