Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; Marketers can direct their products to other businesses or directly to consumers.
The term marketing, which is commonly known as attracting customers, incorporates knowledge gained by studying themanagement of exchange relationships and is the business process of identifying, anticipating, and satisfying customers'
needs and wants.
Definition
Marketing is currently defined by the American Marketing Association as "the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at
large". However, the definition of marketing has evolved over the years. The AMA reviews this definition and its definition
for "marketing research" every three years. The development of the definition may be seen by comparing the 2008 definition
with the AMA's 1935 version: "Marketing is the performance of business activities that direct the flow of goods, and
services from producers to consumers". The newer definition highlights the increased prominence of other stakeholders in
the new conception of marketing.
Recent definitions of marketing place more emphasis on the consumer relationship, as opposed to a pure exchange process.
For instance, prolific marketing author and educator, Philip Kotler has evolved his definition of marketing. In 1980, he
defined marketing as "satisfying needs and wants through an exchange process", and in 2018 defined it as "the process by
which companies engage customers, build strong customer relationships, and create customer value in order to capture value
from customers in return". A related definition, from the sales process engineering perspective, defines marketing as "a set of
processes that are interconnected and interdependent with other functions of a business aimed at achieving customer interest
and satisfaction".
Besides, customers some definitions of marketing highlight marketing's ability to produce value to shareholders of the firm
as well. In this context, marketing can be defined as "the management process that seeks to maximize returns to shareholders
by developing relationships with valued customers and creating a competitive advantage". For instance, the Chartered
Institute of Marketing defines marketing from a customer-centric perspective, focusing on "the management process
responsible for identifying, anticipating and satisfying customer requirements profitably".
In the past, marketing practice tended to be seen as a creative industry, which included advertising, distribution, and selling,
and even today many parts of the marketing process involve the use of the creative arts. However, because marketing makes
extensive use of social sciences, psychology, sociology, mathematics, economics, anthropology, and neuroscience, the
profession is now widely recognized as a science. Marketing science has developed a concrete process that can be followed
to create a marketing plan.
Concept
The "marketing concept" proposes that to complete its organizational objectives, an organization should anticipate the needs
and wants of potential consumers and satisfy them more effectively than its competitors. This concept originated from Adam
Smith's book The Wealth of Nations would not become widely used until nearly 200 years later. Marketing and
Marketing Concepts are directly related.
Given the centrality of customer needs, and wants in marketing, a rich understanding of these concepts is essential:
Marketing research, conducted for the purpose of new product development or product improvement, is often concerned
with identifying the consumer's unmet needs. Customer needs are central to market segmentation which is concerned with
dividing markets into distinct groups of buyers on the basis of "distinct needs, characteristics, or behaviors who might
require separate products or marketing mixes." Needs-based segmentation "places the customers' desires at the forefront of
how a company designs and markets products or services." Although needs-based segmentation is difficult to do in practice,
it has been proved to be one of the most effective ways to segment a market.
B2B and B2C Marketing
The two major segments of marketing are business-to-business marketing and business-to-consumer marketing.
C2B marketing
Consumer-to-business marketing or C2B marketing is a business model where the end consumers create products and
services which are consumed by businesses and organizations. It is diametrically opposed to the popular concept of B2C or
Business- to- Consumer where the companies make goods and services available to the end consumers.
C2C marketing
Customer to a customer marketing or C2C marketing represents a market environment where one customer purchases goods
from another customer using a third-party business or platform to facilitate the transaction. C2C companies are a new type of
model that has emerged with e-commerce technology and the sharing economy.
Differences in B2B and B2C marketing
The different goals of B2B and B2C marketing lead to differences in the B2B and B2C markets. The main differences in
these markets are demand, purchasing volume, number of customers, customer concentration, distribution, buying nature,
buying influences, negotiations, reciprocity, leasing, and promotional methods. or "a corporate state of mind" or as an
"organization culture" Although scholars continue to debate the precise nature of specific concepts that inform marketing
practice, the most commonly cited orientations are as follows:
Product concept: mainly concerned with the quality of its product. It has largely been supplanted by the marketing
orientation, except for haute couture and arts marketing.
Production concept: specializes in producing as much as possible of a given product or service in order to achieve economies
of scale or economies of scope. It dominated marketing practice from the 1860s to the 1930s, yet can still be found in some
companies or industries. Specifically, Kotler and Armstrong note that the production philosophy is "one of the oldest
philosophies that guides sellers... is still useful in some situations."
Selling concept: focuses on the selling/promotion of the firm's existing products, rather than developing new products to
satisfy unmet needs or wants primarily through promotion and direct sales techniques, largely for "unsought goods" in
industrial companies. 2011 meta-analyses found that the factors with the greatest impact on the sales performance area
salesperson's sales-related knowledge, degree of adaptiveness, role clarity, cognitive aptitude, motivation, and interest in a
sales role).
Marketing concept: This is the most common concept used in contemporary marketing, and is a customer-centric approach
based on products that suit new consumer tastes. These firms engage in extensive market research, use R&D, and then utilize
promotion techniques. The marketing orientation includes:
Customer orientation: A firm in the market economy can survive by producing goods that people are willing and able to buy.
Consequently, ascertaining consumer demand is vital for a firm's future viability and even existence as a going concern.
Organizational orientation: The marketing department is of prime importance within the functional level of an organization.
Information from the marketing department is used to guide the actions of a company's other departments. A marketing
department could ascertain that consumers desired a new type of product or a new usage for an existing product. With this in
mind, the marketing department would inform the R&D department to create a prototype of a product/service based on
consumers' new desires. The production department would then start to manufacture the product. The finance department
may oppose required capital expenditures since it could undermine a healthy cash flow for the organization.
Societal marketing concept: Social responsibility that goes beyond satisfying customers and providing superior value
embraces societal stakeholders such as employees, customers, and local communities. Companies that adopt this perspective
typically practice triple bottom line reporting and publish financial, social, and environmental impact reports. Sustainable
marketing or green marketing is an extension of societal marketing.
The Marketing Mix
A marketing mix is a foundational tool used to guide decision-making in marketing. The marketing mix represents the basic
tools that marketers can use to bring their products or services to the market. They are the foundation of managerial
marketing and the marketing plan typically devotes a section to the marketing mix.
The 4Ps
The traditional marketing mix refers to four broad levels of marketing decision, namely: product, price, promotion, and
place.
Outline
Product
Criticisms
One of the limitations of the 4Ps approach is its emphasis on an inside-out view. An inside-out approach is the traditional
planning approach where the organization identifies its desired goals and objectives, which are often based on what has
always been done. Marketing's task then becomes one of "selling" the organization's products and messages to the "outside"
or external stakeholders. In contrast, an outside-in approach first seeks to understand the needs and wants of the consumer.
From a model-building perspective, the 4 Ps has attracted a number of criticisms. Well-designed models should exhibit
clearly defined categories that are mutually exclusive, with no overlap. Yet, the 4 Ps model has extensive overlapping
problems. Several authors stress the hybrid nature of the fourth P, mentioning the presence of two important dimensions,
"communication" and "promotion". Certain marketing activities, such as personal selling, may be classified as either
promotion or as part of the place element. Some pricing tactics, such as promotional pricing, can be classified as price
variables or promotional variables and, therefore, also exhibit some overlap.
Other important criticisms include that the marketing mix lacks a strategic framework and is, therefore, unfit to be a planning
an instrument, particularly when uncontrollable, external elements are an important aspect of the marketing environment.
Modifications and extensions
To overcome the deficiencies of the 4P model, some authors have suggested extensions or modifications to the original
model. Extensions of the four P's are often included in cases such as services marketing where unique characteristics warrant
additional consideration factors. Other extensions have been found necessary for retail marketing, industrial marketing, and
internet marketing
include "people", "process", and "physical evidence" and are often applied in the case of services marketing Other extensions
have been found necessary in retail marketing, industrial marketing, and internet marketing.
Physical- the environment customers are in when they are marketed to
People- service personnel and other customers with whom customers interact. These people form part of the overall
service experience.
Process- the way in which orders are handled, customers are satisfied and the service is delivered
Physical Evidence- the tangible examples of marketing that the customer has encountered before buying the advertised
product
Productivity- the ability to provide consumers with a quality products using as few resources as possible
The 4Cs
In response to environmental and technological changes in marketing, as well as criticisms towards the 4Ps approach, the
4Cs has emerged as a modern marketing mix model.
Outline
Consumer
The consumer refers to the person or group that will acquire the product. This aspect of the model focuses on fulfilling the
wants or needs of the consumer.
Environment
The term "marketing environment" relates to all of the factors that affect a firm's marketing decision-making/planning. A
firm's marketing environment consists of three main areas, which are:
The macro-environment, over which a firm holds little control, consists of a variety of external factors that manifest on a
large scale. These include economic, social, political, and technological factors. A common method of assessing a firm's
macro-environment is via a PESTLE analysis. Within a PESTLE analysis, a firm would analyze national political issues,
culture and climate, key macroeconomic conditions, health and indicators, social trends/attitudes, and the nature of
technology's impact on its society and the business processes within the society. A firm's internal environment consists
Marketing researchers use statistical methods to interpret their findings and convert data into information.
The stages of research include:
Define the problem
Plan research
Research
Interpret data
Implement findings
Segmentation
Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-markets
or segments, each of which tends to be homogeneous in all significant aspects. The process is conducted for two main
purposes: better allocation of a firm's finite resources and to better serve the more diversified tastes of contemporary
consumers. A firm only possesses a certain amount of resources. Thus, it must make choices in servicing specific groups of
consumers. Moreover, with more diversity in the tastes of modern consumers, firms are noting the benefit of servicing a
multiplicity of new markets.
Market segmentation can be defined in terms of the STP acronym, meaning Segment, Target, and Position.
Segmentation involves the initial splitting up of consumers into persons of like needs/wants/tastes. Commonly used criteria
include:
Geographic
Psychographic
Demographic
Gender
Income
Life-Cycle
Lifestyle
Behavioral
Once a segment has been identified to target, a firm must ascertain whether the segment is beneficial for them to service. The
The DAMP acronym is used as criteria to gauge the viability of a target market. The elements of DAMP are:
Discernable – how a segment can be differentiated from other segments.
Accessible – how a segment can be accessed via Marketing Communications produced by a firm
Measurable – can the segment be quantified and its size determined?
Profitable – can a sufficient return on investment be attained from a segment's servicing?
The next step in the targeting process is the level of differentiation involved in a segment serving. Three modes of
differentiation exist, which are commonly applied by firms. These are:
Undifferentiated – where a company produces a like product for all of a market segment
Differentiated – in which a firm produced slight modifications of a product within a segment
Niche – in which an organization forges a product to satisfy a specialized target market
Positioning concerns how to position a product in the minds of consumers and inform what attributes differentiate it from the
competitor's products. A firm often performs this by producing a perceptual map, which denotes similar products produced
in the same industry according to how consumers perceive their price and quality. From a product's placing on the map, a
firm would tailor its marketing communications to meld with the product's perception among consumers and its position
among competitors' offerings.
Promotional Mix
The promotional mix outlines how a company will market its product. It consists of five tools: personal selling, sales
promotion, public relations, advertising, and social media
Personal selling involves a presentation given by a salesperson to an individual or a group of potential customers. It enables
two-way communication and relationship building, and is most commonly seen in business-to-business marketing but can
also be found in business-to-consumer marketing. or via an advertising agency or media buying service, to publicize its
product, service, or message. Common examples of advertising media include:
Social media is used to facilitate two-way communication between companies and their customers. Outlets such as
Facebook, Twitter, Tumblr, Pinterest, Snapchat, and YouTube allow brands to start a conversation with regular and
prospective customers. Viral marketing can be greatly facilitated by social media and if successful, allows key marketing
messages and content in reaching a large number of target audiences within a short time frame. These platforms can also
house advertising and public relations content.
The Marketing Plan
The area of marketing planning involves forging a plan for a firm's marketing activities. A marketing plan can also pertain to
a specific product, as well as to an organization's overall marketing strategy. An organization's marketing planning process is
derived from its overall business strategy. Thus, when top management is devising the firm's strategic direction/mission, the
intended marketing activities are incorporated into this plan.
Outline of The Marketing Plan
Within the overall strategic marketing plan, the stages of the process are listed as thus:
Executive Summary
Current marketing situation
Threats and opportunities analysis
Objectives and issues
Marketing Strategy
Action programs
Budgets
Control
Levels of marketing objectives within an organization
As stated previously, the senior management of a firm would formulate a general business strategy for a firm. However, this
general business strategy would be interpreted and implemented in different contexts throughout the firm.
At the corporate level, marketing objectives are typically broad-based in nature and pertain to the general vision of the firm
in the short, medium, or long term. As an example, if one pictures a group of companies, top management may state that
sales for the group should increase by 25% over a ten-year period.
A strategic business unit is a subsidiary within a firm, which participates within a given market/industry. The SBU would
embrace the corporate strategy, and attune it to its own particular industry. For instance, an SBU may partake in the sports
goods industry. It thus would ascertain how it would attain additional sales of sports goods, in order to satisfy the overall
business strategy.
The functional level relates to departments within the SBUs, such as marketing, finance, HR, production, etc. The functional
level would adopt the SBU's strategy and determine how to accomplish the SBU's own objectives in its market. To use the
example of the sports goods industry again, the marketing department would draw up marketing plans, strategies, and
communications to help the SBU achieve its marketing aims.
Product life cycle
A product life cycle is a tool used by marketing managers to gauge the progress of a product, especially relating to sales or
the revenue accrued over time. The PLC is based on a few key assumptions, including:
A given product would possess introduction, growth, maturity, and decline stage
No product lasts perpetually on the market
A firm must employ differing strategies, according to where a product is on the PLC
In the introduction stage, a product is launched onto the market. To stimulate the growth of sales/revenue, the use of advertising
maybe high, in order to heighten awareness of the product in question.
During the growth stage, the product's sales/revenue is increasing, which may stimulate more marketing communications to
sustain sales. More entrants enter into the market, to reap the apparent high profits that the industry is producing.
When the product hits maturity, it starts to level off, and an increasing number of entrants to a market produce price falls for
the product. Firms may use sales promotions to raise sales.
During the decline, demand for a good begins to taper off, and the firm may opt to discontinue the manufacture of the product.
This is so, if revenue for the product comes from efficiency savings in production, over actual sales of a good/service.
However, if a product services a niche market, or is complementary to another product, it may continue the manufacture of
the product, despite a low level of sales/revenue being accrued.
See also
Types of marketing
Marketing orientations or philosophies
References
Bibliography
Bartels, Robert, The History of Marketing Thought, Columbus, Ohio, Grid, 1988
Church, Roy, and Godley, Andrew, The Emergence of Modern Marketing, London, Frank Cass, 2003
Hollander, Stanley C., Rassuli, Kathleen M.; Jones, D.G. Brian; Dix and Farlow, L., "Periodization in Marketing History,"
Journal of Macromarketing, Vol 25, no.1, 2005, pp. 32–41.
Tedlow, Richard S., and Jones, Geoffrey G., The Rise and Fall of Mass Marketing, Routledge, 2014
Weitz, Barton A. and Robin Wensley. Handbook of Marketing, 2002
External links
Bibliography:
Wikipedia
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