Marketing: meaning and functions

The essentials

Marketing is the process of identifying customers' needs and wants and satisfying them through the exchange of goods and services of value. It is much wider than selling: it begins with understanding the customer before production, and it continues after the sale through customer support. In marketing, anything of value that can be offered for exchange, such as a good, service, idea or experience, is called a product.

Key points

• Functions of marketing: gathering and analysing market information, marketing planning, product designing and development, standardisation and grading, packaging and labelling, branding, customer support services, pricing, promotion, physical distribution, transportation, and storage or warehousing.
• Standardisation means producing goods of fixed specifications; grading means classifying products into groups based on features such as size or quality, mainly for agricultural products.
• Marketing philosophies: the production concept (make products available and cheap through efficient production), the product concept (focus on product quality and features), the selling concept (aggressive selling and promotion to persuade customers to buy), the marketing concept (identify customer needs and satisfy them better than competitors), and the societal marketing concept (satisfy customer needs while also protecting the long-term welfare of society).
• Marketing vs selling: selling is only a part of marketing; selling focuses on transfer of title and the seller's need to convert products into cash; marketing focuses on customer satisfaction and earning profit through it; selling starts after production and ends with the sale, while marketing starts before production and continues after the sale.

Exam tips

• A firm that avoids harmful plastics and promotes health while meeting customer needs follows the societal marketing concept.
• A firm that relies on heavy advertising to push products customers may not need follows the selling concept.

Common mistakes

• Using 'marketing' and 'selling' as the same thing.
• Confusing the product concept (quality) with the production concept (availability and low cost).