There is a significant difference in the meaning of the two terms Economics and Marketing Science. While the price theory in the former relates to the fluctuating behavior of markets, in the case of latter it explains the probable behavior of managers. According to Professor Rao, it is essential for the manager to know how markets react. “The field of Marketing Science thus deals with the market mechanisms and the impact of the marketing managers’ decision on the profit earning” (Dowling, 2004).
Economic science is an age old area of study and encompasses many different theories. But, core of economics till today is the elasticity of price. On the other hand, the field of Marketing Science is a recent field of economic study which is still in its early life-cycle. There have been many additions to the earlier theories in this vast discipline. For example, Srinivasan and Jagpal have contributed to the Farley’s theory of sales force compensation. “While Shugan has added to the theory of channels, Blattberg et.al have suggested to merge economic theory and marketing observations” (Hauser).
An expert in the field of Marketing Science must learn from the parent body i.e. Economics just as Renaissance physicists learnt from ancient Greeks. The author recommends the Little model to investigate the two economic-theory-based models of advertising. In the model, a range of empirical analysis is done to judge the response of advertising. A response to such a theory is then analyzed using the Vidale-Wolfe and Nerlove-Arrow advertising models. These were found to be inconsistent with the advertising phenomena. Blatteberg et.al discuss that some consumers increase their daily-inventory expecting steady prices to return. “The author further claims that with the arrival of UPC panel a well-constructed price theory may rubbish the basics of earlier economic models” (Kuchner, 2011).
References
Dowling, G. R. (2004).The Art and Science of Marketing: Marketing for Marketing Managers. Norflok: Oxford University Press.
Hauser, J. R. Pricing Theory and the Role of Marketing Science. Massachusetts Institute of Technology.
Hunt, S. H. (2002). Foundations of Marketing Theory: Toward a General Theory of Marketing. USA: M. E. Sharpe.
Kuchner, M. J. (2011). Marketing for Scientists: How to Shine in Tough Times. Island Press.
