The Concept And Process Of Marketing Marketing Essay

Published Date: 23 Mar 2015

The term "market" originated from the Latin word "marcatus" meaning a place where business is carried out. In the olden days, a market was thought only as a place where buyers and sellers can get together and exchange their merchandise.

Marketing has been acknowledged as the most central and dominant area of any business organisation. The overall plan of the entire business is created in light of marketing activities conducted.

From its inception, till into the 1950's, marketing was awfully product oriented where businesses were primarily concerned with production. They gave more importance to produce large volumes of output and to increase profits.

The sales orientation stage which emerged after the 1950's were more concerned with selling the products that were manufactured. The modern day marketing we experience today notably referred as the "orientation marketing" emerged during the early 1970's as businesses became more conscious that it is the customer needs and wants which drives and boosts the whole business process. Today, consumers are given more importance and hence this concept has been widely accepted by consumers universally.

Towards a definition......

Marketing has been defined in numerous ways by various people.

Peter F. Drucker: "Marketing means to create customers."

N.C Nair: "Marketing is a creation and delivery of a standard of living of society."

Phillip Kotler: "Marketing is the social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others."

The Charted Institute of Marketing (CIM): "Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably."

The American Marketing Association (1935): "Marketing is performance of business activities that directs the flow of goods and services from producers to consumers."

William Stanton: "Marketing is creation and delivery of a standard of living. It includes finding out what consumers want, planning and developing product or service that satisfies those wants, then determining the best way to price, promote and to distribute that product or service."

The first two definitions by Peter F. Drucker and and N.C Nair emphasises on creating customers. It is agreed that a good marketer creates the need in a customer, but in addition to creating the need and delivering that product or service to their customers, it is highly important to guarantee that the customer has value for money they spent. Here, there is not much importance given to the guarantee that the customer is satisfied with what has been offered. Also there is no mention on the outcome of the transactions on the business. In reality, no business will thrive if there are no profits involved.

While Phillip Kotler's definition clearly highlights the creation of need by the customer and the transactions between the producer and customer, in this scenario, it too fails to arrive at the highly important aspect of outcomes of the transactions. The organization needs profits from the transactions.

The definition by The American Marketing Association signifies the product-oriented approach where the marketing is regarded as a "business performance" where goods are exchanged from the producers to customers for money. There is no part played by the customer in the whole process apart from acknowledging and accepting what has been offered by the producer. Here, the needs and wants of the customer have not been identified as well as there is no regard for customer satisfaction, as there is no value for money. In the present day, business would not survive for long if there is not much regard for the customer and their satisfaction. Business will easily lose customers when other competitive businesses beckon them.

Comparing the definitions between The American Marketing Association and the Charted Institute of Marketing, UK, it is evident that the latter gives a more clear understanding of the needs, expectation, and satisfactions of the customer, which is a priority in the modern day marketing. It also demonstrates that marketing requires elaborate planning, co-ordination and implementation by appropriate people who are trained for it.

While all the above definitions reflect light into what marketing is, I personally put forward the definition by William Stanton, as it provides us with all the essentials of what marketing ought to be. There is emphasis on finding customer needs, planning, developing the product or service, then pricing and promoting it in a way the customer is satisfied.

However keeping in mind the present day customer oriented businesses, and the ever changing needs of customers, marketing, too should be exceptionally dynamic. The whole process should continue on evolving and hence people involved in marketing should forever be on the look-out for innovations. Hence, the word "changing needs" should be included in the modern day marketing definitions.

Marketing oriented organizations......

The centre of attention of a market oriented organization is the customer. The main purpose of their business will revolve around satisfying its customer needs. Staying close to the customers and well ahead of the competitors in the field, at the same time catching the attention of more customers will be the priority of such an organization. Customer satisfaction while leading to profits will be the central goal.

There are major characteristics which identifies the marketing oriented organizations.

Shared values - as the company considers its customers as the first and foremost priority, they share the common value of better-quality products.

Organization - the organization will consist of a few layers and the rules and procedures within the organization would be uncomplicated and easy to follow.

Strategy - they make long term but flexible strategies to attract their customers & promote products and services using both long term and short term basis.

Stakeholders - stakeholders and their views are considered before finalising major decisions.

Culture - they have a very formal culture where communications are quite formal and decision making is participative.

The Marketing oriented organizations are customer driven. A businessman once stated: "we are to produce, what the people want and not what we can sell." Organizations are constantly on the lookout for needs of customers.

The invention of the modern day technologies like the iPods, and Blackberry phones are gadgets that were never dreamt of by customers before and managed lives without it. It is the customer oriented marketing approach that made these inventions possible, creating the need in the customers.

Marketing orientated businesses identifies the needs of its customers through market research and develops those product or services. A value (in money) is added to the product/service followed by promotional activities, thereby making the customers aware of the product/service. The marketing oriented organizations, and then distributes these products/services making it available to its prospective customers through their distribution networks, ensuring that their valued customers receive their products at a convenient place and time.

One important aspect of the marketing oriented organization, once they have established a fine relationship with its customers is to retain them in order to develop and enhance their business. This could only be done if there is an excellent relationship between the customer built on the basis of factors like reliability, commitment, empathy towards the customers, being prompt in their services, courtesy of the employees and their willing to help. This process is approached through Customer Relations Marketing. By implementing a wide range of marketing activities, communications, services and numerous customer care approaches, the organization ensures that the existing customer stay committed to the organization. The organization in return depends on the retained customer-turned-advocate to bring in new clients into the business, thereby growing the customer base and bringing in more profits and recognition to the organization.

As two sides of a coin, while the organization benefits from its customer, it should keep in mind to keep the customer satisfied in every way possible. A minor error on the organization's part can destroy the long standing relationship, causing immense loss to the organization. A customer can make or break your business in minutes.

As Mahatma Gandhi once said in his famous passage.. "A customer is not someone to argue with... Nobody ever won an argument with the customer"

Elements of the marketing concept......

In the world of marketing, a marketer follows a variety of different strategies and principles in order to achieve his marketing goals. Such principles or rather, concepts steers the marketer towards alternative marketing approaches, which helps the marketer reach his desired goal.

Phillip Kotler presented the presented the marketers with five alternative concepts.

The production concept - says that consumers will favour easy and widely available low cost products.

This is traditional approach to marketing management and would have been appropriate when there was not much competition in the market. The modern day customers do not seem to consider the price or how easily accessible the product could be. Noticing how people prefer the expensive and latest versions of mobile phones over the readily available, low cost phones in the market is one example that contradicts this approach.

The product concept - says that from consumers will prefer products with higher quality, better performance and attractive features.

Though this is another traditional approach, keeping in mind the present day customer, whose needs change continuously, this approach will reap benefits to the organization. Following the previous example of latest versions of mobile phones, customers now pursue the product that looks attractive and comes with innovative features.

The selling concept - says that customers if left alone will not buy enough of the organizations products and therefore, the organization must concentrate on promotional and selling efforts.

This is another traditional approach and functions under a competitive market. While highlighting the managers promotional and selling efforts, consumers would feel more valued when contacted through the promotional activities.

The marketing concept - says that to achieve organizational goals, the needs of the target market should be determined and delivered effectively and efficiently keeping in mind customer satisfaction.

This is the modern, customer-centred approach. The key elements being Target market, Integrated Marketing and Customer satisfaction. Hence the modern concept implies that low price, easy and wide distributions, quality, features, performance, promotional and selling efforts falls short if customer is not satisfied.

The marketing concept, based on its four main elements comprises, firstly of Consumer orientation, which emphasizes on creating the 4P's (Product, Price, Promotion, Placement) giving priority to customer satisfaction. Secondly, Integrated Marketing, emphasizing on combined efforts of every employees within organization for customer satisfaction. Thirdly, Target market focus, which highlights on needs of a particular group the company, aims to satisfy and lastly, profitability which stress that the organization profits will be met when customer is satisfaction is achieved.

Benefits and costs of a marketing approach......

The main objective of the marketing approach is utmost customer satisfaction. Based n the assumption that the customer will buy the product if they are satisfied with it, it is reasonable to believe that the benefits would be two way. Considering the target market concept, it could also be assumed that with maximum customer satisfaction, the organization would achieve its maximum profits.

The marketing approach seeks to find the needs and wants of a precise target market, conducts regular marketing research to develop a product. During the stages of research and development, a considerable amount of resources (in the forms of land, labour, capital) would be utilized. The organization, following the in accordance with the marketing concept, while aiming to be ahead of competitors, might possibly overspend the resources in order to maximise customer satisfaction. This would prove to be a major cost, causing dissatisfaction, even if the product proves to be of immense satisfaction to the customer. A scenario like this contradicts the theory that profitability would be met when customer is satisfied.

The cost of building and implementing excellent services and conducting promotional activities to attract customers while ensuring utmost customer satisfaction throughout these activities requires allocating resources for the programs. This too could prove to be a loss on the organizations part if the customers are not satisfied with the facilities.

For an organization that practices marketing approach, employees need to be highly customer oriented, knowledgeable and skilled in their respective areas, as they seek to continuously aim at satisfying customers. Although it is a cost borne by the organization, it could be regarded as a profit and benefit to the organization; as such employees contribute greatly to the organization in dealing with the customers and ensuring to their satisfaction.

Organizations today need to keep a balance between attracting new customers and retaining the existing ones. The cost of retaining a customer is proved to be more beneficial than attracting new customers.

Barista Cafe, in Pamankada, in order to attract new customers put up a 'no smoking" sign. The existing crowd of young '"smoking customers" and business men, who frequents Barista for a leisurely time and for informal business deals, stopped visiting the place, making the business lose its incomes and proved quite costly to the management. The Cafe later removed the sign and business resumed as before.

Costs of building long term relationships with customers, suppliers and distributors too are borne by the organization.

While the costs are uncountable, the organization gains incalculable benefits from its customers. Satisfied customers purchase products in more quantities frequently, talks favourably about the product and organization, will not be impressed with other competitors and would continuously on the lookout for a new product the organization would bring to the market. Satisfied customers lend support to the organization during crisis, maintaining loyalty by giving suggestions and protect the organizations interests. This aspect boosts organizations making it profitable and recognized within the society.