Marketing Strategy: Key Concepts
Concepts, key terms linked to dictionary
Link to Discussion Board
What is Marketing?
Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services that satisfy individual and organizational goals. — AMA
Product is the platform for attracting customers.
All organizations are in the business of attracting customers.
Can the above two statements be challenged?
Is marketing selling OR does it reduce the need for selling?
Discussion Topic: Challenge the above statements, using your own experiences as reference.
What are markets?
Exchange, division of labor, positive sum relationships, barter, money reduces friction.
Evolution of markets
- Traditional bazaars
- Separation of supply and consumption
- Mass Markets / Media
- Target Markets / Niche Media
- Electronic Markets: Meta Markets
Evolution of the Marketing Concept
- Production Concept
Demand for goods and services > Supply … therefore consumers gladly purchased what was being produced. Producers have a captive market. Investment on increasing the efficiencies of production had the greatest impact on company profitability. Thus smart businesses focused on increasing productivity, rather than understanding the consumer. Henry Ford’s quote: “The customer can have any color car as long as it is black” is closely identified with this era! This is appropriate for developing countries, and evolved in the US with the advent of the industrial revolution.
- Sales Concept
Demand = Supply … therefore producers had to convince consumers to purchase their products. Focus of business investment starts shifting towards developing a robust sales mechanism in order to communicate with consumers. The sales concept is also relevant for products consumers do not seek out ordinarily, such as life insurance and dental treatment.
- Marketing Concept
Supply > Demand … therefore producers need to first understand what consumers wanted, then produce those products, then convince consumers to purchase those products. Target marketing and market segmentation became the new tools to increase company profitability.
- One 2 One (Relationship) Marketing Concept
The Marketing era evolved and saw producers further segment their markets, targeting smaller groups of consumers within those markets. With the potential unleashed by the microprocessor and information technology, we are seeing targeting down to the individual, one to one. A commonly cited example is Amazon. Notice, if you make a purchase from this site (or similar) when you return to the site, you will receive recommendations based on your previous purchases. This presentation is based not only on your purchases (data stored in your cookie file allows for this), but on purchases of others who have bought the same book and similar books.
- Viral Marketing
An interesting thing is occuring, as we are now in a networked economy. Our consumers are able to “talk” to each other and serve as an extended sales force. This lateral communication and / or transaction between customers and non-customers can serve as an opportunity for companies to leverage. The pioneer of viral marketing was Hotmail. This Wired article HotMale discusses this marketing “accident.” Another good example is com. Since the receiver of the e-card has to visit the site to access the card, this visit serves to promote the service to the receiver.
- Societal Marketing Concept
Companies, more aware of society and the environment at large, promote their affiliation with the environment. Ben & Jerry’s and The Body Shop are examples.