BACKGROUND .
In the recent times, the independent country's increasing efforts to consolidate her political sovereinity and to achieve economic freedom is a salient feature in the present day world of development. There have been variety of ways of developing countries that try towards tremendous struggle to build independent national economics to ensure their programme development that stems from the peculiarities of their historic development, the differences in the socio-economic structures and their unique position in the system of international division of labour. Among other things; such progress oriented countries proceed on three sided possible directions:
1. Towards restructuring and abolishing the different foreign capitalist exploitation of the available natural and man-power resources.
2. Towards gradual balancing the very lop-sided economy inherited from colonial administration that had been the main cause of particularly their dependence on the world capltahst market and building up of modern balanced national economy and
3. Towards closing the economic gap between the young states and the world's giant powers and raising the well-being of the teeming millions. This "Third World" like "Third Class" railway compartment is to be abolished to "Second World" and finally to "First World". In view of the importance of economic development and its close relationship petween marketing, let me examine the. concepts of economicdevelopment, its meaning, industrialisation - its meaning and importance, causes of under-development alternatives for economic development other than industrialisation and what marketing can play or role to take these developing countries out of this unwanted rut of stagnation and ditch of depression,
WHAT IS ECONOMIC DEVELOPMENT?
Economic development implies an increase in the per-capita real income of an industrial is an economy over a period of say one year. Prof. Mier and Baldwin say "economic development" is the process whereby the real per-capita income of a country increases over a long period of time. According to Buchanan and Ellis "developing the real income potentialities of the under-developed areas by using investment to effect those changes and augment those productive resources which promise to raise real income per person". To borrow the words of Prof. Kindleberger C.P. "in economic growth, the undimensional measure is national income per-capita".
Answer to the twin evils of poverty and unemployment, lies in the rapid economic development of the nation. In an underdeveloped country, economic development gets begged down in the mire of poverty. A country does not develop because it is poor and it is poor because it does not develop. This vicious circle that prevents underdeveloped economles from reaching the take of stage, this vicious circle of underdevelopment is presented as under:
With no purchasing power in the hands of vast majority even to satisfy their elementary heeds, it would be callous to expect savings and investment from these people. Employment opportunities for these teeming millions, could be the only answer of poverty and unemployment and the only way to much desired economic development.
LOW SAVINGS - LOW INVESTMENTS LOW REAL INCOME – CAPITAL DEFFICENCY
Economic development means the overall upliftment of economic activities of the nation so that not only the total national income increases but per-capita income goes up steadily year by year. There is no sense in earning more at one end and being shared by more than desired number which is sure to dip down in per-capita income. Thus, economic development means and includes ever increasing efforts to improve the performance of different sectors of the economy, namely, agriculture, forestry, industry service sectors, which all go to have cumulative effects of optimum utilisation of human and material resources over a period of time. It is the efficient and effective use of all the "MS" – MATERIALS MANPOWER - MACHINERY - METHODS - MONEY - MARKET and the like for the generationl income to be shared for improved standard of living.
HOW TO GET INTO THE PROCESS OF ECONOMIC DEVELOPMENT?
Just as we have "vicious circle of poverty" or "underdevelopment" - it is possible to break it and replace it by the "cycle of growth process". The following figure presents this idea of growth process for replacement of unwanted "vicious circle of underdevelopment".
How economic development is. to be brought about in a tradition bound underdeveloped country like ours? We have two alternatives before us. We could emulate the example of capitalist country like America. or a Communist country like Russia. We, Indians, have altogether different setting. We are not prepared to sacrifice human values and individual freedom at the alter of the economic development, however laudable the objective may be; nor can we afford the luxury of free enterprise in the face of acute poverty. Our objective, ideologically speaking, has been the achievement of socialistic pattern of society which involves economic and social upliftment based on human and social values and the creation of both social and political democracy. Economics development is sought to be through planning without prejudice to the democratic freedom for, we are firmly wedded to the democratic way of life; above all, we believe in liberty; equality and fraternity. We have a question as to depend purely on agriculture or industrialisation or aid or trade. Let us examine each in brief.
I. AGRICULTURE AND ECONOMIC DEVELOPMENT
Prof. Stanley rightly remarked "those who jump to the conclusion that industrialisation is the answer to all their problems are partly wrong and partly right". They are light in the general assumption that manufacturing industry usually. pays better returns than the extraction of raw-materials, in the belief that a diversified and more self-reliant economy is likely to have a greater stability than a single crop economy, and in the conviction that industrial growth can add to the level of natural income and contribution to a solution of unemployment problem and its effects. They are wrong if they assume that almost any kin~ of industrialisation will assist towards their goals; if they think that the benefits of industrialisation flow more or less automatically from investment in industrial projects and if they believe that a small county can afford to go in for achieving high level of speedy industrialisation. General development will occasionally grow out of one spectacular non-farming activity for example the exploitation of great oil discoveries. Such an activity pays both for agricultural and industrial growth, An underdeveloped country, lacking the legacy which an unusual resources represents, is more likely to be in a position where it must build what it wants namely, industry largely on the strength of what it already has i.e., agriculture. This is yet another way of saying-what is obvious from a study of economic history. Virtually in every industrial country, it was agriculture that laid the solid foundation. It was so inevitably in almost every case, agriculture has been the paying activity from which industrialisation could be financed as the major
consuming section of the economy which could provide a market for the new industrial products. That is Why, -Dr. K.S. Gill rightly said "for underdeveloped countries now earning their way largely by the sale of products of agriculture, mining, fishing, forestry, more is usually to be gained and gained more quickly - by emphasizing at first the further development of these embarking too quickly on largescale industrialisation schemes. Frequyntly, much more can be added to the national income by the same amount of capital if it is invested in agricultural equipment or improved seeds instead of an elaborate industrial enterprise. The agricultural development will not be as spectacular as an industrial show place, but it may represent the soundest first priority alternative." Same view was held in 1950 by the International Monetary Fund as "it should not be assumed that an excessive concentration of development in the industrial field is in the interest of the underdeveloped countries. Industrial development requires very large investment for each worker; the immediate cost in resources is highly relative to the number of people benefitted directly. The great majority of the people of these regions draw their incomes from agriculture. The greatest improvement in their well-being would not preclude greater industrialisation in these countries, but policy should be directed towards balanced development to increase production in agriculture as well as industry". Speaking frankly, there is no conflict between industrial and agricultural development which would make it desirable to choose one ate the other. Development of these sectors is closely intertwined and each must bank heavily on other. That is why Prof. Stanley said succinctly that improvement in the productivity of agriculture is one of the most solid means of promoting industrialisation. In fact, unless agriculture do not modernise substantially, the industrial expression is most underdeveloped countries is likely to be cut-short by lack of markets, for the great majority of the population will not have the necessary, purchasing power. Conversely, agricultural improvements can not go very for unless there is industrial development to take up the released man-power and to provide a solid technical base for the equipment and services essential to modernis'e agriculture. Thus, we find that the two sectors - "agriculture" and "industry'" are complementary and interdependent but they are not the alternatives, especially in underdeveloped countries where agricultural yield is low, there is no conflict between agricultural and industrial development. We can not afford to forget the statement made by Prof. Simon Kuznets as "agricultural revolution - a marked rise in productivity per worker in agriculture is a pre-condition of the industrial revolution in any part of the world". Let me close the discussion with another such empirical finding as per United Nations which says "though industrialisation offers many advantages, it has to be supported by a strong agricultural case. Over rapid and unbalanced growth of industrial sector, may give rise to phenomena which in the long-run are likely to retard economic development - the balance of payment position, inflation, excessive urbanisation, the disruption of accepted social patterns".
India, as an under-developed country, suffers from acute poverty; in fact poverty is another name for lack of goods - agricultural and non-agricultural which go to satisfy human wants. It is the land that is the ultimate source of all these goods; its produces both food for direct consumption by human-beings and raw-materials which will lead to manufacture of non-agricultural goods, again, for indirect or ultimate use by men and women. To put in other words, in addition to providing food for the entire population, agriculture, which is another man for utilization or exploitation of land, has to provide continuous and increasing quantity of raw-materials for feeding the wheels of consumer industries such as textiles, oil pressing, rice-mills, jute, sugar, vanaspati and tobacco manufacturers and the like. Similarly, forests and animals which land nourishes make available divergent kinds and types of materials like timber, gum, resin, hides, rubber, lac and the like which form the base of innumerable industries. Further, by way of mines and quaries, land yields stones, pebbles, coal, oil, iron, alumina, mica, and other minerals that are so essential for establishment of capital goods and industries. In the final analysis, it is agriculture which plays a primary role - the role of a precursor. While man can not do without industrial goods, he can not do without food. Similarly, while agriculture can, in the ultimate analysis, do without a heavy or capital goods industry, industry can not do without agriculture at all. If we want our country to develop, there are only two prescriptions:
1. To increase agricultural productivity per hectare and simultaneous reduction of the number of workers per hectare.
2. A transformation of our national psychology in the sense that Hindus, in particular give up' the belief that this world is not a mere illusion and, as industrial and also as a nation, we develop an urge to improve our economic condition and to end our people lean~ to work better and harder.
11..INDUSTRIALlSATON AND ECONOMIC DEVELOPMENT Industry is the' key to the rapid economic development because, industrialisation involves radical transformation of society in all aspects - economic - social-:- political- cultural as pointed out by Mr. R.B. Sut Cliffe. Economic development is something much wider and deeper than economics let alone econometrics. Its roots lie outside the economic sphere, in education, organisation and management discipline and beyond that in political independence and a national conscious of self-reliance Success can not be obtained by some form of magic produced by scientists, technicians or economic planners. It can come only through the process of growth involving education, organisation and discipline of the who population. Anything less than this must end in failure-as rightly pointed out by E.F. Schumacher whole believed in "SMALL IS BEAUTIFUL". The tempo and the content of economic activity must follow and exploit the natural endowments of the nation. Accelerated economic development through industrialisation warrants huge investments in basic and' key industries. By this very nature, these industries are to be organised on a pretty large-scale. Though industries of this kind provide the much needed infrastructure the growth of merely a large-scale sector is bound to create miseries to the millions in the form of unemployment, shortage of consumer goods and concentration of wealth in the hands as very aptly put by Prof. N.B. Newalkar" A situation of too much non-essential goods and too little of essential goods is the
product of inequalities in income and wealth, encouraging conspicuous consumption and wasteful expenditure and, hence, unproductive use of scarce resources - as pinpointed by Mr. Satya Sundaram.
Faced- with these vital problems of ever increasing unemployment, shortage of capital, dearth of technical known-how of foreign exchange, any under-developed country which is growth oriented has to welcome with open arms small-scale and cottage industries because they create large-scale employment opportunities, provide decentralisation and dispersal of industries, achieve diffusion of ownership to prevent concentration of economic power, promote entrepreneurship', develop agro-based and ancillary industries improve the skills of artisans and quality of their products, reduce the role of subsidies and step-up the production of essential articles and also develop potential for exports. This is what is realised by India now after forty five years of economic planning. In effect, small is not only beautiful but efficient and effective in fighting the germs of underdevelopment.
Immediately after political independence, Indian government took over the last of' economic liberation. Jawaharlal Nehru believed in quick returns and hence was to go in for planning from top to bottom to which was quite contrary to Gandhian way of thinking who believed in planning from bottom to top and evolutionary yet sure development. Nehru wanted to emulate America and Russia and went against the well wishes and real economic thinkers. He did not listen to Gandhi and his philosophy of development. That is why he decided to go hammer and tongs both for foreign capital and foreign technology as also to divert all possible domestic resources to heavy industry even at the cost of food water, clothing, housing, education and health. Later Nehru himself admitted his folly and said "I begin to think move and more of Gandhi's approach. Even to day if country has to be saved, the Nehruvian strategy will have to be replaced by Gandhian approach. We will have to return to Gandhi for redemption This thoughts on economic development were not only relevant in 1940's, but even beyond 2000. India made a criminal mistake in
1947 in entirely abandoning the Gandhian path and in wrongly adopting Westernised, Centralised, tickle down from the top to the bottom model that persists even to say. Gandhian thought does not preculate large-scale or marching enterprise from which modern society can not altogether be divorsed. The best solution, is the blend of the two models that would maximise production and organisation on a widely decentralised basis and utilise local endowments and talents. In India progress has to be measured not in the quantity of steel or number of automobiles and television sets that we are able to manufacture but in the quantity and quality of basic necessities of life like food, clothing, housing .health,education and the like that would be available to the "last main" as Mr. M.K. Gandhi used say. Rejection of Gandhian approach was nowhere so total as in the field of restructuring over economy after Independence. The steady deepening economic crisis visible even in the mind fifties, failed to open our eyes to the blunder we were cominitting. All the warming signals were-ignored. Rejection of Gandhian approach was accompanied by our persistence with wholly alter models of economic development. This helped only to compound our miseries as very vehemently pointed out by Dr. Charan Singh. Gandhian blue-print for the framework of our economic policy is revolutionary in the sense that it seeks to keep the people and their capacity to life by their own efforts in a democratic manner as the food point d every measure, every move. In the ultimate analysis what mattered to Gandhi was neither money nor machines but men. He was not against machines and mass production. He believed not "mass production' by gigantic machines but "production by the masses".To quote his philosophy of economic development "If I can convert the country to my point of view, the social order of the future will be based predominantly on CHARAKHA and all its implies. It.will include everything that promotes the well-being of the villagers I do visualise electricity, ship-building, iron-works, machine making and the like existing side by side with village handicrafts. But the order of dependence will be reversed. Hitherto the industrialisation has been so planned as to destroy the villages and village crafts. In the state- of the future, it will sub serve the villages and their crafts. I do not share the socialist belief that centralization of the necessaries, of life will conduce to the common welfare, that is, when the centralised industries are planned and owned by the state".
For economic development planning is a must. Planning from top to down, which socialism necessarily involves, undermines freedom because it requires people 'to obey orders rather than pursue their own judgement. Further, it is inefficient because it makes impossible the use of detailed knowledge stored among millions of individuals. Whereas planning from bottom up, which the economy of Gandhi's conception implied enlists the interests of each a promoting the well-being of all, and thus sub serves true democracy. His ideology is one that translates the dream into reality the fundamental maxim of democracy as a rule of the people, by the people, for the people.
Ill. TRADE OF AID AND ECONOMIC DEVELOP ENT Industry holds the key position to the growth and prosperity of a nation opening its resources and resource-.based products and services to the entire globe. However, there are some academicians, economists who argue on the issue whether development should be based an foreign "aid" or "trade". We are already well-aware that those countries that have gone in for aid than trade including India, the debt servicing" charges have outgrown to such a dizzy zenith point that they are to sell themselves. The natural law "daughter grows faster than mother" that applies. Many underdeveloped countries have entered this trap of "point of no return". They are caught in the cob-wels of taking new loans to pay odd loans. Instead, there is a group of thinkers which says "trade" is better than "end". It is. "trade" that makes the country more patriotic, encourages import substitution and supports export-promotion measures, leading to liberalised and globalised socia-economic order. This is what we are facing now in 1980's and particularly from 1991 to sate. Today the days have come where we believe in "buy made in India" not "made in Japan, America, Germany, Italy, Persee it is because, Indian firms have come out of caccoon of restricted and competitive world. They are moving from the "ISI" markets to "ISO" markets. More and more Indian firms are going global as their products are meeting the quality standards prescribed by I.S.O-Called-ISO-9,000 series-ranging-from ISO 9,000-to ISO 9008. It means that Indian goods are equally competitive in terms of international standards or norms. In the light of these changing" scenario, let us study how marketing and marketing management can play a vital role in accelerating the tempo of economic development. The following points speak of its importance. That is why, world-class management consultant Prof. Peter Drucker said "marketing might itself go far towards changing the entire tone of the existing system without any change in the methods of production, distribution of population or income." Very vehemently emphasized by Mr. W.I Emlen "as production may be the door to economic growth of underdeveloped countries but marketing is the key that turns the lock". To borrow the words of Prof. Leon, V. Hirsch, he says "distribution is "terra incognita" in the underdeveloped two-third of the world." That is why, Pro£. Leon. V. Hirsch says very wisely in the underdeveloped countries as a group, marketing has traditionally been the forgotten are of economic thinking". Unfortunately marketing, otherwise known as distribution is not assigned a meaningful role that it can play; instead, emphasis is on production and techniques of production to improve productive efficiency to increase production which is not market oriented. To use the words of Prof. E.J. McCarthy, "the economic planners are 'production' rather than 'marketing' oriented. Prof. W.W. Rostow goes to the extent of saying "distribution tends to be ignored or regarded somehow, as an inferior kind of economic activity and thus, it is difficult to get development economists and policy-makers to accord problems of efficiency in distribution the same attention they give automatically to problems of production, investment and finance". Many think strongly and wrongly that marketing is passive. However, it is a great activiser - a booster. It plays a constructive role in the process of economic development where the functions of marketing influence and govern the determinants of economic growth namely,
SAVINGS + INVESTMENTS + PRODUCTION -+ CONSUMPTION-puts the
engine of growth in to gear Prof. Benjamin Higgins is of the opion. "The progress of underdeveloped countries depends not only on their attainments in agriculture and manufacturing but also and the development of an efficient marketing system." World renowned management, Peter Drucker, to quite again "marketing occupies a critical role in respect to the development of growth area. Indeed marketing is the most important multiplier of such development; its development, above all others, makes possible economic integration and the fullest utilisation of whatever assets and productive capacity an economy already possesses; it is mobilises latent economic energy". In this context nobody can afford to forget the historic case of Sears Roebuck Company of England as to how it was accountable for faster economic development of Mexico. Thus, the process of economic development is one of increasing or enlarging the existing of a size of market for goods and services. In this sense, it is narrowness of market, a specific feature of a developing economy is an impediment to the faster economic growth. It should be noted that mal production becomes possible and lucrative only at a certain level of output for which mass markets and maching marketing efforts are unavoidable. It is enlarged market for a product which is instrumental, reducing the cost, avoiding wastes, inefficiencies and encourage infrastructural facilities such, communication, transport and so on. Marketing can not necessarily create purchasing power. However, by converting the latent demand in to effective demand and by channelising all the purchasing power in the desired direction, it sets a high level of economic activity. Succinctly, marketing has a key role in bringing up faster economic and social changes that are conducive to its growth and prosperity; it contributes to higher standards of living improvement of quality of life. development of enterpreneurship, buttressing the distributive system more productive and purposeful. That is why Prof. Kindleberger c.P. is very right when he says "even when the growth powers is led by efficiency in production, however, the requirements of distribution are inescapable".
Of course, there are certain reasons as to why marketing has been neglected as the engine of growth. The low profile of marketing is mainly due to certain reasons which are discussed with references to India in particular and other under-developed countries in general. These fundamental reasons for such forlorn forgetting are:
1. Excessive dependence on agriculture. Take any underdeveloped country which is not agriculturally predominant. This is agriculture sector that has not only disguised unemployment and what is worst' the lowest productivity. This low productivity reduces production and income on one hand and disguised unemployment with over production, resulting in lowers per-capita income, finally reflections in low standard of living. The population leads a life standard called as subsistence level as applicable to vast majority. Even for agricultural product, the farmers do not get their due share for their sweat. It is not to underestimate agriculture because, industrial sector depends on very great extent an agriculture. Failure of agriculture will mean failure of industry and economic development.
2. These countries are the pockets of sellers markets. In developing economies, one thing is s, that demand is always more than the supply for good many products and services. Naturally, ready demand pushes the limited production within no time, It means that there is little or no scope for advertising a: publicity or promotional activities. Any economy, with "perennial paucity" is but a sellers market that makes the business houses to concentrate on production side more rather than the distribution. For the "Whatever is produced is sold" and there is no "closing stock".
3. These economics are in infancy stage of industrialisation. Being agrarian countries, the proc of industrialisation is slowed down. It is mainly due to lack of funds, technology though human and material resources are available in plenty. These are virgin lands with maximum potentialities of growth. However industrialisation is kept at low-key due to vicious circle of poverty. Further, -whatever, entrepreneurial skills are there, they are highly traditional and suitable for small-scale and cottage type of activities. There is on professionalisation of management in all its spheres and branches. They work on 'old' marketing concept than the 'new' one.
4. Marketing is considered not only a waste but one affecting cultural values. In the culture: underdeveloped economies, marketing is considered as a sheer wasteful activity and anyone engaged marketing is considered as a parasite on society-as pointed out by Mr. Westfall R. and Mr. H.W. Boyd in their article "Marketing in India" published in Journal of Marketing in October 1960. That is way the status of .merchants .is very low as pointed out by Mr. Hirsch Lean. V. Not only that, the ID philosophy of life has mude. the truding community. or 'vaanies to be held accountable for marketing Indian more hedonistic than spiritual and religious. Right from the early days, Indians believed in "simple living and high thinking ". Now the young generation is an exception to this.
5. Non-monetised sectors of Indian economy. Like any other underdeveloped economy, in India led, larger segments of markets are non-monetised and effective marketing. Markets can not develop without the use of money through production can take place without money. This was the observation made by researchers namely Mr. Westfall R. and Mr. H.W. Boyd Jr., In advanced nations the things are diametrically opposite where there is total monetisation and now through the instruments of credit like credit cards and people are having hedonistic attitude towards life with their cultural background and presellings because of aggressive advertising.
6. Existence of cultural rigidities impeding the distribution system. Any economy, developed and developing is a market oriented economy. Marketing stands for distribution being one of the wheels of the economic system the other wheel being production. The structural patterns and arrangements for the distribution of goods and services are being very badly affected by cultural values prevailing in these countries. It has been pointed out by Mr. Catecora P .R. and Hess J .M. that the cultural and traditional rigidities found in the distribution structure of many countries has caused the neglect of the distribution Till recently, a Brahmin refused to work as a salesman in shoe selling companies like Bata, Carona, Swastik, Flex, Wood lands, Action and Sona. Today, hair-dressing, floriculture and flower arrangements, tailoring garmentcleaning, darning and so on are takes up by everyone as the people have realized that wad is religion and religion is not the work; they have understood the realities of
materialist and hedonistic fife style of today. .
7. Lack of market-intelligence. Mr. Meyers R. has brought out a fact that marketing is intelligible and difficult to quantity as compared to production sphere where accurate quantitative information is important for planning purpose. It is so happening because, in these countries consumer is not the "King" but the "slave" in the Kingdom of marketing. The marketing philosophy or outlets is "production" then "consumer" oriented. To mach the product and service specifications to the consumer specifications there is dire need for adequate, up-to-date and authentic information for decision-making 'process.
WHAT MARKETING AND MARKETING MANAGEMENT CAN DO IN UPROOTING THE DANGERS OF UNDER-DEVELOPMENT?
It would be mere appropriate to say "what marketing and marketing management can not do in freeing these developing countries from the clutches of vicious circle and make them to take-off and join the "first word" from "third world" categorisation ?" The role of marketing and marketing management is self explanatory. Its real need can be well explained by the following points in terms of its contribution. It would be the greatest folly and fallacy to neglect marketing in the process of rapid economic development because, it is the "engine of growth"; it is the "heart" of the economy which should always throb. "If we want economic development in freedom and responsibility, .we will have to build it on the foundation of marketing". It has been a catalytic agent, it is a necessary concomitant of economic development. Simply because the marketing profile is low, one can not sit with folded hands and mute heads because growth is a must. Marketing has an active and constructive part to play in any economy may be totally face or centrally planned or mixed as each is surely a marketing oriented one. Now the contributions of marketing as a sub-system of economy has been well reorganised. World renowned development economist Mr. Benjamin Higgins pointed out that the progress of under-development countries depends not only on their attainments in agriculture and manufacturing but also on the development of an efficient marketing system. The "Modern Guru" of Management, Peter Orucker believes firmly that marketing occupies a critical role in respect of the development of under-development 'growth areas'; indeed, marketing is most important multiplier of such. development; development, above all others, makes possible economic integration and fullest utilisation of whatever assets and productive capacity of an economy already possessing; it mobilises the latent economic energy. He goes to the extent of saying ardently that every organisation has only two major function to perform and they are "marketing" and "innovating". The contributions are multifarious and varied of which most of us are unaware: These are: .
1. It removes the causes of under-development. It has been established fact that economic system .and its sub-system marketing are in constant interaction with one another to the greatest extent; the human body grinds to half if heart stops throbbing. There is concurrence and deeper relevance between low level marketing and underdeveloped. Very often, question arises is of which one is the 'cause-' and 'effect', To put in other words, egg first or the 'chick first', Over this, issue, economic scientists are divided; some opine that in underdeveloped countries, marketing activity remains back because of the underdeveloped state of economy; others assets that these countries remain under-developed because, they neglect marketing. Strictly speaking, these two phenomena are the adjuncts of great vicious circle and therefore, a dent or jerk in either of them will be enough to break this circle, and alter the very shape and patterns of the other. Therefore, if marketing system is kept at high key-is surets break the' very causes of under-development. It is because: (a) Marketing puts the machinery of production and consitmption in 'ear: The major wheels of the economy are production and consumption. They are connected by the belt of marketing to make the machinery to more. If marketing is not the direct creator of purchasing power it has the capacity of converting 'needs' into 'wants' and 'potential demand' into 'effective demand'. It is here that the spark-plug of marketing gives a start and once the effective demand. is generated, it leal to value adding to resources by converting into products and production into sales and back. It would be wrong to say that ,marketing merely promotes and sustains production. In effect, it makes the production activities to happen, converts production into consumption and thereby uplifting the sunky production to errupt into additional production. It is but natural that production leads to sales and sales to profits at these profits. are ploughed back into the chain of production and this cycle keeps on kicking and alive The rate and amount at which the resources of the economy are turned in this cycle with purely depend on marketing activity and rather its growth and efficiency (b) Converts the economy consumption orientd : In real sense of the term, another name for economic development is the enlargement of markets in the nation. Marketing takes the entire nation to Zenith levels of consumption by inducing individuals to consume more and more. Such a creative conversion process takes the nation out of the vicious circle ct low-level consumption and production, and therefore, low-level economic development. though Some argue that technology brings faster economic growth, one can not ignore this 'spark-plug' :-namely marketing that acts as a catalyst because, a 'big-push' and bigger growth of markets that finally percolated in the form of economic growth indicated through the para-meters of increased income-spendingmore production and consumption and so on. Marketing is a booster dose in the treatment of this cancer of underdevelopment.
2. It improves productivity of the economy. Productivity means three things - economy – efficiency and effectiveness. There is productivity where one comes across improvement in economy, efficiency and effectiveness. There rate of economic growth is reflected in improvement in production as there is close link between productivity and economic growth. A net addition to total national product and accelerating the economic growth results perse if the same factors of production are employed more efficiently economically arid effectively. Productivity drive is unavoidable in raising the production per unit of input thereby increasing national income. Marketing has its hands in this as follows: (a) Marketing is profit-oriented: Marketing can guide and direct any economic activity to higher levels of productivity and therefore, profitability by strengthening the very value adding process. By very nature, marketing is profit oriented and can
help to a very great extent in adding value to the production resources while resources getting converted into useful products and services. In other words, it lends its helping hand to improve capital output ratio by pin-pointing the deployment of productive resources strictly founded on the percussion and ripples in the markets. In other words, marketing reduces if not, avoids wastes inefficiencies and, ineffectiveness for which nobody is prepared for any priee. (b) It creates utilities: In economic jargon" marketing is the sum-total of those activities to do with the creation of utilities. It creates - place, time, possession and perception utilities. 'The concept of "perception" utility is unique to marketing. It does not mean that it creates form utility; it does-but indirectly. The major weapon of marketing namely, advertising- creates from utility when it brings to the notice of consumers new-models of products place utility when goods are moved to the places most wanted, line utility by making available products at most opportune time and possession utility when they move from the godowns of producers to the door-step of consumers. Perception utility is created when it makes the consumers perceive a product or service.thus, to day, it is nota question by bringing a mere car but Maruti-1000 or Standard 2000; not a mere Shampoo but Clinic shampoo and so as. (c) It mobilises the resources: Resource mobilisation especially financial is a pre-requisite of starting the process of economic growth. Unless people save and invest, the economic activities can not be productive. However, this job of resource mobilisation is not that easy because people are to be induced to save more by convincing them that savings are possible by consuming less. Generally people are not willing to save, they might be widely scattered though willing and their savings might be meagre to catch the imagination of resource mobiliser. It should be noted that so many drops of water form a mighty ocean. It is the marketing mechanism that does it by identifying and motivating people to some and collecting these savings in the early stages of development from every nook and corner of the country particularly from rural and semi-urban population. It is the traders who do this by combining trading with financing. In due course, it takes a specialised activity and intetmediaries segregate trading and
financing. That is financiers term into bankers. This organised activity takes full advantage of advertising the quickens the pace of savings and investments.
3. It channelises the economic resources in the areas most wanted. The resoures at the disposal of a developing economy are limited yet have alternative uses. Therefore, there is dire need for the judicious use of scarce resources in consonance with consumer demand dimensions. one can not afford the criminal waste of unproductive use of there resources. This deadly wastage can be curbed by marketing as follows: (a) By conducting proper market studies : In underdeveloped countries, lack of proper and timely market studies can lead to misdirection of investment decisions. Not only that in India, but in other underdeveloped countries too, quite a sizeable number of industrial projects were conceived and carried out without scientific market studies and realistic demand forecasting. Depending an such trial and error basis, some projects succeeded while vast majority failed and failed utterly. We have living 'examples in India such as foreign collaborated cars, two-wheelers, tempos, failed to catchup eyen with latest technology as they failed successfully to anticipate the escalation of costs of production and the other half of the storey namely, effective demand. It is marketing that can fill in the gaps through marketing research studies. Scientific research studies form the basis for canalisation of economic resources in the appropriate and priority sectors and direction. The firms produced only those goods ~d services needed and wanted by the community, with due weight age to the divergent dimension of the effective demand. It makes economic system consumer oriented. (b) It widens the h01izons of economic activities: The economy receives a big boosting or booster - dose through advertising and sales promotion measures. It has been the experience of rich and developing countries that if you spend rupee one, it generates a sales of rupees sixteen thus giving net surplus of rupees fifteen. This multiplier effect that sets economic machinery in high gear generating more income, more spending, more employment and again more income. This cycle widens the scope of economic activities because, advertising creates new wants, and therefore, more income to meet these demands.
4. It guarantees better deal for consumers. Consumers are benefitted by marketing in numerous ways. As consumer becomes the pivot of the economy, the developmental activities hum and spin around this "King". The benefits brought about are: (a) Greater consumer satisfaction: A competitive marketing makes available only those goods which are needed by them in plenty, variety of better quality and at reasonal prices. In each line, of activity, entry of more and more home and foreign companies has made things very cheap, of better quality and in adequate quantity which are readily available at time and places wanted. (b) It assures better service: So far service aspect was neglected. However, now more and more firms are speaking and succeeding in terms of before and 'after' sale-services. With the privatisation and globalisation, we have after sale service centres in majority of cosmopolies and now they are coming to district head-quarters and in same areas as close as a city or even a town. This has further widened the marketing and, hence production with constant refinement in quality, cost, and ready availability. Now nobody hesitates to buy a foreign SNOY set of TV or-SANSUI - sound system - as we have service centres in a town with one million population. (c) It-coverts sellers 'market into buyers‟: When marketing and its tentacles percolate to all the sectors of the economy, maximum benefits occur to-consumers. That is, the entire society stands benefitted by it as producers, suppliers, creditors, government or non-government organisations as well as all the consumers. There will be technological up-gradation and a more to higher levels of capacity resultilig in economies. The savings in costs, increase and profits to the manufacturer and middlemen and satisfaction to consumers. It happens once the consumer is the focal point of economic system.
5. It creates better managerial cadre for tomorrow. As we often say, management is management of people. To manage the people, we need super-people. These are entrepreneurs and managers. In underdeveioped countries, there is retorted growth not only because of scarcity of material resources but of entrepreneurs and managers. It is because, many, technology machinery, methods, "materials can be arranged easily. What is pressing need to nimble the dormant economy is that of dynamic entrepreneurship and managerial skills and acumen at various levels and sectors of business namely industry and commerce. It is worth noting here that economic development can not just "happen" but we want those people who can make it happen. It is these people whom we can call as managers who are dare-devils to venture up on the new projects, who break new-ice and who are willing to accept failure with sportive spirit and smile; who are capable of making decisions caught within the peculiar situation and constraints. It is marketing that proposes the spadework where daring enterprises and line-wire managers are shaped and pruned in the crucible of ever changing situations of uncertainties and risks. Here, the manager learns to shoot the "flying-game". It is so because, marketing exposes him to business problems, consumer needs moods, aspirations and pockets by training them in entrepreneurial areas and functions by creating an atmosphere .of competition and innovations.
6. It makes economic planning more purposive and relevant. Planning is the function of prediction, It is a matter of looking before leaping. The management of an economy- both internal and external-is depending on planning. Economic planning of various sectors is based on balancing, integrating and timing of inputs to get desired output interms of results. When economic planning is undertaken on the rocky foundations of marketing forces, it would be more purposive, meaningful and relevant responsible for percolating the benefits to the down-trodden. If peoples' needs are known and converted into wants, due weight age is given to the peoples' priorities, and the resources are geared and augmented to the fuller deyelopment - each sector both internal and external. The growth, expansion and prosperity will be in consonance with. peoples aspirations when commonest of the common man is benefitted. Marketing brings home growth with justice without the tint of prejudice to social justice on maximum social advantage that are of mere relevance to India and Indians which is wedded to the ideologies of socialistic pattern of society or democratic socialism. Marketing broadens integrates and strengthens the distribution system which is a must for maintaining and refining high levels of production and economic growth and for delivering the goods in terms of social responsibilities.
7. It widens the range of production possibilities and choice of scales of economies. The major hurdle encountered by developing economies is related with the choice of the ways in which they exploit the scales of economies. For them, the choice is very narrow with too many constraints. The rule "beggers can not be choosers" that applies. It is marketing that comes to rescue to broaden this horizon of choice by enlarging the market demand in general and in specific geographical territories in particular. There are some lines' where large.-scale operations pay more while there are others where small-scale operation. This happens within the country as well as outside the country for some goods. For example, textiles, consumer construction items, durables where both scales pay within the nation. While. there are some lines where globalisation based on international demand patterns one can think of large-scale production to guarantee adequacy, quality timelines and cheaper pricing of products-may be manufactured or the farm products. In a nutshell, the poverty- another name for under-development can be reduced, if not wiped off totally, by breaking of vicious circle of poverty and a new cycle of economic-growth is to be set in gear that starts with income generation-savings and investment., The root-cause of under"development are identified and thrashed out by marketing to bring home, more employment, more income, more savings and more investments to make economy to payoff for the take off which is a must for every under-developed country.
