Economically speaking, marketing is the process of obtaining what people want and need by exchange. It is a necessary complement to production because it promotes consumption, which is a major part of our economic system. Without the ability to consume, we would be left with only self-production, begging or stealing to acquire goods and services.

Economists believe that consumers are largely rational and seek products that provide the greatest utility. Marketers, on the other hand, acknowledge that consumers are often irrational — otherwise why would middle-aged men choose red corvettes? They also recognize that utility is not just about financial value, but also includes social status, ego-stroking and group affinity. These extra dimensions of utility are borrowed from psychology and sociology. This blending of disciplines confuses economists and makes them uncomfortable with marketing.

The relationship between economics and marketing is not as close as many might think. Economics is the study of scarcity, while marketing is the art of promoting and facilitating exchange. However, the economy has a direct effect on what businesses sell and to whom. This is why it’s important for marketers to understand how their business decisions are affected by the economy.

Moreover, marketers need to be aware of the economics of pricing and distribution. Building scenarios based on a blend of economics and marketing, which takes into account consumer behavior, culture and influence, is more effective than using just econometric modeling or pure marketing intuition alone.