MARKETING COSTS

Whilst the ultimate objective of every business firm is to sell its products, the volume and profitability of its sales depend on the balance between supply and demand. Clearly sales cannot exceed production on the one hand nor demand on the other, and of these two factors demand must be the most important since, under normal conditions, production is planned with the object of meeting the existing demand. The function of the marketing activity is to influence the demand in a direction favourable to the producer. Marketing costs will depend on what action is taken with regard to prices, quality and selling effort. These three are the business firm's parameters of action. From the beginning of the industrialization of sales in the early part of the present century until the 1930s, price was the predominant parameter of action. Then, selling effort started growing in importance, and in the consumer market it has dominated until recent years. Right now, however, we seem to be facing a new trend with product development seeking to bring quality into the foreground among the parameters of action.