What are the core concepts and tools of marketing?
Answer: Marketing is the lifeblood that runs through the veins of all successful organizations. Without marketing, no matter how good the product or service, the organization will fail. It’s marketing that defines the distinctive features and benefits of the product or service, it’s marketing that sets the price, it’s marketing that communicates those features and benefits to the appropriate audience, and it’s marketing that delivers the goods to the consumer.
It should not surprise you, given the range of things marketers do, that there are many different definitions of marketing. For example:
- Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.
- Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchange that satisfy individual and organizational goals.
Core marketing concepts:
Definitions of marketing are helpful, but they are only starting places. We can flesh them out by looking at core marketing concepts.
Target markets and segmentation:
You work for a company that sells high-end stereos. It makes no sense to market to the entire country. Why waste your money, time, and energy on people who have no interest in your products, or who lack the resources to purchase them even if they wanted to? What segment of the population has the most interest in your product and the ability to pay for it?
One of your most important jobs as a marketer is to find likely customers, to identify the target market for your products. For each target market, your company will develop a market offering. The offering is then positioned in the minds of the potential customers as providing some particular benefit the target buyer’s value. How might you go about each step of this process? What do you need to know in order to successfully complete the chain of events that leads from targeting to sale?
Needs, wants, and demands:
You are hungry. You need to eat. But you don’t want to eat just anything. You want to eat pizza. Moreover, you have ten dollars in your pocket. So you have the means to translate your want into a demand.
You’re a marketer for a pizza company. You know that people need to eat. Some of them want pizza. Some of the people who want pizza have the ability to pay for it. These are the people who create demand for your product.
Value and satisfaction:
Value is the ratio between what the customer gets and what he or she gives. Satisfaction is the feeling of pleasure or displeasure that customers feel when they compare the experience of a product with their expectations. What can you do to increase the value of a customer offering? Is value objective or subjective?
Exchange and transactions:
Exchange is a process in which:
- There are at least two parties present.
- Each party has something that might be of value to the other party.
- Each party is capable of communication and delivery.
- Each party is free to accept or reject the exchange offer.
- Each party believes it is appropriate or desirable to deal with the other party.
A transaction occurs when the parties agree to exchange values.
Relationships and networks
Take a closer look at the elements of an exchange listed above. What is being described is a relationship between buyer and seller. The stronger that relationship is, the more likely that values will be exchanged. This is the idea at the heart of relationship marketing. If your customers trust you, feel desired, feel that you are looking out for their needs, they are going to want to continue their relationship with you. They are going to be less price-sensitive, more loyal, and what is more, they are going to market your product for you by telling others of their satisfaction with your product. How would you go about building such a relationship with customers?
How do you turn customers into advocates?
Of course, companies are rarely self-sufficient. They rely on a network of supporting stakeholders with which they have built profitable business relationships. It is the strength of the network as a whole that determines how much value a company can deliver to its customers.
You work for a company that sells designer suits. You want to beat the competition. But what does that mean? Does it mean that you want to outperform the brand competition, the companies that offer suits of similar quality and price as yours? Or does it mean you want to outperform the industry competition, that is all companies that make suits, regardless of quality or price? Maybe you see yourself in competition with all companies that make any form of clothing, from business suits to bathing suits. But aren’t you really in competition with all companies that compete for the same consumer dollars, the generic competition? After all, if consumers see themselves as having to choose between a designer suit and a diamond ring, you are as much in competition with Tiffany as you are with Armani.