Introduction

Welcome to the dynamic, exciting world of marketing! Described by many as the "heartbeat" or "engine room" of a business, Marketing is like a giant jigsaw puzzle; made up of many fields, disciplines, ideas, concepts, processes, techniques, tools, and activities. Most people who choose marketing as a career eventually specialise in a particular field of marketing. But before you can specialise, you first need to see the “big picture” and understand how all the different pieces fit together.

This is easy if you understand the most fundamental ideas on which marketing is based. And that’s exactly what this course is about ... based on these simple ideas, we will give you a broad overview of marketing and a basic understanding of its many parts and how these parts fit together.

We will also take a look at a wide spectrum of marketing principles and practices  from traditional marketing techniques to the latest interactive, digital systems and techniques used in relationship or one-to-one marketing (also known as “micro marketing”). This survey will give you a solid understanding of the basics and, more important, the essential marketing skills you’ll need to be a successful marketer in the business world.

 

Origins of Marketing

At the most basic level, marketing can be seen as an exchange process between two parties (i.e. people and organisations). In primitive times, before money was invented, people bartered (exchanged) products to satisfy basic survival needs. But even primitive people quickly realised the real advantages of bartering; and the demand for products and services - which would make life easier and more enjoyable - quickly increased.

Gradually, as the population of the world increased, the distance between (human) participants in the exchange process increased. This distance caused gaps between buyers and sellers. For example, a space gap exists when Peter (a seller) is in Cape Town and Carl (a buyer) is in Pretoria; which will make the exchange transaction more difficult. Another example, an information gap; exists when a student would like to purchase a textbook, but does not know where to purchase it.

So, bridging the gaps between buyers and sellers, is one of the original, essential purposes and functions of marketing.    

 What is Marketing?

There are many ways to describe the exciting, often dramatic world of marketing. There are so many aspects and interpretations of marketing, that there have been some misconceptions about its true nature and purpose. For example, is it selling, advertising, or promotions? The answer is simply: all of these activities  and more  as we shall see shortly.

Let's now define marketing clearly, by looking at a few well-known working definitions.

“Marketing is the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return” (Kotler and Armstrong, 2014:27).

An alternative definition of marketing could be:

“Marketing is anticipating and satisfying consumer needs by means of mutually beneficial exchange processes, and doing so profitably and more effectively than competitors by means of efficient managerial processes”(Lamb et al, 2010:5)

From these two definitions of marketing, we see several important concepts and principles; such as:

• value: customer value can be described as the customer’s perception of all the benefits gained from a particular purchase. Value is based on the “perceived benefits received versus the price paid” (Berman and Evans, 2013:57). These writers also point out that different people will have different perceptions of value. Price-sensitive consumers want low prices, service-sensitive shoppers will pay more for superior customer service, while status-minded consumers will pay a higher price to own prestigious products and brands (e.g. Rolex watches, Porsche motorcars, and so on).
• customer relationships: The importance of building meaningful, lasting customer relationships cannot be overstated. Here is what the management guru Peter Drucker once said on this topic: “The essential purpose of business is to create and keep customers” (Drucker, 2001). In other words, business (and marketing) success starts and ends with customers. The key to building lasting customer relationships is to create superior customer value and satisfaction. Satisfied customers are more likely to be loyal customers and give the company a larger share of their business (Kotler and Armstrong, 2014:34).
• needs, wants and demand: successful marketing will always start with a deep understanding of customer needs and wants and the market place in which they operate. In other words, marketing’s most basic function is to satisfy human needs. These needs arise from a “state of felt deprivation [i.e. lack] of some basic satisfaction” (ibid); while wants are “the form human needs take as they are shaped by culture and individual personality”. In other words, needs are basic to any human being, while wants are learned and acquired  according to culture, personality and society.  Demands then, are “wants for specific products backed up by the resources and willingness to buy them” (ibid). For example, a typical South African consumer will need food but will want a Wimpy meal (complete with french fries and a milk shake). A person living in Mexico will also need food, but will want tacos, chilli con carne, and burritos. Seen together, people’s needs, wants and resources will translate into a given level of demand  actual sales  for a product like a Wimpy meal, during a specific time and at a certain place.
• anticipating: to anticipate something, is to (strongly) expect or believe something to happen in the future. But it should be based on more than guesswork, or "blind" faith - anticipation should be based on scientific (marketing) research and experience.
• exchange processes: The marketing process is all about “mutually beneficial exchanges” (Lamb et al, 2010:5). These exchanges take place between consumers (with needs and wants) and marketers (with products and services). To exchange is “the act of obtaining a desired object from someone by offering something [valuable] in return” (Kotler and Armstrong, 2014:29).

 

What do marketers actually do?

To answer this question, let's think of marketing as a management function - just like production, finance, human resources, and so on. At the most basic level, all managers have to:

• plan, organise, lead, co-ordinate and control the activities and resources (including the people) of an organisation, in ways that will meet the objectives (goals) of the business - the most important of which is to make a satisfactory profit.

We can also think of marketing as a "set of activities performed by an organisation" (Perreault and McCarthy, 2002). These activities can be summarised by the single most important activity of marketing: creating and keeping customers (profitably). Now the question becomes, How is this done? This is answered by the following key functions and activities of marketing:

• Identifying customers’ needs, wants, buying behaviour  i.e. do market research

                         

 

• Identifying target markets  i.e. market segmentation

                                                                                                                                               

 

• Match product benefits to target market needs

                                                                                                                                               

 

                                                                                                  Develop marketing mixes (the 4 Ps) to satisfy target market needs

(Also known as the "4 Ps" in general marketing, the marketing mix is the term used to describe the best possible combination of the four key elements or variables that form the "heart" of a company’s value offering and marketing strategy. These are the Product, Price, Place, and Promotion: the right product at the right price in the right place with the right promotion. Lately, 2 more P's have been added to the marketing mix: people and (business) processes. More about these later.      

 

All these functions and activities of marketing, might seem a bit strange and complex at this stage. Fortunately, we can summarise most of marketing management's task by means of the following two questions:

• What type of customers will we serve (who is our target market)?; and
• How can we best serve these customers (what is our value offering)?

Let's clarify the concept of a target market, by means of the following example:

The overall tourism market in South Africa is made up of a large, diverse group of people (including local and foreign holiday tourists, business people, sports teams, conference delegates, and many more...). But, no single company can meet the needs of all these people; which is why marketing management must "slice up" (segment) this market into smaller, similar groups (i.e. segments), in order to serve each group properly and profitably. So, if a tourism operator (like a hotel group, for instance) chooses to focus its marketing efforts on business people and "upmarket" travellers, this segment will be its target market.

 

Reflection Questions: The Purpose of Business and Marketing

What was one of the original, essential purposes and functions of marketing?     What is the fundamental purpose of any business? Why is this the fundamental purpose of business? Is Marketing important to the fundamental purpose of business? Why? There are some misconceptions about the (true) nature and purpose of marketing. Provide an example of such a misconception, and Why do you think the nature and purpose of marketing is sometimes misunderstood?

 

Looking Back and Looking Ahead

Now that we have a better understanding of the origin, nature, purpose and key functions of marketing, in our next reading we will take a look at the marketing concept as a guiding philosophy of business. We will also explain where and how marketing fits into an organisation's structure. See you then!
 

REFERENCES:

 

• Kotler,P. and Armstrong, G. 2014, Principles of Marketing, Global Edition. 15th edition. Harlow: Pearson International.
• Lamb, C.W. Jr, Hair, J.F. Jr., McDaniel, C, Boschoff, C. and Terblanche, N.S. 2010,Marketing: Fourth South African Edition. 4th edition. Cape Town: Oxford.
• Perreault, W.D. and McCarthy, E.J. 2002. Basic Marketing. New York: McGraw - Hill.

 

GRAPHICS:

1. Oxbridge Academy. 2019, “Advertising and Marketing Management", https://www.oxbridgeacademy.edu.za/blog/category/advertising-and-marketing-management/ (accessed 20 October 2019).