Table 1.1.1 Selling Vs.

Marketing

Point of difference Selling Marketing

Starting point Factory Marketplace
Focus Existing products Customer needs
Means Selling and promoting Integrated marketing
End Profits through volume Profits through satisfaction

The difference between selling and marketing can be best illustrated by this popular
customer quote: ‘Don’t tell me how good your product is, but tell me how good it will
make me’.

The American Marketing Association, the official organization for academic and
professional marketers, defines marketing as:

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 objectives

Another definition goes as ‘ … process by which individuals and groups obtain what they
need and want through creating and exchanging products and value with others’. Simply
put: Marketing is the delivery of customer satisfaction at a profit.

The notion of exchange as central to marketing is reinforced by many contemporary

definitions such as ‘marketing is the process of creating and resolving exchange
relationships’ and ‘marketing is the process in which exchanges occur among persons and
social groups’. The essence of marketing is the exchange process, in which two or more
parties give something of value to each other to satisfy felt needs. In many exchanges,
people trade tangible goods for money. In others, they trade intangible services.

Exchanges in marketing are consummated not just between any two parties, but
almost always among two or more parties, of which one or more taken on the role of
buyer and one or more, the role of seller. A common set of conditions are present in the
marketplace, viz.,

1) Buyers outnumber sellers

2) Any individual buyer is weaker than any individual seller economically, but

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 3) The total economic power of even a fraction of the buyers is enough to assure the
existence of, or to put out of business, most sellers or groups of sellers, and
4) Consequently, the sellers compete to sway the largest number of buyers they can
to their, rather than another seller’s (competitor’s) offerings. Finally and
intriguingly,
5) The sellers in their attempt to meet competition and attract the largest number of
buyers, are influenced as well, regularly modifying their behaviours so they will
have more success, with more buyers, over time.

The expanded concept of marketing activities permeates all organizational

functions. It assumes that the marketing effort will follow the overall corporate strategy
and will proceed in accordance with ethical practices and that it will effectively serve the
interests of both society and organization. The concept also identifies the marketing
variables – product, price, promotion and distribution – that combine to provide customer
satisfaction. In addition, it assumes that the organization begins by identifying and
analyzing the consumer segments that it will later satisfy through its production and
marketing activities. The concept’s emphasis on creating and maintaining relationships is
consistent with the focus in business on long-term, mutually satisfying sales, purchases
and other interactions with customers and suppliers. Finally it recognizes that marketing
concepts and techniques apply to non-profit organizations as well as to profit-oriented
businesses, to product organization and to service organizations, to domestic and global
organizations, as well as to organizations targeting consumers and other businesses.

Activity 1.1.2

The following list consists of some MARKETING MYTHS. Tick the myths you thought
about marketing before reading this section? Add some new myths you might have
discovered.
 Marketing and selling are synonymous
 The job of marketing is to develop good advertisements
 Marketing is pushing the product to the customers
 Marketing is transaction-oriented than relationship-oriented
 Marketing is a short-term business strategy
 Marketing is an independent function of a business
 Marketing is part of selling

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Evolution Of Marketing

As noted earlier, exchange is the origin of marketing activity. When people need
to exchange goods, they naturally begin a marketing effort. Wroe Alderson, a leading
marketing theorist has pointed out, ‘It seems altogether reasonable to describe the
development of exchange as a great invention which helped to start primitive man on the
road to civilization’. Production is not meaningful until a system of marketing has been
established. An adage goes as: Nothing happens until somebody sells something.

Although marketing has always been a part of business, its importance has varied
greatly over the years. The following table identifies five eras in the history of marketing:
the production era, the product era, the sales era, the marketing era and the relationship
marketing era.
Table 1.1.2 The Evolution Of Marketing

Era Prevailing attitude and approach

Production  Consumers favor products that are available
and highly affordable
 Improve production and distribution
 ‘Availability and affordability is what the
customer wants’
Product  Consumers favor products that offer the most
quality, performance and innovative features
 ‘A good product will sell itself’
Sales  Consumers will buy products only if the
company promotes/ sells these products
 ‘Creative advertising and selling will overcome
consumers’ resistance and convince them to
buy’
Marketing  Focuses on needs/ wants of target markets and
delivering satisfaction better than competitors
 ‘The consumer is king! Find a need and fill it’
Relationship marketing  Focuses on needs/ wants of target markets and
delivering superior value
 ‘Long-term relationships with customers and
other partners lead to success’
In the production era, the production orientation dominated business philosophy.
Indeed business success was often defined solely in terms of production victories. The
focus was on production and distribution efficiency. The drive to achieve economies of

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scale was dominant. The goal was to make the product affordable and available to the
buyers. In the product era, the goal was to build a better mouse trap and it was assumed
that buyers will flock the seller who does it. However, a better mousetrap is no guarantee
of success and marketing history is full of miserable failures despite better mousetrap
designs. Inventing the greatest new product is not enough. That product must also solve a
perceived marketplace need. Otherwise, even the best-engineered. Highest quality
product will fail. In the sales era, firms attempted to match their output to the potential
number of customers who would want it. Firms assumed that customers will resist
purchasing goods and services not deemed essential and that the task of selling and
advertising is to convince them to buy. But selling is only one component of marketing.
Next came the marketing era during which the company focus shifted from products and
sales to customers’ needs. The marketing concept, a crucial change in management
philosophy, can be explained best by the shift from a seller’s market – one with a
shortage of goods and services – to a buyer’s market – one with an abundance of goods
and services. The advent of a strong buyer’s market created the need for a customer
orientation. Companies had to market goods and services, not just produce them. This
realization has been identified as the emergence of the marketing concept. The keyword
is customer orientation. All facets of the organization must contribute first to assessing
and then to satisfying customer needs and wants. The relationship marketing era is a
more recent one. Organization’s carried the marketing era’s customer orientation one step
further by focusing on establishing and maintaining relationships with both customers
and suppliers. This effort represented a major shift from the traditional concept of
marketing as a simple exchange between buyer and seller. Relationship marketing, by
contrast, involves long-term, value-added relationships developed over time with
customers and suppliers. The following table summarizes the differences between
transaction marketing (i.e. exchanges characterized by limited communications and little
or no on going relationship between the parties) and relationship marketing.

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Table 1.1.3 Comparing transaction-based marketing and relationship marketing

Characteristic Transaction-Based Relationship

Marketing Marketing
Time orientation Short term Long term
Organizational goal Make the sale Emphasis on customer
retention
Customer service Relatively low Key component
priority
Customer contact Low to moderate Frequent
Degree of customer Low High
commitment
Basis for seller- Conflict manipulation Cooperation; trust
customer interactions
Source of quality Primarily from Companywide
production commitment

Activity 1.1.3

Make a statement to describe each of the stages in the evolution of marketing. You may
consider the given examples before coming up with your own statements.

1. Production era
a. ‘Cut costs. Profits will take care of themselves’

2. Product era
a. ‘A good product will sell itself’

3. Sales era
a. ‘Selling is laying the bait for the customer’

4. Marketing era
a. ‘The customer is King!’

5. Relationship marketing era

a. ‘Relationship with customers determine our firm’s future’

Marketing Framework

The basic elements of a marketing strategy consist of (1) the target market, and
(2) the marketing mix variables of product, price, place and promotion that combine to
satisfy the needs of the target market. The outer circle in Figure 1.1.1 lists environmental
characteristics that provide the framework within which marketing strategies are planned.

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Figure 1.1.1 Elements of a marketing strategy and its environmental framework

Marketing activities focus on the consumer. Therefore, a market-driven

organization begins its overall strategy with a detailed description of its target market: the
group of people toward whom the firm decides to direct its marketing efforts. After
marketers select a target market, they direct their activities towards profitably satisfying
that target segment. Although they must manipulate many variables to reach this goal,
marketing decision making can be divided into four areas: product, price, place
(distribution) and promotion (marketing communication). These 4 Ps of marketing are
referred to as the marketing mix. The 4 Ps blend to fit the needs and preferences of a
specific target market. These are the four variables that a marketer can use and control in
different combinations to create value for customers. Figure 1.1.1 illustrates the focus of
the marketing mix variables on the central choice of consumer or organizational target
markets. In addition, decisions about the 4 Ps are affected by the environmental factors in
the outer circle of that figure. Unlike the controllable marketing mix elements, the
environmental variables frequently lie outside the control of marketers.

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