Page 551 - Business Principles and Management

Unit 6

20.1 Nature of Marketing

Goals Terms
• Discuss the importance of market- • retailers • researching
ing and its role in the economy. • wholesalers • risk taking
• Describe the factors that are part • buying • grading and valuing
of the nature of marketing. • selling • production oriented
• transporting • sales oriented
• storing • customer oriented
• financing • marketing concept

Importance Of Marketing

In our private-enterprise economy, it is not always easy to match production and
consumption. Individual businesspeople make decisions about what they will
produce, and individual consumers make decisions about what they want to
purchase. For the economy to work well, producers and consumers need infor-
mation to help them make their decisions, so that producers can provide the
types and amounts of products and services that consumers are willing and able
to buy. Marketing activities, when performed well, help to match production
and consumption. As you learned in an earlier chapter, marketing is a set of ac-
tivities that gets products from producers to consumers. From that very basic
definition, you may think that marketing is simply transporting products. How-
ever, it is much more than that. It includes packaging, developing brand names,
and determining prices. Marketing even involves financing and storing products
until customers purchase them. Also, most products require some type of pro-
motion. Marketing is involved in all of these activities and many more.
A more detailed definition will provide a better description of modern market-
ing. The American Marketing Association defines marketing as an organizational
function and a set of processes for creating, communicating, and delivering value
to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders. Because marketing is the key tool in matching
supply and demand, it can be viewed in another way as well. If marketing is suc-
cessful, businesses can sell their products and services and consumers can purchase
the things they want. Therefore, the goal of effective marketing is to create and
maintain satisfying exchange relationships between buyers and sellers.
Every consumer comes into daily contact with marketing in one form or
another. Whenever you see an advertisement on television or on the Internet, notice
a truck being unloaded at a warehouse, or use a credit card to purchase a product,
you are seeing marketing at work. Each retail store location, each form of advertis-
ing, each salesperson, and even each package in which a product is sold is a part of
marketing. A great deal of business activity centers on marketing.
Millions of businesses worldwide engage in marketing as their primary busi-
ness activity. Those organizations include retailers—businesses that sell directly to
final consumers—and wholesalers—businesses that buy products from businesses

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