marketing

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marketing,

in economics, that part of the process of production and exchange that is concerned with the flow of goods and services from producer to consumer. In popular usage it is defined as the distribution and sale of goods, distribution being understood in a broader sense than the technical economic one. Marketing includes the activities of all those engaged in the transfer of goods from producer to consumer—not only those who buy and sell directly, wholesale and retail, but also those who develop, warehouse, transport, insure, finance, or promote the product, or otherwise have a hand in the process of transfer. In a modern capitalist economy, where nearly all production is intended for a market, such activities are just as important as the manufacture of the goods. It is estimated in the United States that approximately 50% of the retail price paid for a commodity is made up of the cost of marketing.

Evolution of Modern Marketing

In a subsistence-level economy there is little need for exchange of goods because the division of labor is at a rudimentary level: most people produce the same or similar goods. Interregional exchange between disparate geographic areas depends on adequate means of transportation. Thus, before the development of caravan travel and navigation, the exchange of the products of one region for those of another was limited. The village market or fair, the itinerant merchant or peddler, and the shop where customers could have such goods as shoes and furniture made to order were features of marketing in rural Europe. The general store superseded the public market in England and was an institution of the American country town.

In the United States in the 19th cent. the typical marketing setup was one in which wholesalers assembled the products of various manufacturers or producers and sold them to jobbers and retailers. The independent storestore,
commonly a shop or other establishment for the retail sale of commodities, but also a place where wholesale supplies are kept, exhibited, or sold. Retailing—the sale of merchandise to the consumer—is one of the oldest businesses in the world and was practiced
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, operated by its owner, was the chief retail marketing agency. In the 20th cent. that system met stiff competition from chain stores, which were organized for the mass distribution of goods and enjoyed the advantages of large-scale operation. Today large chain stores dominate the field of retail trade. The concurrent advent of the motor truck and paved highway, making possible the prompt delivery of a variety of goods in large quantities, still further modified marketing arrangement, and the proliferation of the automobile has expanded the geographic area in which a consumer can make retail purchases.

Modern Marketing

At all points of the modern marketing system people have formed associations and eliminated various middlemen in order to achieve more efficient marketing. Manufacturers often maintain their own wholesale departments and deal directly with retailers. Independent stores may operate their own wholesale agencies to supply them with goods. Wholesale houses operate outlets for their wares, and farmers sell their products through their own wholesale cooperatives. Recent years have seen the development of wholesale clubs, which sell retail items to consumers who purchase memberships that give them the privilege of shopping at wholesale prices. Commodity exchanges, such as those of grain and cotton, enable businesses to buy and sell commodities for both immediate and future delivery.

Methods of merchandising have also been changed to attract customers. The one-price system, probably introduced (1841) by A. T. Stewart in New York, saves sales clerks from haggling and promotes faith in the integrity of the merchant. Advertising has created an international market for many items, especially trademarked and labeled goods. In 1999 more than $308 billion was spent on advertising in the United States alone. The number of customers, especially for durable goods, has been greatly increased by the practice of extending credit, particularly in the form of installment buying and sellinginstallment buying and selling,
buying and selling of goods on credit, with the stipulation that payments shall be made at specified intervals in set amounts. The goods may be used by the buyer before or upon first payment, but legally belong to the seller until the last payment
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. Customers also buy through mail-order catalogs (much expanded from the original catalog sales business of the late 1800s), by placing orders to specialized "home-shopping" television channels, and through on-line transactions ("e-commerce") on the InternetInternet, the,
international computer network linking together thousands of individual networks at military and government agencies, educational institutions, nonprofit organizations, industrial and financial corporations of all sizes, and commercial enterprises (called gateways
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.

Services are marketed in much the same manner as goods and commodities. Sometimes a service, like that of a repair person or physician, is marketed through the same act that produces it. Personal services may also be brokered by employment agencies, booking agents for concert or theatrical performers, travel agents, and the like. Methods of marketing now include market research, motivational research, and other means of determining consumer acceptability of a product before the producer decides to manufacture and market it on a large scale. Market research, often conducted by means of telephone interviews with consumers, is a major industry in itself, with the top 50 U.S. marketing firms tallying revenues of $5.9 billion in 1998.

Bibliography

See J. Wilmshurst, The Fundamentals and Practice of Marketing (1984); E. Kaynak and R. Savitt, ed., Comparative Marketing Systems (1986); E. J. McCarthy and W. D. Perreault, Jr., Basic Marketing (10th ed. 1990); J. H. Ellsworth and M. V. Ellsworth, Marketing on the Internet (1997); L. E. Boone and D. L. Kurtz, Contemporary Marketing (9th ed. 1998).

Marketing

 

(Russian, marketing), a system of managing capitalist enterprises by relying on the careful accounting of the processes occurring in the market in order to make economic decisions.

Marketing arose in the USA in the early 20th century and spread especially in the 1950’s and 1960’s as a response to intensified problems of sales and the extensive use of new, nonprice methods in the competitive struggle (such as advertising, quality competition, and differentiation of products). The overwhelming majority of the largest corporations of the USA use marketing. In the early 1970’s about 400 private research firms in the USA were under contract to the monopolies to do research on marketing problems. The billings of the largest ones (such as A. C. Nielsen) amounted to tens of millions of dollars a year. In the 1950’s and 1960’s in Western Europe more than 200 such organizations did marketing work. There are also international marketing organizations, including the European Marketing Council and the International Marketing Federation.

The goal of marketing is to create the conditions to adapt production to social demand and the requirements of the market and to work out an organizational and operational system to study the market, increase sales, and enhance the competitiveness of goods in order to obtain maximum profits. The primary functions of marketing are studying demand, price formation, and advertising and the stimulation of sales; planning the line of goods, sales, and commercial operations; storing and transporting goods; managing salesmen and sales personnel; and organizing consumer services.

Some marketing specialists and propagandists assert that marketing promotes the social regeneration of the capitalist structure, turning it into an economic system centered on the consumer and his tastes, desires, and needs. In reality, marketing is an attempt, within the limits of individual capital holdings, to eliminate some contradictions of capitalism, such as the contradiction between growing production capacities and comparatively narrowing consumption and the contradiction between the anarchy of production on a society-wide scale and the growing tendency toward the planned organization of production and sales within the limits of individual enterprises, firms, and monopolistic associations.

REFERENCES

Abramishvili, G. G. “Burzhuaznye teorii realizatsii i marketing.” Mirovaia ekonomika i mezhdunarodnye otnosheniia, 1971, no. 12.
Kniffin, F. The Modern Concept of Marketing Management. [Bloomington, 1958.]
Simmons, H. New Techniques in Marketing Management. Englewood Cliffs (N.J.), 1958.
Modern Marketing Strategy. Cambridge (Mass.), 1964.
Buskirk, R. Principles of Marketing. New York [1966].
Cox, R. Distribution in a High-level Economy. Englewood Cliffs (N.J.) [1965].

G. G. ABRAMISHVILI