Marketing – definition and meaning
Marketing is a business term that experts have defined in dozens of different ways. In fact, even at company level people may perceive the term differently. Basically, it is a management process through which products and services move from concept to the customer. It includes identification of a product, determining demand, deciding on its price, and selecting distribution channels. It also includes developing and implementing a promotional strategy.
The UK-based Chartered Institute of Marketing (CIM) defines the term as follows:
“Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably.”
Below is the American Marketing Association’s definition:
“Marketing is 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.”
Marketing covers a vast area of business, including:
– how you communicate
– the brand
– the design
– market research
– consumer psychology
– measuring effectiveness
At the core of marketing is an understanding of what customers need and value. A company’s long-term success depends on learning what its customers’ needs are. It then finds ways to add value through different approaches.
This involves targeting other businesses. We also call it business-to-business or B2B marketing. It involves supplying other companies with products or services.
Physical products that companies sell to other businesses are ‘industrial goods.’ Industrial goods may include raw materials for companies that make plastics, yarn for use in the textile trade. It also includes aircraft for airlines and the military.
In fact, the term ‘industrial goods’ refers anything a company or organization needs and buys.
B2B services may include legal advice, management consultancy, tax consultancy, or training provision. IT services and the provision of temporary staff are also examples of B2B services. IT stands for Information Technology.
Marketing directly to consumers
We also call it B2C. The term refers to targeting the individual people who purchase products and use services. Specifically, people who bought for their own consumption.
This may include FMCGs (fast-moving consumer goods) such as food, beverages, and toiletries, or durable goods. For example, cars, televisions, refrigerators and other white goods are durable goods. ‘White goods’ are major appliances that traditionally have had a white enamel surface.
B2B + B2C marketing
Most large corporations have an integrated marketing approach. In other words, they focus on both individual consumers and businesses at the same time.
The Coca-Cola company, for example, knows that its B2C marketing must succeed. Put simply; it has to persuade supermarkets and smaller stores – B2B – to provide shelf space.
Most makers of durable goods also have an integrated marketing approach. For example, The Haier Group focuses on individual consumers (B2C). However, it also focuses on supermarkets, department stores, and other retail outlets (B2B). The Haier Group is world’s largest manufacturer of consumer electronics and home appliances.
A company’s marketing strategy should combine all its objectives into one integrated and comprehensive plan. In other words, it should not focus on one strategy at the expense of others.
It should use market research data to create its strategy. The company should focus on the ideal product mix to reach the optimum profit potential. The right product mix is also crucial to sustaining the business.
An effective and successful marketing plan depends on a good strategy. A company’s strategy should begin with the setting of objectives that will support its overall aims.
It then needs to come up with a strategy that allows it to reach these objectives.
According to CIM:
“The strategy may involve research into product or service development, how the product or service will reach the market (channels) and how the customers will find out about it (communication).”
“It will also attempt to define a unique positioning for the product or business to differentiate it from its competitors.”
Typical marketing divisions
There are many divisions of marketing. Not all companies have the same names for each one. Below is a list of the most common divisions (Source: London School of Economics):
Advertising involves promoting an idea or product into the marketplace by placing ads in the media.
The term means working with the local community. This is not only good for the company’s standing locally, and as a way of growing customer loyalty, but it is also great for morale within the firm
Examples include sponsoring local events, chairing meetings, volunteering in schools or local youth centers, and belonging to local associations.
Basically, this involves providing assistance and advice to people who purchased the product. In many business, sellers also provide this service to customers before, during, and after a sale.
Good customer service produces satisfied customers. In other words, their experience meets or exceeds their expectations. If your competitors have good customer service and you don’t, you will probably lose market share to them.
This approach involves delivering your message directly to consumers via leaflets, forms, fliers, catalogs, as well as street promotion.
Distribution is part of the management chain. It involves transporting one product from storage to a shop or supermarket.
Market research is the process of gathering and analyzing information. The data will make the company more aware of how people will react to its current and future products.
Business owners are conducting market research all the time. When they talk to customers about their business, they are conducting market research. Whenever somebody tries to find out what the competition is doing, they are conducting market research.
Good market research can produce a wealth of data about the business’ products, customers, and the marketplace.
Media planning is closely-related to advertising. It is an advertising strategy we employ to target consumers using a range of informational outlets.
Advertising or media planning agencies usually conduct this kind of work. They find the best media outlets to reach the target market.
Examples of media outlets include the internet, posters, television, radio, physical newspapers and magazines, etc.
When setting the price, you should take into account how much something costs to produce and deliver. You should also consider how much competitors are selling it for, its quality, the brand, etc.
Most product prices rarely stay the same for long. Production costs may change, salaries can rise, or competitors might suddenly offer discounts or raise their prices. You need to be aware of every factor that influences price all the time.
“A strategic communication process that builds mutually beneficial relationships between organizations and their publics,” says the PRSA.
Sales includes planning and supporting the sales team by pushing ahead with sales targets. It also involves formulating a plan as to how to reach potential and existing customers. Salespeople aim to hit those targets.
One-to-one marketing involves communicating directly with each customer. The company then tailors the approach to each customer’s tastes and preferences.
Impression management is the process of shaping people’s perceptions of things, other people, places and events.
In marketing and sales, it means getting consumers to perceive your products or services in a good light.
The Internet and marketing
With the advent of the Internet and ad-blocking software, inbound marketing has become increasingly popular. It involves using content – newsletters, blogs, podcasts, etc. – that online users like, to lure them in.
In the past, company’s sales personnel used to be the experts. However, today the experts are the consumers.
A term that Internet marketing specialists use all the time is the ‘bounce rate.’ The bounce rate refers to the percentage of people who leave the website after visiting a page.
In other words, instead of going to another page within the same site, they leave – they bounce out. The lower the bounce rate, the better.
Global Marketing refers to the planning, creating, placing, and promoting a business’ goods or services in the worldwide market. Is is a specialized skill. Executives who manage to implement an effective strategy, can take their company to the next level.
During the 1960s and 1970s, many Japanese business practices emerged, which later spread across the world. In some cases, engineering and marketing overlapped. For example, Kansei Engineering is engineering that is based on human emotions. Not only do Kansei developers focus on what products can do, but also on how they make consumers feel.
Video – Introduction to Marketing
This Study.com video explains what marketing is and why it is so important.