UGM June 2019 Q100
- Option : A
- Explanation : Because its purpose is to create a customer, the business enterprise has two–and only these two–basic functions: marketing and
in novation . Marketing and inno vation produce results; all the rest are “costs.” Marketing is the distinguishing, unique
function of the business. A business is set apart from all other human organizations by the fact that it markets a product or a service.
Neither church, nor army, nor school, nor state does that. Any organization that fulfills itself through marketing a product or a service
is a business. Any organization in which marketing is either absent or incidental is not a business and should never be managed as
if it were one.
The first man in the West to see marketing clearly as the unique and central function of the business enterprise, and the creation of a customer as the specific job of management, was Cyrus H. McCormick (1809-1884). The history books mention only that he invented a mechanical harvester. But he also invented the basic tools of modern marketing: market research and market analysis, the concept of market standing, pricing policies, the service salesman, parts and service supply to the customer, and installment credit. He had done all this by 1850, but not till fifty years later was he first widely imitated even in his own country.
The revolution of the American economy since 1900 has in large part been a marketing revolution. However, creative, aggressive, pioneering marketing is stil far too rare in American business. Fifty years ago the typical attitude of American busin ess toward marketing was “the sales department will sell whatever the plant produces.” Today it is increasingly, “It is our job to produce what the market needs.” However deficient in execution, the attitude has by itself changed our economy as much as any of the technical innovations of this century. Marketing is so basic that it cannot be considered a separate function (i.e., a separate skill or work) within the business, on a par with others such as manufacturing ring or personnel. Marketing requires separate work and a distinct group of activities. But it is, first, a central dimension of the entire business. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view. Concern and responsibility for marketing must, therefore, permeate all areas of the enterprise.
Among American manufacturing companies the outstanding practitioner of the marketing approach may well be IBM; and IBM is also the best example of the power of marketing. IBM does not owe its meteoric rise to technological innovation or product leadership. It was a Johnny-come-lately when it entered the computer field, without technological expertise or scientific knowledge. But while the technological leaders in the early computer days, Univac, GE, and RCA, were product-focused and technology-focused, the punch-card sales people who ran IBM asked: “Who are the customers? What is value for them? How do they buy? And, what do they need?” As a result, IBM took over the market.
