2016-10-18

The core of marketing: Price vs. Value


The basics

Several attempts have been made to define the elusive notion of marketing. A definition has to state what something is and what it is not. Now I have tried to be further concise stating the characteristics of the concept by three key aspects only.

The transaction

The starting point has to be the transaction when the commodity and/or service – the product – is exchanged for money. The industrialised economy needs communication, distribution, and information on markets and users. Differentiating products is mandatory for adding more than pure utility value – the metavalue. A number of functions combining for differentiation, value adding and accessibility of branded products are joined under the concept of marketing.
Transactions are triggered – there and then – when the buyer finds that the value of an offer corresponds to the price asked. Consequently, value is a key notion in marketing.

Value

The exchange value in commercial transactions is defined:
The amount of any utility against which any given thing can be exchanged
– or the amount of goods, services, or money that can be accepted in exchange.
In deliberate transactions the value is always decided by the buyer and is relative and hypothetical until it is proved by the realization of the transaction.
In the case of differentiated (branded) products, the value is influenced by rational as well as subjectively experienced valuing factors such as:
·      Practical utility
·      Accessibility
·      Pleasure
·      Supplier relation
·      Social identity

Accessibility/availability

Marketing has as its overall task to ensure that the same differentiated product (ware and/or service) can be sold to the same value on widely differing places. This demands distribution of the physical offer as well as knowledge of it.

Branded products

Differentiated products – goods and/or services – demand identifying names or trademarks to connect with value, influencing associations to the producer/supplier as well as between owners/users and buyers.

SUGGESTED DEFINITION

The above offers a scope for this concise definition of marketing

Marketing comprises the efforts of the supplying chain to add value and accessibility to branded offers.


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