Marketing Concepts: Myths and Fundamentals

Marketing Fundamentals

The Marketing Concept | Debunking the Myths

• Myth 1: Marketing is just advertising.
• Reality: Marketing encompasses research, product development, pricing, distribution and communication.
• Myth 2: Marketing is only about sales.
• Reality: Marketing sets the stage for sales by building strong brand awareness and customer relationships.
• Myth 3: Marketing equals social media.
• Reality: Social media is a tool among many in a comprehensive strategy.

The Marketing Concept | More than Ads

• Marketing is 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.
• Marketing is the set of strategies and activities by which companies acquire and engage customers, build strong customer relationships, and create superior customer value to capture value from customers in return.
• The marketing concept includes achieving organizational goals.
• It depends on knowing the needs and wants of target markets.
• It also requires delivering the desired satisfactions better than competitors do.

The Marketing Concept | Managers Orientation

• Production Orientation: Making whatever products are easy to produce, then trying to sell them.
• Marketing Orientation: Offering customers what they need, instead of just trying to get customers to buy what the firm has produced.
• Purpose Orientation: Focus on why the company exists beyond profit, to create value for stakeholders, like customers, employees, suppliers, investors, and communities.
• Attitudes toward customers varies: Production Orientation believes customers should be glad as they exist, while Marketing Orientation believes customer needs determine company plans, and Purpose orientation believes that customer, employee, and community needs determine company plans are important.
• Attitude toward employees also shifts: Production Orientation focuses on minimizing labor costs and views employees as replaceable, Marketing Orientation makes sure all employees should be concerned with the customer, while Purpose Orientation engages employees and increases their productivity and attention to customers.
• Product offerings depend on what can be done: Production Orientation is when a company sells what it can make, Marketing Orientation is where a company makes what it can sell, and Purpose Orientation is when a company follows its purpose and makes what it can sell.
• The role of marketing research varies: Production Orientation determines customer reaction, if used at all, Marketing Orientation seeks to determine customer needs and how well the company is satisfying them, and Purpose Orientation aims to determine customer and employee needs and how well the company satisfies each.
• Interest in innovation is different in each orientation: Production Orientation focuses on technology and cost cutting, Marketing Orientation is on locating new opportunities, and Purpose Orientation is on new opportunities for making a greater impact on the company's purpose.
• Customer service also changes: Production Orientation focuses on an activity required to reduce customer complaints, Marketing Orientation satisfies customers after the sale so they'll come back again, and Purpose Orientation actively seeks to satisfy customer needs beyond the core product offering.
• Focus of advertising shifts: Production Orientation advertises product features and how products are made, Marketing Orientation advertises need-satisfying benefits of goods and services, and Purpose Orientation advertises the company's purpose to customers and employees.
• Relationship with customers changes: Production Orientation ends when a sale is made, Marketing Orientation focuses on customer satisfaction, before and after the sale, which leads to profitable long-term relationships, while Purpose Orientation focuses on customers who are loyal to the company because of its product and its commitment to a greater purpose.
• Costs have different weights: Production Orientation keeps costs as low as possible, Marketing Orientation eliminates costs that do not give value to the customer, and Purpose Orientation eliminates costs that do not give value to customers or advance company purpose.
• Psychological Marketing Concepts include; sell the benefits, not the features, scarcity drives demand, always remove the risk, and perfection is the enemy of progress.
• People connect with emotions, not products, must always leverage social proof, should people buy outcomes, not products, and people need a reason to act now.
• Marketers must test, measure, and learn throughout the campaign.

Marketing is Ubiquitous

• Marketing is everywhere.
• It exists in the products people buy daily.
• It takes place in advertising on TV and social networks.
• It is present in the interactions people have with brands.

What is the Focus of Marketing?

• Goods, services, events, places, and people.
• Experiences, properties and organizations.
• Also, information.
• Lastly, causes/ideas.

The Marketing Process

• Understand the marketplace and consumer needs and design a customer-driven marketing strategy.
• Construct an integrated marketing mix that delivers superior value and engages customers to build profitable relationships and create customer delight.
• Capture value from customers to create profits and customer equity in return.
• Creating value for the consumer is essential.

Understanding the Marketplace and Customer Needs

• Needs are states of felt deprivation.
• Wants are the form human needs take as they are shaped by culture and individual personality.
• Demands are human wants backed by buying power.
• Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
• Marketing myopia involves paying more attention to the specific products than to the benefits and experiences produced.
• Customers form expectations about the value and satisfaction of market offerings.
• Satisfied customers buy again.
• Dissatisfied customers switch to competitors.
• Exchange happens when obtaining a desired object from someone by offering something in return.
• Marketing efforts should create, maintain, and grow desirable exchange relationships.
• A market is the set of actual and potential buyers.
• Consumers become a market when they search for products, interact with companies to obtain information, and make purchases.
• Each party in the system adds value. The system includes the company, suppliers, marketing intermediaries, competitors, major environmental forces, and final consumers.
• Arrows represent relationships that must be developed and managed to create customer value, engagement, and profitable customer relationships.

Designing a Customer Value-Driven Marketing Strategy and Plan

• Marketing Management: the art and science of choosing target markets and building profitable relationships.
• It asks what customers will be served (target market), and how these customers can best be served (value proposition).
• Value Proposition: A brand's value proposition is the set of benefits or values it promises customers to satisfy their needs.
• Target Segment are the customers and people who will buy.
• Problems are the issues targeted struggle with.
• Scope is that which the value proposition will address.
• Solution is the offering that is the value prop.
• Benefits are the advantages people can expect.
• The marketing mix includes the product, price, place, and promotion.
• Includes features and product interaction.
• Promotion includes marketing channels and strategy.
• Pricing includes price strategy & profit margin.
• Includes location and distribution.

Managing Customer Relationships

• Customer Relationship Management: It is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
• Customer Lifetime Value: It is the value of the entire stream of purchases that the customer will make over a lifetime of patronage.
• Share of Customer: It is the portion of the customer's purchasing that a company gets in its product categories.
• Customer Equity: The total combined customer lifetime values of all the company's customers.

Marketing Evolution

• Marketing 1.0(1900s - 1950s): Product-Centric Era
• Focus: Mass production and distribution of goods
• Objective: Selling as many products as possible
• Communication: One-way, mass advertising
• Marketing 2.0 (1950s-1980s): Customer-Oriented Approach
• Customer Needs: Understanding and meeting individual customer needs
• Segmentation: Targeting specific segments with tailored offers
• Relationship Building: Building long-term relationships
• Marketing 3.0 (1980s-2000s): Values-Driven Marketing
• Mission: Aligning with a social or environmental cause
• Values: Communicating the brand's core values to consumers
• Purpose: Creating a positive impact on the world
• Marketing 4.0 (2000s-2020): Digital Meets Traditional
• Traditional: TV, print, radio advertising
• Digital: Online, social media, email
• Integration: Blending online and offline
• Traditional Marketing: TV, radio, newspapers, magazines, billboards
• Focus on reaching large audiences massively
• Higher cost and lower targeting capability
• Digital Marketing: Websites, social networks (Instagram, Facebook), SEO, Google Ads
• Ability to target specific audiences
• Real-time monitoring of results and lower cost
• Reach: Digital Marketing allows global and immediate interactions, although the TV medium has a high reach.
• Costs: Digital Marketing is generally more affordable for small businesses.
• Measurement of Results: Digital Marketing is where every interaction is measurable.
• Marketing 5.0: Technology for Humanity
• Al: Artificial intelligence for personalization
• Robotics: Automating tasks
• IoT: Internet of Things for data collection
• Marketing 6.0: The Future is Immersive
• Metaverse: Immersive experiences reshape interactions
• Hyper-Personalization: Tailoring experiences
• Sustainability: Ethical practices

The Changing Marketing Landscape

• From Mass to Personal
• Rapid Globalization
• Engagement & Interactivity
• Sustainability
• Digital Domination
• Growth of Not-for-Profit Marketing
• Changing Economic Environment
• Creating value for the customer
• Creating lasting relationships
• Contribution to organization's goals
• Brand creation and management
• Adaptation and resilience

An Expanded Model of the Marketing Process

• Understand the marketplace and customer needs and wants.
• Research customers and the marketplace.
• Manage marketing information and customer data.
• Create value for customers and build strong relationships.
• Design a customer value-driven marketing strategy and select customers to serve: market segmentation and targeting.
• Decide on a value proposition: differentiation and positioning.
• Construct an integrated marketing mix.
• Product and service design: build strong brands, create real value, manage demand and supply chains.
• Promote and communicate the value proposition.
• Engage customers, build profitable relationships, and create customer delight.
• Customer relationship management: build engagement and strong relationships with chosen customers.
• Partner relationship management: build strong relationships with marketing partners.
• Capture value from the customers in return to customer profits and customer equity.
• Create satisfied, loyal customers, capture customer lifetime value, and increase share of the market and share of customers.