of Modern Marketing
By the end of this chapter, you should be able to:
• Define marketing.
• Specify the three basic propositions of the
• Name and describe the four components of
the marketing mix.
• List the five major environmental forces that
An exciting, dynamic discipline, marketing affects our daily lives in many ways. We are all consumers, and many people are part of the marketing process—as salespeople, advertising executives, retailers, product managers, and so forth. This course introduces you to the study of marketing, beginning in this chapter with a description of marketing, an overview of marketing management, and an explanation of the environmental factors that affect modern marketing. The chapter also presents a preview of the topics covered in the remaining chapters.
WHAT IS MARKETING?
Marketing has been viewed traditionally as a business activity. Business organizations exist to satisfy human needs, especially material needs. Consequently, one way to define marketing is from the business perspective. For instance, marketing has been defined as the “delivery of a higher standard of living.” Other definitions refer to marketing as an exchange process. This process involves at least two parties: buyer and seller. Each party gives up something © American Management Association. All rights reserved.
of value and receives something of value. Noted marketing scholar Philip Kotler defines marketing as “a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.”
Because marketing activities bring about exchanges, marketing is an essential function in an economic system. In a free-enterprise economy, resources are allocated by the interaction of supply and demand in the marketplace. Marketing activities and institutions provide the framework and mechanisms for this interaction and the exchange taking place. Although the business aspects of marketing are important, businessoriented definitions of marketing have been challenged. Critics observe that marketing involves a wide range of activities and organizations and should be viewed from a broader perspective. These critics point out that marketing takes place in not-for-profit organizations, such as hospitals, universities, and social and government agencies. New applications of marketing are further evidence of its growing importance in our society. Any definition must recognize that marketing is a fundamental human activity and that marketing decisions affect everyone’s welfare. The American Marketing Association (AMA) provides a definition of marketing in its broader context: 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 goals.
By including exchange as a part of the definition, the AMA has expanded the marketing process to include all types of organizations. This broadened or generic view of marketing recognizes the importance and application of marketing to not-for-profit organizations and situations. As in for-profit businesses, a carefully planned and coordinated marketing program can help a not-for-profit organization reach its goals, whether they are to attract more members, to increase donations, or to provide better client services.
Modern marketing traces its origin to the primitive forms of trade. As people began to adopt the techniques of work specialization, a need for individuals and organizations to facilitate the process of exchange emerged. Until about 1900, however, marketing was little more than physical distribution. We can trace the development of modern marketing through three stages— the...