Marketing is defined by the American Marketing Association as “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 The Chartered Institute of Marketing defines marketing as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably.
A market is defined as a group of customers with the authority and ability to purchase a particular product or service that satisfies their collective demand
Marketing Functions
There are eight universal functions performed in marketing:
Buying: (Raw material to produce goods and services and to purchase finished goods or services as retailer or wholesaler to sell them again for final customers and consumers) It is a function that ensures that product offerings are available in sufficient quantities to
meet customer demands.
Selling: The function to be performed to sell the products/services/idea to satisfy customer needs or wants by using advertising, personal selling and sales promotion to match goods and services to customer needs.
Transporting: Function related to create the availability of product or services. It is used for moving products from their points of production to location convenient for purchases.
Storing: Warehouses are used to store the products for further distribution.
Standardizing and grading: To provide more quality products and services without variation in the quality. Ensuring that product offerings meet established and grading quality and quantity control standards of size, weight, and other product variables.
Financing: Providing the financial resources to carry out different promotions of products and providing credit for channel members (wholesalers, retailers) or consumers.
Risk taking: Marketer takes a risk specifically when any new product is introduced in a market because there are equal chances of success and failure. Dealing with uncertainty about consumer purchases resulting from creation and marketing of goods and services
that consumers may purchase in the future.
Obtaining Market information: Successful Marketing is no accident it involves the conduct of marketing research. This helps the managers to evaluate the potential demand, sales, buying power of the intended market.
The Marketing Process
Under the marketing concept, the firm must find a way to discover unfulfilled customer needs and bring to market products that satisfy those needs. The process of doing so can be modeled in a sequence of steps: the situation is analyzed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are made, the plan is implemented and the results are monitored.
Situation Analysis
A thorough analysis of the situation in which the firm finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the firm must understand its own capabilities and the environment in
which it is operating.
The situation analysis thus can be viewed in terms an analysis of the external environment and an internal analysis of the firm itself. The external environment can be described in terms of macro-environmental factors that broadly affect many firms, and
micro-environmental factors closely related to the specific situation of the firm. The situation analysis should include past, present, and future aspects. It should include a history outlining how the situation evolved to its present state and an analysis of trends in
order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists.
If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities to introduce products to better satisfy those consumers. Hence, the situation analysis should yield a summary of problems and opportunities. From this summary, the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition.
There are several frameworks that can be used to add structure to the situation analysis:
- 5 C Analyses – company, customers, competitors, collaborators, climate. Company represents the internal situation; the other four cover aspects of the external situation
- PEST analysis – for macro-environmental political, economic, societal, and technological factors. A PEST analysis can be used as the “climate” portion of the 5 C framework.
- SWOT analysis – strengths, weaknesses, opportunities, and threats – for the internal and external situation. A SWOT analysis can be used to condense the situation analysis into a listing of the most relevant problems and opportunities and to assess how well the firm is equipped to deal with them.
Marketing Strategy
Once the best opportunity to satisfy unfulfilled customer needs is identified, a strategic plan for pursuing the opportunity can be developed. Market research will provide specific market information that will permit the firm to select the target market segment and
optimally position the offering within that segment. The result is a value proposition to the target market. The marketing strategy then involves:
- Segmentation- Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers. The basis of consumer markets segmentation
are: Geographic, Demographic, Psychographic, Behaviourist that of industrial markets include: Location, Company type, Behavioural characteristics - Targeting (target market selection)
- Positioning the product within the target market
- Value proposition to the target market
Marketing Mix Decisions
Detailed tactical decisions then are made for the controllable parameters of the marketing mix. The action items include:
- Product development – specifying, designing, and producing the first units of the product.
- Pricing decisions
- Distribution contracts
- Promotional campaign development
Implementation and Control
At this point in the process, the marketing plan has been developed and the product has been launched. Given that few environments are static, the results of the marketing effort should be monitored closely. As the market changes, the marketing mix can be adjusted
to accommodate the changes. Often, small changes in consumer wants can be addressed by changing the advertising message. As the changes become more significant, a product redesign or an entirely new product may be needed. The marketing process does not end
with implementation – continual monitoring and adaptation is needed to fulfill customer needs consistently over the long-term.
