Marketing 571

What Is Marketing?

Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is "meeting needs profitably." When eBay recognized that people were unable to locate some of the items they desired most and created an online auction clearing house or when IKEA noticed that people wanted good furniture at a substantially lower price and created knock-down furniture, they demonstrated marketing savvy and turned a private or social need into a profitable business opportunity.

The Marketing Concept

The marketing concept emerged in the mid-1950s. Instead of a product-centered, "make and-sell" philosophy, business shifted to a customer-centered, "sense-and-respond" philosophy. Instead of "hunting," marketing is "gardening." The job is not to find the right customers for your products, but the right products for your customers.

Do marketers create needs or wants? Or what came first, the chicken or the egg?
Today with the advent of the global economy and the internet, the concept of marketing has taken on a whole new meaning and offers a myriad of ways to advertise your presence to your target market. Interestingly enough, customers dont always know they have a need or want for a service or product until educated by the marketer.

Do marketers create needs or wants continued.

History contains many stories and examples about the proliferation of new inventions, technologies and conveniences created for todays consumer that we never would have thought possible. There was once a time when such technologies like computers, televisions and calculators were not even a thought. Consumers would not have known to request them or want them as they were not able to conceive of these ideas. It is the marketers job to convince the consumer it is something they cannot live without. Where would we be without them now?

Do marketers create needs or wants continued again.

Can you think of a product, service or technology

that you cannot live without but never would have thought you needed it until it was presented to you? I can think of my cell phone, car washes, microwave ovens, air conditioners, and dishwashers to name a few.

The Marketing Rat Race

The global economy now has a plethora of marketers who compete with each other to capture the same customers. This challenge for marketers then is to create a marketing mix so outstanding as to leave other marketers in the dust. It requires much more creativity, intelligence, technology, and capital on the part of the marketer to be able to compete, survive and surpass its competition in the marketplace to gain the ultimate prize, that being the customer.

Relationship Marketing
A key goal of marketing is to develop deep, enduring relationships with all people or organizations that could affect the success of the firm's marketing activities. Relationship marketing has the aim of building mutually satisfying longterm relationships with key parties-customers, suppliers, distributors, and other marketing partners-in order to earn and retain their business.

The Marketing Network

Marketing must not only do customer relationship management (CRM), but also partner relationship management (PRM) as well.
Key constituents for marketing are customers, employees, marketing partners (channels, suppliers, distributors, dealers, agencies), and members of the financial community (shareholders, investors, analysts).

The Marketing Network continued.

The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network.
A marketing network consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, retailers, ad agencies, university scientists, and others) with whom it has built mutually profitable business relationships.

The Marketing Network and friends

I have found in my years of experience as a business owner, it is sometimes beneficial to make friends of your enemies (i.e. your competitors) especially if you are new to the industry. They can often be a sounding board for new ideas you want to launch and give you sage advice about what works best in the industry and what will not work. As a business owner, I have saved myself many headaches, money, and time by following their advice.

Marketing Networks again.

Increasingly, competition is not between companies but between marketing networks, with the prize going to the company that has built the better network. The operating principle is simple: Build an effective network of relationships with key stakeholders, and profits will follow.

What is the broad purpose of the marketing concept?

a) b) c) d)

Customer/market orientation Sales orientation Product orientation Production orientation

Marketing Concept
The marketing concept holds that the key to achieving organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating superior customer value to its chosen target markets.

Consumer Orientation
This is the most customer-centric approach among all of them.
A customer orientation strategy is the way that a business focuses its product or service to consumers. There are many specific ways of doing this, but in general there are three ways that you can orient a product to consumers: aiming at price sensitive customers, aiming at quality sensitive customers and aiming at niche customers.

Consumer Orientation
Consumer Orientation is the focus on meeting the needs of one's customers, internal or external. This service establishes specific customer satisfaction standards and actively monitors client satisfaction, taking steps to clarify and meet customer needs and expectations. At lower levels the service involves courteous and timely responsiveness to the requests of customers, while at the higher levels, it involves developing the relationship of partner and trusted advisor.

Consumer Orientation
These companies respond to marketing research and tailor their products in accordance with what they perceive to be the demands of the market.

Consumer Orientation

A business with this type of orientation is essentially led by the needs of its customers. Marketing research outcomes determine how much of a product is produced--old products may be discontinued and new products invented based on the needs or desires of consumers.

Consumer Orientation

4 Basic Stages for Customer Orientation

Development has to be done keeping customer needs into mind. Manufacture the best products to the customer. Do not compromise quality. Market by identifying and targeting the right customer. Processing the demand as early as possible. Customization of the products for the market. Deliver to the target customer. Reduce delivery time.

Price Sensitive Strategy

To be successful with this strategy, you need to be an efficient company with the lowest possible overhead. This will allow you to have low costs which means that you can afford to sell your products or offer your services at a discount compared to competitors in the marketplace. This strategy casts a very wide net for consumers and can be effective in gaining a large market share in price sensitive industries (such as commodities).

Quality Sensitive Strategy

It aims for the company to become recognized as the market leader by being perceived as the best company on a non-price basis. This means that the product or service must have an added value, and the company can demand a higher price where quality is considered more important than price.

Niche Strategy

The niche strategy has a very narrow customer orientation.

The strategy involves finding a small audience and aiming a particular product at that audience. This means that the product is not necessarily the best, or the cheapest, but it is the one that best fits the needs of a particular consumer. Can you think of a niche marketer with a familiar name around town?

Sales Orientation
This concept is the most practiced and follows the path of selling an offering that the public generally knows nothing about nor has asked for it. Therefore, management undergoes large-scale selling and promotion on it to get the message out. In some respects, this concept is like a shot in the dark. You are showering a giant market with your message and hoping that in the fallout, some will stick as your customers.

Can you think of any products that have been promoted this way? From your perspective, do you think it was the best way for the company to advertise?

Sales Orientation
Sales-oriented companies can generate positive short-term sales since customers initially feel good that they are getting more for less. As customers realize they are paying less but getting less, they eventually realize they are not making a good purchase. Discounting your product may eventually cheapen its reputation in the marketplace.

Sales Orientation
A sales-oriented company focuses on strategies and tactics that push people toward buying products, while a product orientation tries to pull people into buying. Offering discounts is an example of a sales tactic, while adding a new feature to a product to increase demand is an example of a product-oriented strategy.

Sales Orientation

A sales orientation often attempts to get people to buy things they dont really need or want, while a product orientation focuses on getting people to buy things they are looking for.

Product-Oriented Organizations
Product-oriented companies keep in mind the adage, Build a better mousetrap and world will beat a path to your door. This strategy assumes that if you offer a superior product or service, customers will buy from you without your having to resort to discounts or other gimmicks. Product-oriented companies work with marketing departments to learn what the marketplace wants, developing or modifying products to meet these needs.

Product-Oriented Organizations

A product-oriented approach to sales might take too long to help a company struggling financially, while a sales orientation might result in fewer long-term customers and eventual financial instability

Product Orientation
Product orientation does have challenges and is often downplayed by marketing professionals. Management that is overly focused on technology development and endless pursuit of an optimized product may lose touch with the marketplace. Consumer-oriented companies research and stay connected with changing consumer tastes. This puts product-oriented companies at a special disadvantage in rapidly changing marketplaces where customer needs and product offerings are constantly evolving.

Product-Oriented Organizations

Product-oriented companies may take longer to generate sales, but their sales may be more stable long-term because buyers come to believe they are getting the value they need from a product or service.

Product Orientation
Whereas production orientation exists when management is more concerned with production efficiency, a product orientation is when management is more concerned with product quality. Managers are often obsessed with their products. Managers typically believe their products are unique and offer distinct benefits. They focus on consistent improvement of the product with the belief that an ideal product will effectively sell itself.

Production Orientation
With production orientation, the focus is more on the processes of production than what is actually produced. Narrow product lines, pricing based on production costs, technical product research, packaging focused on product protection, and minimal marketing are all common traits associated with a production orientation. These traits are all opposite a marketing orientation, where the company attempts to drive demand through marketing efforts.

Production Orientation
I am going to use food in this example because it is one of my favorite topics. What product can you think of in this example? I am thinking ice cream. Take a look in the freezer section the next time you are in a grocery store, WalMart or Target. There are companies out there that only mass produce ice cream and distribute it to the above-mentioned types of stores. It may come in a carton or in popsicle form but it is always the same product. It is always ready to buy off the shelves and it is cheap. It does not require much educating on the part of marketers to remind consumers of its existence.

Identifying the needs of the customer

First step: What are the needs, wants, and demands of the customer? How can marketers capture the customers? Consumers have basic needs but their wants are more complicated and involve the societal experiences of those consumers. For instance, people need food but an American consumer may crave or want a peanut butter sandwich while an Australian consumer may crave or want a vegemite sandwich which is similar in nature to the American peanut butter sandwich but is a much-loved staple of the Australian culture.

Consumer Societal Experiences

Can you think of other examples in which consumers of different cultures digress from basic needs and want something more specifically related to their comfort or familiarity level?

The 4 Ps of Marketing
Know your market. What types of people or consumers are out there and what is it they need and want?

Create your plan to figure out which consumers you want to target. It wont include everyone so select the very best markets that will give you the most profit.

Next, design your strategy or program that will enable you to deliver your market offering to your target market. This strategy is your action plan and includes your marketing mix; that is the tools you use to get the plan off the ground.
These tools consist of the 4 Ps which are product, price, placement, and promotion.

The 4 Ps
Product - satisfy the need of your market Price - how much will you charge your market? Placement - where will the offering be located to be purchased? promotion - letting the market know of the products availability. Where can it be found to buy?

Choosing a Value Proposition

How will a company differentiate itself in the market?

What makes it special and unique? Why should target markets lend importance to this offering over that of other offerings?
Think big when you seek out your unique value proposition. Being the best in price, selection or shipping time is often not enough to separate you from your competition. What can you do with your idea and knowledge of your market to really improve their lives, health, financial situation, status, prestige, etc...?

Examples of Value Propositions

Burger Kings Have it your way to indicate that the target market will get exactly what they want on their terms unlike their competition that does not offer that value proposition. Instead, you just get what it says on their menu.

Your customers will often tell you what they want today or yesterday, but trends and patterns will tell you what they will want next year and the year after that.
Mix short-term market research with longer term research.

Target Marketing
Target marketing is being facilitated by the rapid spread of special-interest magazines, TV channels, and Internet newsgroups. Information systems assemble information about individual customers' purchases, preferences, demographics, and profitability.

TARGET MARKET STRATEGIES

Single-segment strategy - One market segment (not the entire market) is served with one marketing mix. A single-segment approach often is the strategy of choice for smaller companies with limited resources. Selective specialization- Different marketing mixes are offered to different segments. The product itself may or may not be different in many cases only the promotional message or distribution channels vary. Product specialization- The firm specializes in a particular product and tailors it to different market segments. An example of this marketing is when State Tourism Boards advertise the various things to do and see in their State and encourage tourists from different market segments to visit their State. Market specialization- The firm specializes in serving a particular market segment and offers that segment an array of different products. As simple as it sounds, when Pep Boys or AutoZone advertise, they are serving car owners and are advertising or offering an array of automobile products for a consumer to buy to care for their cars. Full market coverage - The firm attempts to serve the entire market. This coverage can be achieved by means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment.3

Marketing trends taking place.

The Societal Marketing Concept

This path questions whether the immediate wants and desires of the consumer are harming the future of the consumer and the planet. It calls for sustainable marketing, which is the creation of products that are socially responsible, serve the current needs of the consumer but at the same time, preserve the ability of future generations to get their needs met.

The Societal Marketing Concept

Should all companies that make and sell products to consumers be required to follow certain protocols in keeping the planet clean? Should there be a system for proper disposal of their product once it is done being useful? What is your opinion of companies that are fined for social and ecological recklessness and polluting the environment? Should more be done about it?

A broader brand presence across channels

With the range of available marketing channels growing all the time, businesses will start to recognize the value of connecting up their marketing approach across the web, social media and other channels. Instead of relying on one or two channel marketing approaches, more and more companies will link up their activities to create a truly coherent brand across multiple channels.

The rise and rise of user-generated content

Whether it is a YouTube video showing a customer using a product or customers sharing their experiences within a selective online community, content that comes direct from the potential or existing customer is likely to grow in value. The key test of this trend will be how successfully companies inspire and facilitate user-generated content.

Mobile marketing reaches critical mass

Mobile is going centre stage. A third of smartphone owners have used their device to buy a product online and this number is growing. This demands targeted, mobile-ready content and a willingness to adapt internal marketing processes. With 59% of UK consumers now in possession of a smartphone and 18% owning a tablet device, mobile marketing is a trend that businesses cant afford to ignore.

The gap closes between business brands and social media

Companies will start taking social media more seriously as a professional marketing tool. But it wont just be the big companies using social media to actively connect with customers. Many more companies will start to interact, meaning customer service and customer interaction via social media will evolve even further. The user or the customer will take centre stage with the rise of the brand advocate in recommending, recruiting customers and connecting with companies.

A clearer vision on the value of analytics

With increased channels and brand presence, businesses will look to clarify and streamline their marketing data. Companies will recognize the value of analytics that allow them to maximize on the flexibility of social media marketing by adapting their content according to live viewer response. Add to this an increasing focus on cost management and online marketing analytics look set to become the vital flipside of business marketing.

Marketing becomes more personalized

Tailored content that is customized to the needs and interests of a specific market or audience will grow in value and popularity due to the growing presence of online, niche communities, for example. As people become more and more accustomed to selecting which brands and businesses can join them within their own online community, the value of personalized marketing approaches and content will continue to grow.

The voice of the customer will get louder

Social media word of mouth will keep growing, with people increasingly relying on their own online social circles to advise and comment on their choice of services or products.

The companies that actively embrace this shift will be the ones that boost their profile and credibility .

Geotargeting and localized marketing

Local discount websites like Groupon and local review sites like Yelp make it easy for consumers to find deals and reviews about businesses in their neighborhoods and beyond.

Creating targeted, local marketing campaigns using these popular tools will become the norm.

Co-marketing
The economy is still struggling, which means small businesses can benefit from economies of scale by partnering with complementary businesses to develop co-marketing programs.
Promotional partnerships not only lead to reduced costs but also can lead to increased exposure to new audiences.

Centralization and Decentralization

Both global and local firms are adopting a combination of centralization and decentralization to better balance local adaptation and global standardization.
The goal is to encourage more initiative and "entrepreneurship" at the local level, while preserving the necessary global guidelines and standards.