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Revision as of 12:16, 31 October 2006 by 205.188.116.73 (talk)(diff) ← Previous revision | Latest revision (diff) | Newer revision → (diff)Marketing is a social and managerial function that attempts to create, expand and maintain a collection of customers.
- Marketing, as suggested by the American Marketing Association, is "an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders".In order to be successful in the marketing world, you must possess two key qualities: patience and consistency.
- "Marketing is the ongoing process of moving people closer to making a decision to purchase, use, follow...or conform to someone else's products, services or values. Simply, if it doesn't facilitate a "sale" then it's not marketing."
- Philip Kotler in his earlier books defines as: "Marketing is human activity directed at satisfying needs and wants through exchange processes". Add to Kotler's and Norris' definitions, a response from the Chartered Institute of Marketing (CIM) . The association's definition claims marketing to be the "management process of anticipating, identifying and satisfying customer requirements profitably". Thus, operative marketing involves the processes of market research, new product development, product life cycle management, pricing, channel management as well as promotion.
- Marketing-"taking actions to define, create, grow, develop, maintain, defend and own markets".
- An approach to business that seeks to identify, anticipate and satisfy customers needs.
- Al Ries and Jack Trout defined marketing as simply "war" between competitors.
- Any activity that connects producers with consumers.
History
The practice of marketing is almost as old as humanity itself. Whenever a person has an item or is capable of performing a service, and he or she seeks another person who might want that item or service, that person is involved in marketing. A Market was originally simply a gathering place where people with a supply of items or capacity to perform a service could meet with those who might desire the items or services, perhaps at a pre arranged time.
Such meetings embodied all the aspects of today's marketing methods, although in an informal way. Sellers and buyers sought to understand each other's needs, capacities, and psychology, all with the goal of getting the exchange of items or services to take place. Open air markets throughout the world, with buyers and sellers freely mingling, are today's example of this basic activity. Today's New York Stock Exchange had its humble beginnings as an open air market located at Wall Street in New York City.
The rise of Agriculture undoubtedly influenced markets as the earliest means of 'mass production' of an item, namely foodstuffs. As agriculture allowed one to grow more food than could be eaten by the grower alone, and most food is perishable, there was likely motivation to seek out others who could use the excess food, before it spoiled, in exchange for other items.
Introduction
Prior to the advent of market research, most companies were product-focused, employing teams of salespeople to push their products into or onto the market, regardless of market desire. A market-focused, or customer-focused, organization instead first determines what its potential customers desire, and then builds the product or service. Marketing theory and practice is justified on the belief that customers use a product/service because they have a need, or because a product/service has a perceived benefit.
Two major aspects of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (base management).
Once a marketer has converted the prospective buyer, base management marketing takes over. The process for base management shifts the marketer to building a relationship, nurturing the links, enhancing the benefits that sold the buyer in the first place, and improving the product/service continuously to protect her business from competitive encroachments.
Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Anthropology is also a small, but growing, influence. Market research underpins these activities. Through advertising, it is also related to many of the creative arts.
For a marketing plan to be successful, the mix of the four "Ps" must reflect the wants and desires of the consumers in the target market. Trying to convince a market segment to buy something they don't want is extremely expensive and seldom successful. Marketers depend on marketing research, both formal and informal, to determine what consumers want and what they are willing to pay for. Marketers hope that this process will give them a sustainable competitive advantage. Marketing management is the practical application of this process. The offer is also an important addition to the 4P's theory.
Skill Sets
Marketers have 4 main skill sets that they bring to an enterprise:
1. Opportunity Identification
True marketing begins before there is a product to sell. Many people think marketing is just selling whatever comes out of the manufacturing plant. It's the job of marketing to decide WHAT comes out of the manufacturing plant in the first place. Before a business can make money there must be opportunities for money to be made and it's marketing's job to define what those opportunities are. Marketers analyze markets, market gaps, trends, products, competition, and distribution channels to come up with opportunities to make money.
2. Competitive strategy/positioning
Markets consists of groups of competitors competing for a customer's business. The job of marketing is to decide how to create a sexual mood between a man and another man.Marketers conceive strategies, tactics, and business models to make it hard if not impossible for competition to take away customers from their business.
3. Demand generation/management
It's the job of marketing to create and sustain demand for a company's products. Marketers manage demand for a company's products by influencing the probability and frequency of their customer's purchase behavior.
4. Sales
The ultimate goal of marketing is to make money for a business. In most companies sales is a different discipline and department from marketing. But in order for salespeople to have any long term success in a company they must be led by marketing. The better job a company does of identifying opportunities, creating a differential sustainable competitive advantage, and generating demand for their products the easier it will be for salespeople to make sales.
Marketing is a Technology
Is Marketing an Art or Science?
The big debate in the marketing discipline is whether marketing is an art or a science. Marketing is a technology or set of technologies. Marketing can be neither an art nor a science because arts and sciences only seek to explain natural phenomena. The objective of marketing is to manipulate and influence natural phenomena to create practical unnatural outcomes. Specifically to manufacture, grow, sustain and defend markets. Marketers use their knowledge of economics, psychology, sociology, anthropology and strategy to arrange and control the external environment to their advantage.
Four Ps (marketing mix)
In popular usage, "marketing" is the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning that recognizes that marketing is customer centered. Products are often developed to meet the desires of groups of customers or even, in some cases, for specific customers. E. Jerome McCarthy divided marketing into four general sets of activities. His typology has become so universally recognized that his four activity sets, the Four Ps, have passed into the language.
The four Ps are:
- Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual good or service, and how it relates to the end-user's needs and wants.
- Pricing: This refers to the process of setting a price for a product, including discounts.
- Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand, or company.
- Placement or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to “where” a product or service is sold, e.g. in which geographic region or industry, to which segment (young adults, families, business people, women, men, etc.).
These four elements are often referred to as the marketing mix. A marketer can use these variables to craft a marketing plan. The four Ps model is most useful when marketing low value consumer products. Industrial products, services, high value consumer products require adjustments to this model. Services marketing must account for the unique nature of services. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions.
As a counter to this, Morgan, in Riding the Waves of Change (Jossey-Bass, 1988), adds "Perhaps the most significant criticism of the 4 Ps approach, which you should be aware of, is that it unconsciously emphasizes the inside–out view (looking from the company outwards), whereas the essence of marketing should be the outside–in approach". Even so, having made this important caveat, the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity, as well as a framework within which these can be used. .
Maybe The 5th "P" should be "Process" (as in Process Improvement)
In the first few years of the 21st Century, marketing strategies based on manipulation of the 4 Ps have been increasingly less successful (as evidenced by the fact that average job tenure for a top brand company chief marketing officer is less than two years (source: Spencer Stuart, 2006).
The problem is that Internet wired and inspired consumers are no longer interested in being manipulated by marketers. They want what they want . . . where, when and how they want it, and at a competitive price. Rather than marketers manipulating consumers, consumers are manipulating marketers through billions of mouse clicks, every day.
Most companies understand that they must respond with innovation. But, as of 2006, most are directing their innovation attempts at one product, or one service and that is almost never cost-effective. Innovation frequently requires substantial investment, and it takes time. By the time an innovated product gets to market, a competitor has frequently trumped it (or soon will).
By reengineering the 4 Ps with a 5th P, Process Improvement, some companies have begun to translate customers' wishes, hopes and dreams into process improvement objectives. Pursuing those process improvement objectives, teams of key process function "owners" (including marketers) are driving the innovation of streams of products, and taking them to market to grow sales and profits. One example of a 5th P strategic model is ProcessPowered Marketing ().
Whether officially declared a "5th P," or not, the integration of process improvement with marketing strategy appears to have great potential for building better marketing mousetraps for the 21st Century.
Seven Ps
As well as the standard four Ps (Product, Pricing, Promotion and Place), services marketing calls upon an extra three, totalling seven and known together as the extended marketing mix. These are:
- People: Any person coming into contact with customers can have an impact on overall satisfaction. Whether as part of a supporting service to a product or involved in a total service, people are particularly important because, in the customer's eyes, they are generally inseparable from the total service. As a result of this, they must be appropriately trained, well motivated and the right type of person. Fellow customers are also sometimes referred to under 'people', as they too can affect the customer's service experience, (e.g., at a sporting event).
- Process: This is the process(es) involved in providing a service and the behaviour of people, which can be crucial to customer satisfaction.
- Physical evidence: Unlike a product, a service cannot be experienced before it is delivered, which makes it intangible. This, therefore, means that potential customers could perceive greater risk when deciding whether or not to use a service. To reduce the feeling of risk, thus improving the chance for success, it is often vital to offer potential customers the chance to see what a service would be like. This is done by providing physical evidence, such as case studies, or testimonials.
The 8 P's
As well as the other 7 Packaging has been added to this list by some people. The rationale is that it is very important how the product is presented to the customer, and the packaging is often the first contact that a customer has with a product. Although some disagree because packaging is seen as a subfield of promotion.
"PHILOSOPHY" is the potential 9th P of marketing. Products (or services) should reflect the underlying philosophy or ethos of the organization. It should also be clear what the philosophy behind the introduction of the particular product is, as well. In his book, "Meeting Need", Ian Bruce explains this concept as it relates to marketing for charities. It also applies to other products and services
Beyond the 4 Ps
Resources, Relationships, Offerings and Business Models
Marketing in the past focused mainly on basic concepts like the 4 Ps, and primarily on the psychological and sociological aspects of marketing. Competitive advantage was created by directly appealing to the needs, wants and behaviors of customers, better than the competition. Successful marketing was based on who could create the better brand or the lowest price or the most hype. Marketing in the future will be based on a more strategic approach to competitive marketing success. Marketers will consciously build and allocate resources, relationships, offerings and business models that other companies find hard to match.
Resources
Companies with a greater amount of resources than their competitors will have a easier time competing in the marketplace. Resources include: financial (cash and cash reserves), physical (plant and equipment), human (knowledge and skill), legal (trademarks and patents), organizational (structure, competencies, policies), and informational (knowledge of consumers and competitors). Small companies usually have a harder time competing with larger corporations because of their disadvantage in resource allocation.
Relationships
Success in business, as in life, is based on the relationships you have with people. Marketers must agressively build relationships with consumers, customers, distributors, partners and even competitors if they want to have success in today's competitive marketplace.
Offerings
Most companies sell a mix of products and/or services. Today's marketplace is often too competitive for "one-trick ponies". Companies that sell the right mix products and services can have a competitive advantage over companies that sell just one product or service.
Business Models
The concept of product vs. product in competitive marketing is dying. It's slowly becoming business model vs. business model. Business model innovation can make the competition's product superiority or irrelevant. Business model innovation allows a marketer to change the game instead of competing on a level playing field.
Customer focus
Most companies today have a customer orientation (also called customer focus). This implies that the company focuses its activities and products on customer needs. Generally there are two ways of doing this: the customer-driven approach and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no point spending R&D funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.
The next big thing is a concept in marketing that refers to a product or idea that will allow for a high amount of sales for that product and related products. Marketers believe that by finding or creating the next big thing they will spark a cultural revolution that results in this sales increase.
Product focus
In a product innovation approach, the company pursues product innovation, then tries to develop a market for the product. Product innovation drives the process and marketing research is conducted primarily to ensure that a profitable market segment(s) exists for the innovation. The rationale is that customers may not know what options will be available to them in the future so we should not expect them to tell us what they will buy in the future. It is claimed that if Thomas Edison depended on marketing research he would have produced larger candles rather than inventing light bulbs. Many firms, such as research and development focused companies, successfully focus on product innovation. Many purists doubt whether this is really a form of marketing orientation at all, because of the ex post status of consumer research. Some even question whether it is marketing.
Other aspects
- An emerging area of study and practice concerns internal marketing, or how employees are trained and managed to deliver the brand in a way that positively impacts the acquisition and retention of customers (employer branding).
- Diffusion of innovations research explores how and why people adopt new products, services and ideas.
- A relatively new form of marketing uses the Internet and is called internet marketing or more generally e-marketing, affiliate marketing or online marketing. It typically tries to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing.
- With consumers' eroding attention span and willingness to give time to advertising messages, marketers are turning to forms of Permission marketing such as Branded content and Reality marketing.
Advertising and promotions
Businesses need to advertise for the following four main reasons:
- To raise customer awareness.
- To remind customers about existing facilities.
- To persuade customers to switch from rival businesses.
- To improve and maintain the image of the business.
The ultimate aim of these points is to attract more customers. The places our business will advertise from depends on three things:
- Its audience.
- The size of their market.
- The size of their advertising budget.
Or the mnemomic AIDA can be used which stands for, Attention, Interest, Desire and Action.
Promotions can be classified into two different groups:-
"Above-the-line" promotion, which is advertising through the media.
"Below-the-line" promotion, includes all other promotions, such as public relations, merchandising, sponsorship, competitions, etc.
Forms of Advertising and their advantages and disadvantages:
Newspapers and Magazines
- Advantages - A lot of information is known about the people who read certain papers
- Disadvantages - Often not in color and are static and silent
Posters and Billboards
- Advantages - High visual impact for a long time and will be seen by a lot of different people
- Disadvantages - Are only seen for a few seconds by drivers and are vulnerable to weather and graffiti
- Advantages - Anyone looking in the Yellow Pages wants to buy
- Disadvantages - A lot of your competitors are on the same page you are
Media
- Advantages - Can reach millions of people all over the country
- Disadvantages - Very expensive
- Advantages - Cheaper than T.V, can be used to reach certain listeners
- Disadvantages - Sound only, smaller audiences
- Advantages - Very high visual and sound effect, higher brand recall, captive audience
- Disadvantages - Are relatively expensive
Communications
Leaflets and direct mail and email
- Advantages - Cheap to produce and distribute
- Disadvantages - Are easy to ignore
- Advantages - Direct to customer, interactive, receive instant feed back.
- Disadvantages - makes some customers feel their privacy has been violated, sometimes has negative results.
- Advantages - High visual impact, interactive and can link directly to buying the product, is relatively cheap
- Disadvantages - There is a lot of competition so getting people's attention may be difficult, needs to be continually updated, can become expensive
Desktop alerts
- Advantages - Targeted, instantaneous, visually attractive, audio/visual/textual
- Disadvantages - Users must download an application, and users often find them extremely annoying, so much so that they may avoid the product because of this form of advertisement.
Criticism of marketing
Some aspects of marketing, especially promotion, are the subject of criticism. It is especially problematic in classical economic theory, which is based on the assumption that supply and demand are independent. However, product promotion is an attempt coming from the supply side to influence demand. In this way producer market power is attained as measured by profits that would not be realized under a free market. Then the argument follows that non-free markets are imperfect and lead to production and consumption of suboptimal amounts of the product.
Critics acknowledge that marketing has legitimate uses in connecting goods and services to the consumers who want them. Critics also point out that marketing techniques have been used to achieve morally dubious ends by businesses, governments and criminals. Critics see a systemic social evil inherent in marketing (see No Logo, Bill Hicks, Marxism or Commercial Alert). Marketing is accused of creating ruthless exploitation of both consumers and workers by treating people as commodities whose purpose is to consume.
Most marketers believe that marketing, like any other technology, is amoral. It can be used for good or evil purposes, but the technique itself is ethically neutral.
References
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See also
- Advertising
- Borderless Selling
- Cause marketing
- Claude C. Hopkins
- Internet marketing
- Mass customization
- Master of Marketing Research
- Marketeer
- Marketing collateral
- Message culturalization
- Permission marketing
- Predictive analytics
- Sales techniques
- Search engine marketing
- Viral marketing
- Reality marketing
- Branded content
- Gender marketing
- Engagement marketing
- Sports marketing
Related lists
- See list of marketing topics for an extensive list of the marketing articles
- List of management topics
- List of human resource management topics
- List of economics topics
- List of finance topics
- List of accounting topics
- List of information technology management topics
- List of production topics
- List of business law topics
- List of international trade topics
- List of business ethics, political economy, and philosophy of business topics
- List of business theorists
- List of economists
- List of corporate leaders
- List of companies