What is marketing?

Marketing is all the processes involved in moving goods from a producer to a consumer.

Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably.

Marketing is a human activity directed at satisfying needs and wants through exchange processes.

Using these three definitions it is clear that marketing is not just about the adverts on the television. Marketing is a complex part of business. We can determine that marketing according to these definitions is the focus on the needs and wants of the consumers.

The definition of marketing therefore goes passed the idea that it is just selling. We start to think about words such as identify- the ability to use market research. Anticipate- this is predicting the behaviors of customers and there reaction to new products, and Satisfy- the customer by ensuring they are happy with the quality, price, design and performance of the goods.

How do we identify and satisfy customer needs and wants?

This process can be long and complicated. Organisations should strive to identify both expressed (known feelings and thoughts) & implied (suggested or hinted) needs and wants. Using the information gained organisations should develop products that meet these expectations. This is known as the Customer orientated approach.

Identifying needs and wants is a good indicator to what products customers will be likely to buy. However organisations still need to know why customers prefer one product or service to another and how to specialise products and services to be exactly what the customer wants.

Customer satisfaction

Customer satisfaction if achieved is a very important part of the marketing concept. By meeting or exceeding customer expectations enhances the chance that a customer will buy a product or service again. This is known as relationship marketing and allows elements of trust, loyalty and habit to form.

The customer has immense power. The actions and trends of customers determine the fate of company’s products and services. The true task of marketing is to identify, assess and realize market opportunities and potentials.

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Customer satisfaction

The marketing concept

The marketing concept starts with a companies existing and potential customers and their needs. It then plans a co-ordinate set of programs in order to serve these needs and create consumer satisfaction at a profit!

To achieve success companies must go further than mere customer satisfaction: they must do it better than the competition ... The modern marketing concept can be expressed as:

'The achievement of corporate goals through meeting and exceeding customer needs better than the competition.'

[Jobber 1995]

This is the concept used to understand the basic functions of an organisation. Organisations have to create consumers. If you do not have any customers for the product or service your business offers, then there is no reason for continuing existence.

What is the key Concepts?

(Outhart, Baker, Colquthourn, Crabtree & Taylor. Page181. 1997)

Understanding buyer behaviour

To understand purchasing behaviour organisations must first investigate why customers buy their products. This involves considering a number of factors that might influence the buying decision. Some of these factors are obvious ones such as quality, price and availability. However some factors are harder to identify such as the image of the product or the packaging.

E.g. A very famous example of an organisation that changed it’s image is Lucozade, traditionally known as a drink for aiding recovery of illness, successfully changed the same product to be associated with sport and sports performance through a changed advertising campaign endorsed at the time by Linford Christie, a very successful athlete.

A further consideration in understanding buyer decisions is the various roles that people take when purchasing a product. Sometimes the person buying the product is not the end consumer this means a products needs to be in the needs of E.g. a parent and child.

Knowing the market

In order to make these correct decisions about the marketing of an organisation it is important to recognise the importance of collecting information, about the environment, the market it is in and the consumer trends & patterns.

To collect information on environment we look towards the DEPICTS model;

(Market Relations page 49. 1995)

Demographic, Economical, Political, Infrastructure, Competition, Technological and Socio legal.

To look at Demographic we are placing people according to e.g. population, age gender income brackets etc. An organisation also looks towards identifying a target market or number of people how they then concentrate selling to e.g. some models of BMW are aimed at single middle managers on a higher than average income.

Economic, is looking at the economic growth or recession in the organisations market and deciding on what products or services will sell better. E.g. over the last 5 years the UK has enjoyed growth and prosperity therefore is more buyers of expensive goods. In contrast when in recession there is little disposable income and people tend to buy cheaper goods and services or put off buying expensive goods until they can afford it.

Political refers to legislation that is brought in by existing governments or EU directives and is very important to watch because the effects of the chancellors budget limit, through increased tax disposable income to each household, and that might make the luxury goods of an organisation slump in sales compared to predicted. There are a great number of legal obligations and duty of care to customers that have to be considered as well.

Infrastructure refers to capital investment from government in the society, e.g. improving public transportation or railways, useful to know if the organisation that it interested in the supplier of busses.

Competitive, Every organisation has rivals in it particular market and on a wider scale as well. Organisations need to know the position of the companies within their industries this is known as market share.

Technological. It is a growing need of business to stay up to date in technological innovations. For example if you are a mail order company in the 1960’s to compete in the more modern era you would have had to develop sophisticated means of distribution to your customers such as the internet or TV purchasing.

Socio –legal,

Highlight consumer’s attitudes towards issues.
The pressure exerted on government legislation by the beliefs of consumers
It is important to monitor socio-legal trends so that products and services fit into society

e.g. After smoking was officially deemed bad for your health a large number of consumers were determined to give up, this power of the consumer has forced over the years tobacco companies to diversify into other industries. Imperial tobacco ltd is now owner of Whitbread breweries.

The business environment must be constantly monitored for the threats and opportunities, which it presents to firms. When scanning and evaluating the business environment, it is essential that firms look beyond superficial impacts and think carefully about multiple causes and effects. As above.

The benefits of the marketing approach are that you make only what can be sold. Making only what customers want to buy means that companies should not have to resort to hard selling, price cutting and discounting. Marketing in this way is more likely to achieve the correct exchange relationship. At the early stage of developing products companies spend lots of time and money on various forms of market research to understand the requirements of customers. E.g. when a firm like Nokia launch a new mobile phone all aspects of the customer requirements are examined in research and development. They spend millions of pounds to get a desirable state of the art, wanted product. Using the right means of communication to there target audience at a time quicker than competitors. This has meant Nokia have been highly successful since 1998 due to customer orientation.