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Marketing is defined by the American Marketing Association as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
The term developed from the original meaning which referred literally to going to market, as in shopping, or going to a market to sell goods or services.
Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling.
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Quotations
Ads are the cave art of the twentieth century.
Advertisements contain the only truths to be relied on in a newspaper.
An advertising agency is 85 percent confusion and 15 percent commission.
Fred Allen (1894-1957), Treadmill to Oblivion (1954)
In Marketing there are those who satisfy needs and those who create wants.
Life's too short to sell things you don't believe in.
Marketing is the art of making something seem better than it really is.
Encyclopedia
Marketing is defined by the American Marketing Association as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
The term developed from the original meaning which referred literally to going to market, as in shopping, or going to a market to sell goods or services.
Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling. It is also concerned with anticipating the customers' future needs and wants, which are often discovered through market research.
Marketing is influenced by many of the social sciences, particularly psychology, sociology, and economics. Anthropology and neuroscience are also small but growing influences. Market research underpins these activities. Through advertising, it is also related to many of the creative arts. The marketing literature is also infamous for re-inventing itself and its vocabulary according to the times and the culture.
Four Ps
In the early 1960s, Professor Neil Borden at Harvard Business School identified a number of company performance actions that can influence the consumer decision to purchase goods or services. Borden suggested that all those actions of the company represented a “Marketing Mix”. Professor E. Jerome McCarthy, also at the Harvard Business School in the early 1960s, suggested that the Marketing Mix contained 4 elements: product, price, place and promotion.
- Product: The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants. The scope of a product generally includes supporting elements such as warranties, guarantees, and support.
- Pricing: This refers to the process of setting a price for a product, including discounts. The price need not be monetary; it can simply be what is exchanged for the product or services, e.g. time, energy, or attention. Methods of setting prices optimally are in the domain of pricing science.
- Placement (or distribution): refers to how the product gets to the customer; for example, point-of-sale placement or retailing. This third P has also sometimes been called Place, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales.
- Promotion: This includes advertising, sales promotion, publicity, and personal selling, branding and refers to the various methods of promoting the product, brand, or company.
These four elements are often referred to as the marketing mix, which a marketer can use 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.
As a counter to this, Morgan, in Riding the Waves of Change (Jossey-Bass, 1988), suggests that one of the greatest limitations of the 4 Ps approach "is that it unconsciously emphasizes the inside–out view (looking from the company outwards), whereas the essence of marketing should be the outside–in approach".
Product
Branding
A brand is a name, term, design, symbol, or other feature that distinguishes products and services from competitive offerings. A brand represents the consumers' experience with an organization, product, or service. A brand is more than a name ,design or symble. Brand reflects personality of the company which is organizational culture.
A brand has also been defined as an identifiable entity that makes a specific value based on promises made and kept either actively or passively.
Branding means creating reference of certain products in mind.
Co-branding involves marketing activity involving two or more products.
Marketing communications
Marketing communications breaks down the strategies involved with marketing messages into categories based on the goals of each message. There are distinct stages in converting strangers to customers that govern the communication medium that should be used.
Advertising
- Paid form of public presentation and expressive promotion of ideas
- Aimed at masses
- Manufacturer may determine what goes into advertisement
- Pervasive and impersonal medium
Functions and advantages of successful advertising
- Task of the salesman made easier
Maximize sales
Publicity
Brand building
Create awareness
Persuade buyers
Introduction of new product
Enable market leadership
To face competition
To inform changes
To counteract to competitors advertisement
To enhance goodwill
Objectives
- Maintain demand for well-known goods
- Introduce new and unknown goods
- Increase demand for well-known goods/products/services
- Create Awareness
Requirements of a good advertisement
- Attract attention (awareness)
- Stimulate interest
- Create a desire
- Bring about action
Eight steps in an advertising campaign
- Market research
- Setting out aims
- Budgeting
- Choice of media (television, newspaper/magazines, radio, web, outdoor)
- Choice of actors (New Trend)
- Design and wording
- Co-ordination
- Test results
Personal sales
Oral presentation given by a salesperson who approaches individuals or a group of potential customers:
- Live, interactive relationship
- Personal interest
- Attention and response
- Interesting presentation
- Clear and thorough.
Sales promotion
Short-term incentives to encourage buying of products:
- Instant appeal
- Anxiety to sell
An example is coupons or a sale. People are given an incentive to buy, but this does not build customer loyalty or encourage future repeat buys. A major drawback of sales promotion is that it is easily copied by competition. It cannot be used as a sustainable source of differentiation.
Marketing Public Relations (MPR)
- Stimulation of demand through press release giving a favourable report to a product
- Higher degree of credibility
- Effectively news
- Boosts enterprise's image
Customer focus
Many companies today have a customer focus (or market orientation). This implies that the company focuses its activities and products on consumer demands. Generally there are three ways of doing this: the customer-driven approach, the sense of identifying market changes 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 in spite of being technological breakthroughs.
A formal approach to this customer-focused marketing is known as SIVA (Solution, Information, Value, Access). This system is basically the four Ps renamed and reworded to provide a customer focus.
The SIVA Model provides a demand/customer centric version alternative to the well-known 4Ps supply side model (product, price, place, promotion) of marketing management.
The four elements of the SIVA model are:
- Solution: How appropriate is the solution to the customer's problem/need?
- Information: Does the customer know about the solution? If so, how and from whom do they know enough to let them make a buying decision?
- Value: Does the customer know the value of the transaction, what it will cost, what are the benefits, what might they have to sacrifice, what will be their reward?
- Access: Where can the customer find the solution? How easily/locally/remotely can they buy it and take delivery?
This model was proposed by Chekitan Dev and Don Schultz in the Marketing Management Journal of the American Marketing Association, and presented by them in Market Leader, the journal of the Marketing Society in the UK.
The model focuses heavily on the customer and how they view the transaction.
Product focus
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 profitable market segment(s) exist 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. However, marketers can aggressively over-pursue product innovation and try to overcapitalize on a niche. When pursuing a product innovation approach, marketers must ensure that they have a varied and multi-tiered approach to product innovation. 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 (Such as Nintendo who constantly change the way Video games are played). 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.
- The Economist reported a recent conference in Rome on the subject of the simulation of adaptive human behavior. Mechanisms to increase impulse buying and get people "to buy more by playing on the herd instinct" were shared. The basic idea is that people will buy more of products that are seen to be popular, and several feedback mechanisms to get product popularity information to consumers are mentioned, including smart-cart technology and the use of Radio Frequency Identification Tag technology. A "swarm-moves" model was introduced by a Princeton researcher, which is appealing to supermarkets because it can "increase sales without the need to give people discounts." Large retailers Wal-Mart in the United States and Tesco in Britain plan to test the technology in spring 2007 .
Marketing is also used to promote businesses products and is a great way to promote the business.
- Other recent studies on the "power of social influence" include an "artificial music market in which some 14,000 people downloaded previously unknown songs" (Columbia University, New York); a Japanese chain of convenience stores which orders its products based on "sales data from department stores and research companies;" a Massachusetts company exploiting knowledge of social networking to improve sales; and online retailers who are increasingly informing consumers about "which products are popular with like-minded consumers" (e.g., Amazon, eBay).
Areas of marketing specialization
See also
Related lists
- See List of marketing topics for an extensive list of the marketing articles.
Further reading
- Laermer, Richard; Simmons, Mark, Punk Marketing, New York : Harper Collins, 2007. ISBN 978-0-06-115110-1 (Review of the book by Marilyn Scrizzi, in Journal of Consumer Marketing 24(7), 2007)
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