Advantages And Disadvantages Of Institutional Approach Of Marketing

Institutional Approach of marketing: The institutional approach to the study of marketing is a system whereby a detailed description and analysis are made for each segment of the marketing mechanism. That is why, this approach is very often regarded as anatomical in character. As the anatomy involves the dissecting of the parts or bodies of men and animals, the institutional approach analyses can part of the marketing. system.

It will be clear from an example. The wholesaling system is dissected into its component parts, each type of wholesale institution is described, its place in the wholesale structure is shown, its functions and costs of operation are examined and its economic position is appraised. The same procedure is followed with the retail system and other phases of marketing structure. This approach takes as its point of departure the component parts of the marketing system.

Advantages of institutional approach of marketing : This approach is very much popular in an organised economic system. Because in the organised economy its accounts are maintained on an institutional basis. The business records are properly maintained by all the business institutions. It is necessary with a view to obtaining relevant quantitative marketing information, to rely upon the reported experience of business undertakings which have been classified according to the major activity in which they are engaged. The enterprises are classified, under this system, as retailing, wholesaling and manufacturing, etc. This approach can make use of the statistical information available on each of the institutions considered. Cost, Profit and sales trends can be analysed.

Disadvantages of institutional approach of marketing: This approach is not sufficiently critical and analytical. A thorouph knowledge of the institutions is required to develop the essential principles or marketing . But it may not always be possible to have a detailed information about each marketing organizational segment. Moreover, this approach is not suitable in disorganized economy where proper maintenance of records by the institutions cannot be expected.

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