What Does Marketing Mean?

what does marketing mean

The American Marketing Association Board of Directors approved the following definition of marketing in July 2013 – Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Many other definitions of marketing can be found in this article which includes marketing as defined by Philip Kotler and 72 other highly successful marketing professionals.

I think of marketing as an action verb for market. It’s like putting market in motion. This is not how any of my marketing professors or the several dozen books I have read have described it. I think this is a unique description and one that seems to explain so much in such little words. But I am going to continue this sermon.

The Objectives Of Marketing

First and foremost, I am going to begin with exploring different objectives of marketing. These, from my experience, can include:

  1. Brand Awareness
  2. Lead Generation
  3. Sales Facilitation
  4. Customer Satisfaction
  5. Customer Loyalty and Retention

Depending on what the overarching marketing objective is, the marketing strategy planners design a campaign. Now that we know what various marketing campaign objectives could be, let us continue with our primary question of what is marketing.

A business, any business, is an entity that provides a product or a service. The consumers (past, current, potential) of this product/service are what constitute the market. Marketing is what makes this market active. Without marketing, a product would be manufactured but no one will ever know about it and its market will remain dormant.

So is marketing essentially communication?

The answer is no. Communication is an integral part of marketing but marketing is broader in scope. Marketing is actually deeply integrated into business strategy. Neil Borden, the president of the American Marketing Association, coined the term ‘Marketing Mix’ in 1953. This mix continues to be taught as the foundation of any marketing course even in top B-schools around the world.

The 4 P’s Of Marketing

Let’s explore this marketing mix which includes the 4 P’s of Marketing – Product, Price, Place and Promotion:

Product

Marketing is the link between manufacturing and end users. Based on customer feedbacks, marketing is able to guide manufacturing in the development of a better product. In some cases, marketing might determine that consumers do not want a change.

For example, consumers were enraged when Coca Cola altered its formula in the 1985. Based on the feedback from the marketing team, Coke decided to revert to its original formula. Of course, commonly, the feedback is more subtle than nationwide protests.

Price

There can be different approaches to pricing. For example, one could determine the manufacturing cost of a product and add a markup based on industry standards for profit.

Alternatively, one could look at competitive pricing and price the product at par with its competitors. It could price it higher with the promise of higher quality or engage in price cut. Here again, the marketing team can gather and analyze industry data to determine industry standard mark-ups, competitor pricing, price sensitivity of target consumers etc. For example, the tobacco companies had engaged in price-wars which had lowered the value of the entire industry in America in 1993.

Apple, on the other hand, charges a premium for its products with the promise of a higher quality. My first employer had used the analogy of the automobile industry to explain how he approaches pricing. He said you must determine where you wish to position your product and base pricing accordingly – do you wish to be a Rolls Royce Phantom, Porsche Cayenne, a Toyota Camry or a Chevrolet Spark?

Place

This is a decision that relates to determining the market for your product. Here, the marketing team helps establish which particular countries, cities, and neighbourhoods one should target. The surest way to failure is in trying to be everything to everyone. The better a business can determine what the niche is; the more effective it will be is creating demand. For example, if you are a service provider serving only the Vancouver metropolitan region, the marketing team can delve deeper into what neighborhoods are more likely to be interested in your product.

If you provide a service like interior designing for affluent houses, you will not want to waste your resources advertising your service in neighbourhoods populated by low-income housing communities. An example of this is Amazon choosing the e-commerce model while Walmart chose the more traditional retail model. Each has its own advantages and disadvantages.

Promotion

This involves deciding the mix of tools to be used to promote your product or service. These days the choice includes two broad segments of traditional and digital media. Traditional media includes print advertisements in newspapers, magazines, billboards etc. Digital media includes television, radio and more recently the elaborate world of the internet which everyone is on. These sub-segments can be further broken into more sub-segments and the marketing team must decide the appropriate media mix based on your product and brand guidelines. E.g. Nike uses the whole gamut of media from T.V. ads to Billboards to actively leveraging social media.

On the other hand, Apple advertises on TV, magazines, and events but chooses not to have any presence on social media. This was explained well in an article by Kissmetrics – ‘Why Apple Doesn’t Tweet’.

The Role Of Communication In Marketing

Now that we have touched upon the broader scope of marketing and briefly elaborated on the marketing mix, let’s explore the role of communication in marketing.

In doing so, let me highlight the classic marketing funnel and the distinct role that communication plays at each stage –

Awareness

This is when you make potential buyers aware of your product/service. Your communication is designed to highlight that you are a player in a particular industry. For example, people interested in buying a car are aware of the popular brands in the market. But in this competitive market, Kia wants to make people aware of its all-new 2016 Sorento. It does so with a commercial focusing on key features such as space, utility, and toughness. Watch the ad here

Consideration

Here, the focus is on conveying more specific advantages of your product. This focus can range from features to visual appeal to price. Using the same example of Kia Sorento, the company has a detailed page published on its website with a complete overview of features, price, reviews, unique selling propositions etc.

Intent

By now, you have moved interested people further down your marketing funnel and now you want to move them closer to making the purchase decision. In the automobile industry, this popularly done with a common call-to-action of a test drive. You want your leads to touch and feel your product. One way of booking a test drive of any Kia model is by filling in a form on their website where you can select the model, your preferred dealer, a suitable date and time etc.

Purchase

You have already created the willingness to buy and now the intent of the communication is to guide the consumer in the buying process making it as easy and seamless as possible. Kia allows you to book your car online with their Build & Price tool on their website.

Loyalty

This is about continuing to build a relationship even after the sale. You want to create loyalty to encourage repeat purchases to increase the customer lifetime value. This can be done by following up to get post-purchase feedback or smart communication relaying information that can add further value to the user – e.g. Kia can look at complementary products like windshield cleaners or even gasoline and give its customers a loyalty discount at select retailers.

Advocacy

Once you win customer loyalty, you should aim to make your loyal customers your brand ambassadors. You can encourage them to refer you to their friends by providing financial or psychological incentives. With social media, encouraging users to share your brand messages has become more integral to marketing communication than ever before. For example, Kia can offer discounts on vehicle servicing for customers who share their post on social media or complementary servicing for customers who refer other buyers.

In the pre-internet age, marketing communication was usually one sided and easier to control until you confronted the sales personnel. In the internet age, it has become more complex because customers have greater control on media and information that they consume and media sources are much more spread out than before.

This has sparked interesting discussions in the marketing teams of various companies like Google, Intuit, SAP, Sephora, Twitter, and VISA. An article published on the Howard Business Review website makes for an interesting read – Marketing can no longer rely on the funnel.

Marketing In The 21st Century

So, now we have visited the Marketing Mix and the classic Marketing Funnel. Let me finally list out three key ingredients of marketing in the 21st century:

Data

having entered the information age, it is not the lack of but the access of data that is a challenge for most companies. But data can be the most useful tool for your business if one knows how to collect, gather and analyze data to draw quality insights.

Data can be used to get a better understanding of your buyers, the buyer’s behavior, the target market segments, the competition, the industry, and all sorts of other variables that influence your business and marketing strategy.

Data projects an unbiased opinion on market realities and can be used for descriptive and predictive analysis. An amazing example of predictive analysis is the accuracy with which Microsoft, Apple and Google predicted the results of each game of the FIFA 15 Men’s World Cup with astounding accuracy. Microsoft Bing’s prediction technology was perfect in the knockout stage scoring 15 out of 15 correct results.

However, one must exercise a high level of caution in using data to guide decision making. Any bugs in the entire process from collection to analysis can alter the end results. Also, data normally needs context to make it relevant.

Authenticity

A dozen years ago, my father use to say that a good salesperson can sell ice to an Eskimo. I differ in my opinion, especially in this day and age. With easy access to abundance of information, consumers are now much smarter than before. Before making a buying decision, they are now likely to research your product a lot more thoroughly.

While before they may have been convinced by the advertising copy and might have consulted their friends and family; today, the advertising copy might be compelling but they will want to check your website, read your blogs, browse your social media feed, look for reviews and may even post a message on their social media page to source an opinion from a much larger pool of family and friends. If they don’t think you are being authentic in your value proposition, not only will they choose not to purchase your product but they might even discredit your brand publicly on the internet.

This has made authenticity extremely important in all of your communication and marketing campaigns. A great example of authenticity is the way Taylor Swift promotes her brand. She actively engages with her fans on social media and her posts and comments are genuine – not tailored by a PR agency. She is excellent in understanding her fans and often goes above and beyond to delight them. No wonder that there was an article published on July 16, 2015 that Hillary Clinton is borrowing marketing tactics from Taylor Swift (and its working).

Responsiveness

One of the differences between your previous smartphone and your new smartphone is that your new smartphone is able to open applications one-tenth of a second faster that your previous phone. As small as this may be, engineers have worked really hard to ensure faster processing speeds and it matters to you. The same way, we have become expectant of faster communication.

A long time ago, postal careers were used to deliver messages. Now we use emails and instant messengers for instant communication. With this breakthrough in the time taken to deliver and receive messages, your consumers have become expectant of almost real time responses to their queries.

Hence, you must have a robust process in place to attend to consumer queries almost immediately when they submit a query form on your website or ask you a question on your social media page. Here is an article that highlights 10 companies that take this very seriously and totally rock customer service on social media.

There are many other factors that play a crucial role in marketing in the 21st century, but off the top of my head I covered three that I feel are very important. One thing to remember is that a sale is a function of marketing – marketing is a much bigger strategy that might have sales as a primary goal but extends much beyond a financial transaction.

Lastly…

I am Vikram Shivahare – a student, thinker and practitioner of Marketing for more than 10 years. I started writing this article with the intent to answer a fundamental question – What is marketing? There is a fine line between passion and obsession and I believe that by continuing to rant on this subject, I might cross that line. Hence I am going to stop here. But I sincerely hope that this article raises the level of understanding of marketing amongst those who are curious. I also hope that for the more experienced professionals in the field – they are able to revisit some of the fundamentals and it sparks more enriching discussions on this subject.

Any feedback and comments are encouraged and will be deeply appreciated.