From a societal point of view, marketing is the link between a society's material requirements and its economic patterns of response.
Marketing satisfies these needs and wants through exchange processes and building long-term relationships.
Marketing is applied in enterprise and organizations through marketing management.
- 1 History
- 2 Customer orientation
- 3 Marketing research
- 4 Types of marketing
- 5 Marketing planning
- 6 Buying behavior
- 7 Marketing roles
- 8 Use of technologies
- 9 Services marketing
- 10 Right-time marketing
- 11 Guerrilla marketing
- 12 See also
- 13 References
- 14 Bibliography
- 15 External links
|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 will 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 that would diminish demand.
|Marketing||Needs and wants of customers||1970s to the present day||The 'Customer 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 (research and development) to develop a product attuned to the revealed information, and then utilize promotion techniques to ensure persons know the product exists. R&D companies often parallel customer orientation with R&D phases to ensure the desired customer specifications are produced. Customization Maximization (similar to profit maximization in economics,) is the measurable approach to more efficiently sustaining specific customer needs, in effort to maximize the customization of the product or service offered to the customer, by the measure of data relating to responses, feedback, and elasticity.|
|Holistic Marketing||Everything matters in marketing||21st century||The holistic marketing concept looks at marketing as a complex activity and acknowledges that everything matters in marketing - and that a broad and integrated perspective is necessary in developing, designing and implementing marketing programs and activities. The four components that characterize holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. Market segmentation and positioning have increased the divergence of society, further segregating and preventing a holistic population. Holistic Marketing helps converge the segments in an approach to improve the entire market through social responsibility and convergence. Holistic marketing disengages the political marketing activities of "divide and conquer", or market segmentation.|
Recent approaches in marketing include relationship marketing with focus on the customer, business marketing or industrial marketing with focus on an organization or institution and social marketing with focus on benefits to society. New forms of marketing also use the internet and are therefore called internet marketing or more generally e-marketing, online marketing, "digital marketing", search engine marketing, or desktop advertising. It attempts to perfect the segmentation strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called personalized marketing or one-to-one marketing. Internet marketing is sometimes considered to be broad in scope, because it not only refers to marketing on the Internet, but also includes marketing done via e-mail, wireless media as well as driving audience from traditional marketing methods like radio and billboard to internet properties or landing page.
|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 provide the best possible customer service and build customer loyalty.|
|Business marketing / Industrial marketing||Building and keeping relationships between organizations||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 products or end products. Different forms of marketing activities, such as promotion, advertising and communication to the customer are used.|
|Societal marketing||Benefit to society||1990s to present day||Similar characteristics to marketing orientation but with the added proviso that there will be a curtailment of any harmful activities to society, in either product, production, or selling methods.|
|Branding||Brand value||1980s to present day||In this context, "branding" refers to the main company philosophy and marketing is considered to be an instrument of branding philosophy.|
A firm in the market economy survives by producing goods that persons are willing and able to buy. Consequently, ascertaining consumer 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 market change identification approach 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 reason to spend R&D (research and development) 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 alternative to the well-known 4Ps supply side model (product, price, placement, promotion) of marketing management.
If any of the 4Ps were problematic or were not 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 decrease. However, in recent years service marketing has widened the domains to be considered, contributing to the 7P's of marketing in total. The other 3P's of service marketing are: process, physical environment and people.
Some consider there to be a fifth "P": positioning. See Positioning (marketing).
Some qualifications or caveats for customer focus exist. They do not invalidate or contradict the principle of customer focus; rather, they simply add extra dimensions of awareness and caution to it.
The work of Christensen and colleagues on disruptive technology has produced a theoretical framework that explains the failure of firms not because they were technologically inept (often quite the opposite), but because the value networks in which they profitably operated included customers who could not value a disruptive innovation at the time and capability state of its emergence and thus actively dissuaded the firms from developing it. The lessons drawn from this work include:
- Taking customer focus with a grain of salt, treating it as only a subset of one's corporate strategy rather than the sole driving factor. This means looking beyond current-state customer focus to predict what customers will be demanding some years in the future, even if they themselves discount the prediction.
- Pursuing new markets (thus new value networks) when they are still in a commercially inferior or unattractive state, simply because their potential to grow and intersect with established markets and value networks looks like a likely bet. This may involve buying stakes in the stock of smaller firms, acquiring them outright, or incubating small, financially distinct units within one's organization to compete against them.
Other caveats of customer focus are:
- The extent to which what customers say they want does not match their purchasing decisions. Thus surveys of customers might claim that 70% of a restaurant's customers want healthier choices on the menu, but only 10% of them actually buy the new items once they are offered. This might be acceptable except for the extent to which those items are money-losing propositions for the business, bleeding red ink. A lesson from this type of situation is to be smarter about the true test validity of instruments like surveys. A corollary argument is that "truly understanding customers sometimes means understanding them better than they understand themselves." Thus one could argue that the principle of customer focus, or being close to the customers, is not violated here—just expanded upon.
- The extent to which customers are currently ignorant of what one might argue they should want—which is dicey because whether it can be acted upon affordably depends on whether or how soon the customers will learn, or be convinced, otherwise. IT hardware and software capabilities and automobile features are examples. Customers who in 1997 said that they would not place any value on internet browsing capability on a mobile phone, or 6% better fuel efficiency in their vehicle, might say something different today, because the value proposition of those opportunities has changed.
In this sense, a firm's marketing department is often seen as of prime importance within the functional level of an organization. Information from an organization's marketing department would be used to guide the actions of other departments within the firm. As an example, a marketing department could ascertain (via marketing research) that consumers desired a new type of product, or a new usage for an existing product. With this in mind, the marketing department would inform the R&D (research and development) department to create a prototype of a product or service based on the consumers' new desires.
The production department would then start to manufacture the product, while the marketing department would focus on the promotion, distribution, pricing, etc. of the product. Additionally, a firm's finance departments would be consulted, with respect to securing appropriate funding for the development, production and promotion of the products. Inter-departmental conflicts may occur, should a firm adhere to the marketing orientation. Production may oppose the installation, support and servicing of new capital stock, which may be needed to manufacture a new product. Finance may oppose the required capital expenditure, since it could undermine a healthy cash flow for the organization.
Herd behavior in marketing is used to explain the dependencies of customers' mutual behavior. The Economist reported a recent conference in Rome on the subject of the simulation of adaptive human behavior. It shared mechanisms to increase impulse buying and get people "to buy more by playing on the herd instinct." The basic idea is that people will buy more of products that are seen to be popular, and several feedback mechanisms to get product popularity information to consumers are mentioned, including smart card technology and the use of Radio Frequency Identification Tag technology. A "swarm-moves" model was introduced by a Florida Institute of Technology researcher, which is appealing to supermarkets because it can "increase sales without the need to give people discounts." Other recent studies on the "power of social influence" include an "artificial music market in which some 19,000 allegations downloaded previously unknown songs" (Columbia University, New York); a Japanese chain of convenience stores which orders its products based on "sales data from department stores and research companies;" a Massachusetts company exploiting knowledge of social networking to improve sales; and online retailers such as Amazon.com who are increasingly informing customers about which products are popular with like-minded customers.
- An emerging area of study and practice concerns internal marketing, or how employees are trained and managed to deliver the brand in a way that positively impacts the acquisition and retention of customers, see also employer branding.
- Diffusion of innovations research explores how and why people adopt new products, services, and ideas.
- With consumers' eroding attention span and willingness to give time to advertising messages, marketers are turning to forms of permission marketing such as branded content, custom media and reality marketing.
Marketing research involves conducting research to support marketing activities, and the statistical interpretation of data into information. This information is then used by managers to plan marketing activities, gauge the nature of a firm's marketing environment and attain information from suppliers. Marketing researchers use statistical methods such as quantitative research, qualitative research, hypothesis tests, Chi-squared tests, linear regression, correlations, frequency distributions, poisson distributions, binomial distributions, etc. to interpret their findings and convert data into information. The marketing research process spans a number of stages, including the definition of a problem, development of a research plan, collection and interpretation of data and disseminating information formally in the form of a report. The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information.
A distinction should be made between marketing research and market research. Market research pertains to research in a given market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing. Thus, market research is a subset of marketing research.
Staying ahead of the consumer is an important part of a marketer's job. It is important to understand the "marketing environment" in order to comprehend the consumers concerns, motivations and to adjust the product according to the consumers needs. Marketers use the process of marketing environmental scans, which continually acquires information on events occurring outside the organization to identify trends, opportunities and threats to a business. The six key elements of a marketing scan are the demographic forces, socio-cultural forces, economic forces, regulatory forces, competitive forces, and technological forces. Marketers must look at where the threats and opportunities stem from in the world around the consumer to maintain a productive and profitable business.
The market environment is a marketing term and refers to factors and forces that affect a firm's ability to build and maintain successful relationships with customers. Three levels of the environment are: Micro (internal) environment - forces within the company that affect its ability to serve its customers. Meso environment – the industry in which a company operates and the industry's market(s). Macro (national) environment - larger societal forces that affect the microenvironment.
Market segmentation pertains to the division of a market of consumers into persons with similar needs and wants. For instance, Kellogg's cereals, Frosties are marketed to children. Crunchy Nut Cornflakes are marketed to adults. Both goods denote two products which are marketed to two distinct groups of persons, both with similar needs, traits, and wants. In another example, Sun Microsystems can use market segmentation to classify its clients according to their promptness to adopt new products.
Market segmentation allows for a better allocation of a firm's finite resources. A firm only possesses a certain amount of resources. Accordingly, it must make choices (and incur the related costs) in servicing specific groups of consumers. In this way, the diversified tastes of contemporary Western consumers can be served better. With growing diversity in the tastes of modern consumers, firms are taking note of the benefit of servicing a multiplicity of new markets.
Market segmentation can be viewed as a key dynamic in interpreting and executing a logical perspective of Strategic Marketing Planning. The manifestation of this process is considered by many traditional thinkers to include the following; Segmenting, Targeting and Positioning.
Types of market research
Market 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 a specific purpose.
- Secondary research (also referred to as desk research), 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 in this case 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. Nevertheless, while secondary research is relatively inexpensive, it often can become outdated and outmoded, given that it is used for a purpose other than the one for which it was intended. Primary research can also be broken down into quantitative research and qualitative research, which, as the terms suggest, pertain to numerical and non-numerical research methods and techniques, respectively. 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 exist additional modes of marketing research, which are:
- Exploratory research, pertaining to research that investigates an assumption.
- Descriptive research, which, as the term 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.
Types of marketing
- Account planning
- Affinity marketing
- Aggressiveness strategy
- Agricultural marketing
- Alliance marketing
- Ambush marketing
- Article marketing
- Article video marketing
- Association of Publishing Agencies
- Brand language
- Business model
- Call to action (marketing)
- Close Range Marketing (CRM)
- Cloud Marketing
- Cause marketing
- The Cellar (marketing)
- Close Range Marketing
- Community marketing
- Consumer-generated advertising
- Content marketing
- Cross-media marketing
- Customer advocacy
- Database marketing
- Digital marketing
- Digital omnivore
- Direct marketing
- Diversification (marketing strategy)
- Diversity marketing
- Ethical marketing
- Evangelism marketing
- Experience curve effects
- Faith-based marketing
- Figure of merit
- Freebie marketing
- Global marketing
- Guerrilla marketing
- Horizontal integration
- Inbound marketing
- Influencer marketing
- Limited edition candy
- Loyalty marketing
- Marketing communications
- Marketing warfare strategies
- Mass customization
- Menu engineering
- Multi-domestic strategy
- Multi-level marketing
- Native advertising
- Next-best-action marketing
- Online advertising
- Permission marketing
- Pitch book
- Pre-installed software
- Product bundling
- Project SCUM
- Proximity marketing
- Relationship marketing
- Revenue Technology Services
- Scenario planning
- Secret brand
- Seeding trial
- Share of voice
- Shopper marketing
- Social pull marketing
- Social marketing
- Special edition
- Strategy dynamics
- Student marketing
- Undercover marketing
- venture marketing
- Vertical disintegration
- Vertical integration
- Yield management
||This section may require cleanup to meet Wikipedia's quality standards. (October 2009)|
The marketing planning process involves forging a plan for a firm's marketing activities. A marketing plan can also pertain to a specific product, as well as to an organization's overall marketing strategy. Generally speaking, an organization's marketing planning process is derived from its overall business strategy. Thus, when top management are devising the firm's strategic direction or mission, the intended marketing activities are incorporated into this plan. There are several levels of marketing objectives within an organization. The senior management of a firm would formulate a general business strategy for a firm. However, this general business strategy would be interpreted and implemented in different contexts throughout the firm.
The field of marketing strategy considers the total marketing environment and its impacts on a company or product or service. The emphasis is on "an in depth understanding of the market environment, particularly the competitors and customers."
A given firm may offer numerous products or services to a marketplace, spanning numerous and sometimes wholly unrelated industries. Accordingly, a plan is required in order to effectively manage such products. Evidently, a company needs to weigh up and ascertain how to utilize its finite resources. For example, a start-up car manufacturing firm would face little success should it attempt to rival Toyota, Ford, Nissan, Chevrolet, or any other large global car maker. Moreover, a product may be reaching the end of its life-cycle. Thus, the issue of divest, or a ceasing of production, may be made. Each scenario requires a unique marketing strategy. Listed below are some prominent marketing strategy models.
A marketing strategy differs from a marketing tactic in that a strategy looks at the longer term view of the products, goods, or services being marketed. A tactic refers to a shorter term view. Therefore, the mailing of a postcard or sales letter would be a tactic, but changing marketing channels of distribution, changing the pricing, or promotional elements used would be considered a strategic change.
A marketing strategy considers the resources a firm has, or is required to allocate in effort to achieve an objective. Marketing Strategies include the process and planning in which a firm may be expected to achieve their company goals, in which usually involves an effort to increase revenues or assets, through a series of milestones or benchmarks of business and promotional activities.
The marketing activity and process of identifying a market problem or opportunity, and developing a solution based on market research, segmentation and supporting data. Positioning may refer the position a business has chosen to carry out their marketing and business objectives. Positioning relates to strategy, in the specific or tactical development phases of carrying out an objective to achieve a business' or organization's goals, such as increasing sales volume, brand recognition, or reach in advertising.
A marketing firm must ascertain the nature of customers' buying behavior if it is to market its product properly. In order to entice and persuade a consumer to buy a product, marketers try to determine the behavioral process of how a given product is purchased. Buyer behavior in the digital age is assessed through analytics and predictive modelling. The analysis of buyer behavior through online platforms includes Google Analytics and vendor side software such as Experian. The psychology of marketing is determined through the analysis of customer perception pertaining to brands. Marketing theory holds that brand attributes is primarily a matter of customer perception rather than product or service features.
B2C buying behavior
This mode of behavior concerns consumers and their purchase of a given product. For example, if one imagines 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 mean 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 made. This could then develop into consumer loyalty to the firm producing the sneakers.
B2B buying behavior
Relates to organizational/industrial buying behavior. Business buy either wholesale from other businesses or directly from the manufacturer in contracts or agreements. B2B marketing involves one business marketing a product or service to another business. B2C and B2B behavior are not precise terms, as similarities and differences exist, with some key differences 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 stages are conducted.
Marketing roles, titles, and responsibilities differ, often significantly, between B2B and B2C companies.
B2B Marketing roles
Marketing roles are often defined by the size of the company and the number of products. At the smallest company size, a general marketer must do everything from shape the product to generate awareness. As the company grows larger, roles start to become more specialized. For example, the product management role can split so that the product manager would focus on designing the product experience and functionality, while a product marketer would package and price the product. The mind map to the right details further roles and responsibilities including: corporate marketing, solution marketing, field marketing, and technical marketing.
Use of technologies
Marketing management can also rely on various technologies within the scope of its marketing efforts. Computer-based information systems can be employed, aiding in better processing and storage of data. Marketing researchers can use such systems to devise better methods of converting data into information, and for the creation of enhanced data gathering methods. Information technology can aid in enhancing an MKIS' software and hardware components, and improve a company's marketing decision-making process.
In recent years, the notebook personal computer has gained significant market share among laptops, largely due to its more user-friendly size and portability. Information technology typically progresses at a fast rate, leading to marketing managers being cognizant of the latest technological developments. Moreover, the launch of smartphones into the cellphone market is commonly derived from a demand among consumers for more technologically advanced products. A firm can lose out to competitors should it ignore technological innovations in its industry.
Technological advancements can lessen barriers between countries and regions. Using the World Wide Web, firms can quickly dispatch information from one country to another without much restriction. Prior to the mass usage of the Internet, such transfers of information would have taken longer to send, especially if done via snail mail, telex, etc.
Recently, there has been a large emphasis on data analytics. Data can be mined from various sources such as online forms, mobile phone applications and more recently, social media. Internet marketing is another branch of online marketing, where SEO (Search Engine Optimisation) is regarded as an effective method of increasing your website's presence in organic searches for creating potential customers.
Services marketing relates to the marketing of services, as opposed to tangible products. A service (as opposed to a good) is typically defined as follows:
- 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 touched, seen, heard, tasted, or smelled.
- The use of a service is inherently subjective, meaning that several persons experiencing a service would each experience it uniquely.
For example, a train ride can be deemed 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 (compared with goods) can also be viewed as a spectrum. Not all products are either pure goods or pure services. An example would be a restaurant, where a waiter's service is intangible, but the food is tangible.
As the number of vendors and delivery channels has increased, customers demand a right time and place for accepting messages and only pay attention to messages when and how it is convenient for them.
Guerrilla marketing is an advertising strategy in which low-cost unconventional means (graffiti or street art, sticker bombing, flash mobs) are used, often in a localized fashion or large network of individual cells, to convey or promote a product or an idea.
- Consumer confusion
- Demand chain
- Family in advertising
- List of marketing terms
- Marketing Management
- Media manipulation
- Multicultural marketing
- Outline of marketing
- Public Sector Marketing
- Real-time marketing
- Visual marketing
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