Adopting a marketing approach to business can provide many benefits:
i. Generates products more likely to find a ready market
ii. Encourages customer loyalty
iii. Offers the opportunity to generate a price premium
iv. Keeps organizations in-touch with ever changing customer needs
v. Promotes potential to create differentiation where none previously existed
vi. Gives marketing a greater impact on strategic planning.
2. Consumers are the Focus:
A company may be ahead of its consumers, or behind its consumers, or with its consumers, but Consumers (as well as customers) are the focal point of marketing activities. They are the kings and queens, and voter, judge and jury and thus, they are always right and the organisations develop, price, distribute and promote products or services for them.
The bottom line of business survival and growth is that next year’s profits do not depend on this year’s numbers – they depend on next year’s customers. Marketers have to define their products not what they produce but what needs they satisfy. Walt Disney’s business is not running theme parks but it is in the business of making people happy.
Today’s profit and not-for-profit-oriented organisations, both need marketing for success. Many a times for profit organisation need marketing for those who are not customers. For example, recently Johnson & Johnson have started ‘Gunj’ for the Children who need toys.
3. Set of Processes:
Marketing involve processes. Process is the set of activities which leads to delivery of the product benefits. Process is the method by which service is provided. It forms the facilitation element of the service offering, which deals with the customer at the point of contact. In a service industry, like airlines, the process of delivery makes a difference to the benefits obtained.
4. Value through Exchange:
The essence of marketing is the exchange process. Marketing is an interactive exchange between a firm and its customers’. Fundamental objective of marketing is to create value both for the customers as well as the firm. Within the firm, marketing creates value in terms of superior value to shareholders (corporate culture), and outside of the firm by creating value for customers.
Value emerges both in interactions between the consumer and supplier, and also through a series of subsequent consumption practices and rituals where goods are appropriated by consumers in their everyday contexts. Customers decide what they will buy and what they won’t and the rules they will use to make those decisions. Selling is only tip of marketing; “right” products are needed.
Marketing is more than simply advertising or selling a product. It involves developing and managing a product that will satisfy customer needs. Marketing deals with decisions relating to Product, Price, Distribution, and Promotion. In fact, they act as the interface between the company and the customers, production and consumption.
Value is provided through exchange. All exchange relationships have to be win-win relationships. In exchange, there are marketers on the one side and the customers on the other. The parties exchange voluntarily. Exchanges also occur in a political campaign and blood donation. Object of exchange can be many things (see the section on what can be marketed). To exchange value the customer offers money and the marketer offers product / service / idea. Something is received, may be intangible. To facilitate exchange of value marketer communicates with customers in different ways. Customer value creation has been faster, because companies are thinking in terms of processes rather than functions, they are shifting from hierarchies to teams, and suppliers and distributors are now partners.
Value is not defined by the factory or value chain – Value is defined by the customer. Customer value is dependent on perception:
Customer Value= Perceived benefits – Perceived sacrifice (Consumer Surplus)
The value propositions include a superior attribute or benefit (Mercedes’ Prestige), appealing design (TOD’s footwear), offering a complete systems solution (DHL supply- chain solutions), social responsibility (Marks & Spencer Plan A), a superior customer relationship (Singapore Airlines), a specialist niche (Likedln), superior value (Aldi), superior quality (Toyota), a familiar brand (Nestle), etc.
5. Customer Relationship and Image Building:
Marketing relationships with the customers are the lifeblood of all businesses. A firm can make money by acquisition of new customers, by enhancing the profitability of existing customers, and by extending the duration of customer relationships. ‘In addition to retaining customers, companies should also focus on regaining and managing relationships with customers who have abandoned the firm.’
Relationship marketing continuously deepens the trust of buyer in the company, and with the growth of customer confidence leads to better understanding of customer needs. According to an estimate it is up to six times more expensive to recruit new customers than to retain existing customers.
Marketing must create an image of the corporate through social marketing. If it fails, its marketing efforts will fail and it will have a great beating at the stock market. Take the case of Vedanta ads, the two boys going to school, and the general public appreciates their social concern. Unitech prices came down when the spectrum case hit Telenor.
6. Beneficial to all the Stakeholders:
Stakeholders are those groups who have a ‘stake’ or claim in some way of company’s products, markets, activities, and outcomes. It includes customers, employees, investors, suppliers, governments, communities and many more. Stakeholders should not exclude non-profit marketing.
7. Dynamic Environment and sustainability:
Marketing environment includes competitive, economic, political, legal and regulatory, technological and socio-cultural forces and each one affects marketing mix. The environment affects customers in their lifestyles, standard of living, and preferences and needs of products.
Market environment forces can fluctuate quickly and dramatically and a marketer has to adjust his strategies as well as offerings accordingly so as to sustain competitive advantage over competitors for a very long time. Its relationship to the ever-changing environment requires it to be dynamic. Even the theory and practice of marketing has undergone change (see Marketing yesterday and today!).
At times the companies will have to change the consumers and consumption patterns and in the process themselves too. Globally one in three households uses a Unilever laundry product. If all of them start using ‘concentrated’ variants of detergents, which use less water, it would save four million tonnes of carbon per year. This is equivalent to taking one million cars off the road. Consumers and consumption is evidently the key to sustainable development.
8. Marketing is a Science as well as an Art:
Marketing is a science, an applied Social Science, because it has a distinct subject matter, the subject matter is properly described and classified, there are uniformities yielding empirical regularities, law like generalizations, laws, principles, and theories, and it adopts the method of science for studying the subject matter.
It owes a great deal to other social sciences like Economics (economic choice), Sociology (study of human beings in groups), Psychology (internal working of the mind), Anthropology (study of human cultures), and Corporate Strategy (positioning the organisation correctly for survival and growth). However, marketing deals with human beings, it is an inexact science.
It is an art, because marketing interacts with our cultural world. It is an Art because “the results of marketing efforts are hard to predict, quantify and replicate.” “‘Marketing has been imitating art and art has also been imitating marketing.’
9. Market is not marketing:
The root word in marketing is market. Marketing and market though related connote different concepts. Marketing the noun to the verb to market’, which means bringing the product/service to the market. Market refers to a group of buyers and sellers who are willing to exchange things for a consideration. However, the term market is often misunderstood as a building (bullion market), a place (Sadar Bazaar), an institution (National Stock Exchange or Bombay stock Exchange), a store (Reliance Fresh), and many more things. In all these cases the reference is to group of buyers and sellers only. Marketing refers to exchange and value creation between the buyers and sellers.