Introduction to Marketing

Marketing is one of the terms in academia that does not have one commonly agreed upon definition. Even after a better part of a century the debate continues. In a nutshell it consists of the social and managerial processes by which products, services and value are exchanged in order to fulfill individual's or group's needs and wants. These processes include, but are not limited to advertising.



Definitions


The term was first academically defined in 1937 when the newly born American Marketing Association (AMA) asserted :

“Marketing consist of those activities involved in the flow of goods and services from the point of production to the point of consumption.”

The AMA has since ammended the ddefinition to read :

“Marketing is an organisational function and a set of processes for creating communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders.”

Widely pulished authorities such as Peter Drucker have expressed a preference for the original definition. Commenting on that original definition, Kirk Cheyfitz – an enterpreneur and marketing expert, wrote “The point of production is too late in the process to start marketing. And the point of consumtion is too early in the process to stop it.” Cheyfitz and others believe that marketing must commence prior to the creation of a product, service or concept and must continue past the point of the consumption to foster loyalty and advocacy among the audience.

Philip Kotler, in his earlier books, defined marketing simply as: "human activity directed at satisfying needs and wants through exchange processes".

Adding to Kotler's and Norris' definitions, the Chartered Institute of Marketing's (CIM) definition claims marketing to be the "...management process of anticipating, identifying and satisfying customer requirements profitably". Thus, operative marketing involves the processes of market research, market segmentation, new product development, product life cycle management, pricing, channel management as well as promotion.


There probably exist as many definitions as there do speakers on the subject but Al Ries and Jack Trout get the prize for succinctness with their quip that marketing is simply "war" between competitors.

History

The practice of marketing is almost as old as humanity itself. A Market was originally simply a gathering place where people with a supply of items or capacity to perform a service could meet with those who might desire the items or services, perhaps at a pre-arranged time.

Such meetings embodied many aspects of today's marketing methods, although sometimes in an informal way. Sellers and buyers sought to understand each other's needs, capacities, and psychology, all with the goal of getting the exchange of items or services to take place. Today's New York Stock Exchange had its humble beginnings as an open air market located at Wall Street in New York City.

The rise of Agriculture undoubtedly influenced markets as the earliest means of 'mass production' of an item, namely foodstuffs. As agriculture allowed one to grow more food than could be eaten by the grower alone, and most food is perishable, there was likely motivation to seek out others who could use the excess food, before it spoiled, in exchange for other items.


Introduction

A market-focused, or customer-focused, organization first determines what its potential customers desire, and then builds the product or service. Marketing theory and practice is justified on the belief that customers use a product/service because they have a need, or because a product/service has a perceived benefit.

Two major factors of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (base management).

Once a marketer has converted the prospective buyer, base management marketing takes over. The process for base management shifts the marketer to building a relationship, nurturing the links, enhancing the benefits that sold the buyer in the first place, and improving the product/service continuously to protect the business from competitive encroachments.

Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Anthropology is also a small, but growing, influence. Market research underpins these activities. Through advertising, it is also related to many of the creative arts.

For a marketing plan to be successful, the mix of the four "Ps" must reflect the wants and desires of the consumers in the target market. Trying to convince a market segment to buy something they don't want is extremely expensive and seldom successful. Marketers depend on marketing research, both formal and informal, to determine what consumers want and what they are willing to pay for it. Marketers hope that this process will give them a sustainable competitive advantage. Marketing management is the practical application of this process. The offer is also an important addition to the 4P's theory.

Within most organizations, the activities encompassed by the marketing function are led by a Vice President or Director of Marketing. A growing number of organizations, especially large US companies, have a Chief Marketing Officer position, reporting to the Chief Executive Officer.

Transactional Marketing

First assumption
There are a large number of potential customers

Second assumption
Customers and their needs are fairly homogenous

Third assumption
It is rather easy to replace lost customers with new ones

Two Levels of Marketing

Marketing is understanding that marketing operates on 2 different levels.


Strategic Marketing
Strategic Marketing attempts to determine how an organization competed against its competition in a market place. In particular, it aims at generating a competitive advantage relative to its competition.

When Jack Trout says that marketing is 'the war between competitors' and 'the conflict between companies' what he is really doing is defining marketing at the business level.



Operational Marketing
Operational Marketing executes marketing functions to attract and keep customers and to maximize the value derived from them.

This includes the determination of the marketing mix, advertising execution etc..