What is Marketing
Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its shareholders. It is also the process of finding, creating and retaining profitable customers.
The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself. ~~ Peter Drucker
Marketing is the process of finding out customer needs and serving those needs profitably. If an organization is obsessed with looking for profits, it will never find them. But if it is focused on satisfying its customers, profits will come automatically. Profit is an outcome of serving customer needs well. The ideal mix of supplying the desired product at a competitive price, promoting the product and making it easily accessible is what creates the right mix.
Profit is legitimate goal of a business organization. Reasonable profits are required to keep stakeholders interested in running the business and to increase the capability of the organization to serve its customer better. In that sense, customers should allow companies to have reasonable profits, because lack of resources will impair company’s capabilities to serve customers in the future.
But a business with a single-minded focus on maximization of profits will not survive. In such companies customer interests will not be accorded top priority. Customer interests are likely to be compromised if they conflict with the profit maximization goal of the company. Customers stop patronizing such companies once they realize that their interests can be compromised in the organizational pursuit of profits.
The essence of marketing is providing desired value to customers. A company cannot possibly satisfy all the customers in a market, because their needs vary. Most organizations do not have the capability to serve widely varying needs. An organization has to select customers whose needs can be matched with its capability to serve them. If it tries to serve all customers, it is sure to have some of them dissatisfied. But if an organization has selected its customers carefully, it is possible to satisfy all of them completely.
Successful companies rely on their satisfied customers to return to repurchase and recommend the company’s offerings to others. Therefore the goal of marketing is attracting and retaining customers through long-term satisfaction of their needs.
Companies understand that it is much more expensive to attract new customers than to retain existing ones. Marketing oriented companies build relationships with their existing customers by providing satisfaction. They attract new customers by building expectations and promising to provide value. New customers find the company’s promise credible, as the company’s existing and erstwhile customers vouch for it.
Marketing should be considered a central business function as it establishes, develops and commercializes long-term customer relationships so that objectives of both the parties are met. Customer needs are served and the company earns profits.
A company exists primarily to serve its customers. Therefore customers are the most powerful stakeholders of any company. It is the job of the marketer to keep the company’s people, processes, and systems tuned to serving the most important stakeholder of the company. Customer interests must be paramount and should be protected in every decision that a company takes.
Product is the most important element in marketing as it provides the functional requirements sought by consumers. Customers primarily get interested in dealing with the company because they feel that its products ore capable of serving their needs.
In the all hype concerning marketing and customer-centricity, companies should not forget that all that a customer wants from the company is a product that serves his needs. Everything else is superfluous.
Another important element of marketing is service. It is difficult to provide a single definition of service. The concept of service has to be understood either as an exclusive offering from a company that is primarily intangible, or as a part of the service-product mix that a company offers.
Core Concepts of Marketing
Basic human desires such as hunger, thirst and shelter are termed as needs. There can also be other, higher order desires, which are called wants. For instance, hunger can be fulfilled by eating basic food. However, the some need can be fulfilled by eating gourmet food at on expensive restaurant. The former is need fulfillment, while the latter is fulfilling wants. Marketers aim to influence wants of customers.
Demand for a product is said to exist under the following conditions
- There is a desire for the product
- There is willingness to buy the product
- The consumer has the ability to buy the product
Accurate demand forecasting is important in determining prices, planning production schedules, resources allocation etc.
A transaction indicates the completion of on exchange between the seller and the buyer. It is a unit of measurement for the marketer. Repeated transaction between the consumer and the marketer can be on indicator of customer satisfaction.
Consumer and Customer
The term ‘customer’ was used to indicate an industrial buyer, who does not buy goods and services for personal gratification. A consumer is the end user of the product, who buys it for personal gratification. Nowadays, a customer also indicates a consumer who patronize a particular retailer or company.
Another difference is in terms of who uses the product. A customer may or may not be a consumer, i.e. a user. A customer may only buy the product. If he uses it too, he also becomes a consumer.
Exchange is an act of obtaining a desired product or service from someone by offering something in return. It is the core concept of marketing and markets. The market exchange process will continue as long as society exists, as want-satisfying is a basic instinct among human beings. For an exchange to take place between two parties, the following conditions must exist:
- Each party must have a desire, willingness and ability to exchange.
- Each party should possess something of value to the other.
- Each party should be capable of communicating with each other.
- There must be freedom to accept or reject the offer.
- Hiring A Lawyer For Company Investigations - September 17, 2020
- Is Homeschooling Hard? Is Homeschool Harder Than Public School? - September 11, 2020
- What Qualifications Do You Need to Homeschool Your Child? - September 10, 2020