Define Marketing and Explain its Process?
There was an old saying that marketing is just “telling and selling”. But now it is to make selling the unnecessary.
In short, marketing is a social and managerial process through which organizations identify what they need by creating and exchanging value with others.
“Marketing is a process by which companies identify customer needs, satisfy the needs of customers by creating a valuable solution to their problems, engage their customers by creating value for them, and build a lifetime customer relationship.”
1) GENERAL DEFINITIONS:
"The right product, at the right time, at the right place is called Marketing.”
OR
"Marketing is a total system of business activities that are designed to product, price, place, promotion and to achieve organizational goals.”
2) According to PHILLIP KOTLER:
“The process by which companies create value for customers and build strong customer relationships to value from customers In return is called Marketing.”
What is Marketing Process?
Some people consider selling and advertising as marketing but selling and advertising are only tips of the marketing Iceberg. The marketing process begins before the creation of a product or service. As we discussed above marketing is a “process”. The marketing process contains five basic steps i.e.
In the first four steps, companies work to understand the consumer needs, wants, and demands then create customer value by designing products or services that satisfy the customer’s needs and build strong customer relationships. In the final stage, they procure the rewards of creating superior customer value in the form of sales, profits, and long-term customer relationships.
(1)- Understanding the Marketplace and Customer Needs
The marketing process begins with understanding the marketplace in which they work. Marketers must need to comprehend the needs, wants, and demands of the people. Here we need to discuss five core concepts regarding customer and marketplace.
- Needs, Wants, and Demands
- Market Offerings
- Value and Satisfaction
- Exchange and Relationship
- Markets
(i) Customer Needs, Wants, and Demands:-
- Human needs are the state of self-deprivation and include
- Physical needs (food, warmth, clothing, and safety)
- Social Needs (belonging and affection)
- Individual Needs (knowledge, self-expression)
Wants are those human needs that are shaped by culture and individual personality. These vary from person to person and place to place. For instance, an American needs food but wants fries and a soft drink. An Indian needs rice, yam, and taro.
When wants are backed by purchasing power, they become demands. When people want something and have enough resources, they demand a particular product or service that adds up to the most value and satisfaction.
People at all levels of the company stay close to the customers to learn about customer needs, wants, and demands. Marketers conduct customer research, analyze customer data, and observe customers when they interact online or offline while shopping.
(ii) Marketing Offerings:-
The combination of products, services, information, or experience offered in a market to satisfy customer needs is called market offerings.
Market Offerings are not limited to the physical products but also include services i.e. benefits or activities offered for sale that are immaterial in nature e.g. banking, home repair service, car repair service, hotel, airline, etc.
Market Offerings also include various other entities such as persons, places, organizations, information, and ideas.
For Example in 2011, San Diego ran a “Happiness is calling” campaign to invite visitors to enjoy the city’s weather, bays, and beaches.
Ad Council and the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) created the “Stop the text, Stop the Wrecks” campaign to promote the idea of discouraging text/calling while driving.
“Sometimes sellers make a mistake by paying more attention to their product rather than benefits and experiences associated with that product. That is known as Marketing Myopia.”
Actually, they rely only on the existing wants of the customers and ignore the customer demands. They forget that the product is only a tool to solve a problem of the customer. For example, a quarter-inch drill bits manufacturer may think that customer needs drill bits. But what the customer really needs is a quarter-inch hole.
Smart Marketers look beyond the qualities of the product and services they sell. They create brand experiences for customers by organizing several services and products. E.g. Mattel’s American Girl creates experiences between the dolls and the girls who adore them.
(iii) Customer Value and Satisfaction:-
Customer value and satisfaction are the key building blocks for improving and coping with customer relationships. The marketer has to be more careful to set the right level of expectation.
How does a customer choose among a broad array of products that satisfy his want when they face a broad array of products in the market?
They form expectations about the value and satisfaction of a specific product that various market offerings will offer. When they are satisfied, they buy again and again and tell others about their experience. Disappointed customers move to other competitors and criticize the product.
Therefore, marketers must be very careful to set the right level of satisfaction. If the satisfaction level is too high, buyers will be disappointed. If they set the level of satisfaction too low, they may satisfy those who buy them but fail to attract more buyers.
(iv) Exchanges and Relationships:-
Marketer tries to bring about a positive response to market offerings. The response may be more than buying a product or service. A political candidate wants votes, a club wants membership, an orchestra wants an audience, and a social media activist wants subscribers or followers.
Exchange is the act of obtaining a desired object from someone by offering something in return (product, service, idea, information, etc.). Marketing occurs when people decide to satisfy needs and wants through exchange and relationships.
(v) Markets:-
The concept of Exchange and relationships leads to the concept of Market. A market is a set of all actual and potential buyers of a product. Marketers must search for, engage customers, identify their needs, design good market offerings, set prices, promote their products, and store and deliver to customers.
Consumer research, product development, communication, distribution, pricing, and service are essential marketing activities.
The market may be local or it may be an international market. Today, marketers must also deal effectively with customer-managed relationships. They are not asking only “How can we influence our customers?” but also “How can our customer influence us?” and “How can our customers influence each other?”
(2)- Designing a Customer-Driven Strategy:
After understanding the marketplace and customer needs, a marketer is better able to design a marketing strategy. The ultimate goal of marketing is to build strong customer relationships. For designing customer driven-marketing strategy a marketer should follow two important steps;
(i) Selecting Customers to Serve (Segmentation):-
A company cannot serve all customers in every way. By trying to serve all customers, it may fail to satisfy them. Instead, it should select only those customers that it can serve well and profitably.
“Marketers divide the market into segments according to income levels or purchasing power, age, taste, demands. This is called Segmentation.”
They do so to serve well to those customers.
Therefore, Marketing Management is Customer Management and Demand Management.
(ii) Choosing a Value Proposition:-
The company must also decide how it will serve the targeted customers and how it differentiate and position itself in the marketplace? A value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. These value propositions differentiate a brand from others.
EXAMPLE: BMW promises "The Ultimate Driving Machine:
Marketing Management Orientation
Marketing management wants to design strategies that will engage the target customers and build a profitable relationship with them. There are five strategies under which organizations plan and carry out their marketing tactics;
a) Production Concept:
Under this concept, companies focus on their production and distribution efficiency. They carry out mass production of goods that are highly affordable to consumers.
For Example PC manufacturers Lenovo and home appliances maker Haier dominate the Chinese markets that are highly price-sensitive and competitive due to low labor costs, high production efficiency, and distribution efficiency.
b) Product Concept:
In this concept, companies emphasize products that offer high quality, enhanced performance, and innovative features. Therefore, they work continuously on product improvement.
For Example Smart Phone Manufacturers Apple and Samsung work under the product concept to offer high-quality products worldwide.
c) Selling Concept:
The idea is that the consumer will not buy enough of the firm’s products unless the firm carries out selling and promotion efforts on a large scale. Firms arrange seminars or debates to make high sales or contracts.
For Example Insurance Policy, Blood Donations, etc.
d) Marketing Concept:
The marketing concept is a philosophy in which companies produce specific products depending upon the consumers’ needs and wants. They provide desired products to target markets that fulfill only targeted customers. Simply put,
The right product for your customers
For Example Mercedes, Ford, Rolls Royce.
e) Societal Marketing Concept:
It holds the marketing strategy in which both the customer and society’s well-being is highly considered. Marketers are now thinking about the shared value which means creating value for society as well as creating economic value.
(iii) Preparing an Integrated Marketing Plan and Program:-
Marketing programs transform the marketing strategy into action. It consists of a marketing mix i.e. marketing tools that a firm uses to implement its marketing strategy. The marketing mix sometimes is called the 4P's of marketing and they are
- Product (Which product do we offer to the market?
- Price (How much do we charge for this product?
- Place (Where and when do we offer our product for customers to buy?)
- Promotion (Communicate and persuade consumers about benefits/merits of product)
(3) Managing Customer Relationships and Capturing Customer Value
The first three steps in the marketing process lead up the fourth aid most important step is building customer relationships. A company maintains the relationship with its customer through customer-relationship-management.
Customer Relationship Management
The overall process of building and maintaining profitable customer relationships by delivering superior value and satisfaction is called customer relationship management.
A company can build strong customer relationships by:-
· Delivering superior customer value and satisfaction using customer relationship levels and tools such as rewarding customers (discounts, special offers) who buy frequently.
· Relating with more carefully selected customers.
· Relating more deeply and interactively.
EXAMPLE: - TONY HSIEH, CEO of the ZAPPOS receives and replies to 1000 tweets per day to relate more deeply and interactively.
(4) Capturing Value from Customer:-
The first four steps in marketing are included in creating customer relationships by delivering superior value to the customer. The final step involves capturing value in return in the form of current and future sales, market share, and profits.
To make a sure long-run return for the firm, a company may take the following steps:
(i) Creating Customer Loyalty and Retention:-
If the customers are well satisfied by the product and services of the company then they will be more loyal and would talk favorably about the company and its products to other people.
EXAMPLE: - STEW LEONARD who run a four-store supermarket in NEW YORK has made rules to make customers more loyal:
RULE#1: Customer is always right
RULE#2: If the customer is ever wrong, reread rule #1.
(ii) Growing Share of Customers:-
The companies can offer more variety of products to current customers or they may sell products to current customers to grow the share of customer
(5)- Build Customer Equity:
The total combined customer lifetime values of all of the companies' current and potential customers are called customer equity. The ultimate aim of customer relationship management is to produce high customer equity.
Build the Right Relationship with the Right Customers:
A company should establish a tie fight relationship with the right customer. Surprisingly some loyal customers can be unprofitable and some disloyal customers can be profitable for a company.
Conclusion
Marketing is managing profitable customer relationships. The marketing process starts by understanding the customer needs and ends by capturing value from them In return.
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