Marketing Mentor
A Primer for Introductory Marketing
© 1997-2007 Calabash Educational Software.
All Rights Reserved.
Chapter 1
Marketing & Society
Definition of Marketing
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Topics & Concepts - Definition of Marketing

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Definition of Marketing Return to Top

The American Marketing Association (AMA) defines marketing as follows:          
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.  [Emphasis added]
The key aspects of this definition have been placed in bold.

When referring to Marketing as a unit within an organization, it refers to that organizational function  that is responsible for all activities that are related to the area of marketing.  [Other functional areas include accounting, finance, human resources, production, etc.].

When referring to Marketing as an activity, it refers to a set of processes.  A process is defined as an activity, or group of activities, that transforms inputs into outputs that are to be provided to customers of the firm by adding value to the inputs.  The processes carried out involve the creation (e.g., develop a product or service), the communication (e.g., develop ads to inform consumer), and the delivery (e.g., distribute or make available the product or service for customer use) of value (i.e., worth the price) to the customers within the defined market (consumers, business firms, or other organizations).  The processes carried out also include dealing with customer relationships (i.e., pre-sale, sale, and post-sale matters and any other matters that involve interaction and communication with customers). 

While the primary focus of marketing-related activities is to satisfy the customer, the processes carried out must also be of such a nature that there is benefit to the organization (e.g., sales, profit) and to other stakeholders (e.g., shareholders, society in general).  Customers are also considered stakeholders of a firm, since they also benefit from or suffer the consequences resulting from the activity or non-activity of a firm.

The AMA definition of marketing provides a useful "umbrella" definition, however, additional insight into this concept is possible by making a distinction between micro-marketing and macro-marketing.  The primary distinction between micro-marketing and macro-marketing is that micro-marketing focuses on the concerns of the organization and the individual customer while macro-marketing focuses on the concerns of society as a whole.


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Micro-Marketing Return to Top

Micro-marketing is defined by Perreault and McCarthy (1997, p. 7) as follows:
Micro-marketing is the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to the consumer or client[Emphasis added]
The key aspects of this definition have been placed in bold.

The relevant activities are those that are related to the planning, implementation (execution), evaluation, and control of a marketing program (PIEC).  In this case, the focus is on carrying out activities to create an output that will enable the firm to satisfy the needs and wants of individual consumers/clients and to achieve the objectives of the firm.  In most cases, marketers must anticipate customer demand in order to ensure that the product or service is available when desired by the market (e.g., a grocery store maintains an inventory of tomatoes so that the product is available when the customer wants to buy the product).  The flow of need-satisfying goods and services goes from the producer to the customer.

Possible organization objectives include:

Objectives can be short- or long-term in focus.


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Macro-Marketing Return to Top

A modified definition of macro-marketing based on the definition offered by Perreault and McCarthy (1997, p. 9) is as follows:
Macro-marketing is a a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society in a fair and efficient manner[Emphasis and underlined portion added]
The key aspects of this definition have been placed in bold.

The macro-level focuses on the productive output of the entire economy, as it moves form all producers to all consumers.  The focus is not on the output and concerns of individual firms or on the concerns of individual consumers.

The objectives of society include the following:

An effective marketing system is one which accomplishes society's objectives (i.e., what needs to be accomplished) [e.g., ensure that all consumers have access to health care].

An efficient marketing system seeks to minimize the input-to-output ratio [e.g., minimize cost per household (input) of ensuring access to health care (output) or to maximize the output-to-input ratio [e.g., maximize the number of households that have access to health care for a given cost].

A fair marketing system means that the availability of products and services is free from discrimination.



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Micro-Macro Dilemma Return to Top

One advantage of viewing marketing from micro- and maco-perspectives is that it helps understand how potential conflict with the good of society can occur due to the marketing activities of organizations.  This conflict is referred to as the micro-macro dilemma.

The basic issue with respect to the micro-macro dilemma is as follows:
What may be good for one producer or one consumer may not be good for society.
While companies can profit from the production and sale of certain products which bring consumers satisfaction (micro-marketing perspective), not all products and services are acceptable to society (macro-marketing perspective).  When the marketing activities of a firm and/or the market desires of a consumer conflict with the needs of society, a conflict between micro-marketing and macro-marketing exists: This conflict is referred to as the micro-macro dilemma.  Since society must outlast any individual firm or consumer, society wins such market confrontations.  Society determines, through laws and regulations, what types of marketing activities are acceptable.  For example, society determines the place (and legality) of products like cigarettes, liquor, and disposable versus returnable containers in the marketplace.

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References

Perreault, William, D. Jr. and McCarthy, E. Jerome.  (1997).  Essentials of Marketing (7th ed.).  Chicago:  Irwin.

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Marketing Mentor
A Primer for Introductory Marketing
© 1997-2007 Calabash Educational Software.
All Rights Reserved.

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