Basic concepts in Marketing..

What's Marketing? It's both an "art" and a "science", there is constant tension between the formulated side of marketing and the creative side.. One of the shortest definitions of marketing is "meeting needs profitably."

 Formal definition from The American Marketing Association: 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 stake holders.

Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

 The social definition of marketing shows the role it plays in society which is to "deliver a higher standard of living." Marking is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

The managerial definition of marketing has often been described as "the art of selling products," but the most important part of marketing is not selling! Selling is only the tip of the marketing iceberg. Peter Drucker, a leading management theorist, puts it this way:

There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customers so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available.

Core concepts of Marketing - needs, wants, and demands

Needs are the basic human requirements. People need food, air, water, clothing, and shelter to survive. People also have strong needs for creation, education, and entertainment.

The above needs become wants when they are directed to specific objects that might satisfy the need. An American needs food but may want a hamburger, French fries, and a soft drink. A person in Mauritius needs food but may want a mango, rice, lentils, and beans. Wants are shaped by one's society.

Demands are wants for specific products backed by an ability to pay. Many people want a Mercedes; only a few are willing and able to buy one.

Companies must measure not only how many people want their product but also how many would actually be willing and able to buy it.

Understanding customer needs and wants is not always simple. Some customers have needs of which they are not fully conscious, or they cannot articulate these needs, or they use words that require some interpretation. Consider the customer who says he wants an "inexpensive car.". The marketer must probe further. We can distinguish among five types of needs:

1. Stated needs (the customer wants an inexpensive car).

2. Real needs (the customer wants a car who operating cost, not its initial price, is low).

3. Unstated needs (the customer expects good service from the dealer).

4. Delight needs (the customer would like the dealer to include an onboard navigation system).

5. Secret needs (the customer wants to be seen by friends as a savvy consumer).

For Example:

Willingness to buy BMW is want but if you have the buying power then it becomes demand.

Manager and marketers always focus on people wants and demands to do that they conduct in depth research using number of different tools such as surveys, interviews, observation and others. That’s the reason CEO of huge company like Wal-Mart visit store to have a check on customer, talk to them, observe them to understand their needs and Wants.

The Four P's in Marketing Mangement

1.     Product - A good, service, or idea to satisfy the consumer's needs.  It includes the physical product and its packaging, or a service along with warrantees and guarantees.

2.     Price - What is exchanged for the product, usually money.

3.     Promotion  - A means of communication between the seller and buyer.  It consists of advertising, sales promotion, public relations, direct marketing, and personal selling.

4.     Place - A means of getting the product into the consumer's hands (via channels of distribution, e.g., wholesalers, retailers, etc.). Channel of distribution members help to physically move product from a
manufacturer to the ultimate consumer via those wholesalers and retailers.

The Marketing Orientation and the Marketing Concept

An organization with a market orientation focuses its efforts on 1) continuously collecting information about customers' needs and competitors' capabilities, 2) sharing this information across departments, and 3) using the information to create customer value.

The market orientation simply defines an organization that understands the importance of customer needs, makes an effort to provide products of high value to its customers, and markets its products and services in a coordinated holistic program across all departments.  In what we call the "Marketing Concept," the company embraces a philosophy that the "Customer is King."

The Marketing Concept is an attitude. It's a philosophy that is driven down throughout the organization from the very top of the management structure.  The Marketing Concept communicates that "the customer is king."  Everything
that the company does focuses on the customer.  Via the Marketing Concept, a company makes every effort to best understand the wants and needs of its target market and to create want-satisfying goods that best fulfill the needs of that target market and to do this better than the competition.It wasn't always that way.  There were other orientations that companies embraced over the years.

The Production Concept has been around for years.  That concept simply suggests that customers prefer inexpensive products that are readily available.  In effect, "if we make it, they will come."

The Product Concept suggests that companies that build the "better mousetrap" will gain favor. The thinking here is that customers want products that have higher quality, that offer better perfromance or do something unique.

The Selling Concept preceeded the Marketing Concept.  From the 1920's until the 1950's, most firms had a sales orientation.  Competition had grown, and there was a need to pursue the scarce customer.  Sales could mean everything from sales people to advertising to public relations, but little effort was made to coordinate any overall marketing function. What we often saw in the Selling Concept was the "hard sell" and the belief that consumers wouldn't purchase unless they were sold.

The Holistic Marketing Concept that is embraced in the 21st century results in companies looking at their overall marketing efforts.  This includes how their marketing affects society, as a whole.  Marketing is also done internally
within the company.  Without customers, a company will quickly flounder -- thus the importance of the relationship.  Holistic marketing looks at the connectivity of the company, its people, its customers, and the society in which it operates. The Societal Marketing Concept focuses on.

How to assess whether a company department is customer-minded?

Is everyone department in your company customer-minded? Check the following items:

 R&D: 

• They spend time meeting customers and listening to their problems.
• They welcome the involvement of marketing, manufacturing, and other departments to each new project.
• They benchmark competitor's products and seek "best of class" solutions.
• They solicit customer reactions and suggestions as the project progresses.
• They continuously improve and refine the product on the basis of market feedback.

 Purchasing

• They proactively search for the best suppliers.
• They build long-term relationships with fewer but more reliable, high-quality suppliers.
• They don't compromis quality for price savings.

 Manufacturing

• They invite customers to visit and tour their plants.
• They visit customer plants.
• They willingly work overtime to meet promised delivery schedules.
• They continuously search for ways to produce goods faster and/or at lower cost.
• They continuously improve product quality, aiming for zero defects.
• They meet customer requirements for "customization" where possible.

 Marketing

• They study customer needs and wants in well-defined market segments.
• They allocate marketing effort in relation to the long-run profit potential of the targeted segments.
• They develop winning offers for each target segment.
• They measure company image and customer satisfaction on a continuous basis.
• They continuously gather and evaluate ideas for new products, product improvements, and services.
• They urge all company departments and employees to be customer-centered.

 Sales

• They have speciallized knowledge of the customer's industry.
• They strive to give the customer "the best solution".
• They only make promises that they can keep.
• They feed back customers' needs and ideas to those in charge of product development.
• They serve the same customers for a long period of time.

 Logistics

• They set a high standard for service delivery time and meet this standard consistently.
• They operate a knowledgeable and friendly customer service department that can answer questions, handle complaints, and resolve problems in a satisfactory and timely manner.

 Accounting

• They prepare periodic "profitability" reports by product, market segment, geographic areas (regions, sales territories), order sizes, channels, and individual customers.
• They prepare invoices tallored to customer needs and answer customer queries courteously and quickly.

 Finance

• They understand and support marketing expenditures (e.g., image advertising) that produce long-term customer prefernce and loyalty.
• They tallor the financial package to the customer's financial requirements.
• They make quick decisions on customer creditworthiness.

 Public Relations

• They send out favorable news about the company and "damage control" unfavorable news.
• They act as an internal customer and public advocate for better company policies and practices.