Marketing is the organization function charged with defining customer targets and the best way to satisfy their needs and wants competitively and profitably.
Because consumers and business buyers face an abundance of suppliers seeking to satisfy their every need, companies and not-for-profit organizations cannot survive today by simply doing a good job.
Marketing is often dynamic, challenging and rewarding. It can also be frustrating and even disappointing.
But it is never dull! Welcome to the part of the organization where “the rubber meets the road” – the place where an organization’s ideas, planning and execution are given the acid test of market acceptance or rejection.
Marketing as a concept evolved decade by decade, its definition also changed with the passing time.
Approach may be defined as the prospective by which the particular field or study is examined or the way in which a particular subject is studied. There are several approaches in the field of marketing.
The various approaches to marketing can be summarized as:-
1. Product or Commodity Approach 2. Institutional Approach 3. Functional Approach 4. Managerial Approach 5. Societal Approach 6. Systems Approach.
7. Scientific Approach 8. Technology Approach 9. Legal Approach 10. Economic Approach 11. Distribution of Goods and Services Approach 12. Standard of Living Approach 13. Utility Creation Approach.
14. Revenue Generating Approach 15. Art and Science Approach 16. Traditional Approaches 17. Modern Approaches 18. Earlier Approaches 19. Contemporary Approaches.
Approaches to the Study of Marketing
Approaches to the Study of Marketing – Top 7 Approaches
Approach # 1. Product or Commodity:
This approach undertakes the study of marketing on the basis of a commodity. For example, when studying the marketing of cotton, one will begin with examining the sources of supply, nature and volume of demand, the purpose for which it is required, how it is transported, the problem of storage, standardization, packing, branding, etc.
This approach is termed as – “descriptive approach”. In this method, the commodity serves as a focus around which the organizational and managerial aspects of marketing are studied.
This approach is criticized for being repetitive and time consuming since the emphasis is on products. The classification of products tends to create another problem.
Approach # 2. Institutional:
Under this approach, analysis of different institutions engaged in marketing is undertaken. The activities performed by each institution form a part of the entire marketing process. Under this approach marketing process is split up into three institutional functions namely, concentration, equalization and dispersion.
This approach has failed to bring, out effectively the interrelations of all the institutions.
Approach # 3. Functional:
Functional approach splits down the field of marketing into a few functions. The purpose is to enable one to separate the essential from the non-essential elements.
According to this approach (designed by A.W. Shaw), middlemen perform the following functions—sharing the risk, transporting the goods and financing the operations.
Approach # 4. Managerial:
This approach combines certain features of the other three approaches. This approach lays emphasis on the application aspects of marketing problems. The changes in marketing are mainly due to two factors—controllable and non-controllable. The controllable factors mean those marketing forces which are well under the control of the firm, for example, personal selling, advertising, etc. The non-controllable factors include economic, sociological and political forces.
Approach # 5. Societal:
In the societal approach to the study of marketing, the entire marketing process is regarded not as a means by which business meets the needs of consumers but as a means by which society meets its own consumption needs. This approach mainly focuses on the environmental factors like sociological, cultural, political, legal, etc., and marketing decisions and their impact on the society. It gives importance to the society and not to the customer.
Approach # 6. Systems:
Marketing has different sub-systems such as product planning, pricing, promotion, distribution, etc. This approach would help the management to plan the activities of each small group in detail and implement them effectively.
Marketing process is not a bundle of isolated functions as was thought in the past. Each function has a profound influence on the other. Moreover, all marketing activities are performed in an ever-changing atmosphere. The above two reasons necessitate the introduction of the systems approach.
Companies are also realizing that losing a customer means more than losing a single sale that is, losing the entire stream of purchases that the customer would make over a lifetime of patronage. Thus, working to retain customers makes good economic sense.
Approach # 7. Scientific:
In recent years considerable progress has been made the study of marketing because of the scientific approach. This approach is otherwise known as interdisciplinary approach. It refers to the uses of all disciplines—social, physical, quantitative and business—to develop marketing insights, concepts and theories, investigate and solve marketing problems. It includes the application and integration of pertinent material to advance marketing.
With the application of behavioural sciences, many new concepts on perception, attitude, opinion, leadership, and communication and consumer behaviour have been developed which are of vital importance to the marketers. The field of statistics, mathematics and electronics has developed many new, analytical tools which are applied to identify and solve marketing problems.
Approaches to the Study of Marketing
Approach may be defined as the prospective by which the particular field or study is examined or the way in which a particular subject is studied. There are several approaches in the field of marketing.
They are as under:
This approach uses marketing on behest of product or commodity which is marketed. It examines food, distribution after sales services, problems of producers, consumer satisfaction, reach of the product, segment covered by the product and every single detail which is concerned with the marketing of their product.
i. It gives a micro view of the product marketed and helps in understanding the marketing of a specific commodity.
ii. It helps in addressing the problems concerned with a particular product and dissolving the same.
i. It is not suitable for products which are combination of other products or assembly line product
ii. It is applicable only for agricultural products and does not address macro issues concerned with the product.
The institutional approach use marketing in relation to the various institutions which come into contract directly and indirectly in the marketing of a product. They mainly include transportation, commission storage and warehouses co. Marketing intermediaries such as wholesalers and retailers advertising agencies, marketing research firms etc.
i. It gives a macro view of marketing
ii. It gives an idea on how institutions function and how they can better their operations.
i. The institutional approach does not take into consideration the consumers who are the most important part of any marketing system.
ii. It gives only a supply side view of the marketing system.
3. The Functional Approach:
This approach studies the various functions involved in marketing and examines three basic functions marketing namely:
a. Functions of exchange
b. Functions of physical distribution
c. Facilitating or auxiliary function.
i. It gives an operational view of marketing
ii. Functions can be altered to suit the requirement of marketing
iii. Functions can be made most cost effective.
It ignores the behavioural aspects and emotional aspects which go into a marketing of the product.
4. Decision Making or Managerial Approach:
The decision making approach concentrates on the decision taken by a Marketing Manager while marketing a particular product. It emphasizes the fact that the most important function of a Marketing Manager is to choose the best alternative course of action.
5. Technology Approach:
This approach use marketing through the technical aspect and aims at using the technology forward the marketing process. Internet marketing, mobile marketing etc. are products of this approach.
6. Legal Approach:
This approach studies the legal aspects of marketing and the rules which govern the marketing distinction of goods and services. It includes the study of various laws such as COPRA (Consumer Protection Act 1986 is an act of Parliament of India enacted in 1986 to protect interests of consumers in India.), Essential commodities Act, Sale of goods Act, etc.
7. Economic Approach:
This approach understands the economic aspects of marketing by studying various laws of economics such as the law of diminishing marginal utility, law of demand and law of variable proportion etc.
Approaches to the Study of Marketing – 9 Important Approaches that Help in Determining the Nature of Marketing
The nature of marketing can be made determined under the following several approaches:
1. Distribution of Goods and Services Approach:
It is an old and narrow approach and therefore, called commodity approach too. All activities executed while moving the commodities and services from producer to the consumers are included under this approach. For example, transportation, grading, storage and sale etc., activities. The definition given by American Marketing Association represents this approach properly. This definition of marketing was considered as an ideal approach for many years. However, owing to some deficiencies, this definition as also this approach has now become obsolete and unfit.
The deficiencies crept in this approach are following:
(i) The function of marketing as per this approach starts after the production of commodity and it ends with the commodity when it is made available to the customer. This approach does not include the product planning, Market Research etc., activities executed prior to production and the after sale services with the process of marketing.
(ii) This approach is based on assumption that the commodities being produced by the producers properly cater the demand of the consumer/customer.
(iii) The system claims that it is simple and gives good result over the marketing of each product; description study is possible. But at the same time this approach is time-consuming and repetitive process which is a drawback.
2. Standard of Living Approach:
This approach is customer oriented. Its scope is widely extended. It converts the entire business in marketing. The activities prior to production and that after sale are included in the scope of marketing. This approach assumes the living standard of people annexed with the development of marketing. In fact, standard of living becomes as high as the marketing is developed. Customers welfare is only possible, when quality goods are manufactured and these are made available to them.
The economics of developed and progressive marketing policies followed there and standard of living promoted. It is notable that owing to slow or no development of marketing has brought down the standard of living in India to a large extent. It is seen that the standard of living in villages, towns and smaller cities in India is lower than that of metro-cities. The main thing is that quality goods are not available in the small cities.
The definition as given by Pul Mazur and Macolm Mc Nair has propounded this approach for the development of marketing.
3. Utility Creation Approach:
As per this approach, the marketing brings in the market economy through the creation of utility and this market economy conducts and controls the society.
Utility creation takes place four ways:
(i) Form utility
(ii) Place utility
(iii) Time utility and
(iv) Transfer of ownership utility.
The several marketing activities create the four kinds utility which are described as under:
(i) By Changing of Form:
Converting raw material into finished product. The change as brought in the shape and size of anything or matter by cutting and pruning is called the changing of form. Everything becomes more valuable and useful than in its original form when such cutting and pruning is made. For example, the chair and table made by craftsmanship on wood are useful and valuable than the wood itself.
(ii) Change of Place:
The change of place of thing increases the utility because it has relatively lesser use and value where it is found abundantly. Transportation, Insurance, Storage and Packaging increases the utility of the thing. For example, the sand at the river bank is not so useful as it becomes when transported to the market.
(iii) Change of Time:
A few things are of such nature that their utility increase with the passage of time. Making products available when needed. For example, the old rice is more useful than that of fresh one.
(iv) Change of Possession:
Establishing contact between the marketer and the customer. Change in possession increases the utility and value of the thing. It is called utility based on authority or authoritative utility. For example, sewing machine at home-is not as useful as with the tailoring shop. Similarly, the comb has no use with a bald but it will be more useful at the barber’s shop.
The manuscript with an author is no as useful as with the publisher because the publisher will publish the same and bring it in the market. It is the opinion of the supporter of this approach that the marketing gives birth to the market economy through the creation of utility and the market economy conducts and regulates the society.
4. Revenue Generating Approach:
This approach is company or firm oriented. All activities executed with the objective of receipt of income under this approach are included in the marketing. The business cannot be extended in the lack of the receipt of income. The existence of business too may meet to crisis if no income is being generated. Income should be generated through appropriate costs. If the expenditure is incurred in the ratio more than that of earning, it cannot be said well anyway.
Following are the salient features of this approach:
(i) The institution should do production and distribution on the profit basis.
(ii) The sale of goods in a firm should be at least to the extent that there may be some savings after meeting all expenses incurred thereon as only then, the investors will sustain in a firm.
(iii) The executives of a firm should not incur expenses more than an appropriate ratio of earning for the promotion of the business because receipt of income as a result of more expenses seldom give profit.
5. Institutional Approach:
Modern era is an era of production in a large scale and the scope of distribution has been extended too much. This approach explains the requirement of several mediatory institutions for distribution of a large scale production. The activities executed by these institutions together are called marketing.
This approach does study of those producers, mediators and other marketing institutions that establish equilibrium between the supply and demand and join the production centre with the consumer centres. The institutional approach does away with the distance made by the large scale production between the producer and consumer in this modern era.
This method does not give adequate knowledge of the entire marketing functions and also fails to explain the interrelations of different institutions.
6. Functional Approach:
This approach of marketing does study all those activities which are related to move the commodities from the centres of production to the consumption centres. It controls the duplication of the functions, analyses the problems being faced while executing the works and does the best use of the time. However, it cannot explain clearly the methods of application of marketing function in a business system.
7. Art and Science Approach:
According to M.J. Baker — “Marketing is not a science while it should be science. Marketing has obtained facts, principles, techniques, statistics and thoughts from mathematics and society as also from applied sciences for another field of business i.e., economics, law etc.
However, this material still could not be represented in synthesized or conglomerate form and no universal principle has been made. However, it appears a negative approach if we discuss in reference to the nature of marketing. It solves the problem of the distribution of the limited means and it assists in availing optimum satisfaction.”
The approach of art and science makes it clear that the marketing on one side is an art making available the production of high quality, appropriate price, at proper hands and with an appropriate manner and simultaneously; it is a progressive and dynamic science on the other.
As it emphasizes making supply according to the demand, it is customer oriented too. In spite of presence of these all, marketing cannot be put in the category of physical science. We can put it in the category of Medical and Engineering science.
8. Marketing System Approach:
Several business activities influencing each other are included in this approach. This approach gives an opportunity to understand the occasion of marketing in a firm or company, laws, economy, competitive behaves and the purchase activities. The system approach can be defined as – “a set of objects together with the relationships among them and their attributes.” Systems focus on interrelations and interconnections among the functions of marketing.
According to Philip Kotler – Following elements are included with the marketing systems – (i) company, (ii) market of a company, (iii) mediator, rivals and suppliers, (iv) public, which includes financial institutions, common public, independent press, government institutions and jurists and – (v) culture and demography. He further envisages that “A marketing system is the set of significant institutions and flows that connect an organisation to its markets.”
The marketing systems can be divided primarily in the large, medium and small size. The large size systems make clear the relations between producers, retailers and wholesalers. The medium size marketing systems depict the consistency between marketing and other functional activities within the firm. The small size systems explain the interrelation between the marketing activities.
The social approach of marketing is most necessary for the influencing determination. Apart from it, this approach has been understood most essential for the use of models and computer technique. It further provides an opportunity to understand the marketing opportunities, competitive deals, buying activities, economy and law too.
9. Social Marketing Approach:
This approach is related to the social organisations. As per Robert Ferber — “Marketing technique should be used the most in the field of social and public sectors.”
This approach has been originated recently. The marketing process is regarded as a means by which society meets its own consumption needs. This system gives no importance as to how the business meets the consumer’s needs. Therefore, attention is paid to ecological factors and marketing decisions and their impact on the society’s well-being.
Approaches to the Study of Marketing – Traditional and Modern Approach to Marketing
The various approaches to marketing can be summarized as under:
Approach # 1. Traditional:
The traditional approach to marketing was focused on make and sell concept.
Following approaching comes under this category:
i. Production concept
ii. Product concept
iii. Selling concept.
Approach # 2. Modern:
The modern approaches to marketing are customer-centered and are focused on sense and serve concept. That means the main aim is to identify and meet the needs of the customer’s profitably.
Following approaches comes under this category:
i. Marketing concept
ii. Customer concept
iii. Societal marketing concept.
Approaches to the Study of Marketing – Early, Contemporary and Systems Approach to Marketing
1. Earlier Approaches:
2. Contemporary Approaches:
Recent approaches in marketing include relationship marketing with focus on the customer, business marketing or industrial marketing with focus on an organization or institution and social marketing with focus on benefits to society. New forms of marketing also use the internet and are therefore called internet marketing or more generally e-marketing, online marketing, “digital marketing”, search engine marketing, or desktop advertising.
It attempts to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing. Internet marketing is sometimes considered to be broad in scope, because it not only refers to marketing on the Internet, but also includes marketing done via e-mail, wireless media as well as driving audience from traditional marketing methods like radio and billboard to internet properties or landing page.
Constructive criticism helps marketers to adapt offerings to meet changing customer needs. A firm in the market economy survives by producing goods that persons are willing and able to buy. Consequently, ascertaining consumer demand is vital for a firm’s future viability and even existence as a going concern. Many companies today have a customer focus (or market orientation).
This implies that the company focuses its activities and products on consumer demands. Generally, there are three ways of doing this, the customer-driven approach, the market change identification approach and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers.
The starting point is always the consumer. The rationale for this approach is that there is no reason to spend R&D (research and development) funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.
A formal approach to this customer-focused marketing is known as SIVA (Solution, Information, Value, and Access). This system is basically the four Ps renamed and reworded to provide a customer focus. The SIVA Model provides a demand/customer-centric alternative to the well-known 4Ps supply side model (product, price, placement, promotion) of marketing management.
Product → Solution
Promotion → Information
Price → Value
Place (Distribution) → Access
If any of the 4Ps were problematic or were not in the marketing factor of the business, the business could be in trouble and so other companies may appear in the surroundings of the company, so the consumer demand on its products will decrease.
However, in recent years’ service marketing has widened the domains to be considered, contributing to the 7P’s of marketing in total. The other 3P’s of service marketing are- process, physical environment and people.
Some consider there to be a fifth “P” – Positioning:
Some qualifications or caveats for customer focus exist. They do not invalidate or contradict the principle of customer focus; rather, they simply add extra dimensions of awareness and caution to it.
The work of Christensen and colleagues on disruptive technology has produced a theoretical framework that explains the failure of firms not because they were technologically inept (often quite the opposite), but because the value networks in which they profitably operated included customers who could not value a disruptive innovation at the time and capability state of its emergence and thus actively dissuaded the firms from developing it.
The lessons drawn from this work include:
1. Taking customer focus with a grain of salt, treating it as only a subset of one’s corporate strategy rather than the sole driving factor. This means looking beyond current-state customer focus to predict what customers will be demanding some years in the future, even if they themselves discount the prediction.
2. Pursuing new markets (thus new value networks) when they are still in a commercially inferior or unattractive state, simply because their potential to grow and intersect with established markets and value networks looks like a likely bet. This may involve buying stakes in the stock of smaller firms, acquiring them outright, or incubating small, financially distinct units within one’s organization to compete against them.
Other caveats of customer focus are:
1. The extent to which what customers say they want does not match their purchasing decisions. Thus surveys of customers might claim that 70% of a restaurant’s customers want healthier choices on the menu, but only 10% of them actually buy the new items once they are offered. This might be acceptable except for the extent to which those items are money-losing propositions for the business, bleeding red ink.
A lesson from this type of situation is to be smarter about the true test validity of instruments like surveys. A corollary argument is that “truly understanding customers sometimes means understanding them better than they understand themselves.” Thus one could argue that the principle of customer focus, or being close to the customers, is not violated here-just expanded upon.
2. The extent to which customers are currently ignorant of what one might argue they should want-which is dicey because whether it can be acted upon affordably depends on whether or how soon the customers will learn, or be convinced, otherwise. IT hardware and software capabilities and automobile features are examples.
Customers who in 1997 said that they would not place any value on internet browsing capability on a mobile phone, or 6% better fuel efficiency in their vehicle, might say something different today, because the value proposition of those opportunities has changed.
3. Systems Approach to Marketing:
A system is a set of interacting or interdependent components or group coordinated to form a unified whole and organized to accomplish a set of objects.
The system approach provides the best model for marketing activity. It place emphasis on inputs to the system and the outputs produced. It helps in the determination of marketing programmes and the total marketing mix.
Adoption of a systems approach provides a good base for the logical and orderly analysis of marketing activities. It stresses marketing linkages inside and outside the firm. It emphasize on environment. It provides a frame work for control. It depends on using the right information. Market can be understood only through study of information.
Marketing is by definition a system. If we accept Webster’s definition of system as on an assemblies of objects united by same form of regular introduction or interdependent. Certainly, the interaction of such objects as products, price, promotion, sale calls, and distribution and so on (Marketing Mix) fits the definition.
The output establishes the purpose or objective of a system. The objective is a profit through serving the demand of customer and community. The output of marketing system is sale of goods. Correct inputs must be available to the processor, i.e., marketing administration in order to produce desirable outputs. These inputs in the marketing system are the element of marketing mix and the target market determined through marketing research.
The marketing system must operates as per plans and polices and within control which may be internal or external of course, feedback must be available for introducing correction in our future plans and marketing operations. The flow of information requested to check performance is called feedback. Feedback ensure the accomplishment of objective through continuous marketing managerial process of planning and control.
In this sense, a firm’s marketing department is often seen as of prime importance within the functional level of an organization. Information from an organization’s marketing department would be used to guide the actions of other departments within the firm. As an example, a marketing department could ascertain (via marketing research) that consumers desired a new type of product, or a new usage for an existing product. With this in mind, the marketing department would inform the R&D (research and development) department to create a prototype of a product or service based on the consumers’ new desires.
The production department would then start to manufacture the product, while the marketing department would focus on the promotion, distribution, pricing, etc. of the product. Additionally, a firm’s finance department would be consulted, with respect to securing appropriate funding for the development, production and promotion of the product.
Inter-departmental conflicts may occur, should a firm adhere to the marketing orientation. Production may oppose the installation, support and servicing of new capital stock, which may be needed to manufacture a new product. Finance may oppose the required capital expenditure, since it could undermine a healthy cash flow for the organization.
Herd behaviour in marketing is used to explain the dependencies of customers’ mutual behaviour. The Economist reported a recent conference in Rome on the subject of the simulation of adaptive human behaviour. It shared mechanisms to increase impulse buying and get people “to buy more by playing on the herd instinct.” The basic idea is that people will buy more of products that are seen to be popular, and several feedback mechanisms to get product popularity information to consumers are mentioned, including smart card technology and the use of Radio Frequency Identification Tag technology.
A “swarm-moves” model was introduced by a Florida Institute of Technology researcher, which is appealing to supermarkets because it can “increase sales without the need to give people discounts.”
Other recent studies on the “power of social influence” include an “artificial music market in which some 19,000 people downloaded previously unknown songs” (Columbia University, New York); a Japanese chain of convenience stores which orders its products based on “sales data from department stores and research companies;” a Massachusetts company exploiting knowledge of social networking to improve sales; and online retailers such as Amazon(dot)com who are increasingly informing customers about which products are popular with like-minded customers.
The following aims are sought to be achieved by studying marketing:
i. To develop an intelligent appreciation of modern marketing practices.
ii. To provide guiding policies regarding marketing procedures and their implementation,
iii. To study marketing problems according to circumstances and to suggest solutions.
iv. To analyse the shortcoming in the existing pattern of marketing.
v. To enable successful distribution of agricultural products, our mineral wealth, and manufactured goods.
vi. To enable managers to assess and decide a particular course of action.