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SOCIAL FOUNDATIONS OF MARKETING: MEETING HUMAN NEEDS
Marketing touches all of us every day of our lives. We wake up to Sears radio alarm clock playing an American Airlines commercial advertising a Bahamas vocation. Then we brush our teeth with Crest, shave with Gillette Sensor razor, put our Guess jeans and Nike shoes and head for the kitchen where we drink Minute Maid orange juice and pour Borden milk over a bowl of Kellogg’s Cracking’ Oat Bran. Later, we drink a cup of Maxwell House coffee with two teaspoons of Domino sugar while munching on a slice of Sara Lee coffee cake. We consume oranges grown in California and coffee imported from Brazil, read a newspaper made of Canadian wood pool, and tune into radio news coming from as far away as Australia. The marketing system has made all this possible with little effort on our part. It has given us a standard of living that our ancestors could not have imagined.
What is Marketing?
What does the term marketing mean? Many people mistakenly think of marketing only as selling and promotion. And no wonder – every day, people are bombarded with television commercials, newspaper ads, direct mail, and sales calls. Someone is always trying to sell us something. It seems that we can not escape death, taxes, or selling. This does not mean that selling and promotion are unimportant, but rather that they are part of a larger “marketing mix” – a set of marketing tools that work together to affect the marketplace. We define marketing as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. To explain this definition, we examine the following important terms: needs, wants, demands, products, exchange, transactions, and market.
Needs.The most basic concept underlying marketing is that of human needs. A human need is a state of felt deprivation. Humans have many complex needs. They include basic physical needs for food, closing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. These needs are not invented on a Madison Avenue: They are a basic part of the human makeup.
Wants.A second basic concept in marketing is that of human wants – the form taken by human needs as they are shaped by culture and individual personality. A hungry person in Bali may want mangoes, suckling pig, and beans. A hungry person in the United States may want hamburger, French fries, and Coke. Wants are described in terms of objects that will satisfy needs.
Many sellers confuse wants and needs. A manufacture of drill bits may think that the customer needs a drill bit, but what the customer really needs is a hole. These sellers may suffer from “marketing myopia.” They are so taken with their products that they focus only on existing wants and lose sight of underlying customer needs. They forget that a physical product is only a tool to solve consumer problem. These sellers have trouble if a new product comes along that serves the need better or cheaper. The customer with the same need will want the new product.
Demands.People have almost unlimited resources. Thus, they want to choose products that provide the most satisfaction for their money. When backed by buying power, wants become demands. Consumers view products as bundles of benefits and choose products that give them the best bundle for their money.
Products.Human needs, wants, and demands suggest that products are available to satisfy them. A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. Suppose a person feels the need to be more attractive. We will call all the products that can satisfy this need the product choice set. This set may include new clothes, hair-styling services, a Caribbean sustain, exercise classes, and many other items or services. These products are not all equally desirable. Those that are more available and less expensive, such as clothing and new haircut, are likely to be purchased first. Moreover, the closer products come to matching consumers’ wants, the more successful they will be. Thus, producers must know what consumers want and must provide products that come as close as possible to satisfying those wants.
The concept of product is not limited to physical objects. Anything capable of satisfying a need can be called a product. In addition to goods and services, products include persons, places, organizations, activities, and ideas. A consumer decides which entertainers to watch on television, which places to go on a vocation, which organizations to contribute to, and which ideas to support.
Exchange.Marketing occurs when people decide to satisfy needs and wants through exchange. Exchange is an act of obtaining a desired object from someone by offering something in return. Exchange is only one of many ways people can obtain a desired object. For example, hungry people can find food by hunting, fishing, or gathering fruit. They could beg for food or take food from someone else. Finally, they could offer money, another good, or a service in return for food.
As a means of satisfying needs, exchange has much in favor. People do not have to prey on others or depend on donations. Nor must they possess the skills to produce every necessity for themselves. They can concentrate or making things they are good at making and trade them for needed items made by others. Thus, the society produces much more than with any alternative system. Exchange is a core concept of marketing. For an exchange to take place, several conditions must be satisfied. Of course, at least two parties must participate, and each must have something of value to the other. Each party must want to deal with the other party; each must be free to accept or reject the other’s offer. Finally each party must be able communicate and deliver. These conditions simply make exchange possible. Whether exchange actually takes place depends on the parties’ coming to an agreement. If they agree, we must conclude that the act of exchange has left both of them better of (or at least not worse off): After all, each was free to reject or accept the offer. In this sense, just as production creates value, exchange creates value: It gives people more consumption possibilities.
Transactions.Whereas exchange is core concept of marketing, a transaction is marketing’s unit of measurement. A transaction consists of a trade of values between two parties. A transaction involves at least two things of value, conditions that are agreed upon, a time of agreement, and a place of agreement. In this broadest sense, the marketer tries to bring about a response to some offer. And the response may be more than simply “buying” or “trading” goods and services in the narrow sense. A political candidate, for instance, wants a response called “voters”, a church wants “membership”, a social-action group wants “idea acceptance”. Marketing consists of actions taken to obtain a desired response from a target audience towards some product, service, idea, or other object.
Markets.The concept of transaction leads to concept of a market. A market is the set of actual and potential buyers of a product. As the number of persons and transactions increases in the society, the number of merchants and marketplaces also increases. In advanced societies, markets need not be physical locations where buyers and sellers interact. With modern communications and transportation, a merchant can easily advertise a product on late-evening television, take orders from hundreds of customers over the phone, and mail the goods to the buyers on the following day without having had any physical contact with them. A market can grow up around a product, a service, or anything else of value. For example, a labor market consists of people who are willing to offer their work in return for wages or products. In fact, various institutions, such as employment agencies and job-counseling firms, will grow up around a labor market to help it function better. The money market is another important market that emerges to meet the needs of people so that they can borrow, lend, save, and protect money. The donor market has emerged to meet the financial needs of nonprofit organizations.
Marketing.The concept of markets finally brings us full circle to the concept of marketing. Marketing means working with markets to bring about to exchanges for the purpose of satisfying human needs and wants. Thus, we return to our definition of marketing as a process by which individuals and groups obtain what they need and want by creating and exchanging products and value with others.
Exchange processes involve work. Sellers must search for buyers, identify their needs, design good products, promote them, store and deliver them, and set prices for them. Such activities as product development, research, communication, distribution, pricing, and service are core marketing activities. Also we normally think of marketing as being carried on by sellers, buyers also carry on marketing activities. Consumers do “marketing” when they search for the goods they need at prices they can afford. Company purchasing agents to “marketing” when the track down sellers and bargain for good terms. A seller’s market is one in which sellers have more power and buyers must be more attractive “marketers”. In a buyer’s market, buyers have more power and sellers have to be more active “marketers”.
Most people think of marketing management as finding enough customers for the company’s current output, but this to limited to view. The organization has a desired level of demand for its products. At any time, there may be no demand, adequate demand, irregular demand, or too much demand, and marketing management must find ways to deal with this different demands states:
Negative demand(отрицательный спрос).A major part of the market dislikes the product and may even pay to avoid it. Examples are vaccinations, dental work, and seat belts. Marketers must analyze why the market dislikes the product, and whether product redesign, lower prices, or more positive promotion can charge the consumer attitudes.
No demand (отсутствие спроса). Target consumers may be uninterested in the product. Thus farmers may not care about a new farming method, and college students may not be interested in taking foreign language course. The marketer must find ways to connect the product’s benefits with the market’s need and interests.
Latent demand (скрытый спрос). Consumers have a want that is not satisfied by any existing product or service. Strong latent demand exists for nonharmful cigarettes, safer neighborhoods, biodegradable packages, and more fuel-efficient cars. The marketing task is to measure the size of the potential market and develop effective goods and services that will satisfy the demand.
Falling demand (падающий спрос). Sooner or later, every organization faces falling demand for one of its products. Churches have suffered membership decline, and private colleges have received fewer applications. The marketer must find the causes of market decline and restimulate demand by finding new markets, changing product features, or creating more effective communications.
Irregular demand (нерегулярный спрос). Demand varies on a seasonal, daily, and even hourly basis, causing problems of idle or overworked capacity. In mass transit, much equipment is idle during slow travel hours and to little is available during peak hours. Museums are undervisited during weekdays and overcrowded during weekends. Marketers must find ways to change the time patterns of demand through flexible pricing promotion and other incentives.
Full demand (полноценный спрос). The organization has just the amount of demand it wants and handle. The marketer works to maintain the current level of demand in the face of changing consumer preferences and increasing competition. The organization maintains quality and continually monitors consumer satisfaction to make sure it is going a good job.
Overfull demand (чрезмерный спрос). Demand is higher than the company can or wants to handle. Thus the Godden Gate Bridge carries more traffic than is safe; the Yellowstone National Park is overcrowded in the summertime. Utilities, bus companies, restaurants, and other businesses often face overfull demand at peak times. The marketing task, called demarketing(демаркетинг), is to find ways to reduce the demand temporary or permanently. Demarketing involves such actions as raising prices and reducing promotion and service. Demarketing does not aim to destroy demand, but only to reduce it.
Marketing management is concerned not only with finding and increasing demand, but also with changing or even reducing it. Thus, marketing management seeks to affect the level, timing, and nature of demand in a way that will help the organization achieves its objectives. Simply put, marketing management is demand management. We define marketing managementas the analysis, planning, implementations and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives. Marketing managers include sales managers and salespeople, advertising executives, sales-promotion people, marketing researches, product managers, pricing specialists, and others.
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