Importance of marketing in an economy

Marketing has greater importance and significance for the economy as a whole than for any of the individual beneficiaries of the marketing process, and can be expressed as follows:

1.       The nation’s income is composed of goods and services which money can buy. Any increase in the efficiency of the marketing process which results in lower costs of distribution and lower costs of distribution and lower prices to consumers brings about an increase in the national income.

2.       A reduction in the cost of marketing is a direct benefit to society. The man who makes such a contribution renders a service as important as that of the inventor of a labour-saving device or a new manufacturing process.

3.       Marketing process brings new varieties, quality and beneficial goods to consumers. A wealth of merchandise can be purchased at retail stores which were not available previously. It thus provides the connecting link between production and consumption.

4.       Scientific marketing has a stabilizing effect on the price level. Producers produce what consumers want and consumers have a wide choice of products, there are no frequent ups and downs in prices. Scientific marketing removes the problems of hoarding, profiting and black marketing.

5.       Marketing brings to the very doors of the farmers useful implements, tools and fertilizers etc., and the benefits of the use of machines and free after sales services, makes them modern farmers besides improving their productive efficiency.

6.       Scientific marketing remedies the imbalance in the supply of goods by making available the surpluses to the deficit areas. Through better provision of transport facilities and storage, marketing develops the trade in perishable goods, most of which at present goes to waste.

7.       Marketing adds value of goods by changing their ownership and by changing their time and place of consumption.

8.       It adds value to services, e.g., business, medical, entertainment and educational services, by performing the services involved.

9.       Patterns of consumption are determined both by the structure of the marketing system which is set up to carry the flow of goods and services from producers to consumers and use, and by the value added to these goods and services through performance of marketing activities.

10.   Marketing is essential for full employment. In order to have continuous production, there must be continuous marketing; only then can sustained and high level of business activity be continued. Further since marketing involves the delivery of goods and services to the whole community, a large number of people are needed for performing various functions and hence large employment –both in production and in distributive trade is available to persons. Out of every five persons employed in industry, four are employed in marketing.

11.   Marketing further provides these benefits to the nation and the economy:

(i)                  It can change public opinion and create new norms of behavior and standards of conduct and new ways of life.

(ii)                The tools of marketing can be used to implement national policy; and

(iii)               It can serve to expand the home market and thus provide a more secure base for export.

In sum, it is the father of innovation and product development, prompter of entrepreneurial talent, developer of economy, simulator of consumption and higher standard of living and guardian of price system.


Also read:
Marketing concept
Evolution of Marketing