Marketing is used to identify the customer, to satisfy the customer, and to keep the customer. With the customer as the focus of its activities, it can be concluded thatmarketing management is one of the major components of business management. Marketing evolved to meet the stasis in developing new markets caused by mature markets and overcapacities in the last 2-3 centuries.The adoption of marketing strategies requires businesses to shift their focus from production to the perceived needs and wants of their customers as the means of staying profitable.
The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions.It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors.
Evolution of marketing:
An orientation, in the marketing context, related to a perception or attitude a firm holds towards its product or service, essentially concerning consumers and end-users. Throughout history marketing has changed considerably as consumer tastes are changing faster.
| Orientation | Profit driver | Western European timeframe | Description |
|---|---|---|---|
| Production | Production methods | until the 1950s | A firm focusing on a production orientation specializes in producing as much as possible of a given product or service. Thus, this signifies a firm exploiting economies of scale, until the minimum efficient scale is reached. A production orientation may be deployed when a high demand for a product or service exists, coupled with a good certainty that consumer tastes do not rapidly alter (similar to the sales orientation). |
| Product | Quality of the product | until the 1960s | A firm employing a product orientation is chiefly concerned with the quality of its own product. A firm would also assume that as long as its product was of a high standard, people would buy and consume the product. |
| Selling | Selling methods | 1950s and 1960s | A firm using a sales orientation focuses primarily on the selling/promotion of a particular product, and not determining new consumer desires as such. Consequently, this entails simply selling an already existing product, and using promotion techniques to attain the highest sales possible. Such an orientation may suit scenarios in which a firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood of changes in consumer tastes diminishing demand. |
| Marketing | Needs and wants of customers | 1970 to present day | The 'marketing orientation' is perhaps the most common orientation used in contemporary marketing. It involves a firm essentially basing its marketing plans around the marketing concept, and thus supplying products to suit new consumer tastes. As an example, a firm would employ market research to gauge consumer desires, use R&D to develop a product attuned to the revealed information, and then utilize promotion techniques to ensure persons know the product exists. |
Contemporary approaches:
| Orientation | Profit driver | Western European timeframe | Description |
|---|---|---|---|
| Relationship marketing /Relationship management | Building and keeping good customer relations | 1960s to present day | Emphasis is placed on the whole relationship between suppliers and customers. The aim is to give the best possible attention, customer services and therefore build customer loyalty. |
| Business marketing /Industrial marketing | Building and keeping relationships betweenorganizations | 1980s to present day | In this context marketing takes place between businesses or organizations. The product focus lies on industrial goods or capital goods rather than consumer productsor end products. A different form of marketing activities like promotion, advertising and communication to the customer is used. |
| Social marketing | Benefit to society | 1990s to present day | Similar characteristics as marketing orientation but with the added proviso that there will be a curtailment on any harmful activities to society, in either product, production, or selling methods. |
| Branding | Brand value | 2000s to present day | In this context, "branding" is main company philosophy and marketing is considered an instrument of branding philosophy. |
Customer orientation:
A firm in the market economy survives by producing goods that persons are willing and able to buy. Consequently, ascertainingconsumer demand is vital for a firm's future viability and even existence as a going concern. Many companies today have a customer focus (or market orientation). This implies that the company focuses its activities and products on consumer demands. Generally there are three ways of doing this: the customer-driven approach, the sense of identifying market changes and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no point spending R&D funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.
A formal approach to this customer-focused marketing is known as SIVA (Solution, Information, Value, Access). This system is basically the four Ps renamed and reworded to provide a customer focus. The SIVA Model provides a demand/customer centric version alternative to the well-known 4Ps supply side model (product, price, placement, promotion) of marketing management.
| Product | → | Solution |
| Price | → | Value |
| Place | → | Access |
| Promotion | → | Information |
If any of the 4Ps had a problem or were not there in the marketing factor of the business, the business could be in trouble and so other companies may appear in the surroundings of the company, so the consumer demand on its products will become less.
Types of marketing research:
Marketing research, as a sub-set aspect of marketing activities, can be divided into the following parts:
- Primary research (also known as field research), which involves the conduction and compilation of research for the purpose it was intended.
- Secondary research (also referred to as desk research), is initially conducted for one purpose, but often used to support another purpose or end goal.
By these definitions, an example of primary research would be market research conducted into health foods, which is used solely to ascertain the needs/wants of the target market for health foods. Secondary research, again according to the above definition, would be research pertaining to health foods, but used by a firm wishing to develop an unrelated product.
Primary research is often expensive to prepare, collect and interpret from data to information. Nonetheless, while secondary research is relatively inexpensive, it often can become outdated and outmoded, given it is used for a purpose other than for which is was intended. Primary research can also be broken down into quantitative research and qualitative research, which as the labels suggest, pertain to numerical and non-numerical research methods, techniques. The appropriateness of each mode of research depends on whether data can be quantified (quantitative research), or whether subjective, non-numeric or abstract concepts are required to be studied (qualitative research).
There also exists additional modes of marketing research, which are:
- Exploratory research, pertaining to research that investigates an assumption.
- Descriptive research, which as the label suggests, describes "what is".
- Predictive research, meaning research conducted to predict a future occurrence.
- Conclusive research, for the purpose of deriving a conclusion via a research process.
Buying Behavior
B2C buying behavior
This mode of behaviour concerns consumers, in the purchase of a given product. As an example, if one pictures a pair of sneakers, the desire for a pair of sneakers would be followed by an information search on available types/brands. This may include perusing media outlets, but most commonly consists of information gathered from family and friends.If the information search is insufficient, the consumer may search for alternative means to satisfy the need/want. In this case, this may be buying leather shoes, sandals, etc. The purchase decision is then made, in which the consumer actually buys the product. Following this stage, a post-purchase evaluation is often conducted, comprising an appraisal of the value/utility brought by the purchase of the sneakers. If the value/utility is high, then a repeat purchase may be bought. This could then develop into consumer loyalty, for the firm producing the pair of sneakers.
B2B buying behaviour
Relates to organizational/industrial buying behavior. The term "B2B" stands for Business to Business. B2B marketing in its most simple definition is when one business markets a product or service to another business. B2C and B2B behavior are not exact, as similarities and differences exist, Some of the key differences are listed below:
In a straight re-buy, the fourth, fifth and sixth stages are omitted. In a modified re-buy scenario, the fifth and sixth stages are precluded. In a new buy, all aforementioned stages are conducted.
Services marketing
Services marketing relates to the marketing of services, as opposed to tangible products. A typical definition of a service (as opposed to a good) is thus:
- The use of it is inseparable from its purchase (i.e. a service is used and consumed simultaneously)
- It does not possess material form, and thus cannot be smelt, heard, tasted, or felt.
- The use of a service is inherently subjective, in that due to the human condition, all persons experiencing a service would experience it uniquely.
As examples of the above points, a train ride can be deemed as a service. If one buys a train ticket, the use of the train is typically experienced concurrently with the purchase of the ticket. Although the train is a physical object, one is not paying for the permanent ownership of the tangible components of the train.
Services (by comparison with goods) can also be viewed as a spectrum. Not all products are pure goods, nor are all pure services. An intermediary example may be a restaurant, where the waiter service is intangible, but the food is tangible.
How to Create a Marketing Plan
What is a marketing plan and why is it so essential to the success of your business? Find out here, in the first section of our comprehensive guide to creating a marketing plan.
Firms that are successful in marketing invariably start with a marketing plan. Large companies have plans with hundreds of pages; small companies can get by with a half-dozen sheets. Put your marketing plan in a three-ring binder. Refer to it at least quarterly, but better yet monthly. Leave a tab for putting in monthly reports on sales/manufacturing; this will allow you to track performance as you follow the plan.
The plan should cover one year. For small companies, this is often the best way to think about marketing. Things change, people leave, markets evolve, customers come and go. Later on we suggest creating a section of your plan that addresses the medium-term future--two to four years down the road. But the bulk of your plan should focus on the coming year.
You should allow yourself a couple of months to write the plan, even if it's only a few pages long. Developing the plan is the "heavy lifting" of marketing. While executing the plan has its challenges, deciding what to do and how to do it is marketing's greatest challenge. Most marketing plans kick off with the first of the year or with the opening of your fiscal year if it's different.
Who should see your plan?
All the players in the company. Firms typically keep their marketing plans very, very private for one of two very different reasons: Either they're too skimpy and management would be embarrassed to have them see the light of day, or they're solid and packed with information . . . which would make them extremely valuable to the competition.
You can't do a marketing plan without getting many people involved. No matter what your size, get feedback from all parts of your company: finance, manufacturing, personnel, supply and so on--in addition to marketing itself. This is especially important because it will take all aspects of your company to make your marketing plan work. Your key people can provide realistic input on what's achievable and how your goals can be reached, and they can share any insights they have on any potential, as-yet-unrealized marketing opportunities, adding another dimension to your plan. If you're essentially a one-person management operation, you'll have to wear all your hats at one time--but at least the meetings will be short!
What's the relationship between your marketing plan and your business plan or vision statement? Your business plan spells out what your business is about--what you do and don't do, and what your ultimate goals are. It encompasses more than marketing; it can include discussions of locations, staffing, financing, strategic alliances and so on. It includes "the vision thing," the resounding words that spell out the glorious purpose of your company in stirring language. Your business plan is the U.S. Constitution of your business: If you want to do something that's outside the business plan, you need to either change your mind or change the plan. Your company's business plan provides the environment in which your marketing plan must flourish. The two documents must be consistent.
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