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Marketing is the process of exploring, creating, and delivering value to meet the needs of a
target market
A target market, also known as serviceable obtainable market (SOM), is a group of customers within a business's serviceable available market at which a business aims its marketing efforts and resources. A target market is a subset of the total ma ...
in terms of goods and services;
potentially including selection of a target audience; selection of certain attributes or themes to emphasize in advertising; operation of
advertising campaign
An advertising campaign is a series of advertisement messages that share a single idea and theme which make up an integrated marketing communication (IMC). An IMC is a platform in which a group of people can group their ideas, beliefs, and conc ...
s; attendance at
trade show
A trade fair, also known as trade show, trade exhibition, or trade exposition, is an exhibition organized so that companies in a specific industry can showcase and demonstrate their latest products and services, meet with industry partners and cu ...
s and public events;
design
A design is a plan or specification for the construction of an object or system or for the implementation of an activity or process or the result of that plan or specification in the form of a prototype, product, or process. The verb ''to design'' ...
of products and
packaging
Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of designing, evaluating, and producing packages. Packaging can be described as a co ...
attractive to buyers; defining the terms of sale, such as
price
A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the c ...
,
discounts
Discounting is a financial mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee.See "Time Value", "Discount", "Discount Yield", "Compound Interest", "Efficie ...
,
warranty
In contract law, a warranty is a promise which is not a condition of the contract or an innominate term: (1) it is a term "not going to the root of the contract",Hogg M. (2011). ''Promises and Contract Law: Comparative Perspectives''p. 48 Cambrid ...
, and return policy;
product placement in media or with people believed to influence the buying habits of others; agreements with retailers, wholesale distributors, or resellers; and attempts to create
awareness of,
loyalty to, and positive feelings about a brand. Marketing is typically done by the seller, typically a retailer or manufacturer. Sometimes tasks are contracted to a dedicated marketing firm or
advertising agency
An advertising agency, often referred to as a creative agency or an ad agency, is a business dedicated to creating, planning, and handling advertising and sometimes other forms of promotion and marketing for its clients. An ad agency is generally ...
. More rarely, a
trade association
A trade association, also known as an industry trade group, business association, sector association or industry body, is an organization founded and funded by businesses that operate in a specific Industry (economics), industry. An industry tra ...
or government agency (such as the
Agricultural Marketing Service
The Agricultural Marketing Service (AMS) is an agency of the United States Department of Agriculture; it maintains programs in five commodity areas: cotton and tobacco; dairy; fruit and vegetable; livestock and seed; and poultry. These program ...
) advertises on behalf of an entire industry or locality, often a specific type of food (e.g.
Got Milk?
Got Milk? (stylized as got milk?) is an American advertising campaign encouraging the consumption of milk and dairy products. Created by the advertising agency Goodby Silverstein & Partners for the California Milk Processor Board in 1993, it ...
), food from a specific area, or a city or region as a tourism destination.
It is one of the primary components of
business management
Business administration, also known as business management, is the administration of a commercial enterprise. It includes all aspects of overseeing and supervising the business operations of an organization. From the point of view of managemen ...
and
commerce
Commerce is the large-scale organized system of activities, functions, procedures and institutions directly and indirectly related to the exchange (buying and selling) of goods and services among two or more parties within local, regional, nation ...
. Marketers can direct their product to other businesses (
B2B marketing
Business marketing is a marketing practice of individuals or organizations (including commercial businesses, governments and institutions). It allows them to sell products or services to other companies or organizations that resell them, use them ...
) or directly to consumers (B2C marketing).
Regardless of who is being marketed to, several factors apply, including the perspective the marketers will use. Known as market orientations, they determine how marketers approach the planning stage of marketing.
The marketing mix, which outlines the specifics of the product and how it will be sold,
is affected by the environment surrounding the product,
the results of
marketing research
Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix i ...
and
market research
Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mark ...
,
[Market Research is a subset of Marketing Research] and the characteristics of the product's target market.
Once these factors are determined, marketers must then decide what methods of promoting the product,
including use of coupons and other price inducements.
The term ''marketing'', what is commonly known as attracting customers, incorporates knowledge gained by studying the
management
Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business.
Management includes the activities o ...
of
exchange
Exchange may refer to:
Physics
*Gas exchange is the movement of oxygen and carbon dioxide molecules from a region of higher concentration to a region of lower concentration. Places United States
* Exchange, Indiana, an unincorporated community
* ...
relationships and is the
business process
A business process, business method or business function is a collection of related, structured activities or tasks by people or equipment in which a specific sequence produces a service or product (serves a particular business goal) for a parti ...
of identifying, anticipating and satisfying customers' needs and wants.
Definition
Marketing is currently defined by the
American Marketing Association (AMA) 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".
[American Marketing Association]
Definitions of Marketing
approved 2017, accessed 24 January 2021 However, the definition of marketing has evolved over the years. The AMA reviews this definition and its definition for "marketing research" every three years.
The interests of "society at large" were added into the definition in 2008. The development of the definition may be seen by comparing the 2008 definition with the AMA's 1935 version: "Marketing is the performance of business activities that direct the flow of goods, and services from producers to consumers". The newer definition highlights the increased prominence of other stakeholders in the new conception of marketing.
Recent definitions of marketing place more emphasis on the consumer relationship, as opposed to a pure exchange process. For instance, prolific marketing author and educator,
Philip Kotler
Philip Kotler (born May 27, 1931) is an American marketing author, consultant, and professor emeritus; the S. C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management at Northwestern University ...
has evolved his definition of marketing. In 1980, he defined marketing as "satisfying needs and wants through an exchange process", and in 2018 defined it as "the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return". A related definition, from the
sales process engineering
Sales process engineering is intended to design better ways of selling and make salespeople's efforts more productive. It has been described as "the systematic application of scientific and mathematical principles to achieve the practical goals ...
perspective, defines marketing as "a set of processes that are interconnected and interdependent with other functions of a business aimed at achieving customer interest and satisfaction".
Besides, customers some definitions of marketing highlight marketing's ability to produce value to shareholders of the firm as well. In this context, marketing can be defined as "the management process that seeks to maximise returns to shareholders by developing relationships with valued customers and creating a competitive advantage".
For instance, the
Chartered Institute of Marketing
The Chartered Institute of Marketing (CIM) was founded in 1911. It has over 30,000 members, including more than 3,000 registered Chartered Marketers. CIM offers 130 study centres in 36 countries, and exam centres in 132 countries.
In 1952 Prince ...
defines marketing from a customer-centric perspective, focusing on "the management process responsible for identifying, anticipating and satisfying customer requirements profitably".
In the past, marketing practice tended to be seen as a creative industry, which included
advertising
Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
,
distribution Distribution may refer to:
Mathematics
*Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations
* Probability distribution, the probability of a particular value or value range of a vari ...
and
selling
Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale.
The seller, or the provider of the goods or services, completes a sale in r ...
, and even today many parts of the marketing process (e.g.
product design
Product design as a verb is to create a new product to be sold by a business to its customers. A very broad coefficient and effective generation and development of ideas through a process that leads to new products. Thus, it is a major aspect of n ...
,
art director
Art director is the title for a variety of similar job functions in theater, advertising, marketing, publishing, fashion, film industry, film and television, the Internet, and video games.
It is the charge of a sole art director to supervise and ...
,
brand management
In marketing, brand management begins with an analysis on how a brand is currently perceived in the market, proceeds to planning how the brand should be perceived if it is to achieve its objectives and continues with ensuring that the brand is pe ...
,
advertising
Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
, inbound marketing,
copywriting
Copywriting is the act or occupation of writing text for the purpose of advertising or other forms of marketing. The product, called copy or sales copy, is written content that aims to increase brand awareness and ultimately persuade a person or ...
etc.) involve the use of the creative arts. However, because marketing makes extensive use of
social sciences
Social science is one of the branches of science, devoted to the study of societies and the relationships among individuals within those societies. The term was formerly used to refer to the field of sociology, the original "science of soci ...
,
psychology
Psychology is the scientific study of mind and behavior. Psychology includes the study of conscious and unconscious phenomena, including feelings and thoughts. It is an academic discipline of immense scope, crossing the boundaries betwe ...
,
sociology
Sociology is a social science that focuses on society, human social behavior, patterns of Interpersonal ties, social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of Empirical ...
,
mathematics
Mathematics is an area of knowledge that includes the topics of numbers, formulas and related structures, shapes and the spaces in which they are contained, and quantities and their changes. These topics are represented in modern mathematics ...
,
economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services.
Economics focuses on the behaviour and intera ...
,
anthropology
Anthropology is the scientific study of humanity, concerned with human behavior, human biology, cultures, societies, and linguistics, in both the present and past, including past human species. Social anthropology studies patterns of behavi ...
and
neuroscience
Neuroscience is the scientific study of the nervous system (the brain, spinal cord, and peripheral nervous system), its functions and disorders. It is a multidisciplinary science that combines physiology, anatomy, molecular biology, development ...
, the profession is now widely recognized as a science. Marketing science has developed a concrete process that can be followed to create a
marketing plan
A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan so that goals may be achieved. While a marketing plan contains a list of actions, without a sound strategic founda ...
.
Concept
The "marketing concept" proposes that to complete its organizational objectives, an organization should anticipate the needs and wants of potential consumers and satisfy them more effectively than its competitors. This concept originated from Adam Smith's book ''The Wealth of Nations'' but would not become widely used until nearly 200 years later. Marketing and Marketing Concepts are directly related.
Given the centrality of customer needs, and wants in marketing, a rich understanding of these concepts is essential:
: ''
Needs
A need is dissatisfaction at a point of time and in a given context. Needs are distinguished from wants. In the case of a need, a deficiency causes a clear adverse outcome: a dysfunction or death. In other words, a need is something required for a ...
:'' Something necessary for people to live a healthy, stable and safe life. When needs remain unfulfilled, there is a clear adverse outcome: a dysfunction or death. Needs can be objective and physical, such as the need for food, water, and shelter; or subjective and psychological, such as the need to belong to a family or social group and the need for self-esteem.
: ''
Wants
The idea of want can be examined from many perspectives. In secular societies want might be considered similar to the emotion desire, which can be studied scientifically through the disciplines of psychology or sociology. Want might also be exam ...
:'' Something that is desired, wished for or aspired to. Wants are not essential for basic survival and are often shaped by culture or peer-groups.
: ''
Demand
In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...
s:'' When needs and wants are backed
by the ability to pay, they have the potential to become economic demands.
Marketing research
Marketing research is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal is to identify and assess how changing elements of the marketing mix i ...
, conducted for the purpose of new product development or product improvement, is often concerned with identifying the consumer's ''unmet needs.''
Customer needs are central to market segmentation which is concerned with dividing markets into distinct groups of buyers on the basis of "distinct needs, characteristics, or behaviors who might require separate products or marketing mixes." Needs-based segmentation (also known as ''benefit segmentation'') "places the customers' desires at the forefront of how a company designs and markets products or services." Although needs-based segmentation is difficult to do in practice, it has been proved to be one of the most effective ways to segment a market.
In addition, a great deal of advertising and promotion is designed to show how a given product's benefits meet the customer's needs, wants or expectations in a unique way.
B2B and B2C marketing
The two major segments of marketing are business-to-business (B2B) marketing and business-to-consumer (B2C) marketing.
B2B marketing
B2B (business-to-business) marketing refers to any marketing strategy or content that is geared towards a business or organization. Any company that sells products or services to other businesses or organizations (vs. consumers) typically uses B2B marketing strategies.
Examples of products sold through B2B marketing include:
* Major equipment
* Accessory equipment
* Raw materials
* Component parts
* Processed materials
* Supplies
* Venues
* Business services
The four major categories of B2B product purchasers are:
* Producers- use products sold by B2B marketing to make their own goods (e.g.: Mattel buying plastics to make toys)
* Resellers- buy B2B products to sell through retail or wholesale establishments (e.g.: Walmart buying vacuums to sell in stores)
* Governments- buy B2B products for use in government projects (e.g.: purchasing contractor services to repair infrastructure)
* Institutions- use B2B products to continue operation (e.g.: schools buying printers for office use)
B2C marketing
Business-to-consumer marketing, or B2C marketing, refers to the tactics and strategies in which a company promotes its products and services to individual people.
Traditionally, this could refer to individuals shopping for personal products in a broad sense. More recently the term B2C refers to the online selling of consumer products.
C2B marketing
Consumer-to-business marketing or C2B marketing is a business model where the end consumers create products and services which are consumed by businesses and organizations. It is diametrically opposed to the popular concept of B2C or Business- to- Consumer where the companies make goods and services available to the end consumers. In this type of business model, businesses profit from consumers' willingness to name their own price or contribute data or marketing to the company, while consumers benefit from flexibility, direct payment, or free or reduced-price products and services. One of the major benefit of this type of business model is that it offers a company a competitive advantage in the market.
C2C marketing
Customer to customer
Customer to customer (C2C or consumer to consumer) markets provide a way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchas ...
marketing or C2C marketing represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction. C2C companies are a new type of model that has emerged with e-commerce technology and the sharing economy.
Differences in B2B and B2C marketing
The different goals of B2B and B2C marketing lead to differences in the B2B and B2C markets. The main differences in these markets are demand, purchasing volume, number of customers, customer concentration, distribution, buying nature, buying influences, negotiations, reciprocity, leasing and promotional methods.
*Demand: B2B demand is derived because businesses buy products based on how much demand there is for the final consumer product. Businesses buy products based on customer's wants and needs. B2C demand is primarily because customers buy products based on their own wants and needs.
*Purchasing volume: Businesses buy products in large volumes to distribute to consumers. Consumers buy products in smaller volumes suitable for personal use.
*Number of customers: There are relatively fewer businesses to market to than direct consumers.
*Customer concentration: Businesses that specialize in a particular market tend to be geographically concentrated while customers that buy products from these businesses are not concentrated.
*Distribution: B2B products pass directly from the producer of the product to the business while B2C products must additionally go through a wholesaler or retailer.
*Buying nature: B2B purchasing is a formal process done by professional buyers and sellers, while B2C purchasing is informal.
*Buying influences: B2B purchasing is influenced by multiple people in various departments such as quality control, accounting, and logistics while B2C marketing is only influenced by the person making the purchase and possibly a few others.
*Negotiations: In B2B marketing, negotiating for lower prices or added benefits is commonly accepted while in B2C marketing (particularly in Western cultures) prices are fixed.
*Reciprocity: Businesses tend to buy from businesses they sell to. For example, a business that sells printer ink is more likely to buy office chairs from a supplier that buys the business's printer ink. In B2C marketing, this does not occur because consumers are not also selling products.
*Leasing: Businesses tend to lease expensive items while consumers tend to save up to buy expensive items.
*Promotional methods: In B2B marketing, the most common promotional method is personal selling. B2C marketing mostly uses sales promotion, public relations, advertising, and social media.
Marketing management orientations
A marketing orientation has been defined as a "philosophy of business management."
[Mc Namara (1972) cited in Deshpande, R., ''Developing a Market Orientation'', Thousand Oaks, CA, Sage, 1999, p. 11] or "a corporate state of mind" or as an "organizational culture" Although scholars continue to debate the precise nature of specific concepts that inform marketing practice, the most commonly cited orientations are as follows:
* Product concept: mainly concerned with the quality of its product. It has largely been supplanted by the marketing orientation, except for haute couture and arts marketing.
* Production concept: specializes in producing as much as possible of a given product or service in order to achieve
economies of scale
In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of output produced per unit of time. A decrease in cost per unit of output enables ...
or
economies of scope
Economies of scope are "efficiencies formed by variety, not volume" (the latter concept is "economies of scale"). In economics, "economies" is synonymous with cost savings and "scope" is synonymous with broadening production/services through div ...
. It dominated marketing practice from the 1860s to the 1930s, yet can still be found in some companies or industries. Specifically, Kotler and Armstrong note that the production philosophy is "one of the oldest philosophies that guides sellers...
ndis still useful in some situations."
* Selling concept: focuses on the selling/promotion of the firm's existing products, rather than developing new products to satisfy unmet needs or wants primarily through promotion and direct sales techniques, largely for "unsought goods" in industrial companies. A 2011 meta analyses found that the factors with the greatest impact on sales performance are a salesperson's sales related knowledge (market segments, presentation skills, conflict resolution, and products), degree of adaptiveness, role clarity, cognitive aptitude, motivation and interest in a sales role).
* Marketing concept: This is the most common concept used in contemporary marketing, and is a customer-centric approach based on products that suit new consumer tastes. These firm engage in extensive
market research
Market research is an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness. Mark ...
, use R&D (Research & Development), and then use promotion techniques. The marketing orientation includes:
** ''Customer orientation'': A firm in the
market economy
A market economy is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand, where all suppliers and consumers ...
can survive by producing
goods
In economics, goods are items that satisfy human wants
and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not tran ...
that people are willing and able to buy. Consequently, ascertaining
consumer demand
In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...
is vital for a
firm
A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common p ...
's future viability and even existence as a
going concern
A going concern is a business that is assumed will meet its financial obligations when they become due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the spec ...
.
** ''Organizational orientation'': The marketing department is of prime importance within the functional level of an organization. Information from the marketing department is used to guide the actions of a company's other departments. 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 department to create a prototype of a product/service based on consumers' new desires. The production department would then start to manufacture the product. The finance department may oppose required capital expenditures since it could undermine a healthy cash flow for the organization.
* Societal marketing concept: Social responsibility that goes beyond satisfying customers and providing superior
value
Value or values may refer to:
Ethics and social
* Value (ethics) wherein said concept may be construed as treating actions themselves as abstract objects, associating value to them
** Values (Western philosophy) expands the notion of value beyo ...
embraces societal stakeholders such as employees, customers, and local communities. Companies that adopt this perspective typically practice
triple bottom line
The triple bottom line (or otherwise noted as TBL or 3BL) is an accounting framework with three parts: social, environmental (or ecological) and economic. Some organizations have adopted the TBL framework to evaluate their performance in a broade ...
reporting and publish financial, social and environmental impact reports. Sustainable marketing or
green marketing
Green marketing is the marketing of products that are presumed to be environmentally safe. It incorporates a broad range of activities, including product modification, changes to the production process, sustainable packaging, as well as modifying ...
is an extension of societal marketing.
The marketing mix
A marketing mix is a foundational tool used to guide decision making in marketing. The marketing mix represents the basic tools that marketers can use to bring their products or services to the market. They are the foundation of managerial marketing and the
marketing plan
A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan so that goals may be achieved. While a marketing plan contains a list of actions, without a sound strategic founda ...
typically devotes a section to the marketing mix.
The 4Ps
The traditional marketing mix refers to four broad levels of marketing decision, namely: ''product'', ''price'', ''promotion'', and ''place''.
Outline
;
Product
Product may refer to:
Business
* Product (business), an item that serves as a solution to a specific consumer problem.
* Product (project management), a deliverable or set of deliverables that contribute to a business solution
Mathematics
* Produ ...
: The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the
end-user
In product development, an end user (sometimes end-user) is a person who ultimately uses or is intended to ultimately use a product. The end user stands in contrast to users who support or maintain the product, such as sysops, system administrat ...
's needs and wants. The product element consists of product design, new product innovation, branding, packaging, labeling. The scope of a product generally includes supporting elements such as warranties, guarantees, and support.
Brand
A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
ing, a key aspect of the product management, refers to the various methods of communicating a brand identity for the product,
brand
A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
, or company.
;
Pricing: This refers to the process of setting a
price
A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the c ...
for a product, including discounts. The price need not be monetary; it can simply be what is exchanged for the product or services, e.g. time, energy, or attention or any sacrifices consumers make in order to acquire a product or service. The price is the cost that a consumer pays for a product—monetary or not. Methods of setting prices are in the domain of
pricing science.
; Place (or
distribution Distribution may refer to:
Mathematics
*Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations
* Probability distribution, the probability of a particular value or value range of a vari ...
): This refers to how the product gets to the customer; the distribution channels and intermediaries such as wholesalers and
retailer
Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and t ...
s who enable customers to access products or services in a convenient manner. This third P has also sometimes been called ''Place'' or ''Placement'', referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales.
;
Promotion
Promotion may refer to:
Marketing
* Promotion (marketing), one of the four marketing mix elements, comprising any type of marketing communication used to inform or persuade target audiences of the relative merits of a product, service, brand or i ...
:This includes all aspects of marketing communications:
advertising
Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
,
sales promotion
Sales promotion is one of the elements of the promotional mix. The primary elements in the promotional mix are advertising, personal selling, direct marketing and publicity/public relations. Sales promotion uses both media and non-media marketing ...
, including
promotional education,
public relations
Public relations (PR) is the practice of managing and disseminating information from an individual or an organization (such as a business, government agency, or a nonprofit organization) to the public in order to influence their perception. P ...
,
personal selling
Personal selling occurs when a sales representative meets with a potential client for the purpose of transacting a sale. Many sales representatives rely on a sequential sales process that typically includes nine steps. Some sales representative ...
,
product placement,
branded entertainment In marketing, branded content (also known as branded entertainment) is content produced by an advertiser or content whose creation was funded by an advertiser. In contrast to content marketing (in which content is presented first and foremost as a m ...
, event marketing, trade shows, and
exhibitions
An exhibition, in the most general sense, is an organized presentation and display of a selection of items. In practice, exhibitions usually occur within a cultural or educational setting such as a museum, art gallery, park, library, exhibitio ...
. This fourth P is focused on providing a message to get a response from consumers. The message is designed to persuade or tell a story to create awareness.
[Borden, N., "The Concept of the Marketing Mix," ''Journal of Advertising Research,'' June 1964 pp. 2–7; van Waterschoot, W. and van den Bulte, C., "The 4P Classification of the Marketing Mix Revisited," ''Journal of Marketing,'' Vol. 56, No. 4, 1992, pp. 83–93]
Criticisms
One of the limitations of the 4Ps approach is its emphasis on an inside-out view. An ''inside-out'' approach is the traditional planning approach where the organization identifies its desired goals and objectives, which are often based around what has always been done. Marketing's task then becomes one of "selling" the organization's products and messages to the "outside" or external stakeholders.
[Kerr, F., Patti, C. and Ichul, K., "An Inside-out Approach to Integrated Marketing Communications: An International Perspective," ''International Journal of Advertising,'' Vol. 27, No. 4, 2008, pp. 531–40] In contrast, an ''outside-in'' approach first seeks to understand the needs and wants of the consumer.
From a model-building perspective, the 4 Ps has attracted a number of criticisms. Well-designed models should exhibit clearly defined categories that are mutually exclusive, with no overlap. Yet, the 4 Ps model has extensive overlapping problems. Several authors stress the hybrid nature of the fourth P, mentioning the presence of two important dimensions, "communication" (general and informative communications such as public relations and corporate communications) and "promotion" (persuasive communications such as advertising and direct selling). Certain marketing activities, such as personal selling, may be classified as either ''promotion'' or as part of the place (i.e., distribution) element. Some pricing tactics, such as promotional pricing, can be classified as price variables or promotional variables and, therefore, also exhibit some overlap.
Other important criticisms include that the marketing mix lacks a strategic framework and is, therefore, unfit to be a planning instrument, particularly when uncontrollable, external elements are an important aspect of the marketing environment.
Modifications and extensions
To overcome the deficiencies of the 4P model, some authors have suggested extensions or modifications to the original model. Extensions of the four P's are often included in cases such as services marketing where unique characteristics (i.e. intangibility, perishability, heterogeneity and the inseparability of production and consumption) warrant additional consideration factors. Other extensions have been found necessary for retail marketing, industrial marketing, and internet marketing
include "people", "process", and "physical evidence" and are often applied in the case of
services marketing
Services marketing is a specialized branch of marketing which emerged as a separate field of study in the early 1980s, following the recognition that the unique characteristics of services required different strategies compared with the marketin ...
Other extensions have been found necessary in retail marketing, industrial marketing and internet marketing.
The 4Cs
In response to environmental and technological changes in marketing, as well as criticisms towards the 4Ps approach, the 4Cs has emerged as a modern marketing mix model.
Outline
Consumer (or client)
The consumer refers to the person or group that will acquire the product. This aspect of the model focuses on fulfilling the wants or needs of the consumer.
Cost
Cost refers to what is exchanged in return for the product. Cost mainly consists of the monetary value of the product. Cost also refers to anything else the consumer must sacrifice to attain the product, such as time or money spent on transportation to acquire the product.
Convenience
Like "Place" in the 4Ps model, convenience refers to where the product will be sold. This, however, not only refers to physical stores but also whether the product is available in person or online. The convenience aspect emphasizes making it as easy as possible for the consumer to attain the product, thus making them more likely to do so.
Communication
Like "Promotion" in the 4Ps model, communication refers to how consumers find out about a product. Unlike promotion, communication not only refers to the one-way communication of advertising, but also the two-way communication available through social media.
Environment
The term "marketing environment" relates to all of the factors (whether internal, external, direct or indirect) that affect a firm's marketing decision-making/planning. A firm's marketing environment consists of three main areas, which are:
* The macro-environment (
Macromarketing
Macromarketing is an interdisciplinary field that studies marketing as a provisioning technology of society. It focuses on marketing-society interactions including such topics as marketing systems, aggregate consumer behavior, market regulation, s ...
), over which a firm holds little control, consists of a variety of external factors that manifest on a large (or macro) scale. These include: economic, social, political and technological factors. A common method of assessing a firm's macro-environment is via a PESTLE (Political, Economic, Social, Technological, Legal, Ecological) analysis. Within a
PESTLE analysis
In business analysis, PEST analysis ("political, economic, socio-cultural and technological") describes a framework of macro-environmental factors used in the environmental scanning component of strategic management. It is part of an external envi ...
, a firm would analyze national political issues, culture and climate, key
macroeconomic
Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole.
For example, using interest rates, taxes, and ...
conditions, health and indicators (such as economic growth,
inflation
In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
,
unemployment
Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for Work (human activity), w ...
, etc.),
social trends Social Trends was a major British annual social and economic survey.
History
In 1967, Muriel Nissel and Claus Moser started work on "a national survey analysing trends in social welfare", that was to become ''Social Trends'', first published in 197 ...
/attitudes, and the nature of technology's impact on its society and the business processes within the society.
* The micro-environment, over which a firm holds a greater amount (though not necessarily total) control, typically includes: Customers/
consumer
A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. T ...
s,
Employees
Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any othe ...
,
Suppliers
In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, activ ...
and the
Media
Media may refer to:
Communication
* Media (communication), tools used to deliver information or data
** Advertising media, various media, content, buying and placement for advertising
** Broadcast media, communications delivered over mass el ...
. In contrast to the macro-environment, an organization holds a greater (though not complete) degree of control over these factors.
* The internal environment, which includes the factors inside of the company itself
A firm's internal environment consists
of: Labor, Inventory, Company Policy, Logistics, Budget, and Capital Assets.
Research
Marketing research is a systematic process of analyzing data that 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 to attain information from suppliers. A distinction should be made between ''marketing'' research and ''market'' research. Market research involves gathering information about a particular target 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. Market research is a subset of marketing research.
[ (Avoiding the word consumer, which shows up in both, market research is about distribution, while marketing research encompasses distribution, advertising effectiveness, and salesforce effectiveness).
Marketing researchers use statistical methods (such as ]quantitative research
Quantitative research is a research strategy that focuses on quantifying the collection and analysis of data. It is formed from a deductive approach where emphasis is placed on the testing of theory, shaped by empiricist and positivist philosop ...
, qualitative research
Qualitative research is a type of research that aims to gather and analyse non-numerical (descriptive) data in order to gain an understanding of individuals' social reality, including understanding their attitudes, beliefs, and motivation. This ...
, hypothesis tests, Chi-square tests, linear regression
In statistics, linear regression is a linear approach for modelling the relationship between a scalar response and one or more explanatory variables (also known as dependent and independent variables). The case of one explanatory variable is call ...
, correlation coefficient
A correlation coefficient is a numerical measure of some type of correlation, meaning a statistical relationship between two variables. The variables may be two columns of a given data set of observations, often called a sample, or two components ...
s, frequency distribution
In statistics, the frequency (or absolute frequency) of an event i is the number n_i of times the observation has occurred/recorded in an experiment or study. These frequencies are often depicted graphically or in tabular form.
Types
The cumula ...
s, Poisson and binomial distribution
In probability theory and statistics, the binomial distribution with parameters ''n'' and ''p'' is the discrete probability distribution of the number of successes in a sequence of ''n'' independent experiments, each asking a yes–no quest ...
s, etc.) to interpret their findings and convert data into information.
The stages of research include:
* Define the problem
* Plan research
* Research
* Interpret data
* Implement findings
Segmentation
Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-markets or segments, each of which tends to be homogeneous in all significant aspects. The process is conducted for two main purposes: better allocation of a firm's finite resources and to better serve the more diversified tastes of contemporary consumers. A firm only possesses a certain amount of resources. Thus, it must make choices (and appreciate the related costs) in servicing specific groups of consumers. Moreover, with more diversity in the tastes of modern consumers, firms are noting the benefit of servicing a multiplicity of new markets.
Market segmentation can be defined in terms of the STP acronym, meaning Segment, Target, and Position.
Segmentation involves the initial splitting up of consumers into persons of like needs/wants/tastes. Commonly used criteria include:
* Geographic (such as a country, region, city, town)
* Psychographic (e.g. personality traits or lifestyle traits which influence consumer behaviour)
* Demographic (e.g. age, gender, socio-economic class, education)
*Gender
*Income
*Life-Cycle (e.g. Baby Boomer, Generation X, Millennial, Generation Z)
*Lifestyle (e.g. tech savvy, active)
*Behavioral (e.g. brand loyalty, usage rate)
Once a segment has been identified to target, a firm must ascertain whether the segment is beneficial for them to service. The ''DAMP'' acronym is used as criteria to gauge the viability of a target market. The elements of DAMP are:
* Discernable – how a segment can be differentiated from other segments.
* Accessible – how a segment can be accessed via Marketing Communications produced by a firm
* Measurable – can the segment be quantified and its size determined?
* Profitable – can a sufficient return on investment be attained from a segment's servicing?
The next step in the targeting process is the level of differentiation involved in a segment serving. Three modes of differentiation exist, which are commonly applied by firms. These are:
* Undifferentiated – where a company produces a like product for all of a market segment
* Differentiated – in which a firm produced slight modifications of a product within a segment
* Niche
Niche may refer to:
Science
*Developmental niche, a concept for understanding the cultural context of child development
*Ecological niche, a term describing the relational position of an organism's species
*Niche differentiation, in ecology, the ...
– in which an organization forges a product to satisfy a specialized target market
'' Positioning'' concerns how to position a product in the minds of consumers and inform what attributes differentiate it from the competitor's products. A firm often performs this by producing a perceptual map, which denotes similar products produced in the same industry according to how consumers perceive their price and quality. From a product's placing on the map, a firm would tailor its marketing communications to meld with the product's perception among consumers and its position among competitors' offering.
Promotional mix
The promotional mix outlines how a company will market its product. It consists of five tools: personal selling, sales promotion, public relations, advertising and social media
* Personal selling
Personal selling occurs when a sales representative meets with a potential client for the purpose of transacting a sale. Many sales representatives rely on a sequential sales process that typically includes nine steps. Some sales representative ...
involves a presentation given by a salesperson to an individual or a group of potential customers. It enables two-way communication and relationship building, and is most commonly seen in business-to-business marketing but can also be found in business-to-consumer marketing (e.g.: selling cars at a dealership).
* Sales promotion
Sales promotion is one of the elements of the promotional mix. The primary elements in the promotional mix are advertising, personal selling, direct marketing and publicity/public relations. Sales promotion uses both media and non-media marketing ...
involves short-term incentives to encourage the buying of products. Examples of these incentives include free samples, contests, premiums, trade shows, giveaways, coupons, sweepstakes and games. Depending on the incentive, one or more of the other elements of the promotional mix may be used in conjunction with sales promotion to inform customers of the incentives.
* Public relations
Public relations (PR) is the practice of managing and disseminating information from an individual or an organization (such as a business, government agency, or a nonprofit organization) to the public in order to influence their perception. P ...
is the use of media tools to promote and monitor for a positive view of a company or product in the public's eye. The goal is to either sustain a positive opinion or lessen or change a negative opinion. It can include interviews, speeches/presentations, corporate literature, social media, news releases and special events.
* Advertising
Advertising is the practice and techniques employed to bring attention to a product or service. Advertising aims to put a product or service in the spotlight in hopes of drawing it attention from consumers. It is typically used to promote a ...
occurs when a firm directly pays a media channel, directly via an in-house agency or via an advertising agency or media buying service, to publicize its product, service or message. Common examples of advertising media include:
* Social media
Social media are interactive media technologies that facilitate the creation and sharing of information, ideas, interests, and other forms of expression through virtual communities and networks. While challenges to the definition of ''social medi ...
is used to facilitate two-way communication between companies and their customers. Outlets such as Facebook
Facebook is an online social media and social networking service owned by American company Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin M ...
, Twitter
Twitter is an online social media and social networking service owned and operated by American company Twitter, Inc., on which users post and interact with 280-character-long messages known as "tweets". Registered users can post, like, and ...
, Tumblr
Tumblr (stylized as tumblr; pronounced "tumbler") is an American microblogging and social networking website founded by David Karp in 2007 and currently owned by Automattic. The service allows users to post multimedia and other content to a sho ...
, Pinterest
Pinterest is an American image sharing and social media service designed to enable saving and discovery of information (specifically "ideas") on the internet using images, and on a smaller scale, animated GIFs and videos, in the form of pinboard ...
, Snapchat
Snapchat is an American multimedia instant messaging app and service developed by Snap Inc., originally Snapchat Inc. One of the principal features of Snapchat is that pictures and messages are usually only available for a short time before the ...
and YouTube
YouTube is a global online video platform, online video sharing and social media, social media platform headquartered in San Bruno, California. It was launched on February 14, 2005, by Steve Chen, Chad Hurley, and Jawed Karim. It is owned by ...
allow brands to start a conversation with regular and prospective customers. Viral marketing can be greatly facilitated by social media and if successful, allows key marketing messages and content in reaching a large number of target audiences within a short time frame. These platforms can also house advertising and public relations content.
The marketing plan
The area of marketing planning 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. An organization's marketing planning process is derived from its overall business strategy. Thus, when top management is devising the firm's strategic direction/mission, the intended marketing activities are incorporated into this plan.
Outline of the marketing plan
Within the overall strategic marketing plan, the stages of the process are listed as thus:
* Executive Summary
An executive summary (or management summary, sometimes also called speed read) is a short document or section of a document produced for business purposes. It summarizes a longer report or proposal or a group of related reports in such a way that ...
*Current marketing situation
* Threats and opportunities analysis
*Objectives and issues
*Marketing Strategy
Marketing strategy allows organizations to focus limited resources on best opportunities to increase sales and achieve a competitive advantage in the market.
Strategic marketing emerged in the 1970s/80s as a distinct field of study, further buil ...
*Action programs
*Budgets
*Control
Levels of marketing objectives within an organization
As stated previously, 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.
At the corporate level, marketing objectives are typically broad-based in nature, and pertain to the general vision of the firm in the short, medium or long-term. As an example, if one pictures a group of companies (or a conglomerate), top management may state that sales for the group should increase by 25% over a ten-year period.
A strategic business unit
A strategic business unit (SBU) in business strategic management, is a profit center which focuses on product offering and market segment. SBUs typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though t ...
(SBU) is a subsidiary within a firm, which participates within a given market/industry. The SBU would embrace the corporate strategy, and attune it to its own particular industry. For instance, an SBU may partake in the sports goods industry. It thus would ascertain how it would attain additional sales of sports goods, in order to satisfy the overall business strategy.
The functional level relates to departments within the SBUs, such as marketing, finance, HR, production, etc. The functional level would adopt the SBU's strategy and determine how to accomplish the SBU's own objectives in its market. To use the example of the sports goods industry again, the marketing department would draw up marketing plans, strategies and communications to help the SBU achieve its marketing aims.
Product life cycle
The product life cycle
In industry, Product Lifecycle Management (PLM) is the process of managing the entire lifecycle of a product from its inception through the engineering, design and manufacture, as well as the service and disposal of manufactured products. PLM ...
(PLC) is a tool used by marketing managers to gauge the progress of a product, especially relating to sales or revenue accrued over time. The PLC is based on a few key assumptions, including:
* A given product would possess introduction, growth, maturity, and decline stage
* No product lasts perpetually on the market
* A firm must employ differing strategies
Strategy (from Greek στρατηγία ''stratēgia'', "art of troop leader; office of general, command, generalship") is a general plan to achieve one or more long-term or overall goals under conditions of uncertainty. In the sense of the " ar ...
, according to where a product is on the PLC
In the introduction stage, a product is launched onto the market. To stimulate the growth of sales/revenue, use of advertising may be high, in order to heighten awareness of the product in question.
During the growth stage, the product's sales/revenue is increasing, which may stimulate more marketing communications to sustain sales. More entrants enter into the market, to reap the apparent high profits that the industry is producing.
When the product hits maturity, its starts to level off, and an increasing number of entrants to a market produce price falls for the product. Firms may use sales promotions to raise sales.
During decline, demand for a good begins to taper off, and the firm may opt to discontinue the manufacture of the product. This is so, if revenue for the product comes from efficiency savings in production, over actual sales of a good/service. However, if a product services a niche market, or is complementary to another product, it may continue the manufacture of the product, despite a low level of sales/revenue being accrued.
See also
Types of marketing
Marketing orientations or philosophies
References
Bibliography
* Bartels, Robert, ''The History of Marketing Thought,'' Columbus, Ohio, Grid, (1976) 198
online
*
* Church, Roy and Godley, Andrew (eds), ''The Emergence of Modern Marketing,'' London, Frank Cass, 200
online edition
* Hollander, Stanley C., Rassuli, Kathleen M.; Jones, D.G. Brian; Dix and Farlow, L., "Periodization in Marketing History," ''Journal of Macromarketing,'' Vol 25, no.1, 2005, pp. 32–41
online
* Tedlow, Richard S., and Jones, Geoffrey G. (eds), ''The Rise and Fall of Mass Marketing,'' Routledge, 2014
* Weitz, Barton A. and Robin Wensley (eds). ''Handbook of Marketing,'' 2002
External links
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Business process
Promotion and marketing communications