Marketing as defined by Dictionary.com | Find the Meanings and Definitions of Words at Dictionary.com
is "the total of activities involved in the transfer of goods from the producer or seller to the consumer or buyer, including advertising, shipping, storing, and selling."
An alternate definition paraphrased from memory of an introductory business text is: Marketing is all activities conducted to prepare for sales. Sales is all activities required to close the deal. Shipping and customer satisfaction would be included in sales to avoid the customer from reversing or unclosing the deal.
Thus Marketing can be categorized as a branch of business as well as a social science. We buy goods (thus becoming the buyer/consumer) from a vendor (or producer/seller), creating a transaction. In the past, marketing involved traveling salesmen, while in modern times, marketing is more likely to involve television, the internet, and other forms of media bombardment.
As we progress in this age of technology it is vital for us to understand marketing and its place in the world. Understanding and applying the principles will be beneficial to the businessperson and the layperson. What is marketing?
Marketing seeks to satisfy the needs of people (customers or the market) (creating a sense of usefulness or utility) through the exchange process. The Marketing Mix or the "4 P's" are:
Place (or distribution)
These are employed to satisfy a target market' or target demographic (the pool of potential customers).
The American Heritage Dictionary defines utility as "the quality or condition of being useful". Utility is further defined as any quality and/or status that provides a product with the capability to satisfy the consumer's wants and needs. Marketing is responsible for creating most of a product's inherent utility.
There are four basic types of utility: Form utility
: production of the good or service, driven by the marketing function. For example, Procter and Gamble turns raw ingredients and chemicals into toothpaste
. Place utility:
making the product available where customers will buy the product. Procter and Gamble secures shelf space for the toothpaste at a wide variety of retailers including supermarkets and drugstores. Time utility:
making the product available when customers want to buy the product. The U.S. drugstore chain Walgreens has many locations open 24 hours a day, and since the 1990's has placed most of their newer stores at major intersections. Possession utility:
once you have purchased the product, you have rights to use the product as intended, or (in theory) for any use you would like.
A fifth type of utility is often defined along with the above four types: Image utility:
the satisfaction acquired from the emotional or psychological meaning attached to products. Some people pay more for a toothpaste perceived to be more effective at fighting cavities and whitening teeth. The exchange process
The exchange process is the process by which two or more parties give something of value to each other to satisfy the perceived needs. The marketer (a company like Procter and Gamble) offers goods and services desired by the market (the pool of potential customers). In return, the market (the customer) gives back something of value to the marketer, generally money. Both ends receive something of value in the exchange process. The marketer makes money and the customer receives goods, services, or ideas that satisfy their needs. The exchange process is the origin of marketing. The exchange process creates utility.
For an exchange to occur:
Both parties must have something of value to exchange
Both parties need to be able to communicate (Procter and Gamble (P&G) must have money to buy advertising on TV/radio/Internet)
Both parties must be able to exchange (the toothpaste (in some cases) must be approved by the FDA; the customer must have the money to buy it, and have access to a retail store where the product is sold)
Both parties must want to exchange
At least 2 people are needed for an exchange to occur
Marketing Management Process
This consists of:
analyzing market opportunities,
selecting target markets,
designing marketing strategies,
planning marketing programs,
organizing, implementing and controlling the marketing effort. Analyzing marketing opportunities
--Defining the market
--Company resource assessment
--Demand analysis and sales forecast Identifying Market Segments and Selecting Target Markets
--Marketers set priorities for business opportunities, concentrating on market segments within which they expect to achieve the best overall economic return from their product or service. Market segmentation and target marketing are the processes used to isolate these opportunities. Market segmentation is the process of grouping customers based on their similarities
--Market segmentation allows a company to:
Understand the different behavioral patterns and decision-making processes of different group of consumers
Select the most attractive segments or customers the company should target
Develop a strategy to target the selected segments based on their behavior Developing marketing strategies
--Develop new product, test and launch
--Modification in the stages of product life cycle
--Strategy choice depends on the strategy pursued by the firm
--Consider changing global opportunities and challenges Planning marketing programs
--Transforming strategy into programs
--Managing Product Lines, Brands, and Packaging
--Managing Service Businesses and Ancillary Services
--Designing Pricing Strategies and Programs
--Selecting and Managing Marketing Channels
--Managing Retailing, Wholesaling, and Physical-Distribution Systems
--Designing Communication and Promotion Mix Strategies
--Designing Effective Advertising Programs
--Designing Direct-Marketing, Sales-Promotion, and Public-Relations Programs
--Managing the Sales force Managing marketing efforts
--Control - Annual control, Profitability control, Strategic control