That’s silly. If anything that implies “understanding of the market” is “marketing” then “marketing” has become an all-purpose synonym for “running a business”. At that point, it has no reason to exist as a separate word. I contend that “marketing” does not in popular practice have such a broad definition.

Yes, absolutely. Marketing is part of everything. It's not a separate department or effort, it's a facet of every effort of a company. It's something that everyone, from product design to development should keep in mind.

I'm just running with the definition given to me by my marketing professor at my university's business school :)

Look at 37Signals. I contend that everything they do is marketing, even if it's not writing commercials or buying ads.