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Marketing is the process of planning and executing conception, pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals." American Marketing Association. See also pricing, distribution, and promotion.
In the past, many 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. Marketing theory and practice rely on the understanding that customers use a product or service because they have a need, or because of perceived value.
Two major aspects of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (base management).
Acquisition marketing is a four-step process (see AIDA) that begins with analyzing and defining a qualified universe of potential users or buyers (called a target market). After this first phase in the marketing process, a true marketing effort succeeds in capturing the attention of the intended buyers within the targeted universe. Third, systematic effort must be put into getting the prospects to accept the concepts or propositions being offered via the marketing effort. Finally, with all three of the previous steps achieved, the marketer must convert prospective buyers into an actual buyers by getting them to take the desired action (purchase, rent, call, download, subscribe, refer, sell, follow the law, become a member, etc.).
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, nuturing the links, enhancing the benefits that sold the buyer in the first place and improving the products/service continuously to protect her business from competitive encroachments.
Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Marketing research underpins these activities. Through advertising, it is also related to many of the creative arts.
Types of markets
The word market originally meant the place where the exchange between seller and buyer took place. Today we speak of a market as either a region where goods are sold and bought or particular types of buyer (summarized from Wells, Burnett, Moriarty, pg. 65–66). When strategizing specialists in marketing comment about markets they are usually referring to the different groups of people and/or organizations. The four major market groups are 1) consumer, 2) business to business, 3) institutional, and 4) reseller.
Product, price, promotion, and placement
In popular usage, the term "marketing" refers to 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. 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:
These four elements are often referred to as the marketing mix. A marketer will 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.
Technique
For a marketing plan to be successful, the mix of the four "p's" 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 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.
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 inspite of being technological breakthroughs.
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.
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 and 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.
Criticism of marketing
Some aspects of marketing, especially promotion, are the subject of criticism. See the main article Criticism of marketing.
Related lists
See List of marketing topics for an extensive list of the marketing articles on Wikipedia.
External links
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