Marketing Definition, Functions, Importance, Process

Marketing Definition: What is Modern Definition of Marketing?Marketing; a tricky topic to define and frame in. the Marketing studies or field has rapidly moved and reached a very high level but still defining is into some fixed variables is just impossible.

Marketing is the part of the management process which responsible for identifying, anticipating and satisfying customer requirements profitably.

Let’s try to understand the definition of marketing and also get a sense of its importance, reach, and radius in business, corporations, organizations and in your life.

The AMA (American Marketing Association) is a prestigious and influential organization not just in the USA but also in the international arena. The definition of marketing in 1964 was-

The process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges that satisfy individual and organizational objectives.

It was until AMA approved and punished another on 2004;

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

In October 2007, they published a new one;

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.

The three definitions are not that different but there is a significant difference between them. I like to call them the generation gap.

In the first definition of AMA “create exchanges that satisfy individual and organizational objectives” indicates that marketing is there for creating exchanges for the involved parties to serve their purpose.

They totally forgot about me and you; the customer’s benefit or value. They also somehow put a boundary to the marketing functions; “process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas”.

In the second definition; they include us-the customers’ value but “in ways that benefit the organization and its stakeholders”. Here they showed the Extend of the marketing activities; “function and a set of processes for creating, communicating, and delivering value”.

The third definition of marketing by AMA is to me the most precise one or the closet on. Well, they put values of customers and society at equals to the organization’s objectives.  Also, they put it in front and regarded it is as the main force behind the marketing activates. See the third change come very quick.

And it is rightly so. Businesses have found out that it is customers who are the only reason for the success, not the large capital or the product/service they produce. For some of them, it had to be found in a hard way.

We can say that marketing is all about delivering customer value and the businesses should be too. Businesses in trying to get customers attention and marketing include all those activates.

The marketing guru of Silicon Valley; Regis McKenna defined marketing in a very short and outrageous way;

Marketing is everything

Bold statement from Regis McKenna’s but take a look again and it’s very true. Marketing functions are not fixed on just products, pricing, promotion, and distribution. It is all the activates that has an effect on how your customer perceives your company.

So in that sense; everything is actually marketing. Marketing is for understanding what the customer needs and then to provide it requires marketing to go beyond the marketing department.

And at the end, we are defining marketing like this-

Every action of an organization; either orbits around, depends on, forced by the activates that marketing makes to communicate with customers for indicating product’s or service’s value to them.

Marketing Functions

The universal functions of marketing are buying, selling, transporting, sorting, standardization and grading, financing, risk taking and market information.

The Selling

The selling function involves promoting the product. It includes the use of personal selling, advertising, and other mass selling methods.

The Transportation

The transporting function. means the movement of goods from one place to another.

The Sorting

The sorting function means involves holding goods until customers need.

The Standardization and Grading

The standardization and grading involve sorting products according to size and quality. This makes buying and selling easier because it reduces the need for inspection and sampling.

Financing

Financing provides the necessary cash and credit to produce, transport, store, promote, sell and buy products.

Risk Taking

It involves bearing the uncertainties that are part of the marketing process. A firm can never be sure that customers will want to buy its products can also be damaged, stolen or outdated.

Who Performs Marketing Functions?

Marketing functions are all part of the marketing process and must be done by someone.

None of them eliminated. In a planned economy, some of the functions may be performed by government agencies. Others may be left to individual producers and consumers.

In marketing directed economy, marketing functions are performed by producers, consumers and a variety of marketing specialists.

Importance of Marketing. Why Marketing is Important?

Effective Marketing is difficult because producers and consumers are separated in several ways.

The exchange between producers and consumers is hampered by spatial separation of ownership exchange of further complicated by discrepancies of quality and discrepancies of assortment between producers and Consumers.

Marketing facilitates production and consumption in different ways. The goals of marketing are depicted below:

Spatial Separation

Producers and consumers are separated geographically. Producers tend to cluster together by industry.

In a few concentrated locations, while consumers are located in many scattered locations. Marketing needed to overcome the spatial separation.

Separation in Time

Consumers may not want to consume goods at the time they are produced and time may be required to transport goods from producer to’ customer.

To overcome the separation in time marketing aids closely.

Separation of Information

Producers do not know who needs, what, when, where and at what price consumers don’t know what is available from whom, where, when and at what price.

The marketing system is necessary to overcome that type of separation of information.

Separation in Values

Producers value goods and services in terms of cost and competitive prices. Consumers value goods and services in terms of utility and ability to pay. To overcome the separation in values marketing facilitate?-.

Separation of Ownership

Producers hold title to goods and services which they themselves do not want to consume.

Consumers want to consume, goods and services which they do not own. The marketing function is necessary to overcome the separation of ownership.

Discrepancies of Quantity

Producers prefer to produce and sell in large quantities. Consumer ’ prefer to buy and consume h small quantities. Marketing needed to overcome discripancies of quantity.

Discrepancies of Assortment

Producers specialize in producing a narrow assortment of goods and ‘ services. Consumers need a broad assortment. The goal of marketing function is also to overcome the discrepancies of assortment.

The goals of marketing from the social foundation according to Philip Kotler and Gar/ Armstrong are;

  • Maximize Consumption.
  • Maximize Consumer Satisfaction.
  • Maximize Choice.
  • Maximize Quality Living.

Role of Marketing in Economic Development

Main purpose of markets and middlemen is to make exchange easier and allow greater time for production, consumption and other activities including recreation.

Effective marketing system is necessary for economic development. Improved marketing may be the key to growth in less-developed nations.

Without an effective marketing system, the less developed nations may not be able to escape the “vicious circle of poverty”.

Many people in these nations can’t leave their subsistence way of life to produce for the market because there are no buyers for what they produce. And there are no buyers because everyone else is producing for their own needs.

As a result, distribution systems and middlemen do not develop.

Breaking this vicious circle of poverty may require major changes in the in-efficient marketing systems that are typical in less- developed nations. Without an effective marketing system, people can’t leave their subsistence way of life.

Marketing means delivering the goods and services that customers want and need.

It means getting products to them at the right time, in the right place and at a price they’re willing to pay.

So, effective marketing is needed to link producers and consumers.

Steps in Marketing Process

Marketing as the process by which companies create value for customers and building strong customer relationships in order to capture value from customers in return.

5 step process of the marketing framework wherein value is created for customers and marketers capture value from customers in return.

  1. Understanding The Marketplace And Customer Needs And Wants.
  2. Designing A Customer-Driven Marketing Strategy.
  3. Constructing an integrated marketing plan that delivers superior value.
  4. Build Profitable Relationships.
  5. Capturing Value From Customers.

Step 1: Understanding The Marketplace And Customer Needs And Wants

It is important to understand customer needs, wants and demands in order to build want- satisfying market offerings and building value-laden customer relationships. This increases long-term customer equity for the firm.

Needs – States of felt deprivation

They include the physical need for basic necessities like food, clothing, shelter, warmth, safety and individual needs for knowledge and self-expression. These need§_cannot be created by the marketers as they are a basic part of human markup.

Wants – The forms human needs take as shaped by culture and individual personality.

Wants are shaped by one’s society and are described in terms of objects that will satisfy needs.

For example; an American in Kolkata needs food but wants McDonald’s.

Demands – Human wants that are backed by buying power

Given their wants and resources, people demand products with benefits that add up to the most va^ue and satisfaction.

Read More: 5 Core Customer and Marketplace Concepts

Step 2: Designing A Customer-Driven Marketing Strategy

Focus areas for designing a marketing strategy:

  • Selecting customers to serve -defining the target market
  • Deciding how to serve customers in the best way – choosing a value proposition

Selecting customers to serve:

The company first decides whom it will serve and divides the market into segments of the customer. Then it goes after specific sections of the market or its target market.

They target customers based on their level, timing, and nature of demand.

Choosing a value proposition

They decide how it will serve their customer that is how it will differentiate and position itself in the market. A brand’s value proposition is the set of values and benefits that it promises to deliver its customer.

Companies need to design strong value propositions to give them the greatest advantage in their target markets.

5 alternative concepts for designing a customer-driven marketing strategy, are;

  1. Production concept: Consumers will favor products that are available and highly affordable. Management should focus on improving production and distribution efficiency.
  2. Product concept: Consumers will favor products that offer most in quality, performance and innovative features. Focus on making continuous product improvements.
  3. Selling concept: Consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. It is typically practiced with unsought goods that the company needs to sell and generally results in aggressive selling practices. The company sells what it makes rather than what the market wants.
  4. Marketing concept: Organizational goals are achieved by knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do.
  5. Societal concept: Marketing strategy should deliver value to customers in such a way that improves both customers as wells as society’s well being and long-run interests.

Step 3: Constructing an integrated marketing plan that delivers superior value

The company’s marketing strategy outlines which customers the company will serve and how it will create value for these customers. Then the marketer develops integrated marketing plans that will actually the intended value to target customers.

It consists of the firms marketing mix (4Ps), the set of marketing tools the firm uses to implement its marketing strategy.

The marketing program builds customer relationships by transforming the marketing strategy into action.

For this, it needs to blend all of these marketing tools into a comprehensive integrated marketing program that communicates and delivers the expected value to the customers.

Step 4: Build Profitable Relationships

Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

The aim of customer relationship management is to produce high customer equity, the total combined customer lifetime values of all of the company’s customers.

The key to building lasting relationships is the creation of superior customer value and satisfaction.

Companies today not only want to acquire profitable relationships but also to build relationships that will increase their share of customer -the portion of the customers purchasing that a company gets in its product categories.

5: Capturing Value From Customers

The ultimate aim of customer relationship management is to produce high Customer equity – total combined lifetime values of all of the company’s current and potential customers.

More loyal the company’s profitable customers, higher are the customer equity. Customer equity may even be a better way to measure the company’s performance than market share or current sales.

Marketers cannot create customer value and build customer relationships by themselves. They need to work closely with other company departments and with partners outside the firm.

In addition to being good at customer relationship management, they also need to be good at partner relationship management.

MoreMarketing /