Marketing

"Marketing" is a term used to describe the various activities involved in transferring goods and services from producers to consumers. In addition to the functions commonly associated with it, such as advertising and sales promotion, marketing also encompasses product development, packaging, distribution channels, pricing, and many other functions. Modern marketing is often presented as an effort to discover and satisfy customer needs. It is often also a method of inventing products and services and creating a demand for them by artful persuasion.

In most large organizations the selling function is divided into distinct marketing and sales functions. In organizations where symbolic product presentation is all-important and buying decisions tend to be emotional, marketing is given much higher rank and emphasis. Such is the case typically with mature products that have over time achieved a commodity status and therefore persuasion to buy this brand is the central focus. In organizations where the product performance as such remains the chief selling feature, sales activity is dominant. Business-to-business distribution tends to have this character, with the selling burden carried by experts (e.g. in finance), sales engineers, and skilled product-savvy sales people. In some industries, e.g., in Pharmaceuticals, emphasis is evenly divided, with the public bombarded by marketing messages ("Ask your doctor …") while "detail men" (and women) are doing technical selling at the doctor's office.

BACKGROUND

"Marketing" used to mean going to the market—either to sell or to buy. The modern concept emerged in the wake of the industrial revolution in the 19th and 20th centuries. During that period, the proliferation of goods and services, increased worker specialization, and technological advances in transportation, refrigeration, and other factors that facilitated the transfer of goods over long distances resulted in the need for more advanced market mechanisms and selling techniques. But it was not until the 1930s that companies began to place a greater emphasis on advertising and promoting their products and began striving to tailor goods to please specific consumer groups. By the 1950s, and the rise of television as a communications medium, many large companies had developed marketing departments charged with devising and implementing strategies that would complement, and later direct, overall sales operations.

MACRO- AND MICRO-MARKETING

Macro-marketing refers to the overall economic/communications process that directs the flow of goods and services from producer to consumer. It includes 1) the buyer's behavior in seeking and judging goods and services; 2) the seller's efforts to draw and to persuade customers to buy; 3) the physical distribution of goods including warehousing and storage at intermediate stages; 3) product-related activities like standardization, grading, and sorting; 4) the financing of distribution at all stages, not least consumer credit; and 5) the communications processes supporting all of these activities.

Micro-marketing refers to the activities of the individual providers operating within this system. Organizations or businesses use various marketing techniques to accomplish objectives related to profits, market share, cash flow, and other economic factors that can enhance their well being and position in the marketplace. The micro-marketing function within an entity is commonly referred to as marketing management. Marketing managers strive to match products to customers; in this process they are equally interested in getting products customers will want to buy and influencing consumers to buy the products the company wishes to sell.

THE TARGET MARKETING CONCEPT

Micro-marketing encompasses a number of related activities and responsibilities. Marketing managers must carefully design their marketing plans to ensure that they complement related production, distribution, and financial constraints. They must also allow for constant adaptation to changing markets and economic conditions. Perhaps the core function of a marketing manager, however, is to identify a specific market, or group of consumers, and then deliver products and promotions that ultimately maximize the profit potential of that targeted market. This is particularly important for small businesses, which more than likely lack the resources to target large aggregate markets. Often, it is only by carefully selecting and wooing a specific group that a small firm can attain profit margins sufficient to allow it to continue to compete in the marketplace.

For instance, a manufacturer of fishing equipment would not randomly market its product to the entire U.S. population. Instead, it would likely conduct market research—using such tools as demographic reports, market surveys, or focus groups—to determine which customers would be most likely to purchase its offerings. It could then more efficiently spend its limited resources in an effort to persuade members of its target group(s) to buy its products. Perhaps it would target males in the Midwest between the ages of 18 and 35. The company may even strive to further maximize the profitability of its target market through market segmentation, whereby the group is further broken down by age, income, zip code, or other factors indicative of buying patterns. Advertisements and promotions could then be tailored for each segment of the target market.

There are many ways to address the wants and needs of a target market. For example, product packaging can be designed in different sizes and colors, or the product itself can be altered to appeal to different personality types or age groups. Producers can also change the warranty or durability of the good or provide different levels of follow-up service. Other influences, such as distribution and sales methods, licensing strategies, and advertising media also play an important role. It is the responsibility of the marketing manager to take all of these factors into account and to devise a cohesive marketing program that will appeal to the target customer.

THE FOUR PS

The different elements of a company's marketing mix can be divided into four basic decision areas—known as the "four Ps": product, place, promotion, and price—which marketing managers can use to devise an overall marketing strategy for a product or group of goods. These four decision groups represent all of the variables that a company can control. But those decisions must be made within the context of outside variables that are not entirely under the control of the company, such as competition, economic and technological changes, the political and legal environment, and cultural and social factors.