What is Marketing?

Marketing is about identifying and meeting human and social needs. One of the shortest good definition of marketing is “meeting needs profitably.” When eBay recognized that people were unable to locate some of the items they desired most, it created an online auction clearinghouse. When IKEA noticed that people wanted good furnishings at substaintionaly lower prices, it created knockdown furniture. Those two firms demonstrated marketing savvy and turned the private or social need into a profitable business opportunity.

       The American Marketing Association offers the following formal definition: Marketing is the activity, set of institutions, and processes for creating communicating and delivering, and exchange the offerings that have values for customers, client’s partners, and society at large. Coping with these exchange processes calls for a considerable amount of work and skill. Marketing management takes place when at least one party to potential exchange thinks about the means of achieving desired responses from other parties. Thus we see marketing management as the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering and communicating superior customer value.

      We can distinguish between a social and a managerial definition of marketing. A social definition shows the role marketing plays in society; for example, one marketer has said that marketing’s role is to “deliver a higher standard of living.” Here is a social definition that serves our purpose:

          Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

Managers sometimes think of marketing as “the art of selling products.” But many people are surprised when they hear that selling is not the important part of marketing! Selling is only the tip of marketing iceberg. Peter ducker, a leading management theorist, puts it this way:

          There is always, one can assume, be need of some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service its him and sells itself. Ideally, marketing should results in a customer who is ready to buy. All that should be needed then is to make the product and service available.

When Nintendo designed its Wii game system, when Canon lunched its ELPH digital camera line, and when Toyota introduced its Prius hybrid automobile, these manufacturer were swamped with orders because they had design the right product, based on doing careful marketing homework.  

11 New Marketing Realities.

Major Societal Forces:

Today, major, and sometimes interlinking, societal forces have created new marketing behaviors, opportunities, and challenges. Here are 11 key ones.

1.       Network information technology.

The digital revolution has created an Information Age that promises to lead to more accurate level of production, more targeted communications, and more relevant pricing.

2.     Globalization.

Technology advances in transportation, shipping, and communication have made it easier for companies to market in, and consumers to buy from, almost any country in the world.

3.     Deregulation.

Many countries has deregulated industries to create greater competition and growth opportunities. In India, the domestic airline industry has been grown up very rapidly after deregulation. Airlines are competing with each other by offering different and better services to the consumers.

4.     Heightened competition.

Intense competition among domestic and foreign brands raises marketing costs and shrinks the profit margins. Brand manufacturers are further buffeted by powerful retailers that market their own stores brands. Many strong brands have become megabrands and extended into wide variety of related product categories, presenting a significant competitive threat.

5.     Industry convergence.

Industry boundaries are blurring as companies recognizes new opportunities at the intersection of two or more industries. The computing and consumer electronics industries are converging, for example, as Apple, Sony, and Samsung release a stream of entertainment devices from MP3 players to plasma TVs and camcorders.

6.     Retail transformation.

Retailing on South Asia in general and in India in particular is undergoing a major transformation. Organized retailing in India, which includes supermarkets chains, departmental stores, and discount retailers, is expected to grow from about 5 percent of the total market to about 14 percent to 18 percent of the total retail sale by 2015.

7.     Disintermediation.

The amazing success of early dot-coms such as AOL, Amazon.com, Yahoo!,; eBay, E*trade, and others created the disintermediation in the delivery of products and services by intervening in the traditional flow of goods through distribution channels. These firms stuck terror into the hearts of established manufacturers and retailers. In response traditional companies engaged in reintermediation and become “Brick-and-click” retailers, adding online services to their offerings.

8.     Consumer buying power.

In part, due to disintermediation via the Internet, consumers have substantially increased their buying power. From the home, office, or mobile phone, they can compare product prices and features and other goods online, bypassing limited local offerings and realizing significant price savings.

9.     Consumer information.

Consumers can collect information in as much breadth and depth as they want about practically anything. They can access encyclopedias, dictionaries, medical information, movie rating, consumers report, newspaper, and other information sources in many languages from anywhere in the world. Personal connections and user-generated contents thrive in social media, such as Facebook, Flickr, Wikipedia, and YouTube. Social networking sites bring together consumers with a common interest.

10.Consumer participation.

Consumers have found an amplified voice to influence peer and public opinion. In recognition, companies are inviting them to participate in designing and even marketing offerings to heighten their sense of connection and ownership.

11.  Consumer resistance.

Many consumers today feel there are fewer real product differences, so they show less brand loyalty and become more price- and quality- sensitive in their search for value, and less tolerant about undesired marketing. A Yankelovich study found record levels of marketing resistance from consumers; a majority reported negative opinions about the marketing and advertising and said they avoid products they feel are over marketed.

Marketing Right and Wrong….!

The Ten Deadly Sins of Marketing:

1.      The company is not sufficiently market focused and customers driven.

2.     The company does not fully understands its target customers.

3.     The company needs to better define and monitors its competitors.

4.     The company has not properly managed its relationship with its stakeholders.

5.     The company is not good at finding new opportunities.

6.     The company marketing’s plans and planning process are deficient.

7.     The company’s product and policies need tightening.

8.     The company’s brand—building and communications skill are week.

9.     The company is not well organized to carry on effective and efficient marketing.

10. The company has not made maximum use of technology.

                                                                                                                                     

The Ten Commandments of Marketing:

1.      The company segments the market, chooses the best segments, and develops a strong position in each chosen segments.

2.     The company maps its customers’ needs, perceptions, preferences, and behavior and motivates its stakeholders to obsess about serving and satisfying the customers.

3.     The company knows its major competitors and their strengths and weaknesses.

4.     The company builds partners out of its stakeholders and generously reward them.

5.     The company develops systems for identifying opportunities, ranking them, and choosing the best ones.

6.     The company manages the marketing planning system that leads to insightful long-term and short-term plans.

7.     The company exercises strong control over its product and services mix.

8.    The company builds strong brands by using the most cost-effective communication and promotion tools.

9.     The company builds marketing leadership and a team spirits among its various departments.

10.The company constantly adds technology that gives its competitive advantages in the marketplace.

Marketing in an Age of Turbulence

The severe economic recession of 2008-2009 caused marketers to rethink best practices of management. Phillip Kotler and John Caslione see management a new Age of Turbulence in which chaos, risk and uncertainty characterize many industries, markets and companies. According to them turbulence is the new normal, punctuated by periodic and intermittent spurts of prosperity and downturn-including extended downturns amounting to recession, or even depression. They see many new challenges in the foreseeable future and unlike past recessions, they may be no assurance that a return to past management practices would ever be successful again.

According to the Kotler and Caslione, markets should always be ready to activate automatic response when turbulence whips up and chaos reigns in. They recommend marketers to keep these 8 (Eight) factors in mind as they create “chaotic marketing strategies”.

1.     Secure your market share from core customer segments:

This is not a time to get greedy, so get your core customers segments firmly secured, and be prepared to ward off attacks from competitors seeking your most profitable and loyal customers.

2.     Push aggressively for greater market share from competitors:                                                                     

All companies fight for market shares, and in turbulence and chaotic times, may have been weekend. Slashing marketing budgets and sales travel expenses is a sure sign a competitor is buckling under pressure. Push aggressively to add your core customer segments at the expense of your weakened competitors.

3.     Research customers more now, because their needs and wants are in flux:

Everyone is under pressure during the time times of turbulence and chaos, and all customers—even those in your core segments whom you know so well—are changing. Stay close to them never before. Research them more than ever. Don’t find yourself using old, tried-and-true marketing messages that no longer resonate with them.

4.     Minimally maintain, but seek to increase, your marketing budget:

 With your competitors aggressively marketing to your core customers, this is the worst time to think about cutting anything in your marketing budget that target them. In fact, you need to add to it, or take money away from forays into totally new customers segments. It’s time to rescue the home front.

5.     Focus on all that’s safe and emphasize core values:

When turbulence is scaring everyone in the market, most customers flee to higher ground. They need to flee the safety and security of your company and your products and your services. Do everything possible to tell them that continuing to do the business is safe, and to sell those products and services that keep making them feel safe.

6.     Drop programs that aren’t working for you:

Your marketing budget will always be scrutinize, in good times and bad times. If anyone is to cut your programs, let it be you, before anyone else sports any ineffective ones. If you’re not watching, rest assured someone else is, including your peers whose budgets couldn’t be produced from the axe.

7.     Don’t discount your best brands:

Discounting your established and most successful brands tells customer two things: your prices were too high before, and product won’t be worth the price in the future once the discounts are gone. If you to appeal more frugal customers, create a new brand with lower prices. This lets value-conscious customers stay close to you. Without alienating those still willing to pay you the higher-priced brands. Once the turbulence subsides, you may consider discounting the product line—or not.

8.     Save the strong; lose the week:

In turbulent market, your strongest brands and products must become even stronger. There’s no time or money to be wasted on marginal brands or products that lack strong value propositions and a solid customer base. Appeal to safety and value to reinforce strong brands and products and service offerings. Remember, your brands can never be strong enough, especially against the waves of turbulent economy.