1. The Concept and Process of Marketing
Marketing is explained as a combination of behavioural and management sciences, augmented with instinct, imagination, inspiration and innovation. Marketing needs a systematic approach to develop new products and identify new channels.
1.3. Elements of the Marketing Process
Marketing process aims to increase company’s top line. Marketers formulate marketing strategies based on insights gathered through marketing research. Key elements of the marketing process are described below.
Needs and Wants: Needs are the basic human requirements (such as food, shelter and clothing). Wants aren’t required for humans to survive. It is something which consumers wish for.
Products: Product is the core of marketing mix. It is essential to have a clear understanding of the product to decide its placement, promotion and pricing strategy. Packaging, warranty and after sales support are also essential for the marketing of product.
Value and Satisfaction: Customers evaluate the product on the basis of benefits delivered and cost paid in comparison to the other options. Customer satisfaction is defined as products ability to meet customers’ needs and expectations effectively, and deliver value.
Exchange Utility and Transaction: Want, need and value of a product do not ensure successful marketing. The goal of a marketing transaction is to get a product that is more desirable than the one given up.
Markets: It is essential to have a free flow of products/services from seller to buyer, for a market to run successfully. There should be an effective communication between all parties involved in the transaction. The seller should provide all important information to the buyer.
1.4. Benefits and Costs of Marketing Orientation
Key components of market orientation are customer orientation, competitor orientation and inter-functional co-ordination. It also focuses on long-term strategy and profitability.
Marketing orientation is also defined as gathering marketing intelligence on the current and future needs of customers. It also covers dissemination of insight across various departments and the firm’s responsiveness to the same.
Firms that are market oriented experience the following benefits:
Improves sales
Increases market share
Higher success rate of new products
It is often believed that the cost of a market oriented company is high as compared to a traditional environment. This is true but benefits achieved from being marketing oriented are more than the cost incurred.
The costs involved in market orientation are:
Conducting market research either through an in-house research team or through research agencies and consultancies
Designing the segmentation, targeting and positioning strategy
Developing a customised product as per the customer requirements
Undertaking promotional activities (e.g. advertisements)
Developing a distribution network
Researchers have assessed market oriented companies on parameters such as return on equity, profitability and market share. The findings revealed that such companies experience higher growth, are more proactive in terms of planning and work in close coordination with most various departments (e.g. finance).
On the other hand, companies that are not market oriented, have lower operating expenses and hence their profits are higher.