Copyright © 2017 Terry Holt & Associates. All rights reserved.
DEFINITION OF MARKETING :
Let’s examine our definition of marketing in a little more detail by looking at the key terms.
Strategies and Tactics - Strategies are best explained as the direction the marketing effort takes over some period of time while tactics are actionable
steps or decisions made in order to follow the strategies established. For instance, if a company’s strategy is to begin selling its products in a new
country, the tactics may involve the marketing decisions made to carry this out. Performing strategic and tactical planning activities in advance of taking
action is considered critical for long-term marketing success.
Identify - Arguably the most important marketing function involves efforts needed to gain knowledge of customers, competitors, and markets (i.e., where
marketers do business). We will see throughout this tutorial how marketing research is utilized in all decision areas.
Create - Competition forces marketers to be creative people. When marketers begin new ventures, such as building a new company, it is often based
around something that is new (e.g., a new product, a new way of getting products to customers, a new advertising approach, etc.). But once something
new is launched innovation does not end. Competitive pressure is continually felt by the marketer, who must respond by again devising new strategies
and tactics that help the organization remain successful. For marketers, the cycle of creating something new never ends.
Maintain - Today’s marketers work hard to insure their customers return to purchase from them again and again. Long gone (see our discussion of
History of Marketing below) are the days when success for a marketer was measured simply in how many sales they made each day. Now, in most
marketing situations, marketing success is evaluated not only in terms of sales figures but also by how long a marketer retains good customers.
Consequently, marketers’ efforts to attract customers do not end when a customer makes a purchase. It continues in various ways for, hopefully, a long
time after the initial purchase.
Satisfying Relationships - A key objective of marketing is to provide products and services that customers really want AND to make customers feel their
contact with the marketer is helping build a good relationship between the two. In this way the customer becomes a partner in the transaction, not just a
source of revenue for the marketer.
Value for Both Customer and Marketer - Value refers to the
perception of benefits received for what someone must give
up. For customers, value is most often measured by how
much benefit they feel they are getting for their money, though
the value one customer feels may differ from what another
customer feels even though they purchase the same product.
On the other side of the transaction, the marketer for a
for-profit organization may measure value in terms of how
much profit they make for the marketing efforts and resources
expended. For a successful marketing effort to take place both
the customer and the marketer must feel they are receiving
something worth while in return for their efforts. Without a
strong perception of value it is unlikely a strong relationship
can be built. Throughout this tutorial we will emphasize value
and show ways marketers build value into the products they offer.
What Marketers Do
In order to reach the goal of creating a relationship that holds
value for customers and for the organization, marketers use a
diverse toolkit that includes (but is not limited to) making
1. Target Markets – markets consist of customers identified
as possessing needs the marketer believes can be addressed by its marketing efforts
2. Products – consists of tangible (e.g., goods) or intangible (e.g., services) solution to the market’s needs
3. Promotion – a means for communicating information about the marketing organization’s products to the market
4. Distribution – the methods used by the marketer that enable the market to obtain products
5. Pricing – ways for the marketer to set and adjust the cost paid by the market to obtain products
6. Supporting Services – additional options that enhance a product’s value
Each option within the marketer’s toolkit is tightly integrated with all other options so that a decision in one area could, and often does, impact decisions
in other areas. For instance, a change in the price of a product (e.g., lowering the price) could impact the distribution area (e.g., requires increased
product shipments to retail stores).
Additionally, options within the toolkit are affected by factors that are not controlled by the marketer. These factors include economic conditions, legal
issues, technological developments, social/cultural changes, and many more. While not managed in the way marketers control their toolkit, these
external factors must be monitored and dealt with since these can cause considerable harm to the organization. Ignoring outside elements also can
lead to missed opportunities in the market especially if competitors are the first to take advantage of the opportunities. As part of the strategic and tactical
planning process discussed above it is wise for marketers to pay close attention to the environment outside the organization.
Finally, as noted earlier, research plays a significant role in all marketing decisions areas. As we will see in the Marketing Research Tutorial, marketing
decisions should not be made without first committing time and resources to obtaining needed information.
History of Marketing
It is hard for many to believe, but when compared to economics, production and operations, accounting and other business areas, marketing is a
relatively young discipline having emerged in the early 1900s. Prior to this time most issues that are now commonly associated with marketing were
either assumed to fall within basic concepts of economics (e.g., price setting was viewed as a simple supply/demand issue), advertising (well
developed by 1900), or in most cases, simply not yet explored (e.g., customer purchase behavior, importance of distribution partners).
Led by marketing scholars from several major universities, the development of marketing was in large part motivated by the need to dissect in greater
detail relationships and behaviors that existed between sellers and buyers. In particular, the study of marketing led sellers to recognize that adopting
certain strategies and tactics could significantly benefit the seller/buyer relationship. In the old days of marketing (before the 1950s) this often meant
identifying strategies and tactics for simply selling more products and services with little regard for what customers really wanted. Often this meant
companies embraced a “sell-as-much-as-we-can” philosophy with little concern for building relationships for the long term.
But starting in the 1950s, companies began to see that old ways of selling were wearing thin with customers. As competition grew stiffer across most
industries, organizations looked to the buyer side of the transaction for ways to improve. What they found was an emerging philosophy suggesting that
the key factor in successful marketing is understanding the needs of customers. This now famous Marketing Concept suggests marketing decisions
should flow from FIRST knowing the customer and what they want. Only then should an organization initiate the process of developing and marketing
products and services.
The marketing concept continues to be at the root of most marketing efforts, though the concept does have its own problems (e.g., doesn’t help much
with marketing new technologies) a discussion of which is beyond the scope of this tutorial. But overall, marketers have learned they can no longer limit
their marketing effort to just getting customers to purchase more. They must have an in-depth understanding of who their customers are and what they
The Role of Marketing
As we’ve seen the key objective of an organization’s marketing efforts is to develop satisfying relationships with customers that benefit both the customer
and the organization. These efforts lead marketing to serve an important role within most organizations and within society.
At the organizational level, marketing is a vital business function that is necessary in nearly all industries whether the organization operates as a for-profit
or as a not-for-profit. For the for-profit organization, marketing is responsible for most tasks that bring revenue and, hopefully, profits to an organization.
For the not-for-profit organization, marketing is responsible for attracting customers needed to support the not-for-profit’s mission, such as raising
donations or supporting a cause. For both types of organizations, it is unlikely they can survive without a strong marketing effort.
Marketing is also the organizational business area that interacts most frequently with the public and, consequently, what the public knows about an
organization is determined by their interactions with marketers. For example, customers may believe a company is dynamic and creative based on its
At a broader level marketing offers significant benefits to society. These benefits include:
* Developing products that satisfy needs, including products that enhance society’s quality of life
* Creating a competitive environment that helps lower product prices
* Developing product distribution systems that offer access to products to a large number of customers and many geographic regions
* Building demand for products that require organizations to expand their labor force
* Offering techniques that have the ability to convey messages that change societal behavior in a positive way (e.g., anti-smoking advertising)
Criticisms of Marketing
While marketing is viewed as offering significant benefits to organizations and to society, the fact that marketing is a business function operating in close
contact with the public opens this functional area to extensive criticism.
Among the issues cited by those who criticize marketing are:
Marketing Encourages People to Purchase What is They Do Not Need
Possibly the criticism most frequently made about marketing is that marketers are only concerned with getting customers to buy whether they want the
product or not. The root of this argument stems from the belief that marketers are only out to satisfy their own needs and really do not care about the
needs of their customers.
As we will discuss, while many marketers are guilty of manipulating customers into making unwanted purchases, the vast majority understand that
undertaking such tactics will not lead to loyal customers and, consequently, is unlikely to lead to longer term success.
Marketers Embellish Product Claims
Marketers are often criticized for exaggerating the benefits offered by their products. This is especially the case with the part of marketing that engages in
customer communication, such as advertising and salespeople. The most serious problems arise when product claims are seen as misleading
customers into believing a product can offer a certain level of value that, in fact, it cannot.
But sometimes there is a fine line between what a rational person should accept as a “reasonable exaggeration” and what is considered downright
misleading. Fortunately, many countries offer customers some level of protection from misleading claims since such business practices may subject
the marketer to legal action. Again, using such tactics is likely to lead to marketing failure as customers will not be satisfied and will likely not return.
Marketing Discriminates in Customer Selection
We will see later that a key to marketing success is to engage in a deliberate process that identifies customers who offer marketers the best chance for
satisfying organizational objectives. This method, called target marketing, often drives most marketing decisions, including product development and
price setting. But some argue that target marketing leads marketers to focus their efforts primarily on customers who have the financial means to make
more expensive purchases. They contend that doing so intentionally discriminates against others, especially lower income customers who cannot
afford to purchase higher priced products. This group ends ups being targeted with lower quality (and in some cases less safe) products or for some
groups, no product options.
While this criticism is often valid, it is worth noting that while many “lower quality” products are inferior to current high-end products, comparison of their
quality to similar products from just a few years ago shows there has been significant improvement. For instance, low cost electronic equipment, such
as digital cameras, offer more features compared to low cost cameras of just a few years ago. Thus, while certain customer groups may not be the
target market for certain new product offerings they may eventually benefit from higher-end products.
Marketing Contributes to Environmental Waste
In recent years one of the loudest complaints against marketing concerns its impact on the environment. Those critical of marketing’s effect on the
environment point to such issues as:
* the use of excessive, non-biodegradable packaging (e.g., use of plastics, placing small products in large packages, etc.)
* the continual development of resource consuming products (e.g., construction of new buildings, golf courses, shopping malls, etc.)
* the proliferation of unsightly and wasteful methods of promotions (e.g., outdoor billboards, direct mail, etc.).
Marketers have begun to respond to these concerns by introducing “green marketing” campaigns that are not only intended to appease critics but also
take advantage of potential business opportunities. For example, auto makers see opportunity by creating new fuel efficient hybrid vehicles, the demand
for which has accelerated in the last few years. Also, certain retailers are finding financial opportunity and promotional value by asserting their marketing
muscle to encourage customers to become more environmentally responsible. This can be seen with retailers, such as Wal-Mart, that are shifting its
inventory of light bulbs from standard incandescent types to more efficient fluorescent products. It is expected that as environmental activism gains
political clout and more consumer support, marketers will see even more opportunity to market environmentally friendly products.
Marketing Encroaches on Customers’ Right to Privacy
Often the most valuable information deals with customers’ buying
behavior and especially determining which factors influence how
customers make purchase decisions. But to some consumer
advocates digging deep into customer buying behavior crosses the
line of what is considered private information. Of most concern to
privacy advocates is marketers’ use of methods that track user
activity. In particular, they are critical of the growing use of advanced
technologies that allow marketers to gain access to customer
shopping and information gathering habits. For instance, marketers
can use highly advanced techniques to track user activity on the
Internet. Some marketers do so using questionable practices,
such as loading tracking software onto a user’s computer, without
the knowledge or permission of the user. One type of software
called adware allows marketers to monitor users’ website browsing
activity and use this information to deliver advertisements based on
users Internet habits.
Privacy issues are not limited to concerns with online tracking;
marketers also use technique to track customers’ offline purchase
activity. One example of offline tracking occurs when retail stores
match sales transactions to individual shoppers. This is easy to do
when customers use purchase cards (a.k.a. loyalty cards, discount
cards, club cards, etc.) as part of the buying process.
Privacy issues are not restricted to marketing research. Other areas
of marketing have also experienced problems. For instance, there have been several recent incidences, most notably those involving mishandled credit
card payment information, where a breach in customer privacy has placed customers at risk.
The issue of customer privacy is likely to become one of the most contentious issues marketers face in the coming years. If this continues marketers
may soon face greater legal limits on how they conduct business.
Ethics in Marketing
In addition to problems cited above, some critics also argue that the money-making motive of some marketers has encouraged many to cross the line in
terms of ethical business behavior. Ethics is concerned with what is right and what is wrong. Many people assume that only actions that violate laws are
considered unethical. While it is true that illegal activity is also unethical, a business activity can be unethical even though no laws are violated. For
instance, some consider it unethical for marketing companies to aggressively promote unhealthy foods to children though such promotional practices
are generally not viewed as illegal.
Sometimes the line between what is considered ethical and unethical is difficult to distinguish since what is right and wrong differs depending on such
factors as nationality, culture, and even industry. For example, many websites offer users access at no monetary charge to their content (e.g., articles,
videos, audio clips, etc.) but do so only if users register and provide contact information including email addresses. Some of these sites then
automatically add registrants to promotional email mailing lists. Some view the practice of automatic “opt-in” to a mailing list as being unethical since
customers do not request it and are forced to take additional action to be removed from the list (“opt-out”). However, many marketers see no ethical
issue with this practice and simply view adding registered users to an email list as part of the “cost” to customers for accessing material.
Marketers often join professional organizations for the purpose of associating with others who share similar interests. These organizations include
industry associations, whose membership is mostly limited to those who work within a particular industry, and professional services associations,
whose membership consists of those who share similar job responsibilities. Marketers joining these organizations often find that a code of ethics has
been developed that is intended to be followed by all organization members. For example, the Canadian Marketing Association lays out rules for its
membership, which includes marketers from many for-profits and not-for-profit organizations, in its Code of Ethics and Standards and Practices. The
Code discusses such issues as:
* Accuracy of Representation of Products (“must accurately and fairly describe the product or service offered”)
* Support of Claims Made About Products (“must be able to substantiate the basis for any performance claim or comparison“)
* Acceptability for Using the Word “Free” (“Products or services offered without cost or obligation”)
* Guidelines for Advertising Which Compares One Product to Another ("must be factual, verifiable and not misleading”)
Social Responsibility in Marketing
Most marketing organizations do not intentionally work in isolation from the rest of society. Instead they find that greater opportunity exists if the
organization is visibly accessible and involved with the public. As we’ve seen, because marketing often operates as the “public face” of an organization,
when issues arise between the public and the organization marketing is often at the center. In recent years the number and variety of issues raised by
the public has increased. One reason for the increase is the growing perception that marketing organizations are not just sellers of product but also
have an inherent responsibility to be more socially responsible, including being more responsible for its actions and more responsive in addressing
Being socially responsible means an organization shows concern for the people and environment in which it transacts business. It also means that
these values are communicated and enforced by everyone in the organization and, in some cases, with business partners, such as those who sell
products to the company (e.g., supplier of raw material for product production) and those who help the company distribute and sell to other customers (e.
g., retail stores).
In addition to insuring these values exist within the organization and its business partners, social responsibility may also manifest itself in the support of
social causes that help society. For instance, marketers may sponsor charity events or produce cause-related advertising.
Marketers who are pursuing a socially responsible agenda should bear in mind that such efforts do not automatically translate into increased revenue or
even an improved public image. However, organizations that consistently exhibit socially responsible tendencies may eventually gain a strong reputation
that could pay dividends in the form of increased customer loyalty.
Characteristics of Modern Marketers
As we’ve seen, marketing is a critical business function that operates in an environment that is highly scrutinized and continually changing. Today’s
marketers undertake a variety of tasks as they attempt to build customer relationships and the knowledge and skill sets needed to perform these tasks
successfully are also varied.
So what does it take to be a successful marketer? Obviously, at the center of a successful marketing career is an understanding of the important
concepts that are discussed in the Principles of Marketing Tutorials. But basic marketing knowledge is just the beginning, for today’s marketers must
possess much more. Among the most important knowledge and skills needed to be successful are:
Basic Business Skills
Marketers are first and foremost business people who must perform necessary tasks required of all successful business people. These basic skills
include problem analysis and decision-making, oral and written communication, basic quantitative skills, and working well with others.
Understanding Marketing’s Impact
Marketers must know how their decisions will impact other areas of the company and others business partners. They must realize that marketing
decisions are not made in isolation and that decisions made by the marketing team could lead to problems for others. For example, making a decision
to run a special sale that significantly lowers the price of a product could present supply problems if the production area is not informed well in advance
of the sale.
Today’s marketers must have a strong understanding of technology on two fronts. First, marketers must be skilled in using technology as part of their
everyday activities. Not only must they understand how basic computer software is used to build spreadsheets or create slide presentations, but in a
world where information overload is a problem marketers must investigate additional technologies that can improve their effectiveness and efficiency,
such as multifunction cellphones, GPS navigation services and web-based productivity applications. Second, marketers must understand emerging
technology and applications in order to spot potential business opportunities as well as potential threats. For instance, the rapid growth of search
engines requires marketers to firmly understand how these fit within an overall marketing strategy.
MARKETING CONSULTANTS GRAPHIC DESIGN & PRINT BRAND CREATION PRODUCTS PROMOTIONS PHOTOGRAPHY
Our starting point for learning about marketing is to begin with
the basics and that starts with defining marketing. Since
marketing has been an important part of business for a long
time we could consult one of the many hundreds of books
written on the subject to locate a definition. Or, as is more the
custom today, we could search the Internet to see how
marketing is defined. Whether we search print or electronic
form we will find that marketing is defined in many different ways.
Some definitions focus on marketing in terms of what it means
to an organization, such as being the key functional area for
generating revenue, while other definitions lean more toward
defining marketing in terms of its most visible tasks, such as
advertising and creating new products.
There probably is no one best way to define marketing,
however, whatever definition is used should have an orientation
that focuses on the key to marketing success – customers.
Marketing consists of the strategies and tactics used to identify,
create and maintain satisfying relationships with customers that
result in value for both the customer and the marketer.
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