Definition of Marketing
After understanding the Market in the last chapter, now let us understand what the marketing is. In market, the sellers and buyers exchange ideas, goods, services and information for money. The ideas, goods, services and information possess a value for the customer. Every organization or firm has to create a value for its product or service and this is very much essential for its survival.The economists call this value “utility”.
What is Utility?
Utility is the want-satisfying power of a good or service. The utility is of four kinds- form utility, time utility, place utility and ownership utility.
Form utility is created when the firm converts raw materials and component inputs into finished goods and services. Any firm’s production function is responsible for creating form utility and marketing provides important inputs that specify consumer preference. Marketing creates the other three utilities, time utility, place utility and ownership utility. Time and place utility occur when consumers find goods and services available when and where they want to purchase them. EBay and other online retailers have a 24X7 format. This format emphasizes the time utility. Cola vending machines at malls and complexes focus on providing place utility for people buying snacks and soft drinks. Similarly, dial a pizza creates place utility. ATMs in banks also create the place utility. The transfer of title to goods or services at the time of purchase creates ownership utility.
Utility is created by marketing. The firms determine what products or services may be of interest to customers. In simple words, the strategy to use in sales, communications and business development is called marketing. Marketing is an integrated process through which a firm creates value for customers and builds strong customer relationships in order to capture value from customers in return.
Just like transaction is central to a market, customer is central to marketing. Marketing involves identifying, retaining and satisfying the customer.
Marketing is not an isolated process. it is an integrated process which involves the planning, execution, pricing, distribution, promotion and after sales service. The American Marketing Association as has defined the marketing as:
“Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives”
The latest definition of Marketing by AMA in October 2007 was revised as:
“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”
The Chartered Institute of Marketing defines marketing as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably”