According of Mc Carthy, an effective macro market system is a necessary ingredient for economic development. To peter Drucker, marketing may be the key to growth is less developed nations. Marketing can enable fuller utilization of resources and facilitates integration of countries and continents. For Nurkse marketing carries with it the solution to break through the vicious circle of poverty in very country. Hence, in every developing and less developed country efforts should be made to reorganize the marketing system.
It is well known that producers and consumers are separated from each other on several counts. Marketing should enable removing these separations. This could be understood by analyzing Mc Carthy‟s view point.
1. Spatial separation: This refers to the geographical separation between the producers and consumers. Producers have several compelling reasons to locate their operations in a particular place. But the consumers are wide spread. This separation could be avoided with a well knit logistic function. That is, by ensuring that the products reach the consumers at the right time, at right price in right shape and at right place. Simply this means if marketing can ensure time utility, place utility and form utility through its performance, then the spatial separation would disappear.
2. Separation in time: One of the basic functions of producers is to determine the time when the product/service is required by the consumers. If it does not reach the consumer at the time of need, it loses its appeal to consumers. Generally producers over come this problem by using various rigorous forecasting and estimation techniques. Similarly by a well-planned inventory management, produces can easily manage demand and supply.
3. Separation of information: Most of the ills in marketing are caused by lack of information. Marketing information could be relating to various aspects like, product functioning or use, availability, price, etc. it is always said that the basis reason for market imperfection is deliberate information lack out. Selective information sharing is viewed as a marketing tactic. The more the consumers are ignorant the more the producer benefits. Hence if marketing ensures flow of relevant and useful information to the consumers at the right time, it would help to narrow the separation of intended of benefits and realized benefits.
4. Separation in values: One of the major role performed by marketing is to enable both the producers and the consumers to determine the value of the product/service. Normally producers to would determine the price of the product/service based on their cost of production. Consumers would consider price payable with the economic utility conferred by the product/service and their own capability to pay. If the interests of these two groups should be served, then marketing alone can achieve this. It has the demand forces and supply forces to interact and determine the true value of a product/service. This way both the seller and the buyer stand to gain.
5. Separation of ownership: The basic requirement for exchange to take place is the transfer of ownership from the seller to the buyer. Sellers would transfer their ownership for a consideration and the buyers would get their ownership for a consideration. When the consideration in question is acceptable to both the parties, exchange is facilitated. Hence, it is marketing which can facilitate legal transfer of ownership for a consideration from the sellers to buyers. This is because producers do not want to retain the ownership of goods they produce and consumers want to get the ownership of goods before consuming the product or service.
6. Discrepancies of quantity: It is well known that producer’s objective is to minimize cost and maximize production. That is unless there is scale economy; producers would not be able to optimize their operations. On the other hand, consumers always require the product/service in convenient small quantity. This makes it imperative that marketing should provide efficient warehousing and storage system so that both producers and consumers would achieve their objectives.
7. Discrepancies of assortment: A fundamental function of marketing is grading and standardization. Through this, marketing can enable the consumers to get the product of his choice and the producers would confine to manufacturing the grade or standard that they are capable of. FOR EXAMPLE, local manufacturers would build the features in their products to fulfill the expectations of the consumers in the locality, while a country level producer has to meet the requirements and aspirations of multitude of consumers with varying preferences. Some time, the manufacturers would have two brands one for the locality and the other for the country as a whole. Therefore, it is marketing which can give indications of consumer‟s preference and choice with which the producers would be able to plan and produce the product/service meeting such preferences/choice of the consumers.
Economy as explained by Mamoria and Joshi could be discussed to appreciate the contribution of marketing in modern economy. These are explained below.
1. Improvement in marketing efficiency brings about reduction in distribution cost, which could help to reduce the price. This in turn, would add to the national income.
2. When the marketing cost declines, the society stands to gain as product/service will be available at a cheaper price adding to the social well-being.
3. It is marketing which brings together the producers and consumers thereby facilitating both to share the common benefits in terms of new varieties and quality goods.
4. With widening of market, the employment potential of the country would also widen.
5. Scientific marketing contributes by eliminating unfair trade practices and stabilizing the price level.
6. Productive efficiency would increase, as marketing would ensure optimum allocation of resources.
7. Artificial scarcity would be avoided when marketing forces are allowed to operate.
8. Time and place utility of a product are achieved only through marketing.
9. Value addition to services takes place with marketing. For an example, when a wholesaler or retailer performs his function, the product moves from the production end to consumption end. This is certainly a value addition to the service.
10. Pattern of consumption is determined other by the structure of the marketing system and by the value added to the goods or services through performance of marketing activities.
