Home Business & Management What is Marketing and 5 Most Important Factors?

What is Marketing and 5 Most Important Factors?

Once upon a time, I asked my friends, what do you understand by marketing? She replied to me, “going shopping, purchasing new clothes, accessories, etc”.

Then I asked her, “If marketing is what you said now, then what you mean by the term market?”

She replied, “A market is a place where the goods and services are available. Buyers and sellers come together for an exchange process. Buyers purchase goods and services from the seller in exchange for money”.

You must be thinking the same thing. Or maybe not!

My friend is right in defining the term ‘Market’ but she was wrong in understanding the term ‘Marketing’. Some of us get mistaken in understanding marketing. We think it is only selling and advertising of the product. Let us look into what does it mean.

What’s in it for me?

  1. What is Marketing?
  2. Key Factors of Marketing
  3. Marketing Management Orientation
  4. Conclusion
  5. Frequently Asked Questions about Marketing

What is Marketing?

It is one of the main functions of the business. It starts with identifying the niche and continues even after the sale of goods and services.

Marketing is defined as satisfying the needs and wants of the target customers by creating an offer. It must add value to the customer and build a strong customer relationship.

Now what does it mean?

Let us break the above definition and understand it part wise.

Key Factors of Marketing

key-to-success-for-a-business

Needs and wants

We all have some needs and wants. It could be anything. Now it differs from person to person, region to region and country to country.

Different sections of society have different needs and want. It depends on their culture, tradition, geographic location, religion, economic status, etc.

So it is very important to identify your target customer’s needs and wants. It helps create a right and best offering for them before jumping onto start a business.

Target customer

It is very important to first decide your target customer. Target customer means that section of the society which you are planning to sell your offering. It will form your target market.

After deciding your target market you have to do thorough research on it. For example, their lifestyle, values, attitudes, income status, etc.

You need to plan each and everything while following the process given below.

  • Segmentation (dividing the large market into small segments).
  • Targeting (targeting selected segments of the large market).
  • Differentiating (customers should be able to differentiate your product easily while going to market).
  • Positioning (you have to form certain strategies which will help position your product in the mind of the customers). 

Create an offer

After doing proper research on your target market, the next step is to create an offer. It means this is the stage where you start manufacturing your product.

It will only be purchased by the customers if there is innovation in the product. Also, it must be different from the offering of your competitors, etc. So your offering should be unique and it is easily differentiated from the product of your competitors.

Value addition

The next point is that the production company is creating and offering to the market should add value to the customers. The customers will purchase your product only if they find it useful and extract some utility out of it.

Customer relationship

As I already said, marketing is an activity that continues even after the sale of the product.

So you have to maintain a strong customer relationship during the sale and after the sale. This will lead to the retention of the customers, the addition of new customers and gain their loyalty.

Your customer service department should be ready to solve the customer’s post-purchase problems. Also to answer their queries whenever they need you. 

Marketing Management Orientation

Marketing has seen a drastic change in its concept as time has passed by. Its interest has shifted from selling to profits to the needs and wants of the customers, to the society. 

It wants to design strategies that will engage target customers. Also to build profitable relationships that will lead to an increase in their goodwill.

But what philosophy should guide these marketing strategies? How much weight should be given to the interests of customers, the organization, and society?

So let us look into the marketing concepts and how it changed as time passed by.

Production Concept

There was a time when people used to buy only those products which were produced in large quantities. They were affordable in price. This concept is termed as a production concept.

It is the oldest concept in marketing management orientation. Big organizations used to produce goods in large numbers to sell more and earn a profit.

During the production concept era, production function was considered one of the most important functions of the business unit. However, it may be useful in some situations; the production concept can lead to marketing myopia.

Organizations were more focused on producing their goods. They were losing sight of focusing more on their main objectives.

An example of a product concept in China. They manufacture large quantities of products with the help of advanced technologies. After that, they export it to various countries at a cheap rate.

These products are affordable to every section of society. Hence, we end up buying more of foreign goods.

Product Concept

In this concept, companies focused more on the quality, performance, and innovative features of the product. Customers used to purchase those products only which had such qualities.

Therefore, companies used to make continuous product improvements. This also helped the organization to be ahead of the competitors.

Hence, product quality and improvement became important parts of most marketing strategies.

What can be the best example of a product concept other than Apple and Google! They keep on bringing innovations, updates, and new models of their products. 

Below is an example of an Apple mobile phone with new features.

Selling Concept

Companies following selling concept undertakes selling and promotion activities on a large scale. The consumers do not purchase the products of those companies who are not active in promoting their product.

This concept is mostly practiced with unsought goods. These are the products that buyers do not generally think of buying it, such as life insurance or blood donation.

This concept focuses on creating more and more sales transactions. Companies do not focus on what the market wants.

A perfect example of this concept would be Policy Bazaar (Insurance Company) or Mutual Fund.

Marketing Concept

This concept focuses on understanding the needs and wants of the target customer. They create an offer to serve the demand by delivering the products to them better than the competitors do.

Under this concept, customer value is the path to sales and profits. This concept is customer-centered rather than product-centered. Instead of focusing on make-and-sell philosophy, it focuses on sense-and-respond philosophy.

An example is McDonald’s. This company used to sell burgers with the stuffing of pork. But when it entered into Indian market they saw that Indian people do not consume pork.

So they did thorough research of the Indian market. They understood the needs and wants of the customers, and then came up with veg-burgers.

Societal Marketing Concept

This concept says that marketing strategy should deliver value to customers. It should be in a way that maintains or improves both the consumer’s and society’s well-being.

It takes into account sustainable marketing, socially, and environmentally responsible marketing. Hence, it helps to meet the needs of consumers and organizations. This leads to preserving or enhancing the power of future generations to fulfill their needs.

Many big organizations and marketers focus not just on the economic needs of the market but also the societal needs as well. An example of the societal marketing concept is Amul Company.

They not just manufacture fresh products but also take up certain activities. This helps serving society and contribute toward its well being. It contributes to a huge amount of money in CSR (Corporate Social Responsibility) activities.

Today many companies are taking up this strategy that helps them to increase their customer base. This helps them to build their goodwill in the market.

The customer gets more attracted to those organizations that serve the society and contribute towards sustainable development of it. This also helps the firm in gaining loyalty and retention of the customers.

Marketing-management-orientation

Conclusion

Marketing never ends. It starts with the idea generation of a business and keeps on going even after the sale of goods and services. So it is very important to have good market research on your target market.

We also saw how the concept changed from the passage of time. Hence, a firm should understand this and take the major steps. It relates to their success or failure.

Also read: Successful and Unsuccessful Startup stories.

Frequently Asked Questions about Marketing

What is the marketing mix?

It is a set of plans and strategies which a firm prepare before launching any product or service in the market.
 
There are 4 types of marketing mix for goods:
1. Product
2. Price
3. Place
4. Promotion
 
There is 7 marketing mix for services:
1. Product
2. Price
3. Place
4. Promotion
5. People
6. Process
7. Physical evidence

What are the difference in marketing and sales?

1. The sale is a subset of marketing. 
2. The sale is a narrow term while marketing is a broad term.
3. Sales focus on just selling the product but marketing focuses on understanding the needs and wants of the customer.
4. Sales value profit but marketing values satisfaction of the customers.
5. The sales process ends after selling the product but marketing continues even after the sale of the product.

What is marketing myopia?

Marketing myopia means the company just focuses on its operation and selling of their product.

They do not focus on understanding the needs and wants of the customer. Hence, this leads to closure or shutting down of the company.

What is marketing research process?

1. Defining the problem and research objectives
2. Developing the research plan for collecting information
3. Implementing the research plan (collecting and analyzing data)
4. Interpreting and reporting the findings

What is marketing process?

1. Understanding the marketplace and customer needs and wants
2. Design a customer value-driven marketing strategy
3. Construct an integrated marketing program that delivers superior value
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and customer equity.

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