Definition and nature of marketing
It's often the case that business and management students enjoy marketing more than any other topic on the syllabus. This is understandable as the subject is lively and easily related to real life - after all we are all consumers. We remember advertising campaigns that have made us laugh or think about buying product and services that have given us immense satisfaction or huge frustration and disappointment. Marketing is a significant part of daily life. However, like most things it's somewhat more complicated than just putting a certain supermodel inside a car and letting the sales take off! Indeed, marketing answers in examinations are often superficial, unstructured and lacking in academic rigour. In other words: beware the curse of the 'easy marketing question'
Let's begin by saying what marketing is NOT.
- Marketing is not interchangeable with advertising. Advertising is just one element of marketing, and a relatively small element at that as it is only a part of promotion. So in examination questions or coursework, do not get carried away with simply describing adverts that appealed to you. Support your answers with examples and data and relate advertising to other aspects of marketing.
- Marketing is not interchangeable with selling. Selling emphasises the needs of the seller, whereas marketing focuses on the needs of the buyer. Selling can be seen as the last stage of the marketing process.
"Selling tries to get the customer to want what the company has; marketing, on the other hand, tries to get the company to produce what the customer wants."
Before we define and explore the concept of marketing in detail, write down your ideas about what companies are trying to achieve through their marketing and then follow the Marketing link to see if you have got similar ideas to us.
There are many definitions of marketing. The better definitions are focused upon customer orientation and satisfaction of customer needs.
"Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably."
Chartered Institute of Marketing (CIM)
There are 4 main elements to this widely used definition that need examining, as these address individual specialism of the marketing function:
- A management process: Marketing has to be planned and represents a key element of part of the firm's strategy. It just doesn't happen!
- Identifying customer requirements: 'Gut feeling' and 'instinct' may have some role in business, but what firms believe customers want may not match the reality, especially in fast changing markets. Indeed, market places are like battlefields littered with casualties of war. The mortality rate of new products is particularly high and the majority of most popular brands are ones that have been in existence for many years. A successful business must understand its customers' needs, wants, habits and attitudes and it achieves this through thorough market research and careful analysis of data.
- Anticipating customer requirements: Being 'first to market' with a product or service offers significant advantages, as it allow the firm to develop customer and brand loyalty. Sony, for instance, dominated the portable music player market for many years after it introduced its Walkman in 1979.
- Satisfy customer needs: Goods and services must satisfy customers' needs and wants and be perceived as good value for money. A satisfied customer often results in repeat purchasing behaviour and good word-of-mouth promotion.
- Making a profit: This definition appears to apply only to commercial businesses if the word profit is taken literally meaning sales revenue exceeds total cost. However, the concept could be applied to non-profit organisations if they make a surplus which can be used to provide a service or if desired results are achieved. For example, if a local government was able to increase recycling and so save costs and improve the environment, this could be perceived as a 'profitable' outcome.
Marketing is a key management discipline that enables the producers of goods and services to interpret customer wants, needs and desires and then match, or exceed them, in delivery to their target consumers. It is therefore an ongoing process that places the consumer at the centre of all activities and affects every aspect of a business. The philosophy of marketing needs to be owned by everyone from within the organization, not just placed within the marketing department. Every employee markets a firm in some way from the CEO to the receptionist. Indeed the marketing of the business extends outside of the workplace - a negative or positive statement about the firm made in a restaurant, shop or bar, may be picked up by others and passed on. Word-of-mouth is a very powerful promotional tool!
Think what effect you and your family may have on the demand for your school? How may you influence public opinion?
Another useful definition of marketing is:
"Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others."
This definition has less of a focus on profit making organisations and places greater emphasis on the exchange process. It recognises the social element of the marketing process.