Marketing is the process by which companies create customer interest in products

or services. It generates the strategy that underlies sales techniques, busines

s communication, and business development.[1] It is an integrated process throug
h which companies build strong customer relationships and create value for their
customers and for themselves.[1]
Marketing is used to identify the customer, to keep the customer, and to satisfy
the customer. With the customer as the focus of its activities, it can be concl
uded that marketing management is one of the major components of business manage
ment. Marketing evolved to meet the stasis in developing new markets caused by m
ature markets and overcapacities in the last 2-3 centuries.[citation needed] The
adoption of marketing strategies requires businesses to shift their focus from
production to the perceived needs and wants of their customers as the means of s
taying profitable.[citation needed]
The term marketing concept holds that achieving organizational goals depends on
knowing the needs and wants of target markets and delivering the desired satisfa
ctions.[2] It proposes that in order to satisfy its organizational objectives, a
n organization should anticipate the needs and wants of consumers and satisfy th
ese more effectively than competitors.[2]
Contents
[hide]
* 1 Further definitions
* 2 Evolution of marketing
o 2.1 Earlier approaches
o 2.2 Contemporary approaches
* 3 Customer orientation
o 3.1 Organizational orientation
+ 3.1.1 Herd behavior
+ 3.1.2 Further orientations
* 4 Marketing research
o 4.1 Marketing environment
o 4.2 Market segmentation
o 4.3 Types of marketing research
* 5 Marketing planning
o 5.1 Marketing strategy
* 6 Marketing specializations
* 7 Buying behaviour
o 7.1 B2C buying behaviour
o 7.2 B2B buying behaviour
* 8 Use of technologies
* 9 Services marketing
* 10 See also
* 11 References
[edit] Further definitions
Marketing is defined by the American Marketing Association (AMA) as "the activit
y, set of institutions, and processes for creating, communicating, delivering, a
nd exchanging offerings that have value for customers, clients, partners, and so
ciety at large."[3] The term developed from the original meaning which referred
literally to going to a market to buy or sell goods or services. Seen from a sys
tems point of view, sales process engineering views marketing as "a set of proce
sses that are interconnected and interdependent with other functions,[4] whose m
ethods can be improved using a variety of relatively new approaches."
The Chartered Institute of Marketing defines marketing as "the management proces
s responsible for identifying, anticipating and satisfying customer requirements
profitably."[5] A different concept is the value-based marketing which states t
he role of marketing to contribute to increasing shareholder value.[6] In this c
ontext, marketing is defined as "the management process that seeks to maximise r
eturns to shareholders by developing relationships with valued customers and cre
ating a competitive advantage."[6]
Marketing practice tended to be seen as a creative industry in the past, which i
ncluded advertising, distribution and selling. However, because the academic stu
dy of marketing makes extensive use of social sciences, psychology, sociology, m
athematics, economics, anthropology and neuroscience, the profession is now wide
ly recognized as a science, allowing numerous universities to offer Master-of-Sc
ience (MSc) programmes. The overall process starts with marketing research and g
oes through market segmentation, business planning and execution, ending with pr
e and post-sales promotional activities. It is also related to many of the creat
ive arts. The marketing literature is also adept at re-inventing itself and its
vocabulary according to the times and the culture.
[edit] Evolution of marketing
Main article: History of marketing
An orientation, in the marketing context, related to a perception or attitude a
firm holds towards its product or service, essentially concerning consumers and
end-users. Throughout history marketing has changed considerably as consumer tas
tes are changing faster.[7]
[edit] Earlier approaches
The marketing orientation evolved from earlier orientations namely the productio
n orientation, the product orientation and the selling orientation.[7][8]
Orientation Profit driver Western European timeframe Description
Production[8] Production methods until the 1950s A firm focusing
on a production orientation specializes in producing as much as possible of a gi
ven product or service. Thus, this signifies a firm exploiting economies of scal
e, until the minimum efficient scale is reached. A production orientation may be
deployed when a high demand for a product or service exists, coupled with a goo
d certainty that consumer tastes do not rapidly alter (similar to the sales orie
ntation).
Product[8] Quality of the product until the 1960s A firm employing
a product orientation is chiefly concerned with the quality of its own product.
A firm would also assume that as long as its product was of a high standard, pe
ople would buy and consume the product.
Selling[8] Selling methods 1950s and 1960s A firm using a s
ales orientation focuses primarily on the selling/promotion of a particular prod
uct, and not determining new consumer desires as such. Consequently, this entail
s simply selling an already existing product, and using promotion techniques to
attain the highest sales possible.
Such an orientation may suit scenarios in which a firm holds dead stock, or othe
rwise sells a product that is in high demand, with little likelihood of changes
in consumer tastes diminishing demand.
Marketing[8] Needs and wants of customers 1970 to present day The 'mar
keting orientation' is perhaps the most common orientation used in contemporary
marketing. It involves a firm essentially basing its marketing plans around the
marketing concept, and thus supplying products to suit new consumer tastes. As a
n example, a firm would employ market research to gauge consumer desires, use R&
D to develop a product attuned to the revealed information, and then utilize pro
motion techniques to ensure persons know the product exists.
[edit] Contemporary approaches
Recent approaches in marketing is the relationship marketing with focus on the c
ustomer, the business marketing or industrial marketing with focus on an organiz
ation or institution and the social marketing with focus on benefits to the soci
ety.[9] New forms of marketing also use the internet and are therefore called in
ternet marketing or more generally e-marketing, online marketing, search engine
marketing, desktop advertising or affiliate marketing. It tries to perfect the s
egmentation strategy used in traditional marketing. It targets its audience more
precisely, and is sometimes called personalized marketing or one-to-one marketi
ng.
Orientation Profit driver Western European timeframe Description
Relationship marketing / Relationship management[9] Building and keeping goo
d customer relations 1960s to present day Emphasis is placed on the whole
relationship between suppliers and customers. The aim is to give the best possib
le attention, customer services and therefore build customer loyalty.
Business marketing / Industrial marketing Building and keeping relationshi
ps between organizations 1980s to present day In this context marketin
g takes place between businesses or organizations. The product focus lies on ind
ustrial goods or capital goods than consumer products or end products. A differe
nt form of marketing activities like promotion, advertising and communication to
the customer is used.
Social marketing[9] Benefit to society 1990s to present day Similar
characteristics as marketing orientation but with the added proviso that there w
ill be a curtailment on any harmful activities to society, in either product, pr
oduction, or selling methods.
[edit] Customer orientation
A firm in the market economy survives by producing goods that persons are willin
g and able to buy. Consequently, ascertaining consumer demand is vital for a fir
m's future viability and even existence as a going concern. Many companies today
have a customer focus (or market orientation). This implies that the company fo
cuses its activities and products on consumer demands. Generally there are three
ways of doing this: the customer-driven approach, the sense of identifying mark
et changes and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic
marketing decisions. No strategy is pursued until it passes the test of consume
r research. Every aspect of a market offering, including the nature of the produ
ct itself, is driven by the needs of potential consumers. The starting point is
always the consumer. The rationale for this approach is that there is no point s
pending R&D funds developing products that people will not buy. History attests
to many products that were commercial failures in spite of being technological b
reakthroughs.[10]
A formal approach to this customer-focused marketing is known as SIVA[11] (Solut
ion, Information, Value, Access). This system is basically the four Ps renamed a
nd reworded to provide a customer focus. The SIVA Model provides a demand/custom
er centric version alternative to the well-known 4Ps supply side model (product,
price, placement, promotion) of marketing management.
Product ? Solution
Promotion ? Information
Price ? Value
Placement ? Access
If any of the 4Ps had a problem or were not there in the marketing factor of the
business, the business could be in trouble and so other companies may appear in
the surroundings of the company, so the consumer demand on its products will be
come less.
[edit] Organizational orientation
In this sense, a firm's marketing department is often seen as of prime importanc
e within the functional level of an organization. Information from an organizati
on's marketing department would be used to guide the actions of other department
s within the firm. As an example, a marketing department could ascertain (via ma
rketing research) that consumers desired a new type of product, or a new usage f
or 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 consumer
s' new desires.
The production department would then start to manufacture the product, while the
marketing department would focus on the promotion, distribution, pricing, etc.
of the product. Additionally, a firm's finance department would be consulted, wi
th respect to securing appropriate funding for the development, production and p
romotion of the product. Inter-departmental conflicts may occur, should a firm a
dhere to the marketing orientation. Production may oppose the installation, supp
ort and servicing of new capital stock, which may be needed to manufacture a new
product. Finance may oppose the required capital expenditure, since it could un
dermine a healthy cash flow for the organization.
[edit] Herd behavior
Herd behavior in marketing is used to explain the dependencies of customers' mut
ual behavior. The Economist reported a recent conference in Rome on the subject
of the simulation of adaptive human behavior.[12] It shared mechanisms to increa
se impulse buying and get people "to buy more by playing on the herd instinct."
The basic idea is that people will buy more of products that are seen to be popu
lar, and several feedback mechanisms to get product popularity information to co
nsumers are mentioned, including smart card technology and the use of Radio Freq
uency Identification Tag technology. A "swarm-moves" model was introduced by a F
lorida Institute of Technology researcher, which is appealing to supermarkets be
cause it can "increase sales without the need to give people discounts."Other re
cent studies on the "power of social influence" include an "artificial music mar
ket in which some 19,000 people downloaded previously unknown songs" (Columbia U
niversity, New York); a Japanese chain of convenience stores which orders its pr
oducts based on "sales data from department stores and research companies;" a Ma
ssachusetts company exploiting knowledge of social networking to improve sales;
and online retailers who are increasingly informing consumers about "which produ
cts are popular with like-minded consumers" (e.g., Amazon, eBay).
[edit] Further orientations
* An emerging area of study and practice concerns internal marketing, or how
employees are trained and managed to deliver the brand in a way that positively
impacts the acquisition and retention of customers, see also employer branding.
* Diffusion of innovations research explores how and why people adopt new pr
oducts, services and ideas.
* With consumers' eroding attention span and willingness to give time to adv
ertising messages, marketers are turning to forms of permission marketing such a
s branded content, custom media and reality marketing.
[edit] Marketing research
Main article: Marketing research
Marketing research involves conducting research to support marketing activities,
and the statistical interpretation of data into information. This information i
s then used by managers to plan marketing activities, gauge the nature of a firm
's marketing environment and attain information from suppliers. Marketing resear
chers use statistical methods such as quantitative research, qualitative researc
h, hypothesis tests, Chi-squared tests, linear regression, correlations, frequen
cy distributions, poisson distributions, binomial distributions, etc. to interpr
et their findings and convert data into information. The marketing research proc
ess spans a number of stages including the definition of a problem, development
of a research plan, collecting and interpretation of data and disseminating info
rmation formally in form of a report. The task of marketing research is to provi
de management with relevant, accurate, reliable, valid, and current information.
A distinction should be made between marketing research and market research. Mar
ket research pertains to research in a given market. As an example, a firm may c
onduct research in a target market, after selecting a suitable market segment. I
n contrast, marketing research relates to all research conducted within marketin
g. Thus, market research is a subset of marketing research.
[edit] Marketing environment
Main article: Marketing environment
[edit] Market segmentation
Main article: Market segmentation
Market segmentation pertains to the division of a market of consumers into perso
ns with similar needs and wants. As an example, if using Kellogg's cereals in th
is instance, Frosties are marketed to children. Crunchy Nut Cornflakes are marke
ted to adults. Both goods aforementioned denote two products which are marketed
to two distinct groups of persons, both with like needs, traits, and wants.
The purpose for market segmentation is conducted for two main issues. First, a s
egmentation allows a better allocation of a firm's finite resources. A firm only
possesses a certain amount of resources. Accordingly, it must make choices (and
appreciate the related costs) in servicing specific groups of consumers. Furthe
rmore the diversified tastes of the contemporary Western consumers can be served
better. With more diversity in the tastes of modern consumers, firms are taking
note of the benefit of servicing a multiplicity of new markets.
Market segmentation can be defined in terms of the STP acronym, meaning Segment,
Target and Position.
[edit] Types of marketing research
Marketing research, as a sub-set aspect of marketing activities, can be divided
into the following parts:
* Primary research (also known as field research), which involves the conduc
tion and compilation of research for the purpose it was intended.
* Secondary research (also referred to as desk research), is initially condu
cted for one purpose, but often used to support another purpose or end goal.
By these definitions, an example of primary research would be market research co
nducted into health foods, which is used solely to ascertain the needs/wants of
the target market for health foods. Secondary research, again according to the a
bove definition, would be research pertaining to health foods, but used by a fir
m wishing to develop an unrelated product.
Primary research is often expensive to prepare, collect and interpret from data
to information. Nonetheless, while secondary research is relatively inexpensive,
it often can become outdated and outmoded, given it is used for a purpose other
than for which is was intended. Primary research can also be broken down into q
uantitative research and qualitative research, which as the labels suggest, pert
ain to numerical and non-numerical research methods, techniques. The appropriate
ness of each mode of research depends on whether data can be quantified (quantit
ative research), or whether subjective, non-numeric or abstract concepts are req
uired to be studied (qualitative research).
There also exists additional modes of marketing research, which are:
* Exploratory research, pertaining to research that investigates an assumpti
on.
* Descriptive research, which as the label suggests, describes "what is".
* Predictive research, meaning research conducted to predict a future occurr
ence.
* Conclusive research, for the purpose of deriving a conclusion via a resear
ch process.
[edit] Marketing planning
This section may require cleanup to meet Wikipedia's quality standards.
Please improve this section if you can. (October 2009)
Main article: Marketing plan
The area of marketing planning involves forging a plan for a firm's marketing ac
tivities. A marketing plan can also pertain to a specific product, as well as to
an organization's overall marketing strategy. Generally speaking, an organizati
on's marketing planning process is derived from its overall business strategy. T
hus, when top management are devising the firm's strategic direction or mission,
the intended marketing activities are incorporated into this plan. There are se
veral levels of marketing objectives within an organization. The senior manageme
nt of a firm would formulate a general business strategy for a firm. However, th
is general business strategy would be interpreted and implemented in different c
ontexts throughout the firm.
[edit] Marketing strategy
The field of marketing strategy encompasses the strategy involved in the managem
ent of a given product.
A given firm may hold numerous products in the marketplace, spanning numerous an
d sometimes wholly unrelated industries. Accordingly, a plan is required in orde
r to manage effectively such products. Evidently, a company needs to weigh up an
d ascertain how to utilize effectively its finite resources. As an example, a st
art-up car manufacturing firm would face little success, should it attempt to ri
val immediately Toyota, Ford, Nissan or any other large global car maker. Moreov
er, a product may be reaching the end of its life-cycle. Thus, the issue of dive
st, or a ceasing of production may be made. With regard to the aforesaid questio
ns, each scenario requires a unique marketing strategy to be employed. Below are
listed some prominent marketing strategy models, which seek to propose means to
answer the preceding questions.
[edit] Marketing specializations
With the rapidly emerging force of globalization, the distinction between market
ing within a firm's home country and marketing within external markets is disapp
earing very quickly. With this occurrence in mind, firms need to reorient their
marketing strategies to meet the challenges of the global marketplace, in additi
on to sustaining their competitiveness within home markets.[13]
[edit] Buying behaviour
A marketing firm must ascertain the nature of the customers buying behaviour, if
it is to market its product properly. In order to entice and persuade a consume
r to buy a product, marketers try to determine the behavioural process of how a
given product is purchased. Buying behaviour is usually split in two prime stran
ds, whether selling to the consumer, known as business-to-consumer (B2C) or anot
her business, similarly known as business-to-business (B2B).
[edit] B2C buying behaviour
This mode of behaviour concerns consumers, in the purchase of a given product. A
s an example, if one pictures a pair of sneakers, the desire for a pair of sneak
ers would be followed by an information search on available types/brands. This m
ay include perusing media outlets, but most commonly consists of information gat
hered from family and friends.If the information search is insufficient, the con
sumer may search for alternative means to satisfy the need/want. In this case, t
his may be buying leather shoes, sandals, etc. The purchase decision is then mad
e, in which the consumer actually buys the product. Following this stage, a post
-purchase evaluation is often conducted, comprising an appraisal of the value/ut
ility brought by the purchase of the sneakers. If the value/utility is high, the
n a repeat purchase may be bought. This could then develop into consumer loyalty
, for the firm producing the pair of sneakers.
[edit] B2B buying behaviour
Relates to organizational/industrial buying behavior.[14] B2C and B2B behavior a
re not exact, as similarities and differences exist. Some of the key differences
are listed below:
In a straight re-buy, the fourth, fifth and sixth stages are omitted. In a modif
ied re-buy scenario, the fifth and sixth stages are precluded. In a new buy, all
aforementioned stages are conducted.
[edit] Use of technologies
Marketing management can also note the importance of technology, within the scop
e of its marketing efforts. Computer-based information systems can be employed,
aiding in a better processing and storage of data. Marketing researchers can use
such systems to devise better methods of converting data into information, and
for the creation of enhanced data gathering methods. Information technology can
aid in improving an MKIS' software and hardware components, to improve a company
's marketing decision-making process.
In recent years, the netbook personal computer has gained significant market sha
re among laptops, largely due to its more user-friendly size and portability. In
formation technology typically progress at a fast rate, leading to marketing man
agers being cognizant of the latest technological developments. Moreover, the la
unch of smartphones into the cellphone market is commonly derived from a demand
among consumers for more technologically advanced products. A firm can lose out
to competitors, should it refrain from noting the latest technological occurrenc
es in its industry.
Technological advancements can facilitate lesser barriers between countries and
regions. Via using the World Wide Web, firms can quickly dispatch information fr
om one country to another, without much restriction. Prior to the mass usage of
the Internet, such transfers of information would have taken longer to send, esp
ecially if via snail mail, telex, etc.
[edit] Services marketing
Services marketing,[15] as the label suggests, relates to the marketing of servi
ces, as opposed to tangible products (in standard economic terminology, a tangib
le product is called a good).
A typical definition of a service (as opposed to a good) is thus:
* The use of it is inseparable from its purchase (,i.e. a service is used an
d consumed simultaneously)
* It does not possess material form, and thus cannot be smelt, heard, tasted
, or felt.
* The use of a service is inherently subjective, in that due to the human co
ndition, all persons experiencing a service would experience it uniquely.
As examples of the above points, a train ride can be deemed as a service. If one
buys a train ticket, the use of the train is typically experienced concurrently
with the purchase of the ticket. Moreover, a train ride cannot be smelt, heard,
tasted or felt as such. Granted, a seat can be felt, and the train can be evide
ntly heard, nonetheless one is not paying for the permanent ownership of the tan
gible components of the train.
Services (by comparison with goods) can also be viewed as a spectrum. Not all pr
oducts are pure goods, nor are all pure services. The aforementioned example of
a train ride can be deemed a pure service, whilst a packet of potato chips can b
e deemed a pure good. An intermediary example may be a restaurant (as the waiter
 service is intangible, and the food evidently is tangible in form).
The professional services industry encompasses a wide variety of businesses whos
e offer is based around specialist skill or knowledge. The one thing they have i
n common is that knowledge is the barrier to entry into their business.
Whilst using many mainstream marketing techniques, the nature of the organisatio
ns in the sector, particularly professional partnerships, and the services they
provide has seen different approaches to marketing and marketing organisation de
velop. Laurie Young contends that Some of the world s most successful, enduring and
profitable practices have, through experience, common sense and brilliance, evo
lved a number of common marketing approaches (even though they don t call them tha
t!)
Professional services marketing is characterised by:
Contents
[hide]
* 1 An approach to revenue generation which enhances the natural reputation
of the business.
* 2 Strategies are developed in a manner appropriate to the style and cultur
e of the firm.
* 3 Decisions about direction are based on insights into their market.
* 4 They turn their competitive reputation into a brand.
* 5 They use distinctive and relevant marketing communication techniques.
* 6 References
[edit] An approach to revenue generation which enhances the natural reputation o
f the business.
The two main drivers of revenue growth in this industry are the technical excell
ence of the work and the quality of client service. For a number of reasons clie
nts talk about a professional service after it is finished. This creates a stron
g reputation (which may eventually turn into a brand) and this, in turn, draws i
n more work.
[edit] Strategies are developed in a manner appropriate to the style and culture
of the firm.
The ownership of an organisation determines its approach to business. Partnershi
ps, for instance, work through mutual ownership and consensus. They tend to use
a situational approach to strategy development with actions agreed by consensus.
The systematic, procedural style used by many publicly owned companies is seen i
n the professions; both in those who have floated and some private firms. Single
owner practices, on the other hand, tend to follow Extant strategy . The owner is
so busy winning, delivering and running the business that direction is created i
n their head and rarely committed to paper.
These business dynamics make many of the recognised strategy tools difficult to
apply. For example, the Boston Matrix s two axes (revenue growth and market share)
are not always success criteria in the professions. Very high market share may
not be possible, in small markets, where conflict of interest is an issue.
[edit] Decisions about direction are based on insights into their market.
Professional service firms examine their markets by profiling client relationshi
ps and methods to stimulate more work from them. This might include cross-sellin
g other services to contacts or deliberately encouraging referrals. Tools such a
s the Boardex database or the activities, actors, resources model can be used to cre
ate a relationship profile of the firm s market.
[edit] They turn their competitive reputation into a brand.
Most services include a process through which users must surrender themselves to
the service provider, and this yielding of control creates anxiety. In professi
onal services the high value of the purchase, and the buyer s lack of technical kn
owledge, increases this anxiety. As a result buyers reach around the proposition
itself to seek emotional reassurance from the entity in charge (without being a
ware that they are doing so). As a result, the best-known service brands tend to
be corporate brands. This has implications to many aspects of brand development
and naming strategy.
There is also a symbiotic link between the brand of a professional service firm
and the reputation of key practitioners. The brand of the firm and the reputatio
n of key partners become inextricably linked. The firm s brand consists of the exp
erience that clients receive from the partners more than the design concept or v
alue set. Partners must therefore feel that the brand represents them.
[edit] They use distinctive and relevant marketing communication techniques.
There are generally three levels of marketing in a professional service firm: (i
) Contact marketing: activities at the client interface such as proposals, event
s, account management, business development and so on. (ii) Credibility marketin
g includes industry skills, technical skills (professionals often take their ski
lls for granted and fail to tell the market about them), and thought leadership.
(iii) Corporate level marketing encompasses: brand, go-to-market strategy and s
pecific reputation initiatives like CSR.
Whilst some traditional marketing tools may be less applicable to professional s
ervices marketing, or may be prohibited by the restrictions of professional gove
rning bodies, a number of successful marketing approaches which have been pionee
red by this industry. Viral marketing has been used for many years as a marketin
g tool to increase word of mouth whilst Thought leadership - the publication and d
issemination of ideas for commercial advantage - is often the source of NPD for
the industry.