what-is-marketing

What is Marketing? | Marketing Fundamentals Defined in Detail

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What’s the first thing that comes to your mind when you hear the term marketing?

Perhaps promoting a product via advertisement? If yes, then you are right anyways. But the word “marketing” carries a lot more inside it.

There comes the term “market” inside marketing. So, what picture this brings to your mind? Of course, a marketplace bustling with people where the sale, purchase, and promotion of commodities are happening everywhere around. So yes, “market” and “marketing” are related to each other. The market is the place where marketing happens.

The reason I’m telling you this so that you can relate the term marketing with your real world.

You are definitely looking to know in deep about subject of marketing. That’s why you have arrived on this blog.

Marketing is a deep subject. To explain each and everything on such a broad topic is impossible to achieve in a single blog article.

So, in this article, I’ll be drawing some details on the fundamentals of marketing. Understanding these fundamentals will help you to better and easily understand the branches of this topic that extend far away from the root.

The Table of Content below is the outline of the details which you are going to look into. Finally, I’ll also try to answer some Frequently Asked Questions(FAQs) around marketing that hover over the internet.

So, with all that said, let’s dive into the details.

What is Marketing?

As per the American Marketing Association(AMA), marketing is defined as follows,

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (Approved 2017).

But we can define marketing and that in the most simplest way possible as follows,

Marketing is to identify and fulfill the needs of a customer profitably.

So, if you are a good marketer or want to become one, then your focus should be to identify the needs of your customers better than your competitors and then create a product or service to fulfill those demands in a profitable way to suffice your company.

Now, you might have noticed that we just read – to identify the needs……… and then create a product or service…..

So, here is the catch. Contrary to traditional beliefs i.e. marketing is or can be done only after a product or service is created, the true or a must knowing, or you may also call this an interesting fact also, is that – the process of marketing starts even before a product is created.

What is Marketing Mix?

Marketing Mix is one of the most important aspects of marketing.

You’d probably have heard the saying one who fails to plan, plans to fail. This goes with marketing and in fact, holds true for every next thing in our life. Because planning creates a roadmap with the help of which you know where you are heading and prepares you for unexpected failures that may arrive along the way.

The marketing Plan mainly includes Segmentation and Targeting which we are going to look more ahead. Once the Marketing Plan is developed, to achieve the desired objectives, Marketing Mix is used.

As per Neil H. Borden, the marketing mix is defined as follows,

The marketing mix is a set of marketing tools the firm uses to pursue its marketing objectives in the target market.

You’ll have already heard about the famous 4P’s of Marketing, which we are going to see next.

4P’s of Marketing

4ps-of-marketing

4P’s of Marketing is a marketing mix for goods. It’s the concept designed by the marketer E. Jerome McCarthy that abbreviates Product, Price, Place, and Promotion as 4P’s.

Product

The crux of the matter lies in your product. Because this only is going to meet the demands of a customer. The product can be any physical good or any service.

As a marketer, you are required to create and constantly iterate your product based upon the market feedback to satiate the market demands.

So, to do that, you may ask yourself the following questions,

a). What exactly my customers want from my product? Does it’s going to help him to solve a problem or make his life easier?

Remember that “people don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”, as famously quoted by Harward Business School professor Theodore Levitt. So, your prime focus should be on understanding the pain point of a customer and how your product is gonna help him. Your complete product design and development has to be based on keeping this fact in the back of your mind.

b). What features have to be inside by product or service?

Again, the answer to this question will be based upon understanding the pain points of your customers. People don’t buy features, but buy benefits to get their things done easily. So, your product should have all the features that provide the benefits with which a customer can get rid of his problems.

c). How the product stands in the market as compared to the competitors?

You must have to be stand out in the marketplace or else your product offering will be lost among other competitor products inside the market.

Price

price

The next P is Price.

Price determines the monetary value of your product. And more than that, it also involves the time and effort a customer is willing to spend on your product.

The P for Profit comes from this P of price. It’s this P only that drives a business. So, the following questions you need to consider that determining the price of your product.

a). What’s the value that a product is going to offer given its price?

Remember that people are nowadays smart enough to analyze your product to quantify the profit they are going to get out of their purchase. Management inside companies literally sits in a round table meeting to calculate and estimate when they will get the Return on Investment (ROI) of their money.

People also compare your products with your competitors as they want the most out of their money. Thanks to the era of cheap data prices and accessibility to smartphones, they can do self-research and know full and minuscule details before arriving for any purchase at your shop, showroom, or website. This brings us our next question,

b). How’s your pricing strategy as compared to your competitors?

For the same category of product or almost the same providing features, your product’s pricing should be as per the market prevalent price. If it’s on a higher side than your competitors, then the benefits a user will get should be justified by your set price.

Place

Place refers to the location where you’ll be displaying your product. As we are in a digital era, perhaps the first thing that came to your mind is – online and offline. Correct?

But there’s more to the picture which we need to understand.

People living in different places have different interests and also differ in their purchase power. Especially in India, people living in rural areas have a lower average income than people living in metropolitan cities.

I have also written a blog on the Rural Marketing Strategy which you can read to know more about marketing planning for rural areas.

Even with cities, the top metropolitan cities like Delhi, Mumbai, and Bangalore have high living standards and those suburban towns. And even with the cities, there are areas that are posh and premium and areas where a middle-class family resides.

If you place your product or service offering with a premium price tag to locations where people aren’t able to afford it, then you are gonna fail miserably.

So, what you have to keep in mind is that it should be you to place your product or service to your potential buyers and not the other way out.

And as for the online marketplace is concerned, what if you are running a B2B business and you place your product on a social media platform like TikTok? The probability of your success is close to zero because 41% of TikTok users are aged between 16 to 24. Plus people visiting TikTok aren’t serious there for purchase. So, not TikTok but LinkedIn might be a better choice in this case.

Promotion

promotion

Here we are with our final P, which is Promotion.

Again, the first thing that perhaps has arrived in your mind is the two means – online and offline – mode of promotion. This is quite similar to our above-defined P – Place.

Promotion mainly aims to create awareness of your product. The offline mode of promotion includes digital billboards, print media like advertisements in newspapers, magazines, pamphlets, posters, and cards, and word of mouth promotion; and in online mode, we have online ads, social media platforms, and mailers. You may choose either both of the means, online and offline, depending upon your budget and your target audience.

7P’s of Marketing

We just understood the 4P’s of Marketing which is meant mainly for goods. But for services and knowledge-based economy, there are 3 more P’s, making a total of 7P’s, which you should know about.

The service industry comprises of banking, hotels and airlines.

But why 3 more P’s are required now? This is because services are a bit different from the goods. Unlike physical goods, services have characteristics like Inseparability, Intangibility, Heterogeneity, and Perishability that needs to be considered.

So, the other 3P’s specially meant for services are,

People

By People, it includes all people that, directly or indirectly, influence the perceived value of a service(or a product). So, this includes management, employees, customers, and knowledge workers. For the service industry to succeed, the presence of appropriate staff and people is essential.

Process

Process implies the flow of activities or mechanisms designed to achieve a goal for customer satisfaction and retention.

Eg. It’s because of Pizza Hut’s efficient process only that it guarantees you pizza delivery at your doorstep within 30 minutes, or you can take it FREE!. McDonald’s also isn’t far behind and wows to service you with hot and fresh burgers within 2 minutes of the order.

Physical Evidence

What would you expect if you travel with the 1st class ticket on an airplane, or have your dining in a 5 Star Hotel vs a 3 Start? You’d expect the quality of service you have paid for. You’d desire a sensory experience of the service you opt for as per its price. This defined as the Physical Evidence in the 7P’s of Marketing.

So, if you are a marketer designing a marketing plan for a service startup, then you have to give a tangible character to your service as per their price and quality which can be done by certificates, logos, and tickets. It allows a customer to measure or evaluate the value he is going to receive for the price tag asked from him.

What is Need, Want, and Demand?

We just learned that marketing is about identifying the needs of a customer. Now let’s understand what exactly is a need? and other important terms like want and demand.

Needs: Needs are defined as the basic human requirements that are must for survival. You need air, water, clothing and shelter to survive.

Wants: When needs become specific to you, then they become Wants. For eg, you need food to satiate your hunger and keep yourself alive. You need that anyhow. But you may satisfy your hunger through a variety of foods available for you like rice, wheat(roti), chicken, pizza, etc. Generally, it’s our society and culture that define our wants.

Demand: A want becomes demand when people are willing and have the ability to pay the price for that. Everyone wants to have a Land Rover or BMW car, but not everybody can afford it. And as a marketer, you need to more concerned about constantly knowing and understanding the demand of the market than the wants or needs, as your complete marketing strategy will be based upon the market insight available at your hand.

What is Segmentation-Targeting-Positioning?

After you have devised the 4P(or 7Ps), the next step is to plan the product segmentation-targeting-positioning, abbreviated STP.

As per the faculties of Kellogg School of Management, Brian Sternthal and Alice M. Tybout,

“Market segmentation involves dividing the market of potential customers into homogeneous sub-groups. These subgroups may be distinguished in terms of their behavior pattern, attitudes, demographic characteristics, psychographic profile, and the like.”

Let’s try to understand this concept with an example.

Earlier life was a bit simpler and so the demands of people. A single variety of products was able to suffice the demand of the large population. That’s why Henry Ford has once said, “People can have model T in any color – so long as it’s black”.

But things are now different. Within a family, family members may prefer different varieties of toothpaste as per their wishes and demand. And so is the reason, the world’s renowned toothpaste brand “Colgate” produces 28 different types of toothpaste in India, 50 types of toothpaste in the UK, and 44 types of toothpaste in the US.

Note that it’s not you who create market segmentation, but it already exists in the market. As a marketer, it’s your responsibility to fetch the segmentation, create and then position your product to fulfill the market demand.

What is a Brand?

As per renowned american marketing professional and author Al Ries, brand is defined as follows,

A singular idea or concept that you own inside the mind of the prospect.

The business tycoon and the founder of Amazon Jeff Bezos says,

A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.

Now, let’s also how American Marketing Association(AMA) defines brand,

A brand is a name, term, sign, symbol, or design or a combination of them intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

So, what can we deduce from these definitions?

First, a brand is like an identity of a company in the form of a name or logo. Second, a brand is like trust which you as a marketer have to build with your customers.

Product Life Cycle(PLC)

Let’s now understand Product Life Cycle abbreviated PLC.

Every product goes through this cycle known as PLC which has following stages – Introduction, Growth, Maturity and Decline.

If you plot these stages on a Sales vs Time Graph, the graph generally will come out to be a bell shaped. So, this PLC curve is also known as Bell Curve.

The time axis in the life cycle of a product will depend on the product to product. In the case of a smartphone, the life cycle is short or 2 years, while in the case of an automobile, it can from (8-10) years.

It can also be more than this in the case of FMCG products. Eg. Lux soap by Unilever is in the marketshelves since 1925!.

Now, let’s understand the PLC by analyzing the PLC curve.

Introduction
In the introduction stage, initial sales growth is slow and promotional expenses are high. This results in no or negative profit for a business. Sometimes, the product is provided free of cost or on a free trial to create awareness and trust for the business.

Growth
In the growth stage, the money starts flowing. So, the business gains profit and the company starts spending more on promotional activities to gain more profit. The company’s market share increases.

Maturity
Here, sales of a product reach their peak and then start declining. So, profit also starts declining and so the market share of a business.

Decline
As it sounds here, the sales or profit declines.

So, these are the four stages which most of the product goes through over their life-cycle.

But, it’s not always the case and with products of fashion or fad, the demand increases sharply and then declines sharply. The graph in these cases looks something like below,

Another case is with the new drugs, where the product demand increases and then declines, and then company again pushes(promotes) the product, and the demand increases and then again declines. So, there are two peaks and two declines and the graph takes the wavy shape and looks like below,

Frequently Asked Questions(FAQ)

Finally, let’s end this discussion with some of the Frequently Asked Questions hovering over the internet getting answered.

What’s the difference between Sales and Marketing?

There’s a lot of confusion around the terms – sales and marketing. Some people say both are the same, some take them infinitely apart from each other and some try to make these two compete with each other.

To end this confusion once and for all, take note of these 2 points below-
1. Sales is a one-to-one transactional process while marketing can be one-to-many.
2. Sales is a subset of marketing.

You can read more in detail about this inside the blog: Difference between Sales and Marketing

Is marketing a good career?

If you are in the early stages of your career and want to build in career in the field of marketing, then go for it without giving a second thought.

You might be surprised knowing that Salespeople are one of the highest-paid professionals in the industry. But even if you not a marketing professional and curious about the field, then know that marketing is one of the subjects that never goes to waste in life. We just read that marketing is about understanding people. So, this will help you in building relationships with people and not only in just earning money.

What’s the most important aspect or part of marketing?

Marketing is about finding pain-points of people and then brainstorming to solve those pain area. But unfortunately, many people fail to realize that. You solve a problem and ease someone’s life, and in return you are paid for that.

Is marketing art or science?

Many people think that marketing is an art and you need to bring out the Leonardo da Vinci inside you to succeed in it. But contrary to that, marketing is a science and has a set of rules to perform and succeed.

This is because it’s based on human psychology which remains the same with every human on the planet, it was the same 1000 years back and is going to remain the same 1000 years ahead.

But if you can bring a little creativity to your marketing efforts, which definitely doesn’t require you to become the next Leonardo or Shakespear, then it’ll be the cherry on the cake.

How can I learn marketing?

You can do a full-time MBA in marketing to get a recognized degree in this subject. But even if you don’t want that, then you can read books and do online and offline training.

How can I sell anything to anybody?

But you should not!. Marketing is about understanding your customer and creating products and services to satiate his demands, and not any thing else.

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