In a primitive subsistence society, there is a very wide scope of marketing because in such a society each person grows the food he consumes as well as makes the tools he uses and the clothes she wears.
However, as the production methods become efficient, one man’s output of a particular product far exceeds his requirements for that product. Since he specializes in producing a particular product, he needs the market to sell surplus production.
Thus, on one side, the scale of production goes on increasing, and on the other hand, the need and importance of marketing also go on increasing.
As soon as a country becomes more industrialized and urbanized, the marketing becomes functionally more important for him.
In this connection, it has been rightly remarked that “nothing happens in our economy until somebody sells something.”
Marketing is not only of great significance for producers or middlemen but also of equal importance to society as a whole.
What is the Importance of Marketing in Today’s Economy
Today we talk of national and international Markets and now marketing is considered as an important force of rapid economic development of a country.
Following are the roles of marketing:
1. Provides Employment
Marketing is an important source of providing employment.
According to an estimate, about, 40% of the labor force in developed countries (such as the U.S.A., Germany, Japan, etc) is engaged in different marketing processes, such as distribution channel (wholesale and retail trade), marketing research, storage, warehousing, transport, communication, publicity, etc.
In a developing country like India, about 3 crore people are engaged in marketing, such as distribution channels, etc.
2. Delivery of Standard of Living
Marketing is the delivery of a standard of living to society.
It provides knowledge about different varieties of goods and services, of means of publicity and sales promotion to society.
3. Helpful in Increasing Profits
All of us know that the main objective of the business is to earn a profit.
4. Protection Against Slump
Marketing provides protection to the economy against a slump.
In the case of the slump, marketing helps by discovering new markets, making it customer-oriented, improving the quality of products, suggesting alternative uses of products, etc.
5. Increases National Income
When different variants of goods are made available according to the needs and tastes of consumers, there is an overall increase in demand.
Increased demand stimulates production activity in the country, which in turn, increases the national income of the country, which in turn, an increase in national income brings and all-round prosperity in the country.
6. Facilitates Choice
In order to satisfy the demand for different types of customers, products of different varieties, designs, colors, sizes, etc. are produced.
It facilitates the choice of the consumers as they are free to select the product of their own choice and taste, etc.
7. Increases the Knowledge of Customer
8. Customer Satisfaction
Goods are produced according to the needs and tastes of the consumers.
Besides production, modern marketing also emphasizes the selection of a suitable channel of distribution and also makes the goods available at reasonable prices in the market.
9. Helpful in Business Planning and Decision Making
In the modern economy, production is planned according to the sales forecast and not according to the production capacity of the firm.
A firm will produce what it can sell and in as much quantity as it sells and not what and how much it can produce.
Thus, business planning and decision making in the business planning firm is based on marketing.
10. Key Factor in Distribution
Marketing is helpful to the firm in selecting the proper distribution channel that can deliver the goods to the consumers at the minimum distribution cost and at reasonable prices.
In this competitive age, only that producer can survival who can deliver the goods to the consumers at a minimum distribution cost.
11. Reduces Distribution Cost
An efficient marketing process is responsible for reducing the cost of distribution to a great extent.
The advantage of reduction and distribution cost goes to the consumers by marketing the goods available at lower prices.
If in spite of the reduction in distribution cost, prices do not fall, it will increase the profits of the manufacturers which will filter down to the shareholders and debenture holders in the form of dividend and interest.
12. Helpful in Communication Between Firm and Society
Today, marketing is an important source of communication between the firm and society.
Marketing provides information regarding consumer’s behavior and changes therein to the firm.
Today, the Producers and Consumers are situated at s distance of thousands of kilometers from each other and it is the marketing that is the source of establishing effective communication between them.
13. Importance in Sellers Market
A seller’s market is one in which there is a shortage of goods and thus the demand for goods exceeds the supply.
Along with waiting, the line exists in the market.
You may argue that there is no need for marketing in the seller’s market because everybody is already standing in a queue and eagerly waiting for his return.
For instance, in India whenever there is a shortage of goods, you may see a long waiting queue before distribution centers.
However, one should not believe that a seller’s market lasts forever. Initial shortages will be overcome in due course of time.
For instance, there was a time when a seller’s market was in existence in food grains, sugar, etc.
Now both these items are available in sufficient quantities at reasonable prices.
Thus, today we have a seller’s market, tomorrow there will be a buyers market. These are changing phases of business.
The need for marketing will exist and does exist even now.
A buyer’s market is one in which the supply of goods exceeds the demand. Every firm is eager to sell the goods but those firms succeed which adopt the modern ways of marketing goods in accordance with the demand and taste of consumers.
Thus, the importance of marketing exists whether it is the seller’s market or buyers’ market.
Remember that the market is the boss and those companies that are successful are those which are able to study the markets.
14. Necessary for Developing Country
Marketing is of great importance in developing countries.
Production of goods and services is undoubtedly a major National issue in almost all the developing countries of the world.
It is so because it is a very potential instrument of rapid economic growth.
In this connection on the increase in production is not enough.
There must also be equitable distribution amongst people so that no one starved to death.
In a vast country, the very thought of equitable distribution cannot be metalized unless there is an efficient distribution channel.
In order to have an efficient distribution of goods, there is the need and importance of marketing.
What are the importance of marketing to the economy?
Marketing is an important factor in modern business planning and decision making. In the modern economy, production is planned according to the sales forecast and not according to the production capacity of the firm.
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