Markets, Products, and Customers

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Marketing

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The average consumer would probably define marketing as a combination of advertising and selling. It actually includes a good deal more. Modern marketing is most simply defined as directing the flow of goods from producers to customers. It encompasses, however, a broad range of activities including product planning, new-product development, organizing the channels by which the product reaches the customer, the actual distribution of products, wholesaling, price setting, advertising and promotion, public relations, product warranties, retailing, financing, and more.

There was a time, not many decades ago, when marketing was an incidental concern for businesses. The main emphasis was on production. Goods were produced and made available for customers to buy, with a minimum concern for what customers might want. What was on the market at any one time was determined by production managers.

Most businesses now are dominated by an orientation toward marketing, not toward production. This means that firms begin by anticipating what consumers want. They then plan their products accordingly. What is produced is guided by marketing decisions, and marketing managers have more to say about company decisions than production managers. It is estimated that at least half of the cost a consumer pays for a product is accounted for by marketing expenditures.

In the simplest terms, a market is the place where seller meets buyer to exchange products for money. (“Products” include services as well as goods.) Traditional markets still function in many parts of the world. Even in the United States, during summer months, there are farmers' markets where direct selling and buying take place between producers and consumers. Most service industries still operate at this market level.

Manufacturing industries and most agricultural enterprises are more remote from the consumer. Their products pass through several hands—truckers, warehouse workers, wholesalers, and retailers—before reaching the final consumer.

Products, or commodities, are usually divided into two types: consumer and industrial. (Manufacturers are consumers as well as makers of products.) Consumer goods are those that are sold to final users, the customers. These goods include food, clothing, automobiles, television sets, appliances, and all those things people go to stores to purchase.

Industrial goods are those that are sold to companies or other businesses for use in manufacturing or other purposes. Automobile makers buy many of the parts used to assemble cars. A tire manufacturer buys rubber, synthetic or otherwise, with which to make tires. Eventually these materials will end up in the hands of final users—the owners of the cars. The nature of industrial goods depends on the nature of the goods to be made for final users. The price of industrial goods and raw materials will influence the price of final goods, those that the consumer buys.

Agricultural and manufacturing enterprises are also final customers of some goods. Farmers buy seed, fertilizer, machinery, pesticides, animal feed, and other goods. Factories need machinery, fire protection, meal services, computers, paper and other office supplies, heating and air conditioning, janitorial services, and other goods to keep operating. Service industries also are final customers for many goods. Doctors and dentists need offices, medicines, and equipment. Insurance companies need desks and chairs, adding machines, and computers.

Дата добавления: 2014-11-29