Marketing is an important function of business that helps in selling of goods and services and ultimately attaining profit.
Importance of marketing lies in identifying consumer’s needs and wants and delivering appropriate product and services to customers so as to maximize their satisfaction.
Marketing is a very important aspect in business since it contributes greatly to the success of the organization. Production and distribution depend largely on marketing.
It is a myth that sales and marketing are basically the same. These two concepts are different in many aspects. Marketing covers advertising, promotions, public relations, and sales.
It is the process of introducing and promoting the product or service into the market and encourages sales. Since the goal of marketing is to make the product or service widely known and recognized to the market, marketers must be creative in their marketing activities.
Some of the importance and significance of marketing are as follows:-
1. Creation of Demand 2. Providing Information 3. Balancing Demand and Supply 4. Improvement in Life Style 5. Achieving Higher Sales 6. Building Reputation
7. Marketing Helps in Distribution Goods 8. Delivering Satisfaction 9. Providing Livelihood 10. Survival and Growth of Business 11. Creation of Utility 12. Helps in Selection of Product.
Importance of Marketing: Creation of Demand, Providing Information, Providing Livelihood, Creation of Utility and a Few Others
Importance of Marketing – Provided by Peter Drucker
Marketing is the basic function of a business enterprise. According to Peter Drucker, “Marketing is a distinguishing feature of business. A business is set apart from all other human organisations by the fact that it makes a product or service”.
1. Marketing generates revenue for business.
2. Marketing considerations are the most critical factors in business planning and decision making.
3. Efficient marketing is a pre-requisite for the successful operation of a business enterprise.
4. Marketing generates employment.
5. Marketing makes available new variety of useful and quality goods to consumers.
6. Marketing converts latent demand of the consumers into effective demand and thus enables to raise the standard of living.
7. Marketing is helpful in stabilizing prices and optimum utilisation of resources.
8. Marketing raises the level of economic activity. There is a positive relation between marketing activity and economic activity of a country—economic booms and depressions are always marked by higher and lower tempo of marketing activities. Thus a high level of marketing activity is a pre-requisite for a higher level of economic activity.
Importance of Marketing – Increase in Discretionary Income, Increase in Intangible Wants, Increasing Technological Competition and High Cost of Product Development
1. Increase in Discretionary Income:
Discretionary income can be defined as the amount of income remaining with the customer after tax and after he has satisfied his basic needs for food, shelter and clothing. It is different from disposable income which is the amount of income after tax. It is assumed that as the general level of wages and salaries has risen, the amount of discretionary income has also increased.
There is competition between all sellers for this share of consumers’ income. The natural action is for firms to engage in aggressive selling in order to increase the demand for their own particular products. Those firms which are less efficient at selling are driven out of business.
The second feature of developed economies has been the increasing tendency among people for psychological or intangible wants to affect purchasing behaviour. In the Western economies, the income of the majority of consumers permits them to satisfy the essential needs, whilst leaving a surplus which permits the satisfaction of higher order needs.
Consumers try to express their individuality through the products they purchase. In response, sellers are striving to build up appropriate images for their products and devising products which cater for these higher-order values.
Modern industrial societies are characterized by growing competition, resulting from the development of new technologies. Against this background of intensifying competition, it is increasingly important to develop, products that have visible competitive advantages. Marketing has a valuable role to play in this process.
A fourth fact is the high cost generally incurred in the development of new products. A high technology product such as a new computer system can involve the expenditure of millions of rupees. Even the development of a less technologically sophisticated product is costly.
Importance of Marketing – Importance of Marketing to Firm, Importance for National Economy, Importance of Marketing for Developed Economy and Developing Economy
A. Importance of Marketing to Firm:
Marketing plays an important role for the well-being of a firm.
Its importance to a business firm can be studied as under:
1. Helps Business Planning and Decision-Making:
In today’s economy, production is planned according to customer needs and wants and sales forecast rather than production capacity of the firm. A firm will produce what and how much it can sell and not what and how much it can produce. Thus, marketing decisions affect business decisions; for instance, planning, production, purchase, finance or design revolve around marketing decisions.
2. Helps Product Development:
Modern concept of marketing helps in discovery and development of new products. Marketing concept is based on intensive research about wants, needs and consumer behaviour. Based on market research, businessman tries for new products and creates demand for them through promotion, publicity and advertisement.
3. Helps Seller in Buyer’s Market:
A buyer’s market is one in which supply of goods/services exceeds demand. In such a situation, scientific ways of marketing enable the firm to dispose its surplus goods.
4. Helps in Recession:
Marketing helps a business firm in successfully facing recession in various ways viz.:
(i) Discovering new markets
(ii) Reducing cost of distribution
(iii) Diversifying and improving products
(iv) Suggesting alternative uses of product.
5. Helps Increasing Profits:
Marketing is helpful in increasing business profits by:
(i) Reducing selling cost
(ii) Increasing demand of product through advertisement and sales promotion activities.
6. Helps Collecting Information Regarding Consumer’s Behaviour:
Through marketing, a firm collects information about competitors and their price policies, production policies, and sales promotion policies and on that basis, takes suitable marketing decisions and makes necessary adjustments in its own policies.
7. Marketing is Eyes and Ears of a Business:
This means that it keeps business in close contact with its environment and informs about events which can influence its operations.
Larger Social Welfare:
Modern marketing concept lays emphasis upon consumer needs and wants. A beginning is made with identifying consumer wants and needs and activities of business and industrial enterprises cluster around these needs and wants. That is, goods of standard quality are provided to consumers at reasonable prices at time and place suited to consumers through most convenient distribution channels with best possible after-sales service to customers. In this way, marketing aims at large social satisfaction and welfare in various ways.
B. Importance for National Economy/Society:
Modern marketing concept also provides for better exploitation of country’s resources, minimum wastages and increases national output. Marketing provides wide employment opportunities. In countries like USA, one-fourth to one-third of total persons employed are engaged in marketing. Also, new goods and services are provided to society and this increases people’s standard of living. Marketing helps over-all growth and development of the country. A higher level of marketing activity is a pre-requisite for a high level of economic activity.
C. Importance of Marketing in Developed Economy:
Marketing plays significant role in developing economies in following ways:
i. In rich economies, the way of life itself reflects certain degree of developments in marketing. In fact marketing creates, maintains and increases the demand of new, innovated products.
ii. In rich economies with abundance, volume of production backed up with up-to-date technology is often more than demand. And to maintain this level of production, it becomes absolutely essential that production is readily sold out domestically or abroad despite competition. Here, sound and effective marketing efforts are helpful in disposal of surplus output.
D. Importance in Underdeveloped or Developing Economy:
In underdeveloped economies, marketing has to play a significant role. It is regarded as an effective engine of development and most important multiplier. Marketing is regarded as ‘Key to Economic Growth’. In the words of W.I. Emlen, (well-known marketing Guru) ‘Production may be the door to economic growth of under developed countries, but marketing is the key that turns the lock’.
To explain, narrowness of market is the general characteristic of developed economies. And mass production in developing economy becomes possible only when large markets are available. Marketing makes this possible. Rapid development of economy is possible only by adopting modern marketing methods.
Marketing further plays significant rate in developing economies in following ways:
i. Industrialization is facilitated by modern methods of marketing so much so that marketing and industrialization go hand in hand. Marketing must catch up with requirements of rapid industrial growth.
ii. Rural marketing also helps development of agriculture.
iii. International marketing also helps in expanding exports.
iv. Effective marketing helps in bringing the fruits of production to people.
Importance of Marketing – Importance of Export Marketing in the National Economy, from the Viewpoint of Individual Firms and Other Viewpoints
I. Importance of Export Marketing in the National Economy:
From the point of view of national economy, the importance of export marketing can be understood under the following heads:
(1) To Meet Imports of Industrial Needs:
No country today can survive in isolation. The developing countries need imports of capital equipments, raw materials of critical nature, technical knowhow for building the industrial base in the country with a view to rapid industrialisation and developing the necessary infrastructure. The share of oil imports in the total import of the underdeveloped countries is much higher and its imports cannot be avoided all it is required as a means of energy to run the industries.
There is only option to avoid the situation is to establish the export-oriented industries and to increase the existing installed capacity of units producing goods for export markets. Industries should also be given stimulus to utilise their unutilised capacity and export the surplus production.
Thus export is a must for meeting the import requirements of a country because by exporting the surplus or additional production, a country can also earn valuable foreign exchange that is necessary to meet the import bill.
Moreover, if a country fails in meeting the import bill by exporting the goods and services from the other country, the difference is trade deficit which cannot be said to be a pleasant situation. Thus, positive measures, and encouragement for the steady and substantial increase in the export trade is necessary to balance the imports.
In this way, export should be increased steadily and substantially especially by an underdeveloped country where trade deficit has become a regular feature.
(2) Debt Servicing:
Almost all underdeveloped countries, including India, have been receiving external aid over the years for their industrial development. The natural consequence of aid has been the need for debt servicing i.e. arrangement of foreign exchange every year equal to the instalment and interest assumed thereon as per terms of the aid or loan.
Hence, it is necessary to aim at sufficient export earnings to cover both imports and debt servicing. This will lead to the availability of higher amount of foreign aid for development and consequently higher amount for debt servicing.
(3) Rapid Economic Growth:
An expanding export trade can be a dynamic factor in a country’s development process. However, one has to plan imaginatively in increasing the production of exportable surpluses. The country should have to utilise domestic resources and to provide technological improvement and improved production at lower costs.
For this purpose industrial development is inevitable which is not possible without making exports. Export and economic development of a country are interrelated without exports economic development of high order cannot be imagined.
In a study on the relation of exports and economic growth conducted for a group of 50 countries by R.F. Emery, it was found that a higher rate of economic growth tends to be associated with a higher rate of export growth. The study also revealed that a significant correlation exists between exports and GNP and that real GNP per capita recorded an increase of 1 % for every 21 % rise in exports.
It is now amply clear that countries that desire to grow economically should take serious view for creating exportable surpluses (surpluses after meeting domestic demands). In the best interest of the economy and exports, emphasis should be on increasing the overall production and expanding the export of non-traditional products.
(4) Profitable Use of Natural Resources:
Natural resources are valuable assets of a country which should be exploited ideally keeping the interest of the country in mind. This can be well done by export marketing. Earning from exports can be utilised in establishing industrial unit based on different natural resources available in the country by making the necessary imports of plant and machinery for the purpose.
Moreover, necessary equipments can be imported for the exploitation of natural resources such as digging machines to be used in oil exploration etc. In this way, an increase in the conservation of natural resources and their profitable use in the industry will reduce imports of a country.
(5) Facing Competition Successfully:
In a thrust to export more, the Government of the country, announces several concessions and incentive plans. Domestic producer in order to avail these concessions, concentrates his mind towards the improvement of quality of goods produced and reducing the cost of production so as to face the acute competitive situation in the foreign markets by making intensive use of latest technology.
As because he is already marketing the goods in the domestic market, the advantage of other- quality at reduced price is also made available to the domestic customers and face competition successfully in the local market. Moreover, better quality and lower prices improve the image of the producer as well as of the country in minds of foreign customers.
(6) Increase in Employment Opportunities:
In an effort to increase the export, many export, oriented industrial units are established, on the one hand, and the existing units produce more to get exportable surplus, on the other hand. This generates new Opportunities for employment and increases the existing level of employment.
In underdeveloped countries, particularly in India, the problem of the employment and under-employment is very serious that can be solved to some extent by increasing the level of export. Moreover, new markets are surveyed exporting the goods and so many other persons are also engaged directly or indirectly in the export trade. Employment opportunities can also be explored by entering new areas for exports.
(7) Role of Exports in National Income:
Export play an important role in the national income of the country and it can be increased to a sizable extent through organised export marketing. Shares of export income in the national income of some countries are Hungary 43%. Netherland 42%, Japan 11%. Canada 21%, Belgium 42%, West Germany 19%, England 17%. This shows the contribution of exports in the national income of the country.
(8) Increase in the Standard of Living:
Export marketing improve the standard of living of the countrymen in the following ways:
(i) The imports of necessary items for consumption can be made which may help improve the standard of living of the people. Such imports can be managed out of foreign exchange fund earned from exports.
(ii) Exports increase the employment opportunities which, in turn, increase the purchasing power of the peoples by which they can purchase more for this consumption.
(iii) Exports are responsible for the rapid industrialisation of the country. New items are produced for consumption in the domestic market. It increases the level of standard of living.
(iv) In order to face the competition in the international market, the producers improve the quality of the product by applying the latest technology. Moreover, cost of production is also reduced because of large-scale production and use of improved technology. In this way, people gets better quality products at cheaper rates. It helps improve the standard of living of the people.
Business and industrial firms are also benefited from the export trade. Due to these benefits, they are motivated to export.
The following are some benefits from exports to the individual firm:
(1) Insufficiency of Domestic Demand:
If the domestic demand for the product is not sufficient to consume the production the firm may take a decision to enter the foreign market. In this way he can equalise the production and the demand.
(2) To Utilise Installed Capacity:
If the installed capacity of the firm is much more than the level of demand of the product in the domestic market, it can enter the international market and utilise its unutilised installed capacity. In this way, it can export the surplus production.
(3) Relative Profitability:
The export trade in more attractive for its higher rate of profitability. The rate of profitability is also increased by export assistance measures offered by the Government of the country. The higher profitability rate also gives extra strength to the firm for its competitive position in the domestic market.
(4) Legal Restrictions:
Sometimes the Government of a country impose certain restrictions on the growth and expansion of certain firms or on the production and distribution of certain commodities in the domestic market in order to achieve certain social objectives. Such firms or producers of such commodities then sell their production in export market.
As a part of its import policy, Government of the country may impose certain export obligations on the industries and, therefore, they will have to export their production to meet the obligation.
(5) Less Business Risk:
A diversified export business helps the exporting firm in mitigating the risk of sharp fluctuations in the business activity of the firm. Downward trend in one market may be partly or fully counterbalanced in other markets.
(6) Social Responsibility:
In order to meet the social responsibility, some business firms take the decision to contribute to the national exchequer by exporting their products. They are committed to exports.
(7) Increased Productivity:
Due to certain social and has technological developments, the industrial production has increased to a great extent. The production, therefore, will be higher at a cheaper rate. The surplus production can, therefore, be exported. The company can, now, spend more money on research and developmental activities.
(8) Technological Improvements:
Technological improvements also attract the business firm to enter foreign markets. It introduces new products with latest technological improvements and faces the competition successfully in the overseas markets.
(9) Product Obsolescence:
If a product becomes obsolete in domestic market it may be in demand in foreign markets. The firm has to make a survey for introducing the product in those markets.
III. Importance from Other Viewpoints:
The importance of export marketing can also be viewed from some other angles:
(1) International Collaboration:
Export marketing results in international collaboration. Developed countries fix their import quotas for different countries and for different commodities. A country can export various commodities to these developed countries to the extent of its quota.
In order to settle certain common issues some countries from a group or a common platform to discuss various issues concerning their international trade and take decision jointly. OPEC and EEC are such groups. In, this way, international trade leads to international collaboration.
(2) Closer Cultural Relations:
International trade brings various countries closer. Better trade relations are established among the countries. Government and non-Government trade commissions or trade representations visit other countries from time to time. The local representatives and other related persons came into contract with foreign representatives and come to know their habits and customs.
Apart from this, exporting firms open their selling deposits, agencies or manufacturing units abroad. Their employees also come into contract with the persons of the countries of their posting. In this way closer cultural relations among various countries develop.
(3) Help in Political Peace:
The economic relations between two countries help improve their political relations. Various countries having different political ideologies import or export their products. The USSR imports food grains from America, though they have a different rather opposite, political ideologies. Thus, to some extent, international trade help maintaining political peace in the world.
Importance of Marketing – Marketing Plays an Important Role in Society, in Business, Offers Outstanding Career Opportunities and Affects Our Day-to-Day Life
Marketing is important for:
3. It offers outstanding career opportunities.
4. It affects our day-to-day life.
1. Marketing Plays an Important Role in Society:
The total population of India is unimaginable; it is the second highest populated country. The numbers of transactions that take place to satisfy the needs such as food, clothing and shelter for the huge population are quite high. And yet it all works quite well, partly because the marketing makes food available when we want it, in desired quantities, at accessible locations, and in convenient packages and forms (such as instant and frozen foods).
2. Marketing is Important to Business:
The fundamental objectives of most businesses are survival, profits, and growth. Marketing contributes directly to achieving these objectives. Marketing includes the following activities, which are essential to business organizations- identifying the needs and wants and then satisfying the potential customers, designing and managing product offerings, determining prices and pricing policies, developing distribution strategies and communicating with actual and potential customers.
Every manager, regardless of specialization or area of responsibility, needs to be familiar with the basics of accounting, finance, management, and marketing. So also people in all business areas need to be able to communicate with specialists in other areas. Furthermore, marketing is not just a job done by people in a marketing department.
Marketing is a part of the job of everyone in the organization. According to David Packard of Hewlett-Packard put it, “Marketing is far too important to be left only to the marketing department”. Marketing is not a department so much as a companywide orientation. Therefore, a basic understanding of marketing is important to all business people.
3. Marketing Offers Outstanding Career Opportunities:
Marketing offers great career opportunities in the areas of professional selling, marketing research, advertising, retail buying, distribution management, product management, product development, and wholesaling. Marketing career opportunities also exist in a variety of nonbusiness organizations, including hospitals, museums, universities, the armed forces, and various government and social service agencies.
The world has become a global marketplace and the job of marketer has become more challenging, companies all over the world and of all sizes have to become better marketers to compete.
4. Marketing Affects Our Day-to-Day Life:
Marketing plays a major role in our everyday life. Every rupee that we spend pays for marketing costs, such as marketing research, product development, packing, transportation, storage, advertising and sales expenses. Advertisement makes people aware about the new product in market; it also helps people to choose the best product which satisfies their needs. By developing a better understanding of marketing, one can become a better informed consumer.
Importance of Marketing – Creation of Demand, Providing Information, Balancing Demand and Supply, Improvement in Life Style, Achieving Higher Sales and a Few Others
Marketing is an important function of business that helps in selling of goods and services and ultimately attaining profit. Importance of marketing lies in identifying consumer’s needs and wants and delivering appropriate product and services to customers so as to maximize their satisfaction.
Human needs like need for food, clothing, shelter, need for safety, security, belonging, affection, need for knowledge are inherent and not created by marketer. Wants are human needs influenced by culture, society and personality. Like an Indian will want rice and wheat products for food while Xhosa people in Africa will prefer Umngqusho, a dish made from white maize and sugar beans, a Japanese want Kimono dress and Indians want saree.
Demand is wants backed by purchasing power. Marketer helps to create demand among the consumers. There are some consumers who feel the need and are actively looking for a solution to the problem while other may feel the existence of need or problem but are not yet looking to resolve a specific problem/need. Most of the time consumer has a problem or need but they don’t know about it but once they see or hear about the solution they want it.
Marketer creates the demand for both the kinds of target audiences by making them aware of the availability of product or services. For instance people felt the need for ready to eat meals and when such foods are launched, it created the demand for this kind of ready to eat foods.
Marketing performs an important function of providing information to the customers. The information may relate to launching of a new product, product development and innovation, launch of a new brand, information relating to product features, quality, product ingredients and price. Such information makes people aware of the availability of the product. Marketer also provides information about the utility of the product and procedure of using the product .This improves the knowledge of the consumers.
Marketer undertakes an extensive market research to understand the needs, wants and demands of the consumers, before introduction of product or services. Marketing process ensures availability of quality and wide variety of products to the customers at right time and convenient location. The marketer thus brings equilibrium between demand and supply by delivering goods and services as per demand of the consumers.
Marketing helps in reviving the latent needs of the consumers by delivering innovative product to the customers and thereby satisfying them. Marketing offers array of goods and services to cater to the unlimited needs of the people. A continuous product development and innovation, incorporating technological changes, improves the lifestyle of people and standard of living.
In the highly competitive business environment, selling of goods is not an easy task. Marketing performs a series of activities that, lead to maximising the sales volume. The marketer needs to make an extensive market research to understand consumers needs and wants and undertakes an extensive advertisement and promotion effort to actualise the sale of goods and services.
Marketing activities aim at delivering customer satisfaction which helps the firm in earning reputation. Effective marketing activities provide recognition to the company and products and helps in building solid reputation.
7. Marketing Helps in Distribution Goods:
Marketing helps in the process of transfer and movement of goods from the manufacturer to the ultimate consumer of goods and services. Marketing process builds a link between the producer of goods and services and the ultimate consumer of goods. Marketing facilitates transfer of ownership from the seller to the buyer.
8. Delivering Satisfaction:
An important task of marketing is delivering satisfaction to customers. Marketer provides satisfaction to customers by providing the appropriate goods and services at affordable price and at right time and place. Customer satisfaction is the extent to which product performance matches customer expectation.
In product performance matches expectation, customers are satisfied. If product performance exceeds customer expectation, customers are delighted and if product performance falls short of customer expectation, customers are dissatisfied.
9. Providing Livelihood:
Marketing involves a series of activities such as – buying, selling warehousing, transportation, grading, finance, risk undertaking, etc. These activities provide employment opportunities to the number of persons involved in the different marketing functions thereby improving their income levels. Thus marketing helps in income generation.
10. Survival and Growth of Business:
Marketing helps the firm to achieve the objectives of earning profit through sale of goods and services. This ensures stability, growth and survival of the firm.
11. Creation of Utility:
Marketing creates time and place utility by delivering the appropriate product to customers at right time and at right place. Marketing activities include storage, transportation and distribution of goods to the ultimate consumers.
Storage and warehousing facility creates time utility to enable easy, timely and uninterrupted availability of goods, especially seasonal products. Distribution of goods through appropriate channel i.e., through wholesaler, retailer or agents ensures easy availability of goods thereby creating place utility.
12. Helps in Selection of Product:
Marketing helps the consumers to select the product from wide variety of available product. Product related information offered through advertisement, promotion helps the customers to compare different brands and types of product and finally select the product that suits his or her needs. The sales personnel also assist the consumers in their purchase decision.
Importance of Marketing – Marketing Promotes Product Awareness to the Public, Helps Boost Product Sales, Earns Profits for the Organization and a Few Others
Marketing is a very important aspect in business since it contributes greatly to the success of the organization. Production and distribution depend largely on marketing. It is a myth that sales and marketing are basically the same. These two concepts are different in many aspects. Marketing covers advertising, promotions, public relations, and sales.
It is the process of introducing and promoting the product or service into the market and encourages sales. Since the goal of marketing is to make the product or service widely known and recognized to the market, marketers must be creative in their marketing activities.
Strategically, the business must be centered on the customers more than the products. Although good and quality products are also essential, the consumer still has their personal preferences. If the seller targets more of their needs, they will come back again and again and even bring along more customers by word of mouth.
If a seller focuses more on the product and disregards the wants and the benefits the buyer can get, the seller is likely to lose customers in no time. The sad thing is that getting the customers back is the hardest part.
As the impact of marketing is phenomenal on the organization, the importance of marketing can be understood in the following ways:
1. Marketing Promotes Product Awareness to the Public:
Various types of marketing approaches can be utilized by an organization. All forms of marketing promote product awareness to the market at large. Offline and online marketing make it possible for the people to be educated with the various products and services that they can take advantage of.
2. Marketing Helps Boost Product Sales:
Apart from public awareness about a company’s products and services, marketing helps boost sales and revenue growth. Whatever the business is selling, it will generate sales, once the public learns about the product through TV advertisements, radio commercials, newspaper ads, online ads, and other forms of marketing. The more people hear and see more of the advertisements, the more they will be interested to buy.
3. Marketing Builds Company Reputation & Image:
In order to conquer the general market, marketers aim to create a brand name recognition or product recall. This is a technique for the consumers to easily associate the brand name with the images, logo, or caption that they hear and see in the advertisements. For example, McDonalds is known for its arch design which attracts people and identifies the image as McDonalds.
For some companies, building a reputation to the public may take time but there are those who easily attract the people. It should also be remembered that a reputation which takes decades to build can be threatened by a single event.
4. Marketing Earns Profits for the Organization:
It is marketing, which is responsible for earning revenues for the organization. If the marketing function is poor or weak in any entity, it will certainly experience dwindling revenues over a period of time. It is precisely, due to this reason that the marketing is strengthened for consistent revenues.
5. Marketing Explores New Markets:
Marketing experts look out for new markets as the competition is fierce and new entrants pose threat of eating away the share of the existing players. Therefore, organizations must continuously explore new markets for survival.
6. Marketing Creates New Markets:
With ever increasing population, growing demand, increasing competition, it is imperative for organizations to create new markets where the product has not reached.
7. Marketing Helps in Development and Growth of Existing Market:
It is very necessary for the management of the organization to not only keep hold on the existing market so that it does not slip, but it is equally important to make continuous efforts to expand it and grow the market.
8. Marketing Helps in Improvement of Product and Total Quality Management:
The marketing managers are able to convey the consumer feed back to the research & development department of the organization, which helps in constant improvement of the product. This in turn, leads to increased sales and improved profits.
Importance of Marketing – Importance of Marketing to the Society, in Company, in Developed Economy, in Developing Economy and in Indian Economy
Marketing has acquired an important place for the economic development of the whole country.
It has also become a necessity for attaining the object of social welfare.
The importance of marketing may be as follows:
i. Delivery of standard of living to the society – marketing involves the liability to produce goods and services for the society according to their needs and tastes at reasonable price, which creates a demand for these goods and services, encourages customers to use them and thus, improves the standard of living of the society.
ii. Decrease in distribution cost – The very next liability of marketing is to control the cost of distribution. Decrease in cost of distribution directly affects the prices of products.
iii. Increasing employment opportunities – Employment opportunities are directly affected by the development of marketing. Marketing includes various operations and services such as – wholesalers, retailers, transportation, storage, finance, insurance and advertising etc. These services provide employment to a large number of persons.
iv. Protection against business slump – Business slump causes unemployment, slackness in the success of business and great loss to the economy. Marketing helps in protecting society against all these problems.
v. Increase in national income – Successful operation of marketing activities creates, maintains and increases the demand for goods and services in the society. It results in the increased level of production and it increases the scope and area of marketing. This ultimately leads to increase in national income.
i. Helpful in business planning and decision-making – It is a critical task to take the decision regarding the production only on the basis of production capacity of an enterprise, especially in the light of increasing competition and changing environment. Therefore, it becomes important to decide what can be sold before deciding what can be produced.
ii. Increase in the profit – The very main motive of every business is to earn the maximum profits by successful operations of its activities.
iii. Helpful in communication – Marketing is an effective media of communication between society and company.
In every developed country the marketing is considered to be the key of economic activity for industrial growth and expansion. In developed countries, the production is carried on at very large scale through the use of latest technology and equipments and other physical resources. Therefore, there is a greater need of marketing.
A rapid development of an underdeveloped country is possible only through the modern techniques of marketing. With an increase in industrialization and urbanization, the importance of marketing increases, as with the help to sell in the market successfully. Marketing the goods and services can be produced at large scale and can be sold in the market successfully.
Marketing contributes to the following achievements:
i. Increase in employment opportunities.
ii. Balanced growth of the country.
iii. Increase in per capita income.
iv. Increase in the sale of goods.
v. Increase in profits.
vi. Development of the means of communication.
vii. Development of the means of transportation.
viii. Development of the means of warehousing.
ix. Development of banking and insurance industries.
x. Development of means of finance.
xi. Expansion in the scope and area of marketing.
xii. Improvement in the standard of living.
xiii. Industrial progress.
xiv. Best/maximum utilization of available resources.
xv. Increase in exports.
xvi. Increase in national income of the country.
Importance of Marketing – Importance to Society, to Firm, in Undeveloped Economy, in Developing Economy and in a Seller’s or Buyer’s Market
1. Importance to Society:
(i) Delivery of Standard of living – Paul Mazur has said “Marketing is the delivery of standard of living of Society.” Marketing creates and increases demand of the new and existing products and thus raises the standard of living of the people.
(ii) Provision of Employment – According to an estimate 40 percent of the labor 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 a 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.
(iv) Increase in National Income – A marketing is associated with creation of increased demand for goods and services, a period of depression and low prices is very harmful to the economy, as many small units stop production leading to wide spread discovering of new markets, reducing cost of distribution, marketing it customer oriented, diversifying and improving the product and suggesting alternative used.
(i) Help in Business Planning and Decision Marketing – Marketing is helpful in business planning and taking various decisions regarding business.
(ii) Help in Increasing Profit – Marketing helps in increasing the business profits by reducing the selling cost on the one hand and by increasing the demand of the product through advertising and sales promotion activities on the other hand.
(iii) Help in Communication between Firm and Society – Marketing provides information to the firm regarding consumer’s behavior change therein from time to time of the competitors production and price policies. It helps a firm in framing its own policies and making necessary adjustments accordingly.
3. Importance in Undeveloped Economy:
Marketing in underdeveloped economies is still in its infancy. Industrialization and organization go hand with application of modern developments in the field of marketing. An effective marketing system is must to bring the fruits of production to the people.
4. Importance in Developing Economy:
Rich economies or the economies of abundance connote a certain degree of development in marketing, in such countries the volume of production is generally more than the demand. In order to maintain the level of production it is absolutely necessary that the produced amount is disposed of readily in the country itself or abroad on the basis of non-price completion. This is possible only by a very sound and advanced marketing system.
5. Importance in a Seller’s or Buyer’s Market:
A Seller’s market is one in which the demand for goods and services exceeds the supply. In such a situation there is tendency of growing monopolies. A buyer’s market is one in which the supply of goods exceeds which demand. Every firm is eager to sell its goods but only that firm succeeds which adopts the scientific ways of marketing of goods much as adopting the designs and quantity of good in accordance with the changing tastes and likings of the common consumer. Thus there is importance of marketing in either a sellers or buyers’ market.