What is Marketing?
My personal, but more accurate, definition of marketing:
Marketing is facilitation of exchange in business. Okay, what does that mean?
The ultimate goal of marketing is to get your/your firm’s product or service (or idea) in the hands of consumers. Marketers find and execute ways to do this effectively and efficiently.
Some of the different marketing jobs include: supply chain, logistics management, product development, market research, marketing analytics, brand management, etc.
Marketing is extremely important in business. Businesses fail all the time due to a lack of marketing or marketing mistakes.
There are 3 types of marketing:
Business to Business (B2B)
This is when marketing efforts are directed towards other firms.
Business to Consumer (B2C)
When marketing efforts are directed towards consumers.
Business to Business to Consumer (B2B2C)
When the end product or service is directed towards both consumers and organizations.
Each type of marketing require different marketing approaches.
Principles of Marketing – The 4 P’s
This principle of marketing is the most important of them all. The 4 P’s.
The 4 P’s stand for:
Product (or service)
Marketing deals with all 4 of these P’s. When starting or changing marketing strategies, focus on at least one of the 4 P’s. These are some examples for each P in the 4 P’s.
If you want to understand “What is Marketing”, we have to talk about Location.
I’m sure you have heard the saying, “Location, Location, Location.” There is no truer saying than this.
The Place is one of, if not, the most important aspects of a business.
Let’s assume you are a business owner. Your business sells ski boots that are made in shop to consumers.
Off of a general assumption, it wouldn’t make much sense to have a ski boot business in Alabama. The climate and the demographic of people ideally make this business location a terrible idea. Well what if you wanted to participate in interstate commerce (selling products outside of your state of business)?
Laws, taxes, logistics, distributors, and a whole lot of other problems are likely to come up. Long story short, businesses generally get more problematic, and less profitable, the further away they are from their marketplace.
Okay so now we are moving the business closer to our intended market, Colorado. Where in Colorado should our business be located? Denver? Fort Collins? Aspen?
“Aspen is a ski resort town, it only makes sense to place our business there!” Except it doesn’t.
Commercial real estate is extremely expensive in Aspen. The ski boot business is tremendously competitive in Aspen already. Additionally, it is very expensive to supply the materials necessary for our business in Aspen.
Well it’s time for some market research (research conducted on specific markets). The majority of our market fly into Aspen. We also find out that consumers want to purchase ski boots before they reach Aspen. Although the majority of consumers do not buy their boots until they reach Aspen.
Additionally, the majority of the flyers fly into Denver before reaching Aspen. With Denver having only a relatively competitive ski boot market, Denver is a great idea! These are only some of the aspects marketers look into when determining a business location.
Note: Place is not exclusive to a business location!
Another important factor in marketing decisions is price. Price is not only important to consumers, but to your business as well.
Consumers buy products based on our purchasing power. For example, would you rather own a Honda Civic or a Bentley Continental?
The Bentley Right!?
Majority of consumers do not have the purchasing power (ability to purchase) for a Bentley though. So we need find a price that is suitable for our product / service.
Various pricing strategies and models can help you determine what price should your product / service should be. Pricing too high limits the purchasing power of your market. But pricing too little limits profitability, quality, and general outlook.
Marketers also manipulate price from suppliers as well. Price is constantly negotiated throughout the supply chain of a business. The more expensive your suppliers charge your business, the less profit there is to be made.
Businesses can also change suppliers that offer cheaper prices. Or more expensive prices. Suppliers worry about losing their customers (other businesses) so they stay competitive. Love it or hate it, this is the system that capitalism is built off of.
When people ask me, “What is marketing?,” this is one of one of the easier aspects to explain. With the 4 P’s in marketing, Product stands for a product or service that your business offers to consumers. Product is everything your business has to offer another business or consumer. AKA, your product offerings.
Imagine your business sells vacuum cleaners. What additional product offerings could you add? You could make the dust tray larger, the vacuum quieter, and a cordless model. But product offerings do not just pertain to the physical components product can offer.
Product offerings refer to services as well. There is something called service dominant logic. What is service dominant logic?
Service dominant logic basically means that the amount of services you can add to products / services are almost infinite. So that vacuum cleaner from before, now it can offer free delivery, free repairs, or the vacuum cleaner itself can open your fridge, clean on it’s own, drive your kids to school! Maybe not the last one, but you get the point!
This is everyone’s favorite P, promotion. Promotion is a very important part of marketing though. Promotion is basically the act of getting your brand, product, or service in front of the eyes of your intended market.
Promotion usually goes beyond your average business operations, in the sense that promotion goes in front of the public’s eyes.
Advertising, trade shows, coupons, are all part of promotion. Everyone basically knows about promotion already because they experience it everyday!
Marketers are always looking to add value to people’s lives in whatever way they can.
The next time somebody asks you, “What is marketing?”, tell them the facilitation of exchange in business!