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What Is Marketing?
Marketing is the process of promoting, selling, and distributing a product or service. It involves understanding customer needs, creating value, and building strong customer relationships to drive sales and achieve business goals. Marketing includes various strategies like advertising, branding, market research, and digital marketing to reach and engage target audiences effectively.
The American Marketing Association offers the following formal definition: Marketing is 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.
According to the Philip Kotler book
Marketing is about identifying and meeting human and social needs. One of the shortest good definitions of marketing is “meeting needs profitably.” When Google recognized that people needed to more effectively and efficiently access information on the Internet, it created a powerful search engine that organized and prioritized queries.
When IKEA noticed that people wanted good furnishings at substantially lower prices, it created knock down furniture. These two firms demonstrated marketing savvy and turned a private or social need into a profitable business opportunity.
We see marketing management, as the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
What Is The Value Of Marketing?
Finance, operations, accounting, and other business functions won’t really matter without sufficient demand for products and services so the firm can make a profit. In other words, there must be a top line for there to be a bottom line. Thus, financial success often depends on marketing ability. Marketing’s value extends to society as a whole. It has helped introduce new or enhanced products that ease or enrich people’s lives. Successful marketing builds demand for products and services, which, in turn, creates jobs. By contributing to the bottom line, successful marketing also allows firms to more fully engage in socially responsible activities
What Is Marketed?
Marketers engage in marketing 10 main types of entities, each requiring distinct strategies. Here’s a quick overview:
Goods
These are physical products like food, cars, electronics, and appliances, which are the backbone of many economies.
Services
As economies develop, services such as those provided by airlines, hotels, legal professionals, and consultants become increasingly vital.
Events
These include time-based occurrences like trade shows, concerts, and sports events. Examples are the Olympics and local fairs.
Experience
Companies create memorable experiences by combining goods and services, such as theme parks or adventure camps.
Persons:
Public figures like celebrities, athletes, and professionals use marketing to build and maintain their personal brands.
Places:
Cities, regions, and countries market themselves to attract tourists, residents, and businesses. Campaigns like “What Happens Here, Stays Here” for Las Vegas are examples.
Properties:
This involves the marketing of intangible rights, such as real estate or financial assets like stocks and bonds.
Organizations:
Nonprofits, universities, and corporations use marketing to enhance their public image and attract support.
Information:
Information, such as educational content or business intelligence, is marketed by entities like universities and data providers.
Ideas:
Behind every product or service is an idea, like safety in the case of “Friends Don’t Let Friends Drive Drunk,” or hope in cosmetics, as stated by Charles Revson of Revlon.
These categories highlight the diverse range of entities that marketers focus on, each with its own unique challenges and strategies.
Key Consumer In the Market
There are four key customer markets that businesses focus on:
Consumer Markets:
These involve companies selling goods and services directly to individuals, like juices, cosmetics, and air travel. Success in this market relies on creating a strong brand, offering high-quality products or services, ensuring availability, and using engaging marketing and communication strategies.
Business Markets:
Companies targeting other businesses face knowledgeable and professional buyers. While advertising and websites are important, the effectiveness of the sales force, competitive pricing, and a solid reputation often have a more significant impact on sales.
Global Markets:
Operating in the global market requires navigating cultural, language, legal, and political differences. Companies must decide which countries to enter, how to enter (e.g., exporting, licensing, joint ventures), how to adapt products for local markets, how to set prices, and how to communicate effectively across different cultures.
Nonprofit and Governmental Markets:
Businesses selling to nonprofit organizations and government agencies, which often have limited purchasing power, need to price their products or services carefully. Government purchases often require a bidding process, where the lowest bid that meets the requirements usually wins.
Core Marketing Concepts
To understand the marketing function, we need to understand the following core set of concepts:
Needs, Wants, and Demands
Needs are the basic human requirements such as for air, food, water, clothing, and shelter. Humans also have strong needs for recreation, education, and entertainment. These needs become wants when directed to specific objects that might satisfy the need. A U.S. consumer needs food but may want a Chicago-style “deep-dish” pizza and a craft beer. A person in Afghanistan needs food but may want rice, lamb, and carrots. Our wants are shaped by our society.
Demands are wants for specific products backed by an ability to pay. Many people want a Mercedes; only a few can buy one. Companies must measure not only how many people want their product, but also how many are willing and able to buy it. These distinctions shed light on the criticism that “marketers get people to buy things they don’t want.”
Marketers do not create needs: Needs pre-exist marketers. Marketers might promote the idea that a Mercedes satisfies a person’s need for social status. They do not, however, create the need for social status.
Some customers have needs of which they are not fully conscious or cannot articulate. What does the customer mean in asking for a “powerful” lawn mower or a “peaceful” hotel? The marketer must probe further. We can distinguish five types of needs:
1. Stated needs (The customer wants an inexpensive car.)
2. Real needs (The customer wants a car whose operating cost, not initial price, is low.)
3. Unstated needs (The customer expects good service from the dealer.)
4. Delight needs (The customer would like the dealer to include an onboard GPS system.)
5. Secret needs (The customer wants friends to see him or her as a savvy consumer.)
Target Markets, Positioning, and Segmentation
Target Markets: A target market is a specific group of potential customers that a company aims to sell its products or services to. By identifying a target market, businesses can focus their resources on reaching the consumers most likely to purchase their offerings. This increases the efficiency of marketing efforts and enhances the chances of success by addressing the specific needs and preferences of that group.
Positioning: Positioning refers to the process of establishing a unique and compelling image or identity for a product or service in the minds of the target market. This involves differentiating the product from competitors by highlighting its unique benefits or features. Effective positioning helps customers understand why they should choose one product over another, making it easier for them to make purchasing decisions.
Segmentation: Market segmentation is the practice of dividing a broader market into smaller, more specific groups based on shared characteristics like age, gender, income, interests, or buying behaviors. By segmenting the market, companies can create tailored marketing strategies that address the unique needs of each segment, leading to more personalized and effective marketing efforts.
In essence, segmentation helps businesses identify different groups within a market, targeting focuses on selecting the most promising group(s), and positioning defines how the product will be presented to the selected group(s). Together, these concepts ensure that marketing efforts are well-directed and resonate with the intended audience.
Offerings and Brands
Offerings: An offering refers to the combination of products, services, and experiences that a company provides to its customers. It’s the complete package that meets customer needs or solves their problems. Offerings can include physical goods, digital products, services, or even a mix of all three. A well-designed offering adds value for the customer and creates a compelling reason for them to choose one company over another.
Brands: A brand is the identity of a company or product as perceived by customers. It encompasses the name, logo, design, and all the associations people make with a company or product. A strong brand builds trust, loyalty, and emotional connections with customers. It differentiates a company’s offerings from competitors, making it easier for customers to recognize and choose the brand over others.
In marketing, the goal is to create offerings that fulfill customer needs and are strongly associated with a positive brand identity. When customers see a brand they trust, they are more likely to choose that brand’s offerings, knowing they can expect quality, reliability, and satisfaction.
Marketing Channels
Marketing Channels are pathways through which goods and services flow from the producer to the consumer. They play a crucial role in the overall marketing strategy and involve a series of intermediaries, such as wholesalers, distributors, retailers, and agents, who help move the product to its final destination.
Here’s a breakdown based on principles from Philip Kotler’s work:
Definition: Marketing channels, also known as distribution channels, are sets of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.
Channel Levels:
- Direct Channel: Involves no intermediaries; the company sells directly to the customer, such as through online sales or direct mail.
- Indirect Channel: Involves one or more intermediaries who help distribute the product. For example, a manufacturer might sell to a wholesaler, who then sells to retailers, who finally sell to consumers.
Functions of Marketing Channels:
- Transactional Functions: Activities such as buying, selling, and risk-taking associated with transferring ownership of goods.
- Logistical Functions: Involve the physical movement of goods, including transportation, warehousing, and inventory management.
- Facilitating Functions: Activities that assist in the process, such as financing, grading, and market research.
Types of Marketing Channels:
- Consumer Channels: Designed to move products from producer to consumer, like the path a television set might take from manufacturer to retailer to consumer.
- Business-to-Business (B2B) Channels: More direct and typically involve fewer intermediaries; for example, a software company selling directly to corporations.
Channel Strategy: Choosing the right marketing channels is critical. Companies need to consider factors like customer preferences, product characteristics, and cost efficiency. The goal is to create a channel system that aligns with the company’s overall marketing strategy and provides maximum value to customers.
Channel Conflict: This can occur when channel members disagree on roles, activities, or rewards. Conflict can be horizontal (between intermediaries at the same level) or vertical (between different levels, like a manufacturer and retailer). Effective management of channel conflict is essential to maintaining smooth operations.
In summary, marketing channels are vital for getting products to consumers efficiently and effectively, and they involve multiple organizations working together to ensure that products reach their final destinations in the most effective way possible.
Paid, Owned, and Earned Media
Paid Media: This refers to any form of media where you pay to promote your content or brand. It includes traditional advertising like TV and radio ads, as well as digital channels like Google Ads, social media ads, and display ads. Paid media is used to reach a broader audience, drive traffic, and create immediate visibility. The primary advantage is the ability to control the message and target specific audiences.
Owned Media: These are the media channels that a company controls entirely. Examples include a company’s website, blog, social media profiles, and email newsletters. Owned media is a vital part of long-term strategy as it allows businesses to build relationships with their audience, establish authority, and create consistent brand messaging. It’s where brands have the most control over content and how it’s presented.
Earned Media: This is the exposure a company earns organically, often through word-of-mouth, customer reviews, media coverage, or social media shares. It’s the result of a brand’s efforts in building a strong reputation and delivering quality products or services. Earned media is highly valuable because it’s perceived as more authentic and trustworthy by consumers, but it’s also the hardest to control and predict.
Together, these three forms of media create a balanced and effective marketing mix. Paid media helps to amplify the reach of owned and earned media, while owned media provides a foundation for brand messaging, and earned media builds credibility and trust.
Impressions and Engagement
Value and Satisfaction
Value: Value represents the overall benefit that a customer perceives they receive from a product or service compared to its cost. It is determined by the combination of tangible and intangible benefits and costs associated with the offering. The customer value triad includes:
- Quality: The overall excellence or superiority of the product or service.
- Service: The level of support and assistance provided.
- Price: The cost of the product or service.
According to the value equation, perceived value increases with higher quality and better service but decreases with higher price. Customers aim to get the best possible value for their money, balancing these three elements.
Satisfaction: Satisfaction is a measure of how well a product or service meets or exceeds a customer’s expectations. It is based on the customer’s judgment of the product’s performance relative to what they anticipated. The satisfaction levels can be categorized as:
- Disappointed: When the performance of the product or service falls short of expectations.
- Satisfied: When the performance matches expectations.
- Delighted: When the performance exceeds expectations.
In essence, marketing revolves around identifying, creating, communicating, delivering, and monitoring customer value. By understanding and managing these elements, companies can enhance customer satisfaction, build loyalty, and ultimately drive business success.
Supply Chain
Ever wondered how your favorite products travel from the factory to your doorstep? That’s all thanks to the magic of supply chain management. If you’ve never thought much about supply chains, you’re not alone! Most people take them for granted. But once you dive into the details, you’ll see how vital they are to keeping businesses—and the world—running smoothly.
Think of a supply chain as a long, interconnected path. It begins with sourcing raw materials, moves through production, and ends with delivery to the final customer. Every step involves a complex web of activities, resources, and people working together to ensure everything flows seamlessly. And trust me, it’s a lot more fascinating than it sounds.