Marketing: Definition and Goals

Marketing Definition

• Marketing involves communicating or promoting the value of a product, service, or brand.
• Marketing companies analyze the external environment, market, competitors, customers, and internal characteristics.
• "By word of mouth" represents the simplest, oldest, and most natural form of marketing.
• Marketing for profit increases sales, while nonprofit marketing communicates messages for social purposes.
• According to the American Marketing Association (AMA), marketing includes creating, communicating, delivering, and exchanging offerings that have value.
• The Philippines Marketing Association (PMA) defines marketing as a science and profession guided by ethics, corporate citizenship, and social responsibility.
• Marketing should adhere to ethical principles and corporate citizenship and avoid harm or promotion of violence.

Goals of Marketing

• Understanding the market and consumers to satisfy their needs and wants is a key goal.
• Marketing aims to introduce and innovate products and services that improve life quality.
• Designing and implementing effective, customer-driven marketing strategies is important.
• Developing marketing programs that deliver superior value to consumers is a goal.
• Building and maintaining mutually beneficial and profitable customer relationships is essential.
• Capturing customer value to generate profits is a primary objective.
• Marketing should promote value transactions with full regard to societal well-being.

The Marketing Process

• The marketing process involves situation analysis, strategy formulation, implementation/control, and marketing mix decisions (4Ps).
• Situation analysis includes micro/macro-environmental factors, the market, customers, and competition.
• Marketing strategy formulation covers market segmentation, target market selection, value proposition, and product positioning.
• Implementation and control include implementation, monitoring, and marketing mix adjustments.
• Marketing Mix Decisions involve product, price, place and promotion.
• Organizations must thoroughly analyze the external environment, market, competitors, customers, and internal characteristics before marketing products or services.
• Marketing strategies are formulated and implemented with elements of marketing (4Ps).
• Monitoring takes place to identify deviations and adjust elements of the marketing mix.

Products, Services, and Experiences

• Organizations market goods, services, experiences, ideas, advocacies, and even personalities.
• The three product levels are core, actual, and augmented.
• The core product is the benefit of the product that makes it valuable.
• The actual product is the tangible, physical product.
• The augmented product is the non-physical part of the product that consists of added value.

Features and Benefits

• Features and benefits are relevant to the three product levels.
• Products often have many features but fewer benefits for the consumer.
• Marketers aim to match individual features to consumer preferences.
• Professional salespeople ask questions to discover consumer preferences, while novice salespeople focus on features.

Classifications

• Products/goods can be classified according to use (consumer/industrial), differentiation, types and durability.
• Consumer goods are for personal or household use while industrial goods are used to make other goods.
• Undifferentiated goods have identical characteristics, while differentiated goods have varied features.
• Products are either consumables, semi-durables, or durables based on durability.
• Product types Consist Of Convenience, Shopping, Specialty, and Unsought Goods.

Consumer and Industrial Goods

• Consumer goods are purchased for personal consumption or household use. Instant noodles, milk, and shampoo are examples.
• Industrial goods are purchased to make other products or serve as raw materials. Aluminum and electronic cables are examples.
• The ultimate use determines whether a product is a consumer or industrial good.

Undifferentiated and Differentiated Goods

• Undifferentiated goods have identical physical characteristics sourced from nature.
• Differentiated goods have varied characteristics and features and is called branding.
• Branding distinguishes a product/service with a unique name, logo, symbol, or image to differentiate products/services.
• Companies branding products have to ensure quality consistency and advertise and promote the brand.
• Brand equity is customers attaching value to a brand higher prices, increased sales revenues, and larger profit margins and building brand loyalty.

Durability

• Consumables' benefit is used for a short time, including food and toiletries, detergents and soaps.
• Semi-durables provide benefits for several months such as clothes, shoes, and belts.
• Durables are long-lasting products and require an augmented product and consist of automobiles, houses, customer electronics and sports equipment.

Type of Good

• Convenience goods are inexpensive, frequently purchased with little effort and are widely available, including newspapers and candy.
• Shopping goods are less frequently purchased, more expensive and require comparison with competition and consist of clothes and handbags.
• Marketing of shopping goods depends on advertising and well-trained salespeople.
• Specialty goods need large effort by consumers to acquire, are in distant locations with luxury merchandise and require promotion of strong brand image.
• Unsought goods include Investments, legal aid and require high pressure marketing.

Marketing Approaches and Services

• Traditional marketing focused on production methods, product quality, and selling methods.
• Contemporary marketing focuses on the customer, relationships, and societal well-being.
• Traditional marketing approaches include the production concept, the product concept, and the selling concept.
• Contemporary approaches to marketing include relationship marketing, industrial marketing, and social marketing.
• Green marketing involves products and services marketed from the environmental benefits.

Characteristics of Services

• Intangibility: services are not tangible and cannot be touched or handled.
• Perishability: A service has to be consumed simultaneously with its production, a service cannot be stored like tangible commodity.
• Inseparability: services are simultaneous and the presence of service provider and consumer is absolutely necessary.
• Simultaneity: Services are generated and consumed during the same period of time.
• Variability: Each service is unique since services lack homogeneity.

Needs, Wants, and Demands

• Consumer needs are physiological necessities required for survival including food, shelter, and clothing.
• Wants are psychological preferences that can improve life and a consumers decides on pizza, doughnut, a sandwich, or a rice meal.
• Market is a group of customers with the willingness and financial capability to purchase.
• Market demand is the total demand of all potential customers for a product/service over some time.

Measuring Market Demand

• Market demand is either primary or selective, with primary being total market demand and selective being for a specific brand.
• Potential demand emerges when there is no demand yet, but a market exists with sufficient financial capability.
• Latent demand means customers are unable to satisfy specific desires because products/services do not exist or are too expensive.
• Current demand is the number of people of a particular market at present that would purchase something.

Satisfaction and Utility

• Utility refers to total customer product/service satisfaction.
• Satisfaction is the measure of expectations met from a purchase.
• Value is value customers place on a product/service.
• Marketers must balance product quality and price, establish consistency among product availability and create a buying atmosphere.
• Customer-perceived value means difference between benefits and costs.

Competition

• Competitor means any company in similar industry, and is classified as A desire, generic, form, or brand competitor.
• Desire competitors compete for the same desire in customers, including "What do I want to satisfy?".
• Generic and form competitors are sometimes called “indirect” competitors.
• Brand competitors are the most “direct” competitors because they offer the same form of product.

Marketshare

• Market share the effectiveness of marketing strategies in an industry.
• Company Market Share is calculated as the company's annual revenue divided by total annual industry revenue, and is expressed as percentage.
• Company boost sales boost sales via product introduction, price reduction, intensive advertising, etc.
• Market leaders often lead the industry in price changes, advertising, and new product introductions.

Traditional Marketing Approaches

• The Production concept assumes that customers prefer inexpensive, widely available products, and focuses on expanding distribution.
• The product concept assumes that customers favor high-quality products, leading to product improvement and innovation.
• The selling concept emphasizes aggressive selling and promotional efforts
• It emphasizes that customers are generally timid and must be persuaded into buying.

Contemporary Marketing Approaches

• Contemporary Approach helps with understanding customer needs rather than serving company profits
• Relationship marketing Develops a strong connection with their customers.
• Industrial marketing Involves one business that’s dealing or marketing their goods and services to another business.
• Social marketing Seeks to bring. Any social change integrates marketing theories and tactics with other plans to achieve social change.

Relationship Marketing

• Helps Brands develop long-term bonds and is essential to maintain and establish relationships with customers and other brands these days.

Customer Relationship

• Relationship marketing emphasizes on retaining customers that extends communication beyond advertising.
• Customers are people or businesses that buy goods or services.
• Businesses acquire and retain customers because they create demand.
• Marketers must meet needs by presenting needed goods and services to be what the customers buy.
• If the customers are retained, the satisfaction results in higher referral traffic.

Service

• Customer service ensures customer satisfaction with forms of salesperson assistance or help desks.
• It involves activities designed to enhance customer satisfaction, or that a product has exceeded expectations
• Managing customer service quality means that their feedbacks are heard.
• It is important to know the customers' feedback from using their product and that of competitors.

Management

• Continuous service performance and evaluations are essential.
• Constant customer service is important, or organizations become unable to deliver what is expected.
• Organizations that are willing to exceed expectations maintain the best relationship.

Customer Service Differentiation

• Organizations do this by developing and training competent customer contact personnel, and designing a superior environment and process.
• Continuous service improvement means maintaining an intimate understanding of what is expected.

CRM

• CRM (Customer Relationship Management) manages businesses’ interactions with customers and potential customers.
• CRM strategy results in increased profit.
• CRM records customer names, birthdates, physical/email addresses, and buying histories.
• Customer database information helps with customer segmentation

Customer Lifetime Value (CLV)

• CLV or Customer Lifetime Value Forecast the product the company is getting from future relations with a customer.
• CLV helps understand the length of their product.
• CLV implies it can cost money and acquire less costs that can increase when a existing customer switches a product.

Strategic Marketing Process

• Establishes a direction for all marketing activities as defined by mission identification, situation analysis, objective setting, strategy development, and evaluation.
• Company mission statement defines why it exists, its reason for being, its primary customers, the products and services it produces, and its geographical area of operation.
• Situation analysis evaluates the market and its competition to identify available and potential and is followed by setting marketing goals that must be followed
• Marketing strategy development segmentation involves the identification of target market followed by selection of the main strategy for marketing

Marketing Strategies

• Cost Leadership This is a strategy primarily for achieving low cost leadership, which can be achieved from low supply costs to overhead expenses.
• Differentiation This seeks to achieve superior product attributes and features that differ from industry competitors.
• Focused Efforts to concentrate on a relatively small but profitable market that meets the needs and want of the business.

Forward Integration vs Backward / Horizontal

• Forward integration Involves ownership and control over distributors or retailers.
• Backward integration Involves ownership over suppliers.
• Horizontal integration Involves controlling the interest of other companies in the industry.

Market

• Market penetration Means to increase shares through more innovative methods in marketing
• Market development Means to introduce current products or services into new locations or market
• Product development Means to find more revenue through different products and or services to increase company gains.

Diversification and Consolidation

• Related Diversification new but related products or services.
• Unrelated Diversification introducing new, but unrelated products or services.
• Retrenchment to Haught or reverse declining sales thru cost or asset reduction.
• Divestiture Sell off divisions to or parts of companies to other ones.

Planning and Control

• Strategy Evaluation and Control This occurs after the strategy is developed, periodic monitoring and evaluations are applied.
• Tactical Marketing process tactical process determines how plans and strategies are executed.
• The tactical activities are the actions, budgets, responsibilities etc are implemented within success.

Marketing MicroEnvironment

• The Marketing Environment and includes forces that are internal to the company, such as the company's self and its suppliers.
• Intermediaries and their customers are also factors.
• Company function is to consider the elements that are important as they affect the company's ability to build and maintain sustainable relationships with current and prospective customers.

The Elements

• (1) The Company is where marketing is the lifeblood” of an organization
• (2) Suppliers provide raw materials, utilities, labor, capital, and equipment through effective partnership.
• (3) Intermediaries serve as channels that link organizations’ customers through practical less costly methods.
• (4) Consumers of course, create demand through service that always needs to be met, but also can maintain more consumers if the product is more affordable.
• (5) Compensation of competitors is also important and not static over time.

Marketing MacroElements

• The public includes shareholders, community and media.
• Identifying opportunities that are in line with favorable factors is referred to as a strength as opposed to weakness where the opposite is true.

Macro-Environments

• All businesses live in a macro environment. Is the same thing in a commercial flight where in they need to know the weather in preparation for delays that may happen at any time.
• Economic Marco-environment means a constant affect of its organization,
• Politico Legal-Environment affects situation because of highly uncertain political unrest leading to bad decisions being made.
• Social structure, is defined as people around the business with customs arts etc. where in culture is something that they are used to.

Environmental Macro Changes

• Demographic macro environment This is the change in the people’s interest of an industry and affects their composition pattern.
• Technological macro-environment The technological environment means the current impending technological advances that helps them improve their product/service and compete.
• Natural macro environment and involves more natural resources to input in order to ensure proper activities.

Consumers

• Market research involves testing what products will work out with potential customers.
• Consumers need have complete information about what will the products or services do, and in fact will new markets be accepted. The perceptions of the market are always subjective.

Market Research

• Can reduce marketing problems, new opportunities, consumer satisfaction, media consumption.
• Research means a lot of different steps, establishing your need for marketing, defining marketing and other things.
• Determine the research, determine the types of source of data
• Research can help know different factors of a report, internal or external through the marketing information.

Marketing Opportunities

• Marketing is about describing or understanding behavior of individuals. It recognizes that long-term value goes much further and creates a clear communication and understanding.

Individuals/Household

• Consumer Markets include individuals who purchase services for the personal consumption, which is normally bought in small expenses.
• Knowing about complex individuals helps with creating and implementing successful campaigns
• The consumer buying process is a 5 stage process describing journey through a product. Is important and allows u to align sales.

The Five Main Stages

• Problem/Needing recognition this shows what needs a consumer has before a purchase is made.
• Informational search which gives the best solution/answer what customers need during or after a buyer’s decision.
• Evolution of relatives in relations to alternative attributes, and the ability to deliver benefits in what the customer is seeking.
• A Purchase can be disrupted by bad reviews from others or by the limited motivation shown from the marketer which causes the consumers to get second thoughts.
• It means the consumers will compare product results in having a huge knock on effect to search of information.

Buying Roles

• Initiation Suggest buying that suggest a product.
• Involves influencing others or of how great a product or service can be.
• Making the final decision on what and how to buy.
• Actually purchasing the items.
• The user is who utilizes the service.
• Different type of people will make decisions at different layers

Consumer Markets & Buying Behavior

• Are the different people of any kind in regions with different varying economical standards.
• Making it very difficult to sell to one of them, being persuaded by different goods and services. Advertising influences the product being sold.

Psychological Factors

• Social, personal can influence whether or not a customer goes through with the event after seeing what other personal factor have done.
• Culture as personal can also push that in a certain point because people like seeing to “fit in”

Factors

• Small parts of the community can affect consumer.
• Different ways that people see money or the class that they live in can be a strong thing with buying from the market
• Reference groups like the social factors can have people make sure that the way make a decision is ok.

Market Segmentation

• There is the breaking down of the potential audience, to see who all can find the marketing strategy
• It enables easy marketing because more is made for the public. It also reduces the risks
• It also helps to show what people buy then sell and what they have access to so u know that it’s what people want.

Geographical Information

• In where a population, or a segmentation can be based from regional cities, urban etc.
• Is also done by dividing into different regions.

Demographics and Psychographics

• Demographics are very general and can be done by grouping of male/female vs a income bracket.
• Education/ethnicity are good ways can be grouped to
• Psychographics or the consumers show the psychological part of individuals when predicting what they buy
• It shows how individuals use products or what benefit the individuals seeks.

Behavior And Characteristics

• This shows how the product that the consumer has can tell what kind of demographic, it will indicate a purchase.
• In this the retailer or people in the higher up need to organize what they will be getting and what they are promoting to the client in order to sell. After target marketing the products, it will be more efficient.

Target Marketing

• After the market segmentation what it looks to pursue.
• Target market is known as whatever the product can show the consumer and tell what their market is like
• What are males and females in metro manila of age and classes and what are their interests
• Has to show if enough product or what it can determine size, then it can take how the company and give good results

Idealistic Marketing Elements

• Company may settle to market based on “Substancial-the target must be enough.”
• Financially capable Means must have the wealth that they need to buy to participate in a sale
• Reachable Should be in the same area to that things can be bought easily and with the technology people to talk about it and review it.

Heterogeneous/Homogeneous

• Product is from the market but is used for small functions for those who aren’t similar and is not the target so cannot tell anything.
• From this it is clear that what they do may not have different benefits