Approaches to Study of Marketing

There are many approaches to study marketing. The main are given as follows:

1. Commodity Approach

Under this approach, the flow of goods and diffusion from the producers to the consumers is studied. In this study, emphasis is given to production center, involvement of men in selling and purchasing of the products, methods and means of transportation, problems in sale and advertisement of goods, problems in financing, storing, and other related matters. The commodity approach of marketing is related to demand and supply of commodity. This approach is also related to channel of distribution and transportation. So, this approach establishes marketing system for products. It finds out necessary principle, strategy and technology for marketing goods or services. The commodity approach of marketing is practiced mostly in agricultural products, in cotton, jute, wheat etc.

The commodity approach of marketing establishes marketing system of each product. It studies demand and supply of commodity. It also encompasses the channel of distribution and means of transport. But this is time consuming and lengthy process; there remain possibilities of repeating the efforts of marketing.

2. Functional Approach

Functional approach of marketing indicates the study of the functions of marketing. Whatever function are marketing performs is called marketing as a whole. Marketing performs exchange function, physical distribution function and other auxiliary functions. The study of these functions is marketing.
  • Exchange functions: Exchange functions of marketing include purchasing and selling. These are the basic functions of marketing.
  • Physical distribution functions: Physical distribution function includes transportation and storage. These functions transport goods/products to the right place at right time as desired by the customers.
  • Auxiliary functions: The auxiliary functions of marketing include standardization and classification, financing, labeling, packaging, risk bearing, information flow etc. These functions simplify the exchange function.
The functional approach of marketing is related to the study of flow of commodities and concerned organizations. It gives more emphasis to the functions that should be done by marketing. But it does not care the consumers’ needs and wants and gives less importance to the use of the functions of marketing.

3. Institutional Approach

Institutional approach of marketing gives emphasis to the study of marketing institutions and agencies. Wholesalers, importers, transporters, exporters, business agents, transport organizations, banks, insurance companies, finance companies etc. play their roles in marketing by supplying or distributing commodities from producers to the consumers. So, the institutional approach centers its study to them. The study, ‘how these different institutions and agencies function together for marketing system,’ is the institutional approach of marketing.

The institutional approach of marketing gives emphasis to the institutions involved in marketing. These institutions achieve different expertise in marketing activities. The cost of marketing can be minimized by selecting proper institutions. Even then this approach cannot give complete meaning of marketing and does not care needs and wants of customers.

4. System Approach

This approach supposes marketing as a system which includes input, processing, output and feedback. Goods, price, place (distribution) and promotion are included in input of this system. Environmental effect and buyers’ are included in processing. Similarly, profit, customers’ satisfaction and social welfare are included in output and the task of sending message asking for redesigning input and processing fall under feedback. Marketing system can be shown in figure as follows:
Marketing according to Simple System
Marketing is a system which functions in dynamic environment. Economic, political and legal, social and cultural and technological contexts are the external elements of marketing system whereas the organizational activities and stakeholders are the internal elements of marketing system. The marketing system approach can be explained as subsystem of exchange system, marketing mix system, organization system etc.

System approach gives an integrated picture of marketing and the objective of marketing can be achieved effectively from it. Similarly, it makes marketing adjustable to the environment by scanning dynamic environment. But is does not care for the need and wants of customers. It becomes difficult to implement.

5. Environmental Approach

According to environmental approach, environment affects marketing. So, marketing should be made suitable to the environment by studying and scanning the environment. Environment always becomes dynamic. It changes continuously. So, it also appears both as an opportunity and as a challenge. The environment of marketing can be classified into two types as micro environment and macro environment.

  • Micro Environment: Micro environment is also called internal environment. Production, financial resource, human resource, research and development (R & D), culture of organization, goal of organization, structure of organization, suppliers, customers, labor organization, pressure group, competitors, market intermediaries etc. are the micro environmental elements. As these elements affect marketing, their scanning is compulsory.
  • Macro Environment: Macro environment is also called external environment. External/macro-environmental elements do not remain under control of marketing. So, marketing should be suitable to these elements. Economic, political and legal, social and cultural and technological elements are included in macro environmental elements. Inflation, monitory policy, financial policy, economic condition, income distribution etc. are economic elements, and law, rules and regulations, government policy, government procedure, interest group, political thought, political culture etc. are political-legal elements. Similarly, population, culture, social classes, life style, etc. are socio-cultural elements. Technology transfer, level of technology, research and development (R & D) etc. are technological elements.
This approach is important to make marketing suitable to the environment by environmental scanning. But this approach is expensive and gives less emphasis to the achievement of objective.

6. Managerial Approach

Managerial approach advocates for the scientific management of marketing. This gives more importance to the activities of managers and managerial decisions on marketing. This approach gives high priority to goal achievement and emphasizes that the marketing managers should always remain effortful to achieve the goal. These functions are based on planning, implementation and controlling.
  • Planning: Formation of goal and the process of defining future activities for achievement of the goal, analyzing and selecting them is called marketing plan. It prepares certain yardstick for control.
  • Implementation: The task of handing over authority to work and giving direction to carry out marketing plan is called implementation. Marketing manager makes plan and his/her subordinates and other employees implement it. The manager should explain the plan to the related employees and make them understand the importance while implementing it. Good leadership, effective communication, positive motivation, participation, ability etc. are the compulsory elements for successful implementation of marketing plan.
  • Controlling: Works are performed according to plan. The task of examining and analyzing whether or not the work has been completed according to plan is controlling. In controlling, actual performance is compared with plan or predetermined standard. If there are found differences, they are identified and necessary suggestions are given to take corrective actions.
Managerial approach stresses on taking managerial decision of marketing and conducting marketing activities effectively. But it does not pay attention towards environmental elements and consumers’ needs and wants.

7. Economic Approach

The economic approach of marketing gives emphasis on increase of profit maximization. Buyers and sellers are the important elements of marketing. Price of commodities or service is fixed through their interactions and the action of selling and buying completes. Marketing helps how to effectively utilize limited resources to fulfill the unlimited needs and wants. It researches markets, studies and analyzes demands and supply. It gives emphasis on salesmanship. Similarly, it believes in sales promotion through advertisement and promotional activities. It uses different economic tools in markets research and analyzing demand and supply. So, this approach is popular among economists.

Economic approach of marketing is more developed and it analyzes demands and supplies including production cost. But this approach does not agree with the modern marketing and is based on several assumptions.

8. Legal Approach

This approach advocates that marketing should be regularized by laws. All the marketing activities should agree with and remain under control of legal provisions. Acts, rules and regulations, policy, procedure, working process etc. are included in law. Law restricts to do some works and prior permission should be taken to do some other works. For example, opening brothel is restricted by Law in Nepal. So, it is an illegal act, such acts are not allowed in Nepal. Similarly, it is necessary to take prior permission to conduct alcohol industry, medicine industry, brick industry etc. and all the related legal provisions, rules and regulations, working procedures etc. should be strictly abided by. Otherwise, such businesses are not allowed to conduct. So, this approach of marketing gives protection to society and consumers. Legal approach strongly advocates that all the marketing activities should remain within legal purview. It gives high priority to bearing social responsibility. But his approach has not made clear how to adopt dynamic environment. Although it tries to protect consumers through legal provisions, rules and regulations, it does not care for consumers’ needs, wants and satisfaction.

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