What is Marketing Management? Definition, Importance, and Functions

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By: Site Engineer, Staff

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Marketing consists of human activities which aim at facilitating and expediting exchanges. It functions include product planning, buying, selling, transportation, materials handling, storage, and pricing. Others are financing, risk-bearing, standardization and grading and market information. These functions are performed by producers, wholesalers, retailers, facilitators and, sometimes, consumers.

Marketing is perhaps the most misunderstood business function in Africa. It is often equated to buying and selling, advertising, or just simply, selling. There are at least two possible reasons for this misconception.

First, marketing is a relatively new discipline in Africa. In the early 80s, only a few universities had a full-fledged department of marketing, particularly in Nigeria only one University – the University of Nigeria, Nsukka – had a full-fledged department of marketing, although courses in certain specialized areas were possible in some of the other universities.

Secondly, buying, selling and advertising are the most conspicuous marketing activities all around us. Almost everybody buys or sells every day. The various mass media – television, radio, billboards, and newspaper bombard us daily with one form of advertisement or the other. Consequently, people tend to think of marketing only in terms of advertising and selling. But selling, buying, and advertising, as we shall see later in this article, are only a few of the activities that marketers perform.

Definition of Marketing

The definition of marketing has changed with time. Earlier definitions tended to see marketing as being exclusive to business organizations. In this sense, marketing has been defined as consisting of the performance of business activities that direct the flow of goods and services from producer to consumer or user. This definition might have been an adequate description of marketing in 1960 when it was formulated. But today, it is wanting in many respects.

First, it suggests that marketing activities can be performed by only business organizations. This is no longer so. Non-business organizations also perform marketing activities. They employ marketing techniques by finding out the characteristics of their potential clients, by designing their services to suit specific groups of people, by differentiating their services from those of other organizations and by advertising. This is true of churches, schools, political parties, political candidates, museums, philanthropic organizations, social clubs and governments as appropriate definition must recognize this fact.

Secondly, the American Marketing Association’s (AMA’s) definition states that only goods and services are traded or marketed. As implied previously, political ideas, religious doctrines, organizations, causes (e.g., smoking is bad for your health), government policies (e.g., University Primary Education) and persons (e.g., political candidates, celebrities, prophets) can be marketed.

A third weakness of the definition lies in the implied notion that marketing starts only after the goods or service have been produced, and ends when they reach the consumer. Today, a lot of marketing activities, such as research and planning, are carried out ever before the product reaches the manufacturing stage. Similarly, marketing is still carried out in respect of goods that have already been sold and delivered to the consumer. For example, the seller sometimes provides after-sale services such as installation, repairs, and maintenance for many durable, such as cars, computers, air conditioners, and electronics.

William J. Stanton defined marketing as a total system of business activities designed to plan, price, promote and distribute want-satisfying products and services to present and potential customers. Again, this definition does not recognize that non-business organizations perform some marketing functions.

A more acceptable and contemporary definition is that offered by Cundiff, Still and Govoni. They conceptualize marketing as the managerial process by which products are matched with markets, and through which the consumer is enabled to use or enjoy the products. For this definition to avoid the shortcomings of many others, the term ‘product’ must be defined widely to include, not only goods and services as suggested by the authors but also, causes, persons, organizations, ideas, and doctrines. Markets and consumers must similarly be defined widely to accommodate non-business marketing.

We shall, however, adopt Price and Ferrel’s definition, which says that:

Marketing consists of individual and organizational activities aimed at facilitating and expediting exchange within a set of dynamic environmental forces.

This definition recognizes explicitly or implicitly that:

  1. Marketing is not performed only by business organizations but also by individuals and non-business organizations.
  2. Marketing consist of activities;
  3. Marketing activities are aimed at bringing about the exchange of things of value;
  4. Marketing starts ever before the product is produced, and continues after exchange;
  5. Things of value, other than goods and services, may be the objects of exchange;
  6. Marketing takes place in a dynamic environment.

Importance of Marketing

Although marketing is the most criticized of all business functions, its importance cannot be over-emphasized. Imagine for a moment what would happen if all marketing activities were stopped. Products would not be sold; many people would lose their sources of livelihood, and in fact, our economy would grind to a complete halt.

More especially, the importance of marketing to society, individuals and organizations can best be imagined if we realize that:

  1. Marketing is a major source of the information (about the environment), which organizations need for adjustment purposes if they are to survive;
  2. Business organizations earn their revenue through marketing, and so cannot survive if their goods are not marketed;
  3. Many individuals are involved in one form of marketing activity or the other, and so it constitutes their means of livelihood;
  4. Our knowledge of products, were and how to obtain them, and how and when to use them, is made possible by marketing;
  5. Goods and services have ownership, time, place and form utilities only because marketing creates them, or helps in their creation;
  6. The marketing system permits specialization by individuals, countries, and organizations, and this contributes to the high standard of living, which many people all over the world enjoy today.

The indispensable role of marketing in any economic system can best be understood by discussing its functions.

Functions of Marketing

Marketing functions consist of those economic activities that must be performed, to enable the consumer or user acquires and consumes what has been produced by others. The various marketing functions are inevitable in any market economy.

These functions may be classified into three broad groups:

1. Merchandizing Functions

This covers the selection, purchase, stock management and display of a range of products, whose successive sale will achieve the marketing objectives of the business. This is done by ensuring that the right type, quality, and quantity of products are stocked and sold at the right price, at the right time, and at the right place. In other words, it includes those activities intended to get the right product to the right consumers, at the right time. It consists of product planning and development, buying, selling, and pricing.

(a) Product Planning and Development: This is the process by which new product ideas are selected and developed.

(b) Buying: This involves searching for, evaluating and purchasing goods and services that will appeal to consumers. Middlemen buy for resale, while producers buy to aid them in producing goods that are needed by consumers.

(c) Selling: This, is a restricted sense, is simply the process of effecting ownership transfers through the exchange process. In a broader sense, however, it includes all the promotional activities whose purpose is to stimulate sales. It includes face-to-face selling (personal selling), advertising, sales promotion, packaging, and point-of-purchase display.

(d) Pricing: All producers and sellers have to decide what price to charge, so as to attract and retain customers, as well as make profits.

2. Physical Distribution Functions

Physical distribution activities are those needed to move goods to where they are needed, and to store them until they are needed. These may involve moving them from the producer to consumers or middlemen, or from middlemen to the consumer. The physical distribution includes transportation, storage, and materials handling.

(a) Transportation: This involves the movement of goods to where they are needed.

(b) Storage: This amounts to holding goods until such a time that they are designed for purchase, consumption or use.

(c) Materials Handling: This refers to the in-store transfer of goods from one place to another. Stacking is an example. Handling may be mechanical, involving the use of conveyor belts or forklifts, or manual, as in the use of wheelbarrows. The choice of means will depend on the financial position of the company, and the fragility, weight, and size of materials to be handled.

3. Auxiliary Functions

These activities support and facilitate the main functions of exchange and physical distribution. Although classified as auxiliary, their performance is essential to the smooth operation of the marketing system.

(a) Financing: This is concerned with the provision of funds for operations, including granting of credit by sellers. For example, a producer may permit a distributor to collect goods now and pay later. Similarly, a wholesaler may permit a retailer to buy on credit. Sometimes, consumers also enjoy credit (e.g., hire purchase) facilities given by sellers. Cash purchases by customers also provide manufacturers and middlemen with funds needed to produce, transport, store and promote their goods or services.

(b) Risk-Bearing: Producers produce in anticipation of demand. Middlemen also stock goods in anticipation of demand. In their case, the producer or manufacturer bears the risk that his goods may not be bought. There are also risks of obsolescence, damage, and theft. Some of these risks are, however, transferable through insurance, although at a cost to the transferor.

(c) Standardization and Grading: These involve sorting goods on the basis of predetermined weight, quality, size and quantity standards. Consequently, the potential buyer of a Dunlop tyre, for example, undoubtedly knows that it will fit the wheels of his car, provided he chooses the right size. Similarly, a customer who buys an electric bulb is certain that it will match his socket. Standardization and grading, therefore, help to reduce the need of buyers to inspect goods before purchase, since they are reasonably certain that the goods or services will conform to certain minimum standards.

(d) Marketing Information: This is essential for market planning and action. Sellers constantly gather and analyze data about the characteristics, needs preferences, and complaints of consumers, as well as information about the products and actions of competitors and distributors. This market information function enables the company to plan and adapt to its constantly changing environment.

 

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