The importance/significance of marketing can be studied under the following,
- Importance of marketing to business organization.
- Importance of marketing to society or non-business organization.
Importance of Marketing to the Business Organization
Marketing activities are considered as significant to business organization due to following reasons,
(a) Increases Company’s Profits
Generating profits is the main objective of each and every business. An effectively designed marketing system assists the company in achieving such objectives by focusing on minimizing the selling cost and creating demand for the product through various promotional activities.
(b) Assists in Planning and Decision Making
The marketing system assists the company in planning business activities and in taking various decisions pertaining to business. How much quantity of products have to be produced by the company is decided on the basis of demand and of sales forecasts. Sales forecasting is a marketing activity. Marketing decisions are surrounded by decisions of other functional areas such as — production, finance, purchasing etc.
(c) Ensures Free Flow of Communication
Marketing ensures a free flow of communication between the company and the society. The information related to consumers tastes, preferences, their behavior, attitude and changes in them can be gathered through marketing. Apart from this, information about competitors can also be gathered through marketing. Marketing is also used to create awareness among the customers regarding the introduction of new products.
Importance of Marketing to Society or Non-Business Organization
Marketing activities are considered as significant to society due to the following reasons,
(a) Generate Employment Opportunities
In developed countries like – USA, Germany, Japan and many more, nearly 40% of the population are employed in marketing activities like – Retailing, wholesale activities, transportation, warehousing, promotion activities, market research activities etc. Even developing countries can minimize the unemployment rates by developing marketing activities in their countries.
(b) Increases the Country’s National Income
An effective marketing system enables the firm to increase production levels. The production levels of the country’ have to be increased to match up with the increasing demand. Higher the productivity levels, higher will be the national income of a country.
(c) Increases Standard of Living of the Society
Marketing involves identifying needs and wants of the customers and offering goods and services as per the needs of the customers. This process will automatically increase the standard of living of the society.
(d) Reduction in Distribution Cost
Reduction in the distribution cost is one of the objectives of marketing. When distribution cost is reduced, the price of the product will automatically get reduced. The customers who cannot purchase products offered at high prices can now purchase the products, as price is reduced due to reduction in distribution cost.
(e) Protect society from unfavorable effects of business cycle
A business has to face a boom and a depression stage in its business life cycle. In the depression stage, the production level goes down, due to which unemployment level increases. An effectively designed marketing system protects the society in the depression stage by introducing new markets, expanding the existing markets, minimizing the distribution cost, enhancing the product quality level and by ensuring customer orientation.