Marketing is the name of the game
Why is marketing an essential activity for each and every company?
Among many definitions, Philip Kotler’s sums up the quintessential aspect of it: “meeting needs profitably.” This might look like an unfitting definition, but it actually represents the very essence of marketing:
- First, marketing enables organizations to discover or incentivize new needs in their consumers;
- Exploring those needs empowers organizations to better meet them;
- Understanding and meeting the consumers’ needs is key, alongside other factors, for being profitable.
How is marketing helping organizations discover and better understand consumers’ needs?
Well, these are discovered by conducting marketing research. Besides that, expectations, perceptions, satisfaction, and loyalty can also be analyzed or measured through this type of research.
Without it, an organization will never be able to understand the particularities of their target markets and as a result, satisfaction will be lackluster. The end result? Fewer new customers and low customer lifetime value.
There are a lot of tools and methods that can be used when conducting marketing studies. They should be chosen wisely, according to the specifications of each research endeavor. Choosing the right respondents (in the case of surveys or interviews) and using a high quality data analysis tool or process play an important role in ensuring success is reached and that the data is relevant. Due to the high complexity and importance of this activity and its intricacies, a variety of companies offer professional marketing research services.
How can marketing create new needs?
Look no further than 2007, when Apple launched the first modern smartphone. No one specifically asked for all the new functions that Apple delivered through its iPhone. The reason is simple: people were not feeling the need of having such a smartphone because there was not a single one on the market. This launch created a brand new batch of needs and desires, many consumers embraced it, and other producers followed, by designing their own alternatives.
By designing the first iPhone, Apple created value for consumers and enabled them to embrace the experience of using a mobile phone in novel, innovative ways.
What is the meaning of “value” for a marketer?
Basically, value represents the difference between the benefit and the cost for the consumer. But when analyzing benefits and costs, there is a series of elements that must be taken into consideration. There are 4 elements for benefits: product benefits, service benefits, personal benefits and image benefits. The cost is also a combination of 4 elements: monetary costs, time costs, energy costs and psychological costs. The key is to keep all of them in mind when analyzing the value that a product will bring to the market.
Ideally, a new product should be launched only after conducting a few viability studies. By taking this first step, companies ensure that their products will be top tier. But creating valuable products is not enough. Consumers have to be aware of them and have easy access, both to information pertaining to that particular item and the product itself. Therefore, marketing activities are not used only to create value, but to “create, communicate and deliver value for consumers.”
How is value communicated and which are the key elements of this process?
A company has to ensure that all the information is communicated to the customer base, in order to generate demand for its products. Marketing communications represent the efforts of reaching out and informing potential customers of the created value. This is a complex process and the following decisions must be made:
- Who is the audience and what are its particularities? A certain product can be designed for different consumers, and defining and understanding those segments is required for adapting the message.
- Which tools and methods are most efficient? Designing a communication mix is a key action and its complexity comes from the various alternatives offered by the constant evolution of technology. This mix of methods can contain activities such as: advertising, public relations, sales promotions, direct marketing, personal selling. There are also several mediums that can be used to send the message: websites, emails, television, radio, newspaper etc.
- How to create messages that will convince consumers of the offered value? Segmenting and understanding the target audience enables companies to tailor their messages and spur the desired reactions.
How is value delivered?
Value delivery starts from the supply chain, from raw materials or product components. Then, the manufactured goods reach end consumers through distributors. Being efficient in value delivery means that any potential customers have swift access to your products, and that they are delivered with the lowest possible cost, while avoiding stock-outs and product damage during transportation. Thus choosing the right suppliers and distributors, as well as paying attention to demand and available stocks, must be ranked highly when setting up such a plan or task.
How is technology empowering companies to deliver value in more efficient ways?
In the case of certain products, like books for example, there has been a shift in the recent years, from hardcopy to e-books. The same happened with newspapers and magazines. Things have also changed in the software and game industries, as CDs and DVDs are replaced by direct downloads from the internet.
There are two big advantages in transforming physical products into digital ones:
- A customer receives the product faster through the internet;
- The storing, packaging and shipping costs are eliminated or greatly reduced.
Therefore, marketing is a mandatory activity for ensuring efficiency, because it enables organizations to choose the right clients, listen to their needs, develop and communicate valuable solutions, and choose the best ways for delivering them. Every organization must have a marketing department or outsource this activity in order to survive in today’s crowded business environment.
Tags: Marketing performance, operational performance, Philip Kotler Marketing Management