What is marketing? Basic Principles of Marketing

Understanding the fundamentals of marketing can have a deterministic effect on the outcome of marketing strategies, tactics, and plans. Marketing isn’t about buzzwords; it is instead about the deep understanding of the needs and wants of buyers and matching those jointly with the seller’s product, service, or abilities.

By Navid Jafari  |   19 Jul, 2020  | 0
what is marketing?
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This article is about capturing the fundamentals of marketing.  Understanding the fundamentals can have a deterministic effect on the outcome of marketing strategies, tactics, and plans.  So, let’s start with the basics:

What is marketing? Principles of marketing

Marketing can mean different things to different people.  To me, it is about promoting an exchange-relationship between a buyer and a seller.  One party (the seller) has something to sell.  The other party (the buyer) has a need (or want).  It is the job of marketing to catalyze and promote this relationship with the following goals: sell more (or buy more), sell at a higher price (or buy at a higher price), and ultimately, help build a business.

What is marketing for?

Customers either have a need, a want, or both.  Marketing is meant to facilitate the procurement or satisfaction of these needs or wants.  A customer “need” is a requirement.  A customer’s “want” is a desire.

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It is important to note the difference because depending on this classification of a product, needs, and wants are marketed differently.  Arguably, no one really needs a luxury car, but most want one!  Inversely, customers need shoes or clothes and therefore, this isn’t a want.

Types of marketing

The main types include Business-to-Business (B2B), Business-to-Consumer (B2C), Business-to-Government (B2G), and Consumer-to-Consumer (C2C).  Let’s break these down:

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  • B2B Marketing: This is an approach that facilitates selling between a buying business and a selling business.  In this example, a business is selling products or services to another business.
  • B2C Marketing: This is a framework that facilitates exchange between a business (seller) and a consumer (buyer).  For example, companies that sell personal items directly to consumers (i.e. think shampoo, shoes, watches) are in the B2C market.
  • B2G Marketing: These are businesses that sell directly to governments and thus need specific marketing strategies and plans to deal with governments.
  • C2C Marketing: Consumers can create opportunities to commercially engage with other consumers.  The point to note here is that these are individuals selling to other individuals.  For example, some sellers on certain platforms such as eBay, or amazon can be considered C2C because they are selling directly to other consumers.
  • Enterprise marketing: this type falls under B2B however, there are nuances here worth noting.  For example, enterprises typically require a multi-channel marketing approach and therefore need specific strategies that may not be necessary for a generic B2B model.

Principles of Marketing: The 4 Ps of Marketing

One of the most fundamental marketing concepts discussed in every book is a set of frameworks, tools, or processes that a business uses to reach its marketing objectives.  These are typically categorized under place, product, price, and promotion.

  • Product: This P refers to a tangible or intangible product that satisfies a customer’s need (or want).  The product’s design, presentation, packaging, and experience are some of the key decisions that marketing teams need to make.  Understanding the product well enables marketers to build effective strategies.
  • Price: How much is a business to charge for a product?  Price plays a pivotal role in marketing.  After all, price isn’t just about the amount a customer pays; it can help shape or influence the way a product appears in the client’s mind.  For example, priced too high and the customer may forego a product, and priced too low, a customer may perceive it to be unworthy or ineffective.
  • Place: Have you ever seen a mechanic setting “shop” on the second floor of a building?!  Place refers to the access or location where the seller meets the buyer.
  • Promotion: This P is the one most people associate marketing with promotion.  In reality, promotion refers to the advertising, communication, and publicity of a product.

Marketing Mix: The 4 Cs of Marketing

A more modern look at the 4 Ps of marketing is the 4 Cs of marketing.  The concepts are similar but this method addresses some of the deficiencies of the 4 Ps.  The 4 Cs of marketing are Consumer, Cost, Convenience, and Communication.

  • Consumer (or sometimes noted as Client): This c refers to the person, business, or entity that will buy the product or is interested in buying the product.  Knowing well who the target audience is, can help marketers tap into their interests, wants, and needs better.  This is often referred to as a buyer persona.
  • Cost: Fairly simple concept around how much something will cost.  This is the equivalent of Price in the 4 Ps of marketing.  It is important to note that cost doesn’t always mean a monetary amount, but can also refer to opportunity costs: e.g. time.
  • Convenience: This c refers to the “convenient” place where the seller will meet the client.  The frameshift here from place to convenience is important to highlight: it is more about a seller making it convenient for a buyer than it is to “meet” them at a place.
  • Communication: similar to “promotion”, this c refers to the process of communicating the product or service’s benefits, features, and values to the potential buyer.

Marketing Segmentation

Marketing segmentation is about creating specific groupings within the larger marketing pool.  For example, if a company is selling shoes, then they might want to segment their entire marketing target audience into smaller subsets such as male, female, adult, and child.

Segmentation is critical for a couple of reasons: 1) the seller can determine the right message and approach for a specific audience subset, and 2) the seller can focus on the most important subset – rather than the entire market.

Let’s dive deeper into this.

Let’s imagine that BestShoeCompany is selling, well, shoes.  Let’s assume that they have several types of shoes including dress, athletic, and casual.

Finally, let’s assume that they serve the entire age/sex market as well.  As you can imagine, this company now has quite a lot of shoe categories in different sizes, colors, ages, and classes.  Let’s assume that they have three shoes in each use case category, in both sexes, age groups, and 10 sizes and 2 colors each.  Let’s do the math: that is 3 shoes x 2 colors each x 2 sexes x 2 age groups x 2 colors x 10 sizes each = 240 kinds and sizes of shoes.

By creating segmentation, this seller can quickly line up their marketing message toward the right audience, but perhaps just as importantly, focus their attention on the most lucrative segments.  If for example, their dress shoes for women are not selling well, then they might choose to completely discontinue that type of shoe.  By contrast, if their athletic shoes for men are a big hit, they can focus more on expanding those offerings.

Segmentation can take many forms.  Here are some common marketing segmentation

  • Location: geographical segmentation is perhaps one of the most important factors that play a role in marketing messages and approaches.  Customers in different geographIes may have unique needs or wants.  Those types of distinctions are of course important, but perhaps language, culture, and social biases (which are typically inherent in a geographical segmentation) can have a deterministic effect on the marketing approach.
  • Gender, age: As discussed in the example above, age and gender often create foundational segmentations – particularly in B2C approaches.
  • Income, occupation, interest: Companies that market luxury goods, for example,  typically rely on these types of segmentation in order to hone in on the right buyer.
  • Lifestyle, education: What does a business professional who runs to keep fit typically like to wear on those cold winter morning runs?  Basic assumptions here can be: a college degree, leading to higher income, and therefore, leading to this prospect willing and able to buy more expensive running clothes.  Knowing these facts can help set the right price point for the product.

Sources:
  • wikipedia: Marketing Definition »

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