Ceteris paribus is a Latin phrase that means “holding other things constant”. This assumption, no matter how unrealistic it may sound, is required in many scientific enquiries in order to investigate and establish a causal relationship between two variables. For example, as the law of demand says, increase in price (independent variable) results in decrease in quantity demanded (dependent variable), ceteris paribus (meaning, holding all other independent variables constant, so that we can find the price-quantity relationship). What are the other independent variables that we are holding unchanged? They include, but not limited to: prices of complementary and substitute goods, consumers’ tastes and preferences, income etc. Now the question is: what does happen in reality?
In reality, most independent variables are dynamic in the market- they change over time. This is where marketing science has come to play its role as an applied branch of economics (the mother science!). Most marketing gurus have rightly dubbed marketing as “applied microeconomics”. Thus, the challenge of marketing is obvious. This challenge can be visualized in a two-pronged model. First, since all the variables are dynamic in the market, a marketer has to understand the direction and magnitude of all market forces that are having impact on an organization’s results. Second, it is not enough to understand the interaction of forces, but it is required to intervene with management tools and techniques to manage this interaction of forces.
It turns out that, the key fight in marketing is centered around how effectively these apparently independent variables can be intervened or tempered with creative forces, so that in reality they make things happen for marketers as they wish. What do you think?