People might think that marketing is only the selling and advertising as we are bombarded with different media like television, newspaper, internet etc. Today's marketing is not only telling and selling the products but also about satisfying the customer needs.
Marketing is simply defined as managing profitable customer relationship. The twofold goals of marketing are to attract new customers by providing superior value and keep and grow current customers by delivering satisfaction.
For example, Wall Mart has become the world's biggest retailer and also one of the largest business company by promising low priced products to customer.
Marketing is the process by which any firm creates value for the customers and build the strong relationship in order to capture value from customers in return.
You see a pretty girl at a party. You go up to her and say, "I am a wealthy person. Marry me!" That's Direct Marketing.
You're at a party with many of friends and see a beautiful girl. One of your friends goes up to her and pointing at you says, "He's very wealthy. Marry him." That's Advertising.
You see a pretty girl at a party.You go up to her and get her cell phone number. The next day you call and say "Hi, I'm very wealthy. Marry me." That's Telemarketing.
You're at a party and see a pretty girl. You get up and straighten your tie, you walk up to her and bought her a drink. You open the door, pick up her bag after, offer her a ride, and then say, "By the way, I'm very wealthy. Will you marry me?" That's Public Relations.
You're at a party and see a pretty girl. She walks up to you and says, "You are very wealthy…" That's Brand Recognition.
You see a pretty girl at a party. You go up to her and say, "I'm very wealthy. Marry me" She gives you a nice hard slap on your face. That's Customer Feedback !!!!!
Marketing process includes five steps as shown in the figure. Understanding customer, creating customer value, building strong customer relationship are the major objectives of the company. In last step, company reaps the rewards for creating superior value.
At first, marketers need to know the customers need, wants as well as marketing place to operate. The five cores of customer and marketplace concept are described below.
1.Customer Needs, Wants and Demands
Need is the state of deprivation that includes physical needs for food, clothing, warmth, safety social needs for a love and affection and individual needs for knowledge and experience.
Wants are the form of human need which relies on the individual culture and personality. For Eg: An American need food but wants a burger , French fries, and coca-cola.
Demands are defined as the human want that is backed by purchasing power of customers.
2.Marketing Offerings- Products , Services and Experience
Marketing offering is the combination of the products, services, information, or experiences that are offered to satisfy the need or want. It not only includes the physical products but also include banking, airline, hotel, tax preparation etc.
3.Customer Value and Satisfaction
The expectation about the value and satisfaction that various marketing offers product and services is customer value and if the expectation is met then we called it as satisfaction.
4.Exchanges and Relationship
Exchanging is an act of gaining desired products or object from someone by offering something in return. Marketers try to build the strong relationship with the customer by exchanging their products for the money and satisfying their needs and wants.
The combination of actual and potential buyers of a product is a market. These buyers share a specific need or want that can be satisfied through exchange relationship.
Once it fully understands both customer and marketplace then marketing management can design a customer driven marketing strategy in which he must answer two important questions: What customers we have to serve and how to serve them best?
1.Selecting Customers to Serve
The marker must understand who should be served and it does by dividing the market into segments of the customer (market segmentation) and selecting which parts it will go after (Target Marketing).
2.Choosing a value Proposition
The company must also decide how it will serve those target customers – how it will differentiate and position itself in the marketplace. A company's value proposition is the set of values that it promises to deliver to the consumer in order to satisfy their needs.
Marketing management wants to form strategies that will build a profitable relationship with the consumers. There are five concepts under which organization designs and carry out their marketing strategies,: the production concept, the product concept, the selling concept, marketing concept, societal marketing concept.
The company that follows the production concept believes that it should produce the product efficiently and try to bring down the prices so that products become affordable. The firm undertakes mass production and makes an effort to improve the distribution
For example Computer maker Lenovo dominates the highly competitive, price sensitive Chinese Pcs market by the help of lower labor cost, high production efficiency and mass distribution.
The managers may become narrow in their thought and forget about customer satisfaction. Later they may realize that there is a need to redefine the marketing objectives and plans. Also,the quality of the product may become an issue if it starts to decline.
-Selling Concept :
In selling concept,the idea that consumer will not buy the enough products unless it initiates a large-scale selling is a promotion effort . For example Insurance and blood donations. The aims of the marketers are to sell whatever company makes rather than focusing on what market wants.
-The Product Concept;
This concept holds that consumer will favour only those products which offer most in quality, performance, and innovative features. Under this concept marketers always tries to improve their products continuously.
-The Marketing Concept:
This concept holds that achieving the organizational goals and objectives depends on the needs and wants of the target marketers and delivers the desired satisfactions better than their competitors. Under this concept , customer values and satisfaction are the paths in order to make sales and profits.
As Herb Kelleher , Southwest Airlines colorful CEO, puts it , “ We don’t have a marketing department , we have a customer department.
-The societal Marketing Concept:
This concept questions whether the pure marketing concept overlook possible conflicts between consumer short run wants and consumer long run welfare. Is a firm that are satisfying the short run wants also able to maintain the long-run welfare of the consumer? The societal marketing concept holds that marketing strategy should deliver the value towards the customer by maintaining both consumer and social well-being.
The business marketing strategy outlines which consumers the company will serve and how it will serve. Next, the marketers develop an integrated program for marketing that actually delivers the intended value for the target consumers. If the marketing strategy is implemented into action then the customer's relationship can be build which creates positive impacts in the customers as well as the company. It also consists of the marketing mix that is the set of marketing tools to implement its marketing strategy.
The fourth step is related to the customer relationship. No, any organization can sustain in a long run if it is not able to build the strong bond among their customers. So every company tries to manage the relationship with their customers from different aspects and concept. Customer Relationship Management(CRM) is one of the important concepts in the modern marketing which is followed by almost every company that builds and maintains profitable customer relationships by delivering highest customer value and satisfaction.
The first four steps in the marketing process involve in building a relationship with the customer by creating and supplying superior customer value . Now the final step involves capturing the value in return that is in the form of current and future sales profits and market share. If the company succeed in creating superior customer value , then it also creates highly satisfied customers who will buy their products more. This means that firm achieves greater long-run returns. Here we discuss outcomes of creating customer value.
1.Creating Customer Loyalty and retention
Good Relationship with the customers creates customer delight. This delighted customers remain loyal and talk to others about the company and its products. Thus, Customer Relationship Management's aim is to create not only customer satisfaction but also customer delight.
2.Growing share of Customers
The part of the customers purchasing that company receives in its product categories is a share of customer. Thus, a bank wants to increase “ share of wallet” restaurant wants to increase “share of stomach”.
3.Building Customer Equity
Customer Equity is the total combined values of all the customers of the company . The ultimate aim of the customer relationship management is to generate high customer equity.
Reference: Kotler, P., & Armstrong, G. (2013).
Kotler, P., & Armstrong, G. (2013). Principles of Marketing. Chennai: Pearson India Education Services Pvt Ltd.