What is Marketing?

Everyone does marketing.  Everyone does it quite often, acting as either the customer or the marketer.

Marketing

In layman’s terms, Marketing is about predicting the future for your organization, as an employee or as an entrepreneur. In technical terms, the process of developing and exchanging ideas, goods and services that satisfy customer and organizational needs, using the principles of pricing, promotion, and distribution.

Exchange

The transfer between two or more parties of tangible or intangible items of value.

Product

A good, service, or idea for which customers will exchange money or something else of value.

Marketers divide products into three categories;

1)  Goods: Tangible products that customers can evaluate by touching, seeing, tasting or hearing.

2)  Services: Intangible products that offer financial, legal, medical, recreational, or other benefits to the consumer.

3)  Ideas: Concepts, philosophies, or images that can be exchanged in the marketplace.

People (such as political candidates) and places (such as cities trying to attract new businesses) are the two other major categories of products.

Anything that can be exchanged for something of value is a product.

Ideas include musical compositions and lyrics, visual images, fictional characters and plots, computer software, business plans, and other creative works.  Religious and political beliefs are also ideas.

Certain conditions must exist before an exchange will occur.

Needs

Differences between customers’ actual conditions and their desired conditions; the driving forces behind all purchases.

When you’re hungry, you experience a disparity between your actual condition (physical discomfort) and your desired condition (physical comfort).  This need creates a motivation to seek satisfaction.

Wants

The particular choices (including the type of product and the specific brands) that people make to satisfy their needs.

You need food; you want a cheeseburger, etc.

Utility

The ability of a product to satisfy a customer’s wants or needs.

4 types;

  • Form utility
  • Time utility
  • Place utility
  • Possession utility

Emotions can play a bigger role than economics in many purchase decisions.

A product will be purchased only if someone has a need for it and it possesses acceptable utility.

Marketers don’t usually have much control over the demand for entire product categories but they do have some control over the demand for specific products.

Demand

The degree to which potential customers have an interest in , and the financial ability to buy, a product or class of products.

Compare a Range Rover with a Nissan Versa.  Both vehicles fulfill the basic transportation need, but when Range Rover buyers make their costlier purchases, they are fulfilling a different set of psychological and social needs than Versa buyers.  Marketers don’t create these needs; they simply give buyers a greater range of options for satisfying their wants.

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