What is marketing? Definition and meaning
Marketing is a business term that has been defined by experts in dozens of different ways, and is hardly ever perceived identically from company-to-company. 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, selecting distribution channels, and developing and implementing a promotional strategy.
The UK-based Chartered Institute of Marketing (CIM) defines marketing as follows:
“Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably.”
Marketing are activities of a business related to buying and selling a product or service. It involves finding out what consumers want, determining whether it is possible to produce it at the right price, making it, and then selling it.
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
Marketing can be aimed at businesses (B2B) or individual consumers (B2C).
At the core of marketing is an understanding of what customers need and value. A company’s long-term success depends on learning what your customers’ needs are, and how to add value through marketing activities.
Marketing to other businesses, known as business-to-business or B2B marketing, involves supplying other companies or organizations with products or services.
Physical products sold to other businesses are commonly referred to as ‘industrial goods’, and may include raw materials for companies that make plastics, yarn for use in the textile trade, aircraft for airlines and the military, production machinery, office supplies – in fact anything a company or organization needs and buys.
B2B services may include legal advice, management consultancy, tax consultancy, training provision, IT services, the provision of temporary staff, etc.
Marketing directly to consumers
Marketing directly to consumer, also known as B2C, refers to targeting the individual people who purchase products and use services for their own personal consumption.
This may include FMCGs (fast-moving consumer goods) such as food, beverages and toiletries, or durable goods including cars, televisions, refrigerators and other white goods (major appliances that traditionally have had a white enamel surface).
B2B + B2C marketing
Many companies, especially large ones, have an integrated marketing approach – they focus on both individual consumers and businesses at the same time.
The Coca-Cola company, for example, knows that if its B2C marketing is to have any hope of success it has to persuade supermarkets – B2B – to provide shelf space for its products.
Most makers of durable goods also have an integrated marketing approach. For example, The Haier Group, the world’s largest manufacturer of consumer electronics and home appliances, focuses on individual consumers (B2C), but also supermarkets, department stores and other retail outlets (B2B).
A company’s marketing strategy, at least a good one, should combine all its marketing objectives into one integrated and comprehensive plan.
The strategy should be originally drawn from market research data. It should focus on the ideal product mix in order to reach the optimum profit potential and sustain the business.
According to marketingstrategynow.com: “The best marketing strategy process allows you to specially target your products and services to the ideal buyers most likely to buy.”
An effective and successful marketing plan is rooted in a good marketing 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 these objectives to be reached. 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.”
Ideally, sales and marketing are trying to achieve the same thing – more customers and revenues. However, they look at things a bit differently. Put very simply, marketing focuses on the market, what it wants and delivering products that satisfy those needs, while sales focuses on the product and how to persuade those in the market to like it and buy it. Some sales managers may disagree with the image above, insisting that sales does continue after the product is sold.
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.
– Community Involvement: 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, 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. The local community may also be reached online.
– Customer Service: basically, this involves providing assistance and advice to people who purchased or used the company’s product or service. In many business, it is also a service provided to customers before, during and after a sale is made.
Good customer service produces satisfied customers – 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.
– Direct marketing: involves delivering your message directly to consumers via leaflets, forms, fliers, catalogues, as well as street promotion.
– Distribution: this is part of the management chain in transporting one product from storage to a shop or supermarket.
– Market research: the process of gathering and analyzing information that will make the company more aware of how the people it hopes to sell to will react with its current or potential products and services.
Business owners are conducting market research all the time. When they talk to customers about their business or check out the prices of their competitors they are conducting market research.
Barack Obama, 44th President of the United States, once said: “Anybody who’s occupied this office has to remember that success is determined by an intersection in policy and politics and that you can’t be neglecting of marketing and P.R. and public opinion.” (Image: White House)
Market research done properly can produce a wealth of data about the business’ products and services, its customers and the marketplace where it operates.
The Canadian Business Network, part of the Government of Canada, offers the following advice regarding market research:
“The level of complexity used in your market research campaign is up to you, as market research can cover a broad spectrum of activities. You can undertake simple activities that can be done on your own, such as creating a short customer satisfaction questionnaire or studying demographic data for your area, or undertake complex ones that require assistance from a professional market research firm.”
“Regardless of the size of your market research budget, the time you have available or your level of experience, some form of market research is possible and it can help you to improve your business decisions.”
Elon Musk, a South African-born Canadian-American business magnate,engineer and inventor, once said: “The path to the CEO’s office should not be through the CFO’s office, and it shou ld not be through the marketing department. It needs to be through engineering and design.” (Image: Wikipedia)
– Media Planning: closely-related to advertising. It is an advertising strategy employed to target consumers using a range of informational outlets.
It is generally conducted by an advertising or media planning agency, which finds the best media outlets to reach the target market.
Examples of media outlets include the internet, posters, television, radio, physical newspapers and magazines, etc.
Product pricing: when setting the price, you should take into account how much it costs to produce and deliver, the market place, how much competitors are selling it for, its quality, the brand, etc.
Most product prices rarely stay fixed 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.
Public Relations: “A strategic communication process that builds mutually beneficial relationships between organizations and their publics,” says the PRSA (Public Relations Society of America).
Sales: planning and supporting the sales team by pushing ahead with sales targets and formulating a plan as to how to reach potential and existing customers in order to hit those targets.
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, today the experts are the consumers, the customers.
A term that all Internet marketing specialists use all the time is the ‘bounce rate’, which refers to the percentage of people who leave the website after visiting a page instead of bouncing to another page within the same site. The lower the bounce rate the better.
Video – Introduction to Marketing
This Study.com video explains in very simple terms what marketing is.