Nature of Marketing Meaning, Definition, Scope

Table of Contents:-

Nature of Marketing
Scope of Marketing
Marketing Meaning
Marketing Definition
Marketing Concepts
Marketing in Developing Economy
Difference between Selling and Marketing

Marketing refers to ascertaining consumer needs, converting them into products and services, moving the product or service to the final consumer segment with emphasis on profitability and customer satisfaction, and ensuring the optimum use of the resources known to the organization. The nature and scope of marketing are vast and ever-evolving. Correctly understanding the marketing concepts, principles, content, and nature enables customers and marketers to make informed choices. By following the changing nature and scope of marketing, businesses can keep themselves updated with the changing trends in the market and position themselves for long-term growth and success.

The Nature and Scope of Marketing are given below:

Nature of Marketing

The nature of marketing is as follows:

Marketing is an Integrated Process
Marketing is Customer Oriented
Marketing Starts and Ends with the Consumer
Marketing is a System
Marketing is Creative
Marketing Precedes and Succeeds Production
Marketing is the Guiding Element of Business
Marketing is Goal Oriented
Marketing is Pervasive
Marketing in Science as well as Art
Exchange is the Essence of Marketing
Marketing is a Continuous Process
Selection of Target Markets

1) Marketing is an Integrated Process

Marketing is not a single activity. It is a coordination of many interrelated activities. The interaction between various marketing activities gives a unique character. Marketing is a managerial process as it involves planning and control functions. Marketing is a multidimensional and social process as it is concerned with the satisfaction of human needs.

2) Marketing is Customer Oriented

The primary objective of a business is to satisfy human needs. Therefore, companies must first find out what the consumers want and then produce goods according to the needs of the consumers. Only such products should be made that best satisfy consumer needs and at a profit to the maker. Products offered for sale should be determined by the buyer rather than the seller.

In Levitt’s words, “Instead of trying to market what is easiest for us to make, we must find out much more about what the consumer is willing to buy.” In other words, we must apply our creativity more intelligently to people and their wants and needs rather than products.

Marketing exists to identify and satisfy the wants and needs of present and potential consumers. The customer is the main focus of all marketing activities.

3) Marketing Starts and Ends with the Consumer

Marketing is often concerned only with the flow of products and services from the manufacturer to the end user. In consumer-oriented marketing, it is essential to know what the customers want. This is possible only when information is collected directly from the consumers. Earlier, the producer was in direct contact with the consumers. However, after the mass production system, this limit was broken. Therefore, a formal mechanism is required to stay in touch with consumers. Thus, marketing research and information systems have emerged as full-fledged marketing functions. Marketing involves satisfying customer needs and wants.

4) Marketing is a System

Another essential feature of marketing is its function as a system. Marketing is a system comprising several sub-systems. Under marketing, inputs are drawn from society and transformed into outputs supplied to the organization. Marketing is a system consisting of several interacting and interdependent sub-systems. It obtains the information from the environment (Supra System), transforms these inputs, and supplies the output (customer satisfaction, profits, etc.). Marketing is an approach to business problems and philosophy.

5) Marketing is Creative

Marketing creates possession, time, and place utilities. Time utility is designed by keeping goods for use in the future. Place utility is created by carrying goods to places where consumers most need them. Marketing creates possession utility by transferring services and products from producer to customer. The exchange process between buyer and seller is an essential element of marketing.

6) Marketing Precedes and Succeeds Production

Today, all organizations acknowledge that marketing activities must commence well before production. It is not sufficient if the activities begin after the product is ready. In companies operating under the marketing concept, the entire marketing is designed to serve consumer needs. This is evident from the speech of the Chairman of General Electric Company in the Company’s Annual Meeting of 1952: “Over the last ten years, we have endeavoured to incorporate customer and market appeal into the product from the design stage onward. We view the actual act of selling as the final step in the sales effort. The effort commences before the engineer puts pencil to drawing paper. We introduce the marketing professional at the outset rather than after the production cycle and aim to integrate marketing into each phase of the business.”

7) Marketing is the Guiding Element of Business

Marketing has become a pervasive force that guides businesses today. It integrates several activities, from a product idea to profitable selling and ultimate consumption. In recent years, marketing has gained greater importance due to the rapidly increasing tempo of producing a wide range of goods. Sustained economic growth depends, to a large extent, on the performance of marketing activities because it is only through marketing that the demand for goods and services is stimulated. This stimulation leads to the multiplication of products and, ultimately, higher production. Therefore, marketing is at the core of all industrial activities.

8) Marketing is Goal Oriented

Of the many vital characteristics of marketing, one essential aspect is that it is goal-oriented. Marketing seeks to achieve benefits for both sellers and buyers. It results in a mutually beneficial relationship by fulfilling customers’ wants and generating business revenues. The ultimate aim of marketing is to earn profits by satisfying human wants.

9) Marketing is Pervasive

Marketing is needed in business as well as in social and other organisations. In other organisations, marketing is necessary for spreading socially useful ideas and programs, adult education, family planning, communal harmony, environmental protection, national integration, etc. Such marketing is called social marketing.

10) Marketing in Science as well as Art

Marketing has evolved from economics but has a closer relationship with social and behavioural sciences. Marketing is interdisciplinary in nature, orientation, and design. It is closely associated with science and humanities streams and subject lines such as Economics, Law, Psychology, Anthropology, Sociology, Information Technology, etc. It heavily depends upon the demographic features of the target market, philosophy, political environment, mathematics, statistics, etc.

Related Article:-Types of Attitude

11) Exchange is the Essence of Marketing

Marketing revolves around commercial exchange. Exchange implies transactions between buyer and seller. Marketing also involves the exchange of technology, information, and ideas. The seller hands over a product or service to the customer, who, in turn, gives money to the seller. There is also an exchange of information between buyers and sellers.

12) Marketing is a Continuous Process

Marketing is not an isolated or static process but a continuous, complex, and interrelated one. It involves ongoing planning, implementation, and control. It is a significant functional area of management.

13) Selection of Target Markets

Every marketer can only satisfy some people in the market. A marketer must select target markets rather than a quixotic attempt to win every market and be all things to everyone. Therefore, marketers start with market segmentation, choosing a target group(s), identifying target group needs and requirements, and meeting these needs better than the competitors through a suitable marketing mix.

You may also like:

Scope of Marketing

Marketing primarily focuses on coordinating activities that meet customers’ needs and fulfil organizational goals. It has a broad scope because these activities are all-pervasive.

The scope of marketing can be explained with the following points:

1) Study of Consumer Needs and Wants

Goods are produced to satisfy consumer needs. Therefore, studies are conducted to determine consumer needs and wants. These needs and wants serve as motivation for consumers to make purchases.

2) Study of Consumer Behaviour

Marketers perform a study of consumer behaviour. Analysis of buyer behaviour helps marketers target the market and market segmentation.

3) Production Planning and Development

It starts with generating a product idea and ends with product development and commercialisation. Product planning includes packaging and branding to product line contraction and expansion.

4) Pricing Policies

Marketer has to determine pricing policies for their products and services. Pricing policies differ from product to product. It depends on the product life cycle, level of competition, marketing goals and objectives, etc.

5) Distribution

The study of the channel of distribution is essential in marketing; for maximum sales and profit, goods need to be distributed to the ultimate consumers at the lowest cost.

6) Promotion

It includes sales promotion, personal selling, and advertisement. The right promotion mix is essential for the accomplishment of marketing goals.

7) Consumer Satisfaction

The product or service the business offers must satisfy the consumer’s needs. Consumer satisfaction is the primary purpose of marketing.

8) Company Analysis

In company analysis, the marketers highlight the company’s cost structure and constrained resources to the competitors. Marketing managers can work with the accounting department to analyze the profit the firm generates from various offerings and different groups of customers. A brand audit can also be done to know the strengths of the other brands.

9) Competitor Analysis

This is done to construct a detailed profile of each player operating in the related field. Marketing managers analyse the competitors’ cost structure, sources of resources and profits, product positioning, competencies, and product differentiation to ascertain the relative strengths and weaknesses of the players operating in the market.

Marketing Meaning

Generally, people see marketing as facilitating the trade of goods and services, but this perception needs to be more complex. The term ‘marketing’ is much broader in scope and nature. It encompasses more than just the requirements, sale, or acquisition of goods and services. Marketing means the whole process of satisfying the needs of consumers. It starts with discovering the needs and wants of the consumers. It continues until the wants are satisfied and the customers are delighted.

Marketing is not only about providing services or products but also about providing benefits to the changing needs and demands of the customers. It is thus the total of all the activities and processes, including creating, communicating, delivering, and exchanging offerings that value customers, clients, partners, and society. Through its studies and research, marketing will determine for the engineer, designer, and manufacturing man what the customer wants in a given product, what price they’re willing to pay, and when and where it will be desired.

Marketing Definition

According to William J. Stanton, “Marketing is a total system of interacting business activities designed to plan, price, promote and distribute want-satisfying products and services to the present and potential customers”

According to Prof. Malcolm McNair, “Marketing is the creation and delivery of standard of living to the society”.

As per Cundiff and Still, “Marketing is the business process by which products are matched with the market and through which the transfers of ownership are affected”.

According to the American Marketing Association (new definition), “Marketing is an organisational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders.”

Marketing Concepts

There are five different marketing concepts under which business enterprises conduct their marketing activities:

Production concept
Product concept
Selling concept
Marketing concept
Societal concept

Production Concept

This is likely the oldest marketing concept. Some businessmen believe that consumers are interested only in low-priced, quick, and widely available goods. They do not consider the finer points of the product to be very important. Therefore, producers believe they must concentrate solely on efficient (economical) and extensive (large-scale) production.

A company adhering to this approach focuses on achieving high production efficiency and comprehensive distribution coverage. Organizations may adopt this concept in two types of situations:

i) When the demand for the product exceeds the supply, increasing production makes selling more possible. Here, the management’s primary concern is finding ways to increase production to fill the demand and supply gap.

ii) When the product cost is high, an increase in production is expected to bring down the price due to economies of scale.

Organizations that adopt this concept are typically production-oriented concerns. Engineering and production departments play an essential role in this situation. Such organizations have only sales departments to sell the product at a price set by production and finance departments.

Product Concept

In contrast to the production concept, some organizations believe in the product concept. The product concept implies that consumers favour products that offer the highest performance, quality, and features. They also believe that consumers appreciate quality features and are willing to pay a higher price for the extra quality of the available product or service.

Hence, companies that believe in this concept concentrate on the product and its improvement. While enhancing the development, they often need to pay more attention to customer satisfaction and their diverse needs. Even when planning new products, the producer is more concerned with the product itself and less with its uses or the consumers’ needs. For example, a biscuit manufacturer might produce a new brand of biscuits with good ingredients, colour, packaging, etc., without considering consumer tastes and preferences. This approach may lead to failure in the market if the biscuit does not appeal to the ultimate consumer’s taste.

Selling Concept

At times, the primary challenge for an enterprise is not merely production volume but selling the output. Similarly, having a superior product may not guarantee success in the market. Thus, selling assumes greater importance. Some producers believe aggressive persuasion and selling are the crux of their business success. Without such assertive methods, they can sell and survive.

Therefore, attention is devoted to finding ways and means to sell. Additionally, there is a belief that customers/consumers, left to themselves, will need to purchase more of the organization’s products and services. Consequently, a considerable promotional effort is deemed justified. The selling concept posits that consumers, on their own, will only buy enough of an organization’s products if the organization undertakes aggressive sales and promotional efforts.

This concept applies to various professions, including insurance agents, salespersons dealing with specific electrical gadgets, health drinks, soft drinks, and individuals fundraising for social or religious causes.

Sales are the index of the success of both marketing and production efforts. Marketers who adhere to the sales concept often need to pay more attention to consumers purchasing goods to fulfil specific needs. After the sale, they do not concern themselves with what happens or how the consumer feels. They may not anticipate the customer returning to buy the product, preferring to target new consumers rather than building a network of satisfied customers. Some firms dealing with excess production also adopt the selling concept. Both fair and unfair persuasive means may be employed in this process, but the underlying goal is to increase sales.

In the sales concept, sales executives or the sales department assume greater importance than production and product concepts.

Marketing Concept

In an evolutionary process, many organizers have shifted their focus and embraced a broader perspective for their marketing tasks. The marketing concept is considered a business philosophy with broader implications. Under this concept, the organization regards the needs and wants of consumers as the guiding principle, aiming to deliver goods and services that can efficiently and effectively satisfy consumer needs more than competitors. It is also asserted that marketing involves consumer orientation to achieve long-term profits. It represents a modern marketing philosophy for dynamic business growth.

Under this concept, the marketing task begins by identifying what the consumer wants and then producing a product that meets those wants and provides maximum satisfaction. Implicitly, the consumer is seen as the boss or king who dictates preferences. The focus, which transitioned from the product to selling, now centres on the consumer.

When organizations practice the marketing concept, all their activities, including manufacturing, finance, research and development, quality control, distribution, and selling, are directed toward satisfying the consumer, becoming the core of the corporate culture in such organizations. Companies produce what consumers want, thereby helping consumers and generating profits.

Companies that have reached a certain level of maturity and can see beyond the immediate future adopt this concept. Some companies may resist adopting this concept, fearing a decline in sales or profits in the short run, with long-term gains being unpredictable or uncertain. Companies seeking quick profits may also refrain from embracing this concept. Even within the organization, departments may only fully cooperate if they are convinced about the advantages of following the marketing concept. Despite these hurdles, it is a worldwide experience. Successful companies that enjoy goodwill and long-term growth have adopted the marketing concept as their business philosophy. These companies recognize that a satisfied customer is the best advertiser for their product, with profits generated from customer satisfaction rather than solely from the product or selling efforts. In an economy like India, with shortages in many goods and a lack of resistance from consumers, firms practising the first three concepts may still survive.

Societal Concept

With the growing awareness of the social relevance of business, there is an effort to make marketing more aligned with societal needs. In this context, marketing is not viewed solely as a business activity but must also consider social needs. Excessive exploitation of resources, environmental degradation, and the rise of consumer movements, in particular, have emphasized the importance of recognizing the relevance of marketing to society. Consequently, marketing must be a socially responsible and accountable activity.

The societal concept asserts that a business organization must consider the needs and wants of consumers and efficiently deliver goods and services to enhance both consumer satisfaction and societal well-being. It is an extension of the marketing concept to encompass consumers and society.

A company adopting the societal concept must balance company profits, consumer satisfaction, and societal interests. This mirrors the challenges associated with the social responsibility of business. Determining what is beneficial for society is a crucial question. The voluntary acceptance of this concept is desirable for the long-term survival of private companies. Effectively implementing the societal concept will undoubtedly enhance the goodwill of the business entity. Companies that embrace this concept will produce and market goods and services that benefit society, do not harm the environment and provide total value for the money spent.

Marketing in Developing Economy

The efforts, scope, and functions of marketing depend on economic development, technological achievements, and political, social, and cultural factors. For example, the size of marketing for an illiterate population differs from that of a literate population.

Marketing in a developed economy differs from that in a developing economy like India. Only some advantages of a matured marketing system, as found in a developed economy, may be realized in a developing economy. The characteristics of marketing in a developing economy are as follows:

1. Most markets remain seller’s markets, where the seller holds a dominating position and can influence the pattern of consumption, prices, and the quality of goods and services to their advantage. Many manufacturers subscribe to the selling concept and are less concerned about consumer satisfaction.

2. The variety of goods and services available is limited, and even their quality may require improvement. The lack of effective competition enables manufacturers to sell whatever they produce. Consumers have to accept and purchase whatever is available in the market.

3. In a developing economy, people spend most of their income on necessities due to lower per capita income, leaving little money available for discretionary spending. People may be unable to need help to purchase many goods and services within their limited income. Since income determines consumption patterns, the scope for marketing is also influenced by income.

4. Consumers’ knowledge and awareness of their rights are limited because they need exposure to marketing activities. It is easier to learn about higher quality, better service, and a wider choice if exposed to these terms. Therefore, consumers in developing economies are content with whatever is available in their country.

5. Supporting services such as departmental stores, credit facilities, packaging and delivery systems, after-sales services, product guarantees, money-back guarantees, etc., are also less prevalent in developing countries.

All developing countries are in gradual evolution and, in the ordinary course of events, must grow into developed systems. However, the situation is becoming more complex with the rapidly changing environment.

Difference Between Selling and Marketing

The terms “marketing” and “selling” are used synonymously in our day-to-day lives. Both marketing and selling functions are directed towards revenue generation. Being so closely interwoven, it becomes difficult for many to differentiate between them. However, there exists a significant difference between the two functions.

Selling is a part of marketing. It is concerned with delivering goods/services to customers in exchange for a price. For example, one goes to a shop to buy a pair of shoes, and the shopkeeper sells them in exchange for the price paid.

Marketing is much broader in scope. It is a function that begins with determining the needs and wants of the customers and ends with customer satisfaction and feedback. In between, various activities like production, pricing, promotion, and distribution occur, and finally, the selling happens. The customer always remains the main centre of marketing. For example, buying a car and receiving after-sales service is also a part of marketing.

Let us explore the difference between marketing and selling.

Point of Difference	Selling	Marketing
Definition	Selling is the process of persuading customers to buy products in order to increase sales.	Marketing is concerned with creating value for customers by delivering goods and services according to their needs and making a profit.
Scope	It has a narrow scope.	It has a wider scope.
Business viewpoint	It views business as a process of manufacturing goods.	It views the business as a process of satisfying the customer.
Orientation	Sales oriented	Profit oriented
Price	The cost determines the price.	The consumer determines the Price.
Customer orientation	Customers are viewed as the last link in any selling business.	It views customers as the starting point of any business.
Profits	It focuses on earning profits through aggressive promotions.	It focuses on earning profits through customer satisfaction.
Emphasis	Emphasis on cost reduction by sticking with the same technology.	Emphasis on adopting the latest technology for product innovation to enhance customer value.
Views of seller’s needs	It stresses the needs of the sellers.	It stresses the needs of the customers.

FAQ

1. What is nature of marketing?

2. What is marketing nature scope and importance?

3. Marketing Meaning, Definition, Nature, Scope of Marketing