What is Marketing?
Kotler defines marketing as “The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.”
In general, marketing is considered to be only selling and advertising. But the term marketing has a much deeper meaning and as a function, it is a gamut of sub activities, including, but not limited to selling and advertising. Modern day marketing is a vibrant function of finding, satisfying, retaining, and re-inviting customers, by way of varied activities.
Marketing, as a function, is applicable not only to companies, but to people as well. Every individual is performing marketing at some point in his/her life. This can be seen in a very common example in every person’s life. A guy sees a girl, and wants to woo her. He does this by:
- Find ways to talk to her: Networking
- Get talking to her: Communication
- Project a good image of himself to her: Branding
- Attract her: Advertising
- Knows what she is and how she reacts to situations: Understanding consumer behaviour
- Make her like him: Conversion and Sale
- Make her stay with him for life: Retention and loyalty
This as it can be seen is not just a list of independent activities. These activities, only when interrelated, create true value. If a name has to be given to the group of activities put together, it would be called Marketing.
- Are you marketing to your Clients or to yourself?
- Consider your marketing campaigns! Are they directed at solving customer problems or are they a list of your available services?
If you are an auto mechanic do your ads talk about oil changes and tune ups, or do they stress keeping your car safe and break down free. Which is more important to your customers?
Of course, oil changes and tune ups along with other maintenance is what keeps your automobile safe and avoids troublesome break downs. But which one reaches your potential customers?
Make sure your marketing campaigns are directed toward solving customer problems and not listing your services and you will reach more people and build longer term relationships with each of them.
- Question: What is the difference between advertising and promotion?
- Advertising is generally targeted at the end consumer (as opposed to the channels of distribution).
Advertising can be used for many purposes, including establishing awareness, providing information for knowledge, and creating brand loyalty. In its knowledge role, advertising can communicate a positioning (or modify a positioning) and even promote new uses of a product.
Promotion is a general term. It is so general, in fact, that most communications that are not strictly advertising (paid and non-personal) are characterized as promotions. But this distinction is blurry at times, so looking for a clear definition is useless. It’s better to just recognize that there are many types of promotions.
Some promotions -- special events, sampling, rebates, and coupons, to name a few -- are aimed directly at consumers.
- Question: Why do I need a marketing plan?
- A marketing plan saves you time and money. Without a plan, it is difficult to know which activity to do and when. It saves you time and keeps you focused. It saves you money because you have identified your target market and strategy, and following the plan, you will engage in the right activities to accomplish your goals.
- Question: What is Market Segmentation?
- The marketplace is a dynamic entity - dynamic in multiple dimensions. One buyer is not necessarily similar to another. Consumers differ in their wants, age, gender, location, income, attitude, and education.
Market Segmentation helps the marketer to split the market consisting of varied buyers, into smaller segments, which consists of a uniform buyer group that can be reached more efficiently with a specific communication method, or served with a specific product.
In general marketers practice four major segmentation techniques:
- Geographic Segmentation: This means splitting the market based on the location of the customer. This can be segments based on continents, nations, regions, states, districts, cities, or even neighbourhoods. For example: The (local) Gazzette segments its markets based on cities.
- Demographic Segmentation: This divides the markets into groups based on variables like age, gender, income, education, religion, nationality, occupation, family size, and generation. This is one of the most popular segmentation techniques.
- Psychographic Segmentation: This technique divides the market into groups based on parameters like class, lifestyle, or personality traits.
- Behavioural Segmentation: This divides the market into groups based on parameters like knowledge, attitude, product use, response to a product, or occasion
- Question: Does advertising really increase sales?
- Decreases in the level of advertising do not lead to an immediate decrease in sales. An increase in the level of advertising by itself does not lead to an increase in sales.
On average, half of all ongoing ad campaigns are ineffective. Changes in the creative, medium, target segment or product itself sometimes lead to change in sales, even though increases in the level of advertising alone do not.
When advertising is effective, it is effective either early on or never. When advertising does affect sales, its impact is not large and is much smaller than that of price. In fact, research shows that the elasticity of sales to advertising is .1, while the elasticity of sales to price is –2.5.
- Question: What is the difference between Sale and Marketing?
- This is often a topic of confusion. There are times when both are confused for the other. We will see what each function is, and then understand the difference between the two.
Sales: It is a function whereby the product/service gets “sold” to the client. This process begins with identifying the clients, investigating their requirements, understanding their problems/needs, proposing a solution/offer/make the pitch, handling objections, negotiating the terms, and closing the deal. Sales is a very in-detail approach to client acquisition. It follows a one-to-one approach.
Marketing: Marketing is a function, which tries to entice people to buy a product/service. This is done by creating awareness about the product to a large base of prospects. This includes use of various methods, which can attract attention to a product, thereby facilitating sale/sales pitch.
As it can be seen Sales and Marketing are two different functions, but the objective, at large, is the same. Both the functions go hand in hand. Sales depend on Marketing, for creating awareness about the product, which will make lead acquisition and conversion easier.
Sales, is also the function that rakes in the money flow into the company; which means that all other departments are in some-way dependant on sales. The data provided by sales teams is critical to making Marketing decisions too.
- Question: What is the difference between marketing, advertising, and sales?
- First of all, marketing encompasses a wide range of both analysis and tactics.
For example, marketing involves doing customer analysis, including market segmentation, market perceptions, market sizing, but also competitive analysis and reactions, target segment selection, positioning, branding, advertising, sales, promotions, channel of distribution arrangement and management, product line decisions, sales force management, and more. You can see that marketing involves a number of activities.
Advertising, however, is a tactic in marketing. It involves a number of activities but it really focuses on communicating a message to the market (which it partly shares with Public Relations).
Sales is also a tactic of marketing. This is typically what the sales force does. But it is marketing's job to focus the entire marketing effort (of which the sales force is one part) towards providing what customers want and gaining a sustainable strategic advantage.
- Question: What is a Product Life Cycle?
- Just like a plant has a life cycle, which begins with the sowing of the seed, goes on to sprouting, shooting leaves and establishing roots, and finally shrinking and withering away, every product also has a life cycle.
The product life cycle happens in four different stages
Introduction: It is a stage when the product is totally new to the market. The stress is not on immediate profits, but on creating awareness about the product. A price skimming strategy is employed.
Growth: Competitors are attracted into the market. They begin offering similar products. Product becomes more profitable. The stress is on advertising and brand building. Market share starts stabilising.
Maturity: The survivors of the earlier stages tend to stay longest in this stage. Sales grow at declining rates. Producers leave the market because of poor margins. Sales promotion and price wars are rampant and find prominent part in this stage.
Decline: This stage marks the downturn of the market. Sales grow negatively. Many products are withdrawn from the market. Profits are ensured by cost cutting and reduced marketing spend.
All products need not go through all these stages. There are products which go from introduction to decline. The length of each stage also varies enormously. The decisions of the marketers also change the stage. For example a steep price rise can take the product from growth to decline, or a shift from decline to maturity can be experienced by a price cut.
- uestion: What is publicity - public relations - PR?
- Publicity, Public Relations, or "PR" is the art of gaining media and public exposure for your company, product or service through communication techniques. The most popular publicity vehicles are the distribution of articles, news releases, and pitch letters.
Publicity is different than advertising since you do not directly pay for publicity (unless you hire someone to conduct your publicity campaign). Instead of purchasing advertising, you can use publicity techniques to "spread the news" about your product for less cost and higher-impact than advertising.
- Question: What is direct response advertising?
- Direct response advertising is the business of designing, writing, and placing advertisements that ask the reader to respond by, either, calling a phone number, sending a business reply card, or visiting a website for more information.
Direct response advertising is salesmanship in print or over the air. As salesmanship, it makes a solid case for your company, product or service and overcomes sales objections. It answers all major questions and it promises performance or results and backs the promise with a risk-free warranty or money-back guarantee.
Used effectively, direct response advertising can produce tons of qualified and favourably-oriented prospects for your company. At its best it literally compels people to call, write in, or buy.
- Marketing Myths
- Marketing is not mathematics. It is not exact or definite, because it deals with the human psyche and our consumption and buying patterns, which are very unpredictable. When marketers fail to realize this fundamental reality, they fall prey to marketing “rules” which don’t exactly turn out to be rules. Here is a list of eight of such “pseudo rules” or myths. While a couple of them may be more prominent in the Indian market, none of them are exclusive to just India. Interestingly enough, the human mind seems to work more or less the same everywhere.
- Marketing is all about selling the products that have been made.
- Marketing is primarily about understanding correctly what people want. And when you have understood that (which is extremely difficult, by the way), it is about creating good products that satisfy those wants and finally making them available to the customer (not the consumer, refer myth # 8). Indian marketers are still behind their western counterparts in understanding this. Confusing marketing with sales or advertising is rampant in India.
- Advertising is marketing.
- Advertising is a form of promotion and promotion is just a small part of the overall marketing function. Advertising is not marketing. Also more advertising doesn’t mean more sales. Advertising makes people aware of the brand. Now whether they trust the advertising (which they don’t, most of the times, and that’s why PR works better) and go ahead and buy the product, is an entirely different issue.
- Branding is marketing.
- The scope of branding goes beyond marketing; rather it is the result of marketing. Apart from marketing, branding is also about the work culture, the employees, the leadership, the core values, the performance of the products, etc. The company makes a promise through advertisements and then fulfils it with the help of all its resources. Only when both promise and fulfilment happen the way they should is a brand built.
- Only big companies need to invest in branding.
- Branding is not one of the many activities of a company, it is the activity. Everything that a business entity does contributes or takes away from its brand identity. Even if the company is small and has limited customers, it will be perceived in some way by those limited number of customers. Then why neglect brand building and lose even them?
- The best product or service will win.
- Apple’s iPhone still wins not because it is the best, but because it is perceived to be the best. You don’t go into a TV store and buy a Samsung instead of a Alba because you know for a fact that Samsung is better, but because you perceive it to be better. Remember, marketing or branding or advertising is all about perception, human perception.
- Competitors are bad.
- Competitors are good. Pepsi would not have been Pepsi without Coke-Cola. Vodaone would not have been Vodafone without Racal. Grazia magazine would not have been Grazia without Cosmopolitan. A competitor refines your own positioning. It tells the consumer, what you are not.
- Customer is always right.
- Customer is sometimes wrong, horribly wrong. Considering the customer to be always right may sometimes harm the morale of the loyal and efficient employee. The Indian principle of Atithi Devo Bhavah(the Guest is God) doesn’t apply to customers. And there are both good and bad customers. Seth Godin, the marketing Guru says that the customer is indeed always right, because when he is wrong, you should let him cease to be your customer. Sound advice!
- Customer and consumer is one and the same thing.
- They are not! A customer – purchases and pays for a product or service; a consumer – is the ultimate user of the product or service; the consumer may not have paid for the product or service. For example: a food manufacturing business makes own-label, Italian ready meals for the major supermarkets. So far as the business is concerned, the customer is the supermarket to whom it supplies meals. The consumer is the individual who eats the meal.
In terms of its marketing effort, who should the business above target? In reality – it needs to understand the needs and wants of both the customer and the consumer. Considering both to be the same might be misleading for marketers.
- How to build a consistent Brand Identity
- Building a successful Brand isn't as easy as it seems. Advertising alone won't establish a Brand Identity. Consider a company that advertises using a slogan like, "We are here for you". However when you arrive at their office the sign on the door says, "We are out of the office, at the moment". We are here for whom?
The advertising message of our sample company came through loud and clear but they failed to follow through. They weren't there for you or for anyone else.
In addition to advertising, a Brand must be established in house. The message in an advertisement is a promise to people who view it and when they visit a store they must see that message in action.
Product price and promotions must also stay consistent to build a successful Brand. If an advertisement says they are the cheapest, they better be the cheapest! If the ad says they are friendly, everyone in the store must be friendly. One cranky clerk can destroy the Brand that has been promoted.
A web site is a mixture of media ad, point of sale brochure and physical store. A business web site must be consistent with the message being advertised and the nature of the business.
Consistent advertising messages regarding a web site are essential. Is your business an online business, a physical store, or both? Do you advertise your physical store or office one day, your web site another and on other ads promote both?
- Question: What exactly is search engine optimization (SEO)?
- Search engine optimization is the practice of guiding the development or redevelopment of a website so that it will naturally attract visitors by winning top ranking on the major search engines for selected search terms and phrases.
- Questions: What are meta tags?
- Meta tags are HTML codes that are inserted into the header on a web page, after the title tag. They take a variety of forms and serve a variety of purposes, but in the context of search engine optimization when people refer to meta tags, they are usually referring to the meta description tag and the meta keywords tag.
The meta description tag and the meta keywords tag were proposed so that webmasters would have a consistent method for providing meta document data to user agents, such as search engines. Unfortunately, so many unscrupulous webmasters have abused the meta description and meta keywords tag that search engines have had to de-emphasize their importance.
In addition to the well-known meta description and meta keywords tags, there are other useful meta tags, including the meta http-equiv tag, meta refresh tag, the meta robots tag, the meta copyright tag, and the meta author tag, among others. These tags are used to instruct user agents such as web browsers and search engine spiders on a variety of topics.
- Question: What is a spider?
- A spider is a piece of software that follows links throughout the Internet, grabbing content from sites and adding it to search engine databases.
Spiders follow links from one page to another and from one site to another. That is the primary reason why links to your site are so critical. Getting links to your website from other websites will give the search engine spiders more opportunities to find and re-index your site. The more times they find links to your site, the more times they will stop by and visit. This has been true since spiders began. Recently there has been an incredible amount of attention paid to links. That's because Google came clean and said in public that the number and quality of links to your site will directly impact its rankings in the search results.
AltaVista, AllTheWeb, Teoma, and Google all factor in the number and quality of links to your site when giving your site its ranking.
Spiders find Web pages by following links from other Web pages, but you can also submit your Web pages directly to a search engine and request a visit by their spider. In essence, that is search engine submission. Because so many millions of web masters have submitted their sites over and over, the search engines have responded by putting more emphasis on sites that their spiders find naturally and less and less emphasis on sites submitted directly. So, being found is better than submitting directly.