Marketing system involves the whole marketing process which has to do with the creation of goods and services designed to satisfy specific buyers and users. To be able to achieve this goal at a profit, marketing practitioners must determine the needs of the consumers and users of products with a view to converting them into wants.
Once the goods and services have been produced, they have to be made available to the target market at the right quantity, right quality, right place, and right time. These are the responsibilities of the manufacturers and/or marketers. Furthermore, they have the duty to communicate to the consumers/users that the goods and services they offer have the capability to satisfy their wants.
A system is described as a “group of things or parts working together as a whole” as in the case of a railway system. In the context of the marketing system, emphasis is on the interrelated functioning of the marketing activities geared towards the satisfaction of consumers and users. These activities are expressed in the 4Ps of marketing namely – The Product, Price, Place, and Promotion.
What Does Marketing System Involve?
Marketing system, according to David et al (1980) involves the sum of all the channels of distribution functioning in the society which perform all the activities required to link producers with users, and users with producers in order to accomplish the marketing task. These authors went further to state that the marketing system is made up of many organizations and individuals, all interrelated by flow of information, products, negotiations, risks, money, and people.
The marketing system embodies and represents the sum of all marketing activities geared towards improving the quality of life of the consumers or individuals – hence the goals of marketing system which includes: maximize choice and maximize quality of life.
Marketing System can also be defined as a “regular interacting or inter-dependent group of items forming a unified whole”. This definition was postulated by Ifezue (1990). According to him, this indicates that the system is made up of some component parts which function as one. The component parts include products, price structures, channels of distribution, promotional activities, and the firm.
McCarthy, et al (1990) evaluated the marketing system at two levels; the macro-level which looks at the economy’s entire marketing system to see how it operates and how efficient and fair it is, and the micro-level which examines individual firms within the economic system to see how they operate or how they should function.
The marketing environment can also be described using the marketing process and marketing system analysis as tools. These processes according to Kotler enable the marketers to understand and grasp the complexity of the organization’s environment and opportunities.
Marketing System Analysis
The marketing system analysis consists of two levels of increasing scope and complexities namely exchange and organizational analyses which are described below. The system identifies the institutions which interact to produce the desired results.
What is exchange analysis?
In a marketing situation where two or more parties are involved, each must have something of value. The exchange process refers to the ways and means by which exchange is actualized. This talks about transaction. The more active seeker in the exchange is the marketer and the other is the prospect. The marketer may be the one buying or selling. At this point, it is imperative to note that what distinguishes the prospect and the marketer is the degree of marketing effort. If the market demands 500 units, and you can only supply 300 units, there is therefore no need for marketing efforts e.g marketing of scarce products. In most cases, however, the producer (seller) of the goods and/or services is the most active party.
A situation where two parties are equally active in the exchange process is called bilateral marketing. It is therefore necessary for the marketer to understand the want-list of the prospects and formulate an offer; an offer sufficient to motivate a transaction. Simply put, you have to study the wants and needs of the prospects. Each party in an exchange situation pursues self-interest. A fine example of this is in an institutional marketing scene. Self-interest is the key drive. Exchange situations include – a commercial, employment, civic, religious, and charity transactions.
Organizational Marketing Analysis
In the organizational marketing analysis, what is involved is the description of the organization and the interacting forces in the environment which affects the organization’s ability to serve the market. They include the following factors:
- Organization’s internal environment and the facilitators, as well as the inhibitors to successful marketing actions.
- Task System considers the institutions that cooperate to create marketing value for a market. Such institutions could be suppliers, other organizations at the same level, intermediaries, etc. These institutions constitute a total marketing channel for meeting a set of customer needs.
- Competitors vying for the same market. The competitors may be generic, products, or enterprise competitors. Generic in the sense that other people in the market are your competitors. Makers of toothpaste are in competition with one another. And this is a perfect example of product competitors.
- The Publics: the publics have actual or potential interest or impact on the organization’s ability to achieve its objectives. The publics include the various audiences making various demands, and they include financial public, government public, media, local, and general public.
- Major Macro-environment forces are uncontrollable to the marketers. These include demography, the economy, natural resources, technology, culture. A marketer has to adjust to all these forces, or even adapt to them. In trying to adapt, the company has to do a lot of forecasting and environment analysis.