There are four different approaches to the study of marketing. These approaches explain clearly the mechanism and concept of marketing. These approaches are Commodity Approach, Institutional Approach, Functional Approach, Decision Making Approach, Legal Approach and Economic Approach.
- Commodity Approach
- Institutional Approach
- Functional Approach
- Management Approach or Decision-Making Approach
- Legal Approach
- Economic Approach
1. Commodity Approach
- This approach studies marketing on the basis of “commodity”.
- The marketing situation of each product is studied as regards to its sources of supply, marketing organization and policies involvement of middlemen, extent of market, etc.
- This approach is also called as descriptive approach.
- In this method, commodity serves as a focus around which other aspects of marketing are studied.
- Its main defect is that it is repetitive and time consuming.
- Sometimes the classification of products also becomes difficult.
2. Institutional Approach
- Under this approach, the description and analysis of the different institutions engaged in marketing are undertaken.
- Here we not only study products but also analyze the various functions and activities of the producers, wholesalers, agents, retailers, transporters, etc.
- The different institutions serve as separate “cells” of the marketing body and the functions performed by each cell form part of whole marketing.
- This approach is also considered defective as it fails to bring out effectively the inter-relations of all the institutions.
Here the marketing process is split up into three important factors i.e.
- In a highly developed and a large economy, many a times, particular products are produced at one place and customers may be located thousands of miles away, say at distant places.
- Then it becomes necessary to bring accessibility in making goods available for consumption as and when demanded by those ultimate consumers.
- Therefore, the product should be available at centre point from where the product can be purchased by the consumers.
- As countries develop and multinational trade increased due to globalization, then activities like storage, transportation, assembling, inventory management, standardization and grading and handling of customers order brings more importance in the marketing process.
- All these activities are included in the process of concentration including financing and risk-bearing also.
- Equalization is the intermediate activity which occurs between the process of concentration and dispersion.
- The process of equalization involves proper adjustment of supply at all centers of distribution, where the supply of goods has to be balanced with the demand for goods on the basis of time, quality and quantit
- Thus it can be said that equalization is the process of making available the goods in a particular place or market just in accordance to the actual demand so that the chances of loss might be minimized.
- The process involves storage and transportation of goods in required quantities, where transport equalizes supply place-wise and warehousing equalizes it time-wise.
- Dispersion is that process through which goods and services produced are delivered to their real consumers at the right time and right place in the right quantity, through the most appropriate channels of distribution.
- The assembled stock of goods is sub divided into smaller lots required to meet the needs of buyers.
- The intermediaries like wholesalers, retailers, middlemen etc are engaged in this activity as the goods are distributed through these different channels for sale to consumers.
3. Functional Approach
- It splits down the field of marketing into separate functions.
- Specific functions are those concerned with buying, selling, transportations, storage, standardization, grading, financing, risk taking and marketing research etc.
- This approach is definitely an improvement over the former ones but not entirely free from defects.
4. Management Approach
- It combines certain features of the other earlier mentioned three approaches.
- The basis of this approach is that marketing is purely a management function.
- However changes in marketing are brought about by two types of factors i.e. controllable and uncontrollable.
- Controllable forces are those marketing forces which are within the control of the firm. These internal factors are adjustments in prices, advertising, personal selling, etc.
- Uncontrollable forces are those marketing forces which are beyond the control of a business firm unless it is forecasted well in advance. These are external environmental forces such as economic, social and political forces.
5. Legal Approach
- This approach is very narrow and it is a part of a political environment as it concentrates only on one aspect i.e. the effect of transfer of goods or title in a legal way.
- In India this aspect has a particular significance.
- There are many enactments past under legislation which regulates and controls the entire business activities.
6. Economic Approach
- Under this approach marketing is concerned with creation of value demand, demand, supply and price.
- Such an approach is incapable of giving the complete idea of marketing. Hence it requires market study from various points of views.
- One has to analyze the market from the consumer’s point of view such as their needs, taste, acceptability, purchasing power, etc.
- Also the business has to evaluate the product from the competitor’s point of view, how their marketing strategies are, their approach to customers; methods adopted, price policy, etc.
- It should try to understand its weaknesses, modify its strategies to pull the customers by creating greater demand.
- It may be possible by improving the utility of the product or with attractive and useful packaging and various other marketing gemics.