What Is Marketing

What is Marketing?

According to (Kotler, 2003) "Marketing is the business function that identifies unfulfilled needs and wants, defines and measures their magnitude and potential profitability, determines which target markets the organisation can best serve, decides on appropriate products, services, and programs to serve these chosen markets, and calls upon everyone in the organisation to think and serve the customer." The goals are to create value by offering superior solutions, save the buyer time and effort in finding and purchasing goods/services, and delivering a higher standard of living to society as a whole.

Evolution of Marketing

(Keith, 1960)

During a production orientation era, business concerned itself primarily with production, manufacturing, and efficiency issues. The reason for the predominance of this orientation is that there was a shortage of manufactured goods (relative to demand) during this period, so goods sold easily. The implications of this orientation were:

* Product lines were narrow

* Pricing was based on the costs of production and distribution

* Research was limited to technical product research

* Packaging was designed primarily to protect the product

* Promotion and advertising was minimal

After the WWII, as supply was starting to out-pace demand in many industries businesses had to concentrate on ways of selling their products. Numerous sales techniques such as closing, probing, and qualifing were all developed during sales orientation era and the sales department started to play a ky role in a company's organizational structure. Other promotional techniques like advertising and sales promotions were starting to be taken seriously. Packaging and labeling were used for promotional purposes more than protective purposes and pricing was usually based on comparisons with competitors.

The development of marketing orientation was motivated by the need to dissect in greater detail relationships and behaviours that existed between sellers and buyers. In the old days of marketing (before the 1950s) companies were identifying strategies and tactics for simply selling more products and services with little regard for what customers really wanted. Often this led companies to embrace a "sell-as-much-as-we-can" philosophy with little concern for building relationships for the long term. But starting in the 1950s, as competition grew stiffer across most industries, firms started looking for ways to improve. In 1960, Theodore Levitt, introduced the notion of "Marketing Myopia", which forms the basis of the present day marketing concept. Levitt argued that companies were thinking too much of their product not potential customers. This marketing concept suggests, that marketing decisions should be made by first knowing the customer and what they want. Only then should an organization initiate the process of developing and marketing products and services.

Customer Orientation and Value Creation

Today's marketing is customer oriented, focused on satisfying customer needs. (Armstrong and Kotler, 2002) define marketing as a "social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others". We have to distinguish between human needs, wants and demands. Human needs represent states of felt deprivation. Grouped as physical (i.e. food, clothing), social (i.e. belonging, affection) and individual (i.e. knowledge, self-expression) they form basic part of human life. Wants are form of human needs shaped by culture and individual personality, and are seen as objects that will satisfy needs. People have many wants but limited resources. For that reason, they want to buy the product that will provide the most value and satisfaction for their money. When backed by strong buying power, wants become demands.

http://moncton.localintheknow.com

Value refers to the perception of benefits received for what someone must give up. For customers value is most often measured by how much they feel they are getting for their money, though the value one customer feels she/he obtains may differ from the perception of value from another customer even though they purchase the same product. Customer value is the difference between the values customer gains from owning and using a product, and the cost of obtaining and using the product. Customer satisfaction depends on a product's perceived performance in delivering value relating to buyer's expectations.

On the other side of the transaction, the marketer may measure value in terms of how much profit they are making for the marketing efforts and resources expended. For a successful marketing effort to take place both the customer and the marketer must feel they are receiving something worthwhile in return for the efforts. Without a strong perception of value it is unlikely a strong relationship can be built.

Set of marketing tools that work together, with the end result of satisfying customer needs is called a 'Marketing mix'. These four P's (Price, Product, Place and Promotion) are the parame-ters that the marketer can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that centre the four P's on the customers in the target market, in order to create perceived value and generate a positive response.

http://www.netmba.com/marketing/mix/

Changes in Social and Cultural Trends

"...Within a few decades, new medical breakthroughs in fields such as nano-technology, stem cell science, genetic engineering, cloning, and bionics might extend the human life span well beyond 100 years. This will transform and redefine the human life cycle". http://www.wfs.org/2005soc.htm

But we don't need to wait to realise changes in trends that are already part of our society:

* Individuality - more single families, impact on health services and welfare, family values in decline

* Mobility - type of employment is changing from full-time to part-time, self-employment or the latest trend of E-Bay earnings