Marketing can occur any time a person or organization strives to exchange something of value with another person or organization. Thus, the essence of marketing is a transaction or exchange. In this broad sense, marketing consists of activities designed to generate and facilitate exchanges intended to satisfy human or organizational needs or wants.

Exchange is one of three ways we can satisfy our needs. If you want something you can make it yourself, acquire it by theft or some form of coercion, or you can offer something of value (perhaps your money, your services, or another good) to a person who has that desired good or service and will exchange it for what you offer. Only this last alternative is an exchange in the sense that marketing is occurring.

The following conditions must exist for a marketing exchange to take place:

Two or more people or organizations must be involved, and each must have needs or wants to be satisfied. If you are totally self-sufficient in some area, there is no need for an exchange.

The parties to the exchange must be involved voluntarily.

Each party must have something of value to contribute in the exchange, and each must believe that it will benefit from the exchange. In the case of an election, for example, the things of value are the votes of the electorate and the representation of the voters by the candidate.

The parties must communicate with each other. The communication can take many forms and may even be through a third party, but without awareness and information there can be no exchange.

These exchange conditions introduce a number of terms that deserve some elaboration. First there are the parties involved in the exchange. On one side of the exchange is the marketer. Marketers take the initiative by trying to stimulate and facilitate exchanges. They develop marketing plans and programs and implement them in hopes of creating an exchange. A college or university recruiting students, the American Cancer Society soliciting donors, and United Airlines seeking passengers are all marketers.

On the other side of the exchange is the market, which consists of people or organizations with needs to satisfy, money to spend, and the willingness to spend it. Marketing programs are directed at markets that either accept or reject the offer. Markets are made up of current and prospective customers, defined as any person or group with whom a marketer has an existing or potential exchange relationship.

Note also that an organization's markets encompass more than the customers for its primary product. For example, in addition to students who consume an education and the parents who frequently pay for all or some of it, a state university markets to legislators to secure funds, to citizens living near the university who may be affected by its activities, and to graduates who support university programs. A firm's markets include government regulatory agencies, environmentalists, and stockholders.

We most often think of something of value as money. However, barter (trading one product for another) is still fairly common among small businesses and even between countries. Of course many exchanges in the non business world, such as donating blood in exchange for a sense of helping others, do not involve cash.

Marketers use many forms of communication, ranging from billboards to personal selling, to inform and persuade their desired markets. Because there are so many communication methods available, selecting the most effective combination is an important marketing task.

In describing exchanges, we use the terms needs and wantsinterchangeably because marketing is relevant to both. Technically, needs can be viewed in a strict physiological sense (food, clothing, and shelter), with everything else defined as a want. However, from a customer's perspective the distinction is not as clear. For example, many people would consider a cellular phone or a personal computer a necessity.

Finally, the object of the exchange or what is being marketed is referred to generically as the product. It can be a good, service, idea, person, or place. All of these can be marketed, as we shall see. 

This article focuses on the activities carried out by organizations to facilitate mutually beneficial exchanges. These organizations may be profit seeking business firms, or they may have a primary objective other than profit -- a university charity, church, police department, or political party, for example. 

Both types of organizations face essentially the same marketing challenges and opportunities. eBay, the online auction firm discussed in the chapter opening case, must attract both sellers and buyers. To expand its buyer pool, eBay is paying America Online (AOL) $75 million over four years so AOL will make it easy for its 16 million subscribers to have access to the eBay site. Similarly, community leaders found they could successfully market Steubenville, Ohio, as a tourist attraction by decorating the city's downtown buildings with large murals depicting historic scenes. Consequently, we need a definition of marketing to guide executives in business and non business organizations in the management of their marketing efforts, and to direct our examination of the subject.

Therefore, a definition of marketing -- based on the concept of exchange and applicable in any organization -- is as follows: Marketing is a total system of business activities designed to plan, price, promote, and distribute want-satisfying products to target markets in order to achieve organizational objectives. This definition has two significant implications: 

Focus: The entire system of business activities should be customer oriented. Customers’ wants must be recognized and satisfied.

Duration: Marketing should start with an idea about a want satisfying product and should not end until the customers’ wants are completely satisfied, which may be some time after the exchange is made.

The marketing concept is based on three beliefs:

All planning and operations should be customer oriented. That is, every department and employee should be focused on contributing to the satisfaction of customers needs. The inspiration for the “hub and spoke” concept created by Federal Express was the customer need for reliable, overnight package delivery. Making it work requires the coordination provided by sophisticated information management, state-of-the-art material handling, and dedicated customer service personnel. What seemed like an impractical idea 30 years ago is now the basis for a $10 billion business that delivers 2.3 million packages a day in over 200 countries.

All marketing activities in an organization should be coordinated. This means that marketing efforts (product planning, pricing, distribution, and promotion) should be designed and combined in a coherent, consistent way, and that one executive should have overall authority and responsibility for the complete set of marketing activities. At Barnes & Noble stores, consumers discover a relaxing environment where they can enjoy a cup of coffee in a store that's big enough to offer a broad selection of books and small enough to provide local entertainment and children's story hours. The combination of carefully selected inventory, discount pricing, and inviting surroundings produces over $3 a year in sales for the firm.

Customer oriented, coordinated marketing is essential to achieve the organization's performance objectives. The ultimate objective for a business is typically a profitable sales volume. However, the immediate objective might be something less ambitious that will move the organization closer to its ultimate goal. For example. Cinergy. Inc., the electric utility in Cincinnati that now must compete with other power companies in a deregulated environment, wants its customers to know the company that has been faithfully supplying their energy needs for years. By paying $6 million to put its name on Cincinnati's Riverfront Stadium, the firm was able to increase the proportion of area residents who recognize its name from 36% to 95%.

Sometimes the marketing concept is simply stated as a customer orientation, as expressed in these words of the late Sam Walton, founder of Wal-Mart: “There is only one boss: the customer. As important as it is to stress a customer focus, however, it should not replace achievement of objectives as the fundamental rationale for the marketing concept. Perhaps a better definition of the marketing concept is "Serving the customer and attaining organizational objectives."