Chapter 1. The concept of marketing
1.1. The essence, principles and functions of marketing
1.1.1. Basic concepts in marketing
Marketing - is a broad and multi-faceted concept. The initial meaning of the word marketing was associated with the definition of "market" (from the English market). Specialists offer a literal translation - "market-making", i.e. activities aimed at the formation of the market. Therefore, marketing is often understood as a philosophy of management, management in the market, proclaiming the orientation of production to meet the needs of specific consumers.
One of the first mentions of marketing can be attributed Adam Smith's assertion that consumption is the only ultimate goal of production (1776).
However, but the opinion of most experts, marketing emerged in the 20-30-ies. XX century. in the USA.
The definition of marketing given by the American Marketing Association is: "Marketing is the process of planning and implementing the development, pricing, promotion and distribution of ideas, products and services to create exchange situations that meet the goals of individuals and organizations." >
Marketing seeks to identify the needs and needs of potential consumers and satisfy them. The key point of this process is the idea of "exchange", which means a transaction of value exchange between the seller and the buyer.
The classical definition of marketing was given by F. Kotler: "Marketing - is a kind of human activity aimed at meeting the needs and needs of people through exchange."
Marketing, according to a broad understanding, is a social and managerial process through which individuals and groups of people, through the creation of products and their exchange, receive what they need. This process is based on the following key concepts: need, desire, demand, product, exchange, transaction, market (Figure 1.1). F. Kotler in the book "Fundamentals of Marketing gives definitions to all these concepts.
Fig. 1.1. The concept of marketing
Need - a need that takes a specific form in accordance with the cultural level and personality of the individual. Needs are expressed in objects that can satisfy need in a way that is inherent in the cultural level and capabilities of the individual (rich to satisfy hunger, buy caviar, balyk, and a hungry student - a bun with yogurt). The needs of people are almost limitless, and the resources to meet them are limited. Thus, a person will choose goods that give him greater satisfaction within the limits of his financial capabilities.
When a person is unable to meet some of his needs, he or she replaces, or reduces the level of his requests. The concept of needs underlies the theories of motivation of Freud and the hierarchy of consumer preferences of A. Maslow and others, including those determining the behavior of consumers in the market.
In turn, need - this sense of lack of something. If the need is not satisfied, the person feels deprived, unhappy. An unsatisfied person will do one of two things: either he will look for an object that can satisfy his need, or he will try to drown it.
Desire - a need that takes a specific form in accordance with the cultural level and personality of the individual. Sometimes it is called a specific need. For example, the general need for food is transformed into a more private need for fruit, which in turn is revealed in a specific desire to buy apples. And in different regions and countries, common needs are transformed into a wide variety of desires, determined by cultural, historical, geographical and other factors. People meet the same need by consuming different products.
Demand - desire, a specific need, reinforced by purchasing power. Given the resource opportunities, people satisfy their needs and desires by acquiring goods that bring them the greatest benefit.
Product - anything that can be offered in the market for acquisition, use or consumption in order to meet certain needs. In the literature on marketing, the English term "product" often translated as product & quot ;. It is understood that the product manufactured by the manufacturer becomes a commodity when it enters the market.
Exchange - the act of obtaining from someone the desired product by offering him something in return. Exchange is only one of many ways by which people get the desired product. Other ways are hunting, gardening, as well as theft, begging. Exchange is one of the basic concepts of marketing. For the exchange, it is necessary that the following conditions are met: the parties must be at least two; each party must have something that could be of value to the other party; each party should want to make an exchange with the other party; each party should be free in the choice - to enter into an exchange or not; each party should be able to communicate and deliver its product. Observance of these conditions makes the exchange possible, but whether it takes place or not depends on whether the parties have come to an agreement and are ready to conclude a deal.
Deal - a transaction between two parties, involving at least two subjects of interest and an agreement on the terms, terms and place of its implementation. There are two types of transactions: monetary, when goods are exchanged for money, and barter.
In Fig. 1.2 and 1.3 reflect the signs and conditions of the transaction.
The forms of transactions shown in Fig. 1.4.The determinative factors in the characterization of the state of the economic system of the market are production and economic factors (means and objects of labor, the technology of production, the state of the employee, the forms of organization of labor and production, the nature and forms of ownership, the level of efficiency, etc.). Among the variety of production and economic factors, the key ones are the relationship of ownership and the form of management.
The Civil Code of the United States defines the basic concepts: property, alienation, property relations, relations of use, order relations, economic content of property, objects and property subjects.
Fig. 1.2. Symptoms of the transaction
Fig. 1.4. Transaction Forms
Property - is a historically determined form of appropriation by people of material goods (means and objects of labor) in the process of their production, exchange and consumption. Assignment of means and objects of labor by a certain person means that no one else can use them in the production process (in consumption) without entering into a production relationship with the first person. Property relations allow the possibility of the transfer of the object (means) of labor into the ownership of one person (appropriation) and its alienation from another.
Alienation means depriving a certain person of the opportunity to use the object (tool) of labor in production, consumption, which also involves a production relationship between two persons (for example, sale). Therefore, property relations are relations of appropriation and alienation. Between them, a system of relations of use and disposition is hidden.
Usage relationships allow you to apply funds or objects of labor with a certain benefit.
Order Relationships provide an opportunity to manage the use of property.
The economic content of property (assignment - alienation) is a system of production relations between people.
Subjects property can be people, businesses, the state. And objects are economic resources and finished products.
Thus, property as an economic category expresses:
o the relationship between people about the social appropriation of the alienation of factors of production;
o possession, management and control.
The most significant characteristic of property as a legal category is disposal.
In a market economy, production is carried out in the presence of a policy chain, i.e. the benefits complete their movement in consumption. However, consumption can be considered a direct purpose of production only in non-market relations. For example, the purpose of production in a slave society is the consumption of slaveholders. In subsistence farming, consumption is the goal of production. In the market system, the goal is not production, but profit.
Exchange increases the wealth of society, the movement of goods to meet human needs.
Distribution in the market system occurs under the influence of the price mechanism.
The needs of a person can be defined as a state of dissatisfaction or need, which he seeks to overcome. Requirements for the theory of A. Maslow are divided into higher (secondary) and lower (primary). Under primary understand the needs for food, clothing, etc. Secondary are related to the spiritual, intellectual activity of a person. Needs evolve as civilization progresses (most of which concerns secondary needs).
Market - is a collection of existing or potential sellers and buyers of some products, the place where transactions are made. It is on the market that the product produced and the labor expended on it prove their social importance, gain recognition from consumers.
The economic mechanism of a market economy determines the procedure for carrying out activities in the process of production, distribution and redistribution of the aggregate social product and national income. The main thing here is organizational and economic relations, including those that arise in the process of organizing social labor, market relations and management relations.The economic mechanism of market economy covers specific forms of organization of social production (state enterprises, joint-stock companies, cooperatives, small enterprises, individual labor activity), the system of organizational economic relations, economic ties, and forms and methods of state regulation and management of the economy.
In general, the economic mechanism consists of:
o economic mechanism, based on planning, motivation and economic stimulation;
o a market mechanism, based on different forms of markets, a complex system of trade services;
o the organizational mechanism, based on the definition of functions, rights, relationships, responsibilities of each management unit, improvement of business style and methods, information base, selection and placement of personnel.
The link between the economic mechanism and organizational structures is the market mechanism, which determines the final results of activities and the level of satisfaction of the population's needs for goods and services. A characteristic feature of the economic mechanism is its dynamism: it is constantly changing and improving.
The motivation of labor in a market economy is based on the private interest of producers, and in the administrative-command it was based on administrative-command methods of management. The administrative-command economy was governed by the principle of centralism, when the central economic authorities dictated the planned indicators and directives, and also completely regulated economic activity.
In a market economy, the private interests of producers, on the one hand, stimulate their work, on the other - they give employees a careful attitude to the means of production and the products they create. The market economy is characterized by the existence of various forms of ownership, each of which predominantly develops in the environment where it brings the greatest social result. In the transition to a market economy, a system of legal, organizational, planned and financial-economic levers was developed.
Market economy provides efficient management of the economy, production is subject to the needs and interests of consumers. Market relations are constantly regulated through taxes, financial incentives, subsidies, interest rates and other instruments. The advantage of a market economy lies in the fact that it is able to balance production and consumption without administrative interference, is directed towards a real person and is aimed at satisfying his needs.
Needs are poured into specific desires, taking into account the material possibilities transforming into the demand in the market for specific products. There is an exchange between the producer and the consumer, formalized in the form of a certain transaction. Thus, marketing directs the economy to meet the multitude of ever-changing needs of millions of consumers.
In more than narrow, entrepreneurial sense, marketing is a system of managing the enterprise's sales and production activities aimed at obtaining an acceptable profit margin by taking into account and actively influencing market conditions. Marketing is defined as a whole system designed to plan the range and volume of products produced, to determine prices, to distribute products between selected markets and to stimulate their sale, so that the variety of benefits achieved while satisfying the interests of both producers and consumers.>
1.1.2. Goals, objectives and marketing functions
There are different approaches to determining enterprise marketing objectives and ranking them.
Marketing is not an altruistic activity, so its main goal is economic: an increase in profits. It is achieved with the fulfillment of social goal - meeting the individual needs of customers. However, the goals of the enterprise and the desires of individual individuals sometimes may not correspond to the goals of the whole society and even be antisocial (consumption of goods irrational from the point of view of society: alcohol, tobacco, drugs).
In connection with the need to harmonize marketing and match marketing activities to the interests of the whole society, the third goal is the satisfaction of public interests.Supporters of the maximum possible level of consumption believe that the goal of marketing is to facilitate and stimulate the highest possible consumption, which in turn creates the conditions for maximum production, maximum employment and wealth.
Representatives of the direction of the widest possible choice of products believe that the marketing system should give the consumer the opportunity to find the products most suited to his taste. Thus, they argue, the consumer will improve his lifestyle as much as possible and gain happiness. Unfortunately, the maximum satisfaction of consumer choice and tastes requires huge expenses.
Thus, the true purpose of the marketing system by world science and practice is not yet established and is in the stage of defining a single interpretation.
Among the basic marketing tasks can be identified:
o research, analysis and assessment of the needs of real and potential consumers, enterprise products;
o marketing support for the development of new products (services) of the enterprise;
o analysis, assessment and forecasting of the state and development of the markets on which the enterprise operates, including research of competitors' activities;
o formation of the assortment policy of the enterprise;
o participation in the formation of the strategy and tactics of market behavior of the enterprise, including the development of price policy;
o development of the marketing policy of the enterprise;
o implementation of the communication policy of the enterprise.
To marketing functions include:
o study of market conditions;
o development of the forecast of supply and demand;
o analysis of market opportunities;
o market segmentation and customer behavior modeling
o Definition of marketing strategy in the market;
o planning sales and service organization;
o pricing and pricing;
o implementation of the marketing communications complex. The performance of marketing functions helps to strengthen the relationship between producers and consumers.
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