WHAT IS MARKETING?

Marketing is often defined as managing profitable customer relationships. This means not only attracting new customers but also fostering the growth of existing ones. Marketing is a crucial function for every organization, extending beyond for-profit entities to include non-profits such as colleges, hospitals, and churches. These organizations also need to engage in marketing activities to fulfill their missions effectively.

2.1 Marketing Defined

While many people associate marketing with selling and advertising—often encapsulated in the phrase "telling and selling"—marketing encompasses much more. It is fundamentally about satisfying customer needs and creating value.

A comprehensive definition of marketing is: the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. This means that marketing is not just about pushing products or services but about understanding and meeting customer needs to foster lasting relationships.

2.2 The Marketing Process

The marketing process involves several key steps, as illustrated in Figure 1-1:

1. Understand the Marketplace and Customer Needs and Wants:

   • Market Research: This involves gathering and analyzing information about the market, including customer demographics, preferences, and behaviors.
   • Customer Insights: Understanding what customers need and want, and how they perceive the market and competing offerings.

2. Design a Customer-Driven Marketing Strategy:

   • Segmentation: Dividing the market into distinct groups of buyers with different needs or behaviors.
   • Targeting: Selecting one or more of those segments to enter.
   • Positioning: Developing a clear, distinctive, and desirable place in the minds of the target market relative to competitors.

3. Construct a Marketing Program that Delivers Superior Value:

   • Product: Developing offerings that meet customer needs and preferences.
   • Price: Setting a price that reflects the perceived value to customers while ensuring profitability.
   • Place: Ensuring the product is available where and when customers want it.
   • Promotion: Communicating the product's benefits and value to the target audience through advertising, sales promotions, public relations, and other tools.

4. Build Profitable Relationships and Create Customer Delight:

   • Customer Service: Providing excellent service to ensure satisfaction and loyalty.
   • Engagement: Building strong, long-term relationships through ongoing interaction and feedback.
   • Loyalty Programs: Offering incentives to encourage repeat business and reward loyal customers.

5. Capture Value from Customers to Create Profits and Customer Quality:

   • Sales and Revenue: Generating income through transactions with customers.
   • Customer Equity: The total combined customer lifetime values of all the company’s customers. Building customer equity leads to greater profitability and sustainable success.

In the first four steps, companies focus on understanding their consumers, delivering value, and fostering strong relationships. In the final step, they reap the benefits of these efforts by capturing value from customers, which manifests as sales, profits, and long-term customer loyalty. By consistently creating and delivering superior customer value, companies can ensure ongoing success and growth in their markets.