According to the American Marketing Association "marketing is the activity, set of institution, and process for creating, communicating, delivering and exchanging offerings that have value for customers, client, partners and society at large''. This definition focuses on creation of communication, delivering and exchange of offerings. The creation of value for the stakeholder has been the significant aspect of marketing.
If you are an entrepreneur who wants to start a new business and you do not have a product. In fact you will have to decide what product you should manufacture and sell. How do you decide this? This you can do only when you identify the need, which require satisfaction among human beings. Once you identify the need of a group of human beings, you can determine the product which can satisfy that need. This is a part of the modern philosophy of marketing or the marketing concept.
Philip Kotler, a well known author in the area of marketing, defines marketing as "a human activity directed at satisfying needs and want through exchange processes." Thus, the most fundamental concept which must be realised as being the basis of all marketing activities is the existence of human needs. A marketing man may devise a product or service aimed at satisfying a certain need, and thus provide satisfaction to the user. People may have unlimited wants but the ability to buy may be restricted on account of their economic background. They will, therefore, select from among those products which give more satisfaction or are needed more. Thus, when they are backed by ability to buy, the wants are converted into demand for your product. Therefore, when people decide to satisfy their needs and wants, in terms of marketing activities, exchange takes place.
This explains in detail the definition given by Kotler. Kotler, Armstrong and Agnihotri (2018) in their book Principles of Marketing defined marketing as "the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return."
The analysis of above definition reflects that:
- Marketing is a wholistic process;
- In this process, the organisation makes effort to engage customers;
- The organisation makes effort to develop strong customer relationships;
- The customer value is created;
- The company takes back the value from the customers in terms of revenue and profit.
Based on the above discussion we can develop a process-oriented definition of marketing, as "the process of ascertaining consumer needs, converting them into products or services, and moving the products or services to the final consumer or user to satisfy certain needs and wants of specific consumer segment or segments with emphasis on profitability, ensuring the optimum use of the resources available to the organisation."
In practice, often, the business functions such as production, finance and marketing are performed by separate departments with their own way of thinking. Production was often considered the more important function as compared to marketing. This practice is, gradually losing ground and it is being recognised that unless you can sell a product, you should not manufacture it. Production-orientation evolved because often products were designed and developed by inventors who hoped that they would sell. However, if these products fail to satisfy some needs, they would never sell in the market place. Therefore, consumer oriented thinking becomes necessary for any business to survive and grow.
