Marketing

"Marketing" is a term used to describe the various activities involved in transferring goods and services from producers to consumers. In addition to the functions commonly associated with it, such as advertising and sales promotion, marketing also encompasses product development, packaging, distribution channels, pricing, and many other functions. Modern marketing is often presented as an effort to discover and satisfy customer needs. It is often also a method of inventing products and services and creating a demand for them by artful persuasion.

In most large organizations the selling function is divided into distinct marketing and sales functions. In organizations where symbolic product presentation is all-important and buying decisions tend to be emotional, marketing is given much higher rank and emphasis. Such is the case typically with mature products that have over time achieved a commodity status and therefore persuasion to buy this brand is the central focus. In organizations where the product performance as such remains the chief selling feature, sales activity is dominant. Business-to-business distribution tends to have this character, with the selling burden carried by experts (e.g. in finance), sales engineers, and skilled product-savvy sales people. In some industries, e.g., in Pharmaceuticals, emphasis is evenly divided, with the public bombarded by marketing messages ("Ask your doctor …") while "detail men" (and women) are doing technical selling at the doctor's office.

BACKGROUND

"Marketing" used to mean going to the market—either to sell or to buy. The modern concept emerged in the wake of the industrial revolution in the 19th and 20th centuries. During that period, the proliferation of goods and services, increased worker specialization, and technological advances in transportation, refrigeration, and other factors that facilitated the transfer of goods over long distances resulted in the need for more advanced market mechanisms and selling techniques. But it was not until the 1930s that companies began to place a greater emphasis on advertising and promoting their products and began striving to tailor goods to please specific consumer groups. By the 1950s, and the rise of television as a communications medium, many large companies had developed marketing departments charged with devising and implementing strategies that would complement, and later direct, overall sales operations.

MACRO- AND MICRO-MARKETING

Macro-marketing refers to the overall economic/communications process that directs the flow of goods and services from producer to consumer. It includes 1) the buyer's behavior in seeking and judging goods and services; 2) the seller's efforts to draw and to persuade customers to buy; 3) the physical distribution of goods including warehousing and storage at intermediate stages; 3) product-related activities like standardization, grading, and sorting; 4) the financing of distribution at all stages, not least consumer credit; and 5) the communications processes supporting all of these activities.

Micro-marketing refers to the activities of the individual providers operating within this system. Organizations or businesses use various marketing techniques to accomplish objectives related to profits, market share, cash flow, and other economic factors that can enhance their well being and position in the marketplace. The micro-marketing function within an entity is commonly referred to as marketing management. Marketing managers strive to match products to customers; in this process they are equally interested in getting products customers will want to buy and influencing consumers to buy the products the company wishes to sell.

THE TARGET MARKETING CONCEPT

Micro-marketing encompasses a number of related activities and responsibilities. Marketing managers must carefully design their marketing plans to ensure that they complement related production, distribution, and financial constraints. They must also allow for constant adaptation to changing markets and economic conditions. Perhaps the core function of a marketing manager, however, is to identify a specific market, or group of consumers, and then deliver products and promotions that ultimately maximize the profit potential of that targeted market. This is particularly important for small businesses, which more than likely lack the resources to target large aggregate markets. Often, it is only by carefully selecting and wooing a specific group that a small firm can attain profit margins sufficient to allow it to continue to compete in the marketplace.

For instance, a manufacturer of fishing equipment would not randomly market its product to the entire U.S. population. Instead, it would likely conduct market research—using such tools as demographic reports, market surveys, or focus groups—to determine which customers would be most likely to purchase its offerings. It could then more efficiently spend its limited resources in an effort to persuade members of its target group(s) to buy its products. Perhaps it would target males in the Midwest between the ages of 18 and 35. The company may even strive to further maximize the profitability of its target market through market segmentation, whereby the group is further broken down by age, income, zip code, or other factors indicative of buying patterns. Advertisements and promotions could then be tailored for each segment of the target market.

There are many ways to address the wants and needs of a target market. For example, product packaging can be designed in different sizes and colors, or the product itself can be altered to appeal to different personality types or age groups. Producers can also change the warranty or durability of the good or provide different levels of follow-up service. Other influences, such as distribution and sales methods, licensing strategies, and advertising media also play an important role. It is the responsibility of the marketing manager to take all of these factors into account and to devise a cohesive marketing program that will appeal to the target customer.

THE FOUR PS

The different elements of a company's marketing mix can be divided into four basic decision areas—known as the "four Ps": product, place, promotion, and price—which marketing managers can use to devise an overall marketing strategy for a product or group of goods. These four decision groups represent all of the variables that a company can control. But those decisions must be made within the context of outside variables that are not entirely under the control of the company, such as competition, economic and technological changes, the political and legal environment, and cultural and social factors.

Marketing decisions related to the product (or service) involve creating the right product for the selected target group. This typically encompasses research and data analysis, as well as the use of tools such as focus groups, to determine how well the product meets the wants and needs of the target group. Numerous determinants factor into the final choice of a product and its presentation. A completely new product, for example, will entail much higher promotional costs to raise consumer awareness, whereas a product that is simply an improved version of an existing item likely will make use of its predecessor's image. A pivotal consideration in product planning and development is branding, whereby the good or service is positioned in the market according to its brand name. Other important elements of the complex product planning and management process may include selection of features, warranty, related product lines, and post-sale service levels.

Considerations about place, the second major decision group, relate to actually getting the good or service to the target market at the right time and in the proper quantity. Strategies related to place may utilize middlemen and facilitators with expertise in joining buyers and sellers, and they may also encompass various distribution channels, including retail, wholesale, catalog, and others. Marketing managers must also devise a means of transporting the goods to the selected sales channels, and they may need to maintain an inventory of items to meet demand. Decisions related to place typically play an important role in determining the degree of vertical integration in a company, or how many activities in the distribution chain are owned and operated by the manufacturer. For example, some larger companies elect to own their trucks, the stores in which their goods are sold, and perhaps even the raw resources used to manufacture their goods.

Decisions about promotion, the third marketing mix decision area, relate to sales, advertising, public relations, and other activities that communicate information intended to influence consumer behavior. Often promotions are also necessary to influence the behavior of retailers and others who resell or distribute the product. Three major types of promotion typically integrated into a market strategy are personal selling, mass selling, and sales promotions. Personal selling, which refers to face-to-face or telephone sales, usually provides immediate feedback for the company about the product and instills greater confidence in customers. Mass selling encompasses advertising on mass media, such as television, radio, direct mail, and newspapers, and is beneficial because of its broad scope. A relatively new means of promotion involves the Internet, which combines features of mass media with a unique opportunity for interactive communication with customers. Publicity entails the use of free media, such as feature articles about a company or product in a magazine or related interviews on television talk shows, to spread the word to the target audience. Finally, sales promotion efforts include free samples, coupons, contests, rebates, and other miscellaneous marketing tactics.

Determination of price, the fourth major activity related to target marketing, entails the use of discounts and long-term pricing goals, as well as the consideration of demographic and geographic influences. The price of a product or service generally must at least meet some minimum level that will cover a company's cost of producing and delivering its offering. Also a firm would logically price a product at the level that would maximize profits. The price that a company selects for its products, however, will vary according to its long-term marketing strategy. For example, a company may under price its product in the hopes of increasing market share and ensuring its competitive presence, or simply to generate a desired level of cash flow. Another producer may price a good extremely high in the hopes of eventually conveying to the consumer that it is a premium product. Another reason a firm might offer a product at a very high price is to discount the good slowly in an effort to maximize the dollars available from consumers willing to pay different prices for the good. In any case, price is used as a tool to achieve comprehensive marketing goals.

COMPETITIVE STRATEGIES

Decisions about product, place, promotion, and price will often be dictated by the competitive stance that a firm assumes in its target market. Common strategies are to be the low-cost supplier, to be highly differentiated, or to satisfy a niche market.

Companies that adopt a low-cost supplier strategy are usually characterized by a vigorous pursuit of efficiency and cost controls. A company that manufactures a low-tech or commodity product, such as wood paneling, would likely adopt this approach. Such firms compete by offering a better value than their competitors, accumulating market share, and focusing on high-volume and fast inventory turnover.

Companies that adhere to a differentiation strategy achieve market success by offering a unique product or service. They often rely on brand loyalty, specialized distribution channels or service offerings, or patent protection to insulate them from competitors. Because of their uniqueness, they are able to achieve higher-than-average profit margins, making them less reliant on high sales volume and extreme efficiency. For example, a company that markets proprietary medical devices would likely assume a differentiation strategy.

Firms that pursue a niche market strategy succeed by focusing all of their efforts on a very narrow segment of an overall target market. They strive to prosper by dominating their selected niche. Such companies are able to overcome competition by aggressively protecting market share and by orienting every action and decision toward the service of its select group. An example of a company that might employ a niche strategy would be a firm that produced floor coverings only for extremely upscale commercial applications.

BUSINESS VERSUS CONSUMER MARKETS

An important micro-marketing delineation is that between industrial and consumer markets. Selling to business is often very different than selling to the consumer. The industrial buyer is almost never moved by fancies and emotions and buys on price and technical specifications. To be sure, in many consumer markets the same rules apply as well; where they do, the situation is, of course, the same. Examples are elderly couples buying retirement packages and do-it-yourselfers buying tools. Buyers in the middle levels of distribution, such as wholesalers, think in terms of their customers, the retailers. Retailers, in turn, will view products from the consumer's point of view. Both of these levels, of course, will be very interested in price and performance issues as well.

Technical know-how and deep product knowledge is more valued in selling business-to-business. The industrial buyers will use components or machinery and will wish to satisfy him- or herself on their suitability to a particular end-use of operation. Distribution channel buyers will see the products as items they will have to explain to others or service in-house.

INTERNET MARKETING

A discussion of marketing would not be complete without mentioning the emerging field of Internet marketing. Increasingly, small businesses have sought to take advantage of the global reach of the World Wide Web and the huge number of potential customers available online. Although it may seem like a completely new field, Internet marketing actually combines many of the basic elements of traditional marketing. "Internet marketing employs the same methods and theory as traditional public relations and integrated marketing—the basic tools for any campaign," Maria Duggan and John Deveney wrote in Communication World.

In their article, Duggan and Deveney outline five steps for marketing managers to follow in putting together an Internet marketing campaign. Whether the campaign is intended to increase awareness of an existing brand, draw visitors to a Web site, or promote a new product offering, the first step involves identifying the target market. As is the case with any other type of marketing campaign, the small business must conduct market research in order to define the target audience for the campaign, and then use the information gathered to determine how best to reach them.

The next step is to develop a strategy for the campaign. This involves setting concrete and measurable goals and tying the campaign into the organization's traditional marketing efforts. The third step is to present the strategy to key decision-makers in the small business. It is important at this stage to develop a timeline and budget, and also to be prepared to encounter resistance among colleagues not familiar with cyberspace. The fourth step is to implement the Internet marketing campaign. The final step, evaluation, should be conducted throughout the process. Online surveys of customers are one source of potential feedback.

MARKETING FOR SMALL BUSINESSES

In the early stages of forming a small business, a business plan is a vital tool to help an entrepreneur chart the future direction of the enterprise. A good plan will have a marketing component and demonstrate the owner's understanding of how to advertise and promote his or her product or service line. The more the business is narrowly focused on selling, the more important this element will be. Some businesses, of course, will be engaged in activities barely touched by marketing in the modern sense—but will always have a sales component.

As a small business grows, it may be helpful to create a separate marketing plan. While similar in format to the general business plan, a marketing plan will focus on expanding a certain product line or service rather than on the overall business. Such plans will be especially valuable in obtaining financing for ventures relying upon persuading buyers to try novel products not already on the market.

A number of resources are available to assist small businesses in marketing their products and services. It may be prudent to seek legal advice before implementing a marketing plan, for example. A firm with experience in consumer law could review the small business's product, packaging, labeling, advertising, sales agreements, and price policies to be sure that they meet all relevant regulations to prevent problems from arising later. In addition, many advertising agencies and market research firms offer a variety of means of testing the individual elements of marketing programs. Although such testing can be expensive, it can significantly increase the effectiveness of a company's marketing efforts.

BIBLIOGRAPHY

Duggan, Maria, and John Deveney. "How to Make Internet Marketing Simple." Communication World. April 2000.

"Office Depot Helps Small Business Hitch a Ride with Nascar." Brandweek. 13 March 2006.

"Picture Your Business with a Logo; Logoworks.com creates affordable logos and identities for small businesses." Business Week Online. 4 April 2006.

Schaller, Marcus. "Analyze the Basics When Evaluating Marketing." San Diego Business Journal. 13 March 2006.

Scharich, Joanne. "Learn to Take Small Business Global." Crain's Detroit Business. 10 April 2006.

Simkin, Lyndon. "Marketing Is Marketing—Maybe!" Marketing Intelligence and Planning. March 2000.

Stephenson, James. Ultimate Small Business Marketing Guide: Over 1500 Great Marketing Tricks That Will Drive Your Business Through the Roof. Entrepreneur Press, 2003.

Tracy, Joe. Web Marketing Applied: Web Marketing Strategies for the New Millennium. Advanstar Communications, 2000.

Zyman, Sergio. "Put the Petal to the Metal: Marketing and the Internet." Brandweek. 2 October 2000.

                              Hillstrom, Northern Lights

                                updated by Magee, ECDI

MARKETING

MARKETING is the multifaceted, systematic approach to selling goods, adopted by every business and not for-profit agency and group with a message. It attempts to optimize an organization's ability to make a profit, whether monetary (profits or donations) or electoral.

Marketing encompasses advertising, promotions, product design, positioning, and product development. Marketing tools include elements such as focus groups, gap analysis, concept testing, product testing, perceptual maps, demographics, psychographics (lifestyles), and choice modeling. It is powerfully aided by market research, a science that has become increasingly complex and sophisticated over the past century or more.

Market research embraces qualitative and quantitative methods. Environmental analysis gives companies key information about economic conditions, consumer demographics, consumer lifestyles, industry trends, distribution channels, new technology, employee relations and supply, foreign markets, corporate image, political and regulatory changes, and key players in the business. Sophisticated data collection and analysis investigate market segmentation and target selection, product and advertising positioning, product design, pricing, mass media advertising, direct marketing, promotion, distribution channels, and sales force allocation.

Market research rarely has a direct impact on income, but provides the essential data to prove or disprove client preconceptions, resolve disagreements, expose threats, quantify a population, and qualify an opportunity. The ways that research is used for strategic decision making determines its relationship to profit and market advance. Marketing has existed in every age and culture. In the United States, marketing reached its high level of sophistication as a result of the mass market.

Three overlapping stages have marked the history of our republic. Until roughly the 1880s, the economy was characterized by market fragmentation. Geographical limitations were reinforced by the absence of a transportation and communications infrastructure that spanned the continent. There were hundreds of local markets and very few national brand names. Profit was determined by low sales volume and high prices.

Mass Marketing

Spurred by a communications revolution and the completion of a national railroad network that by 1900 consisted of more miles of track than the rest of the world combined, a national mass market emerged. Technological innovation mushroomed, and a small number of firms realized economies of scale previously undreamed of. Giant corporations (or a small cluster of corporations) dominated single industries. Companies were able to produce goods in high volume at low prices. By 1900, firms followed the logic of mass production as they sought to create a "democracy of desire" by universalizing the availability of products.

Mass production required the development of mass marketing as well as modern management, a process spurred by analysis of the depression of the 1870s, when unsold inventory was blamed in part for the depth of the crisis, and the depression of the 1890s, when the chaos of market competition spurred efforts to make the market more predictable and controllable.

As the mass market emerged, manufacturers and retailers developed a range of instruments to shape and mold the market. National brand names like the Singer Sewing Machine from the 1860s, Coca-Cola from the 1890s, Wrigley's Chewing Gum after 1907, and Maxwell House coffee around the same time heralded the "golden age of brand names." Advertising also came into its own during the early decades of the twentieth century. The first advertising agency was established in 1869 as N. W. Ayer and Son. John Wanamaker placed the first full-page advertisement in a newspaper in 1879. Advertising media were powerfully supplemented by the use of subway cars, electric trolleys, trams, billboards, and the explosion in magazine sales. Further developments came after the 1890s with flashing electric signs, and in 1912 "talking signs" that allowed copy to move swiftly along boards from right to left first appeared on Broadway in New York City. By 1910, photo technology and color lithography revolutionized the capacity to reproduce images of all kinds.

Forward integration into wholesaling also aided mass marketing, beginning in the 1870s and 1880s with meat packers like Gustavus Swift. Franchise agreements with retailers were one key to the success of companies such as Coca-Cola. Another feature in the success of mass marketing was the creation and implementation of sales programs made possible by the spread of modern management structures and the division of corporate functions. In 1911, with the appointment of its first director of commercial research, the Curtis Publishing Company instituted the systematic analysis of carefully collected data. Hart, Shafner, and Marx became the largest manufacturer of men's suits in America by the 1910s through research that suggested producing suits for fourteen different male body types and psychographic appeals in its advertising. During and after the 1920s, as the social sciences matured, sweeping improvements in statistical methodology, behavioral science, and quantitative analysis made market research more important and accurate. Through these means—as well as coherent production and marketing plans—a mass market was created by World War II. However, consumerism as understood in the beginning of the twenty-first century did not triumph until after 1950.

Market Segmentation

The final stage of the twentieth-century market in America has been characterized as "market segmentation." Fully developed in the 1970s and 1980s, firms sought competitive advantage through the use of demographics and psychographics to more accurately pinpoint and persuade consumers of their products. Price was determined not so much by how cheaply something could be sold, but more by the special value a particular market placed upon the goods, independent of production costs.

General Motors (GM) pioneered market segmentation in the 1920s, as it fought and beat Ford for the biggest market share of the booming automobile business. Henry Ford was an exemplar of mass marketing. He had pioneered the marketing of the automobile so that it could be within the reach of almost all Americans. Standardized models were produced quickly, identically, and only in black, which dropped the cost of car buying from $600 in 1905 to $290 by 1924. In nineteen years of production, his Model T sold to 15.5 million customers. By 1924, thanks largely to Ford, the number of cars produced in the United States was greater than 4 million, compared to 180,000 in 1910. Due to his methods, by 1921 Ford sold 55 percent of all new cars in America. In trying to compete with Ford, GM first tried merging with rivals to create a larger market force, but then embraced individuality. It was in the 1920s that annual modifications to automobile models were introduced. GM made not one model to suit all, but a number of different models to suit differing pocketbooks. It looked at the market not as an undifferentiated whole, but as a collection of segments with differing requirements and desires to be satisfied. GM made the ownership of automobiles both a status symbol and stylish. By 1927, Ford's market share had been cut to 25 percent, and Ford was forced to retool and try to catch up with GM.

By the 1960s, as consumer values shifted because of social change, marketers and advertisers sought ways to reach a more segmented society. Generational differences became much more important. Further changes, after 1970, meant that marketers needed to be much more sensitive to the differences between groups of Americans and their values. Serious foreign competition in American markets during the 1970s and 1980s also spurred innovation in market research, product design, and marketing generally. Television's Nielsen ratings offered one instrument, and more sophisticated polling techniques another. The ability to identify who watched what shows according to age, gender, and ethnic background led to more targeted advertising and a leap in TV advertising, from $12 billion in 1960 to $54.5 billion in 1980. By 1985, advertisers had developed eight consumer clusters for women alone, and over forty lifestyle groups.

By the 1990s, children, teens, and seniors were similarly analyzed. In 1997, it was estimated that "kid power" accounted for sales of over $200 billion per year. Age segmentation among children received particular attention, as researchers took into account neurological, social, emotional, and moral development. Testing determined the relative perception of visual and verbal information at different ages and developmental stages. Humor and gender differences were also studied to make marketing more successful. Deregulation of children's programming in the 1980s led to cartoons becoming merchandising vehicles. By 1987, about 60 percent of all toys sold in the United States were based on licensed characters from television, movies, or books.

Market research also determined the kinds of junk mail that went to each individual and how advertising would appear on the Internet or on television. During the 1980s and 1990s, more sophisticated research developed as patterns of credit card spending were analyzed, television was deregulated into cable and satellite channels, and Internet usage was identified.

Despite the end of a long post–World War II economic expansion, after 1970 consumer spending continued to grow, largely the result of consumerism; newer, easier forms of obtaining credit; and segmented marketing; which seized a generation of Americans who were born into the first generalized age of affluence in America. Consumer spending jumped from $70.8 billion in 1940 to $617 billion in 1970. The U.S. Census Bureau reported in 2001 that retail sales just for the fourth quarter accounted for $861 billion, a remarkable figure, given the slowdown in economic growth in the preceding thirty years.

The development of marketing during the twentieth century matched and aided American economic growth and was symbiotic with the triumph of consumerism. The creation of a "democracy of desire" came to characterize American society and its values. It was a distinctive quality that influenced the attitudes of the rest of the world toward the United States, as the strength of marketing smoothed its economic dominance around the planet.

BIBLIOGRAPHY

Acuff, Dan S. What Kids Buy and Why: The Psychology of Marketing to Kids. New York: Free Press, 1997.

Beacham, Walton, et al., eds. Beacham's Marketing Reference: Account Executive-Market Segmentation. 2 vols. Washington, D.C.: Research Publishing, 1986.

Burwood, Stephen. "Advertising and Consumerism." In Beacham'sEncyclopedia of Social Change: America in the Twentieth Century. Edited by Veryan B. Khan. Osprey, Fla.: Beacham Publishing, 2001.

Clancy, Kevin J., and Robert S. Shulman. The Marketing Revolution: A Radical Manifesto for Dominating the Marketplace. New York: Harper Business, 1991.

Tedlow, Richard S. New and Improved: The Story of Mass Marketing in America. Boston: Harvard Business School Press, 1996.

Zollo, Peter. Wise Up To Teens: Insights into Marketing and Advertising to Teenagers. 2d ed. Ithaca, N.Y.: New Strategist Publications, 1999.

StephenBurwood

See alsoAdvertising ; Consumerism ; Direct Mail ; Mass Production ; Marketing Research ; Radio ; Television: Programming and Influence .

market In both economics and sociology a market is understood to be an area over which any well-defined commodity is exchanged between buyers and sellers. Such commodities are considered to be of two kinds–goods and services. The total amount of a commodity produced and available for purchase is referred to as the supply of the commodity, while the total amount being sought for purchase is termed the demand. Because human wants are, in themselves, potentially infinite, it should be noted that in the study of markets demand must be effective, that is to say backed by money or purchasing power.

Note that a market need not be a physical location–as in the case of a Stock Exchange. It is any arrangement for bringing buyers and sellers together. Improvements in telecommunications networks have speeded up communication to such an extent that financial markets and commodity markets are now international in scope. The central purpose of certain regional political initiatives is to create larger integrated markets for goods and services, such as the European Economic Community, or the proposed Latin American Economic Community.

Mainstream economic theory mostly assumes that competition in markets is perfect. That is to say, there is a large number of buyers and sellers, none of whom can exert undue individual influence on the process by which the market price is fixed. Perfect competition, it is argued, ensures that there is an inherent tendency for supply and demand to adjust to each other through the prevailing price which, if all participants act rationally, will rise or fall according to the relative scarcity of the commodity and the competitive efficiency with which it is supplied by producers and purchased by consumers. Competition also explains the relationship between markets: all products are in competition with each other for a share of consumers' limited purchasing power, and all producers are in competition for access to a limited total stock of raw materials, machinery, labour, and investment capital. The competitive process will then penalize any departures from rationality among producers or consumers by driving them out of the market altogether.

Market economies are seen as placing the individual consumer in command of production. Each individual, using income derived in the main from his or her own productive activities, expresses his or her desires and preferences by the way he or she distributes this income for the various goods and services available in markets. This economic theory is associated with a political theory which places the citizen, as a voter, in ultimate authority over the production of public goods, such as education services, weapons, or art. The market system is thus argued to be democratic in essence.

A market is not the only method of allocating goods and services since a central planner could achieve the same result. One of the longest-standing debates in economics has been over which is the more efficient method. Hence the command economies of socialist countries are contrasted with the market economies of capitalist countries. In the market economy, also called free economy or free enterprise economy, the greater part of the activities of production, distribution and exchange are conducted by private individuals or companies rather than by the government, and government intervention is kept to a minimum. Exceptions are sometimes made in the provision and distribution of health services and education services, which are funded by and organized by central or local governments, in which case the term mixed economy would be more appropriate.

Markets are recognized to have some obvious disadvantages. They tend to have trade-cycles which mean that resources are periodically not fully employed. In the case of labour, under-utilization means unemployment, which threatens workers' living standards and this may in turn have a wide range of social as well as economic effects. An uncontrolled market system produces undesirable outputs as well as the goods and services sold on the market. The classic example now is environmental pollution, with waste products being dispersed into the atmosphere, rivers, and oceans. Markets have no morals. The production and sale of weapons, access to basic health care, scientific research, artistic products, and religious services are determined entirely by the level of demand for them. Most societies have value systems which are not wholly consistent with and subservient to the amoral functioning of the market, so that market outcomes may at times be judged to be socially unacceptable. Disadvantages such as these are quite separate from a range of practical imperfections in the functioning of any market. For example markets work best when there is perfect information available to all buyers and sellers, so that demand for commodities and the supply of them interact until prices reach an equilibrium. In practice, full information may not be available, or only at disproportionate cost, or information may be unequally distributed among market participants.

Since few social scientists have been entirely happy with the notion of perfect competition, one fruitful area for collaboration between economics and sociology is the attempt to develop a systematic account of how the empirical world supports or departs from the competitive ideal. From the outset, economics has sought to understand the distortions to economic processes introduced by any government which attempted to displace the effects of unregulated economic transactions with the political allocation of resources and commodities, even within a single society. Departures occur, however, because of monopoly and other concentrations of economic power and interest; or because of cultural or administrative barriers. All of these issues are central to the concerns of the sociologist of economic life but it is only in the study of labour-markets that any real attempt at integrating economic and social theory has occurred.

One of the few exceptions to this generalization is Robert E. Lane's The Market Experience (1991), which comprehensively reviews the literature on the market economy, drawing on material from economic philosophy, economic anthropology, economic psychology, and the sociology of work. Controversially, Lane argues that the research evidence from these fields offers a powerful critique of market economics, notably by demonstrating that two of its major premisses are mistaken: namely, that (contrary to mainstream economic theory) work is not a disutility, but is in fact one of the two major sources of lifetime satisfaction; and that monetary income, although a source of utility which does compensate for sacrifices at work, contributes little to a person's sense of well-being.

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 store , 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 selling . 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 Internet .

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).

mar·ket / ˈmärkit/ • n. 1. a regular gathering of people for the purchase and sale of provisions, livestock, and other commodities: farmers going to market. ∎  an open space or covered building where vendors convene to sell their goods. 2. an area or arena in which commercial dealings are conducted: the sale of cruisers in the American market continues to plummet. the labor market. ∎  a demand for a particular commodity or service: there is a market for ornamental daggers. ∎  the state of trade at a particular time or in a particular context: the bottom's fallen out of the market. ∎  the free market; the operation of supply and demand: future development cannot simply be left to the market | [as adj.] a market economy. ∎  a stock market. • v. (-ket·ed , -ket·ing ) [tr.] advertise or promote (something): the product was marketed under the name “aspirin.” ∎  offer for sale: sheep farmers are still unable to market their lambs. ∎  [intr.] buy or sell provisions in a market: [as n.] (marketing) some people liked to do their marketing very early in the morning. PHRASES: be in the market for wish to buy. make a market Finance take part in active dealing in particular shares or other assets. on the market available for sale: he bought every new gadget as it came on the market.DERIVATIVES: mar·ket·er n. ORIGIN: Middle English, via Anglo-Norman French from Latin mercatus, from mercari ‘buy’ (see also merchant).

market gathering of people for buying and selling XII; public place for this XIII; (opportunity for, rate of) purchase and sale XVI; seat of trade XVII. Early ME. market, recorded earlier in the late OE. comp. ġēarmarkett (XI; see YEAR); both simplex and comp. appear to be — OS. iārmarket = OHG. iārmarchāt (of which the second el. — L. mercātus, f. mercārī buy, f. merx, merc- merchandise.
Hence vb. XVII (marketing XVI).

MARKET

A market exists when a buyer and a seller exchange money for a product or service in a transaction in which neither person is forced into the exchange. Markets can be as simple as children selling lemonade for a nickel or as complex as the international trade in cars, steel, or telecommunications.

The most important question in any market is the setting of the price. Economists since the days of British economist Adam Smith (1723–1790) have noted that prices tend to fluctuate with supply and demand. If, for example, a farmer offers his crop of wheat for sale at a given price and no one buys, she or he will lower the price to try to attract buyers. On the other hand, if there is a scarcity of the product, sellers will be able to charge more for it. In this way prices are set for thousands of products in many markets every day.

The free flow of information is essential to the efficient operation of markets. If a buyer knows that cars are cheaper at one dealership than another, she or he will buy at the less expensive dealership. But if this information is not available, the buyer may spend more money than necessary. This would leave less money to spend on something else, and thus markets would be less efficient. Information, then, is essential, whether passed by word of mouth, newspaper advertisements, or other means. Sellers sometimes try to restrict such information or scheme to keep prices high. Economists refer to such schemes as price-fixing or collusion, and governments generally outlaw such practices.

Economists also believe it is important that governments don't unduly restrict the operation of free markets with burdensome taxes or regulation. Some regulation may be necessary; for example, some regulations protect the health and safety of workers. But when governments restrict the sale of a commodity, such as automobiles, to a single state-controlled brand at an artificial price, then economists say such a market is no longer free. Markets in the former Soviet Union were not free, which is why an illegal market in food and other essential goods and services flourished side by side with official ones. Economists call these illegal markets the underground economy or black markets. Such markets tend to spring into existence in any country whenever government taxes or regulations restrict the sale or supply of a product.

See also: Price, Supply and Demand

market market cross a stone cross situated in the marketplace of a British town.
market leader the company selling the largest quantity of a particular product.

See also bear market at bear2, black market, bull market, buy in the cheapest market, a drug on the market.

market.
1. Periodic gathering of people in order to buy and sell goods.

2. Building, public place (e.g. market square), etc., used for such gatherings, e.g. a fish market.

3. Privilege granted to the lord of a manor, municipality, etc., to establish a market (1).

market (place) In Palestine of the gospels the market was the place of merchandise (Mark 7: 4), but in the Graeco-Roman world of Paul it is the city centre or ‘main square’ of Philippi (REB, Acts 16: 19) and of Athens (Acts 17: 17).

mar·ket·ing / ˈmärkiting/ • n. the action or business of promoting and selling products or services, including market research and advertising.

marketing Study and practice of enhancing the sales of goods or services. It includes product development, design, packaging, pricing, market research and advertising.

Market as affix, see main name, e.g. for Market Bosworth (Leics.) see Bosworth.

market •adit •bandit, pandit •accredit, credit, edit, subedit •Chindit • conduit •audit, plaudit •pundit • refit • misfit • benefit •profit, prophet, soffit •forfeit • outfit • Tophet • photofit •buffet, tuffet •comfit • counterfeit • surfeit • agate •margate, target •frigate • Tlingit • hogget •drugget, nugget •Brigitte • gadget • eejit •Bridget, digit, fidget, midget, widget •budget •Blackett, bracket, jacket, packet, placket, racket •blanket • gasket • bedjacket •straitjacket • lifejacket • leatherjacket •downmarket, market, upmarket •basket, casket •breadbasket • Euromarket •Newmarket • hypermarket •Becket, Beckett •cricket, midwicket, picket, picquet, piquet, pricket, snicket, thicket, ticket, wicket •trinket •biscuit, brisket, frisket •identikit •brocket, crocket, Crockett, docket, locket, pocket, rocket, socket, sprocket •airpocket • pickpocket • skyrocket •toolkit •bucket, Nantucket, tucket •Blunkett, junket •musket • rust bucket •circuit, short-circuit

marketing •matting • exacting •Banting, ranting •parting •enchanting, planting •everlasting, fasting, lasting •narrowcasting •letting, setting, wetting •self-respecting, self-selecting, unreflecting, unsuspecting •tempting •unconsenting, unrelenting •excepting •arresting, unprotesting, unresting, westing •bloodletting • trendsetting •pace-setting • typesetting •photosetting •grating, plating, rating, slating, uprating, weighting •painting •pasting, tasting •undeviating • self-perpetuating •unaccommodating • self-deprecating •suffocating • self-regulating •undiscriminating • underpainting •unhesitating •beating, fleeting, greeting, Keating, meeting, self-defeating, sweeting •easting •fitting, sitting, unbefitting, unremitting, witting •printing, unstinting •listing, twisting, unresisting •shopfitting • marketing •telemarketing • pickpocketing •weightlifting • side-splitting •carpeting • trumpeting •uninteresting • visiting •backlighting, lighting, self-righting, sighting, unexciting, uninviting, whiting, writing •infighting • prizefighting •dogfighting • bullfighting •handwriting • screenwriting •scriptwriting • copywriting •skywriting • signwriting •typewriting • songwriting • knotting •prompting •costing, frosting •self-supporting, unsporting •malting, salting •ripsnorting • outing •accounting, mounting •coating •Boulting, revolting •posting, roasting •billposting • disappointing •shooting, suiting, Tooting •sharpshooting • footing •off-putting •cutting, Nutting •bunting •disgusting, self-adjusting, trusting •blockbusting • linocutting •woodcutting • disquieting •disconcerting, shirting, skirting