What is marketing

An introduction to the Marketing Management Philosophy

 

What does the term “Marketing” involve?  Many people believe that marketing is the same as selling and advertising.  Others believe that marketing is a store display, getting the price right or establishing a brand.  Marketing, in fact, encompasses all these activities and more. 

 

Marketing is a perspective or attitude that ultimately has the goal of customer satisfaction.  In order to pursue this philosophy, marketers use a set of activities that can all be described as marketing.  They are:

 

business plan objective Anticipating and satisfying customer needs.

 

business plan objective To create mutually beneficial exchange processes

 

business plan objective To outperform competitors by being more effective and profitable

 

business plan objective By establishing an efficient management strategy

 

Each of these marketing activities will be discussed in more detail below.

 

Anticipating and satisfying customer needs

 

Customers are satisfied with a product or service if it has met, or exceeded their expectations.  However, companies cannot simply rely on customers to compliment or complain, because many consumers simply do not make use of an inferior product or service again, rather than air their opinions.  Thus, it is necessary for companies to actively seek information about customer satisfaction, by developing a measuring program which is a permanent and ongoing process.  Keeping customers satisfied and responding to their concerns or compliments, will often lead to loyal customers.  Every company should strive to create loyal customers, as they hold several benefits to a company.  A few of these benefits are listed below:

 

Lower acquisition cost – companies with a loyal customer base need only to remind their customers of their product or service, unlike companies with a new product or service that have to invest heavily into advertising, sales calls, needs research etc.

 

Referrals – word of mouth is the most powerful marketing attribute, and satisfied/loyal customers tend to recommend a good brand to others.

 

Less price conscious customers – loyal customers who have become used to a good product’s value, will be less price conscious than new, wary customers, and will probably spend more.

 

To create mutually beneficial exchange processes

 

A market exists if there are consumers and sellers, who want to exchange something of value.  Consumers with needs and wants, and the means to satisfy these with money, will look for an opportunity to fulfil their needs.  Basic needs are hunger, thirst and the need for shelter.  Marketers cannot, however, create needs, but they can create wants.  Marketers cannot make consumers thirsty, but they can attempt to create an association with thirst, and a satisfying cold drink that they promote.

 

The exchange of value thus leads to benefits for both the consumer and the marketer – the need/want satisfaction for the consumer, and income for the seller/marketer.

 

Outperforming competitors with the Marketing concept


The marketing concept suggests that consumers do not buy a product just for the sake of having it, but to fulfil certain needs or wants.  Different consumers have different needs, for example: Some women buy shoes simply for the basic need of having shoes, some women buy shoes to enhance their athletic ability, yet other women buy shoes to feel good or to make an impression.  Firms that follow this philosophy, understands that making a sale depends on a thorough understanding of a customer’s needs, and they will try to position their product to target a specific need.  This philosophy will help them to establish a competitive advantage, to offer something special to potential buyers that no other firm offers.  A competitive advantage is the reason consumers choose to buy from that company instead of another.  This is the reason why consumers choose one brand over another, their reason for buying.  This “reason for buying” is a strategy that marketing orientated companies follows to differentiate their company and their products.

 

 

Establishing an efficient management strategy

 

Many people still confuse the terms “sales” and “marketing”.  Companies with a “sales” strategy will focus on mass production, aim their product at the general public and have the main goal to increase sales.  Companies with a “marketing” strategy will target a specific group, aim their product at this group’s needs and have the main goal to satisfy the target group’s needs.

 

A company that has a good marketing management strategy will carefully analyse the market and will segment it into different groups of people with the same characteristics and needs.  They will develop products or services to satisfy the individual needs of the different groups.  See our article on market segmentation for a more detailed discussion of this topic.