Marketing

• 1. Introduction

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  Marketing begins with three verbs: acquiring, satisfying, and retaining customers. That triad sits at the heart of business management and commerce. It is usually carried out by the seller, often a retailer or a manufacturer.

  Yet the people doing the work are not always inside the company. Sometimes the job goes to dedicated firms, a media agency, a market research outfit, or an advertising agency. Sometimes a trade association or a government body speaks for a whole industry. The Agricultural Marketing Service advertises on behalf of producers. A campaign like Got Milk? sells an entire category rather than one brand. A region promotes itself as a place to visit.

  So what does this word actually mean? Who decides whether a business sells to other businesses or directly to people? How did a field once filed under the creative arts come to call itself a science? And why do practitioners argue, even now, over four simple letters: product, price, promotion, and place?

• 2. A Definition That Keeps Moving

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  The American Marketing Association revisits its own definition every three years. Its current wording calls marketing "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." That last phrase, society at large, was added in 2008.

  Compare that with the same body's 1935 version: "Marketing is the performance of business activities that direct the flow of goods, and services from producers to consumers." The older sentence is a pipeline. The newer one names many more stakeholders and gives them weight.

  Philip Kotler, a prolific marketing author and educator, shows the same drift inside one career. In 1980 he called marketing "satisfying needs and wants through an exchange process." By 2018 he defined it as "the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return." The relationship had moved to the center.

  Not every definition centers the customer. From a sales process engineering view, marketing is "a set of processes that are interconnected and interdependent with other functions of a business." Some definitions point at the firm's owners, describing marketing as "the management process that seeks to maximise returns to shareholders." The Chartered Institute of Marketing keeps the customer in view, naming "the management process responsible for identifying, anticipating and satisfying customer requirements profitably."

• 3. Craft Or Science

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  Advertising, distribution, and selling once placed marketing squarely among the creative industries. Even today product design, art direction, brand management, copywriting, and inbound marketing lean on the creative arts. The instinct to make something appealing never left the work.

  Social sciences pulled the field in a different direction. Marketing draws on psychology, sociology, mathematics, economics, anthropology, and neuroscience. That borrowing is why the profession is now widely recognized as a science, with a concrete process for building a marketing plan.

  The intellectual roots run deeper than the modern terminology suggests. The marketing concept, the idea that an organization should anticipate the needs and wants of potential consumers and satisfy them better than its competitors, traces back to Adam Smith's The Wealth of Nations. It then waited nearly 200 years before becoming widely used.

• 4. Needs, Wants, And Demands

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  Needs are what people require to live a healthy, stable, and safe life. When they go unmet, the outcome is stark: dysfunction or death. Some are objective and physical, like food, water, and shelter. Others are subjective and psychological, like the need to belong to a family or social group and the need for self-esteem.

  Wants sit one rung removed from survival. A want is something desired, wished for, or aspired to, and it is often shaped by culture or by peer groups. Wants become demands only when they are backed by the ability to pay, turning desire into economic demand.

  This hierarchy is not academic. Marketing research aimed at new product development often hunts for the consumer's unmet needs. Those needs anchor market segmentation, which divides markets into distinct groups of buyers with separate needs, characteristics, or behaviors. Needs-based segmentation, also called benefit segmentation, puts the customer's desires at the front of how products are designed and marketed. It is hard to do in practice, yet it has proved one of the most effective ways to split a market.

• 5. Who Buys From Whom

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  Business-to-business marketing, or B2B, aims at a business or organization rather than a person. Its framework stretches the familiar model to seven points: product, price, place, promotion, people, process, and physical evidence. Trends here run toward podcasts, videos, and social media campaigns. The goods range from major equipment and raw materials to component parts, supplies, venues, and business services.

  B2B buyers fall into four camps. Producers turn purchased inputs into their own goods, as when Mattel buys plastics to make toys. Resellers buy to sell on, as when Walmart stocks vacuums for its stores. Governments buy for public projects, such as weather monitoring equipment for a wastewater treatment plant. Institutions buy to keep running, like schools purchasing printers for office use.

  Business-to-consumer marketing, or B2C, promotes products and services to individual people. Once it simply meant shopping for personal items. More recently the term has come to mean the online selling of consumer products, often using tailored emotional appeals aimed straight at the individual.

  Two less familiar models reverse or sidestep that flow. In consumer-to-business marketing, or C2B, end consumers create the products and services that businesses consume, letting customers name their own price or contribute data while firms gain a competitive edge. In customer-to-customer marketing, or C2C, one customer buys from another through a third-party platform, a model that emerged with e-commerce technology and the sharing economy.

  The gap between B2B and B2C runs through many seams. B2B demand is derived, since businesses buy according to demand for the final consumer product, and they buy in large volumes from relatively few sellers. B2B purchasing is a formal process run by professional buyers, influenced by people across quality control, accounting, and logistics. In Western B2C settings prices are fixed, while B2B buyers expect to negotiate. Businesses also practice reciprocity, buying from the firms they sell to; a seller of printer ink is more likely to buy office chairs from a supplier that buys its ink. The most common B2B promotional method is personal selling, while B2C leans on sales promotion, public relations, advertising, and social media.

• 6. Philosophies Of The Firm

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  A marketing orientation has been called "a philosophy of business management," "a corporate state of mind," and "an organizational culture." Scholars still debate the precise nature of these orientations, but several recur. The product concept fixes on quality and now survives mainly in haute couture and arts marketing. The production concept chases volume for economies of scale, and it dominated practice from the 1860s to the 1930s; Kotler and Armstrong note the production philosophy is "one of the oldest philosophies that guides sellers" and "is still useful in some situations."

  The selling concept pushes existing products through promotion and direct sales, especially for unsought goods in industrial companies. A 2011 meta-analysis found the strongest drivers of sales performance were a salesperson's sales-related knowledge, adaptiveness, role clarity, cognitive aptitude, motivation, and interest in the role.

  The marketing concept is the most common approach in contemporary practice, customer-centric and built on products that suit new consumer tastes. It folds in customer orientation, the view that a firm survives only by making goods people will buy, and organizational orientation, in which the marketing department guides the actions of other departments. A marketing team might learn through research that consumers want a new kind of product, then tell R&D to build a prototype while production prepares to manufacture it. Finance may resist the capital expenditure that threatens healthy cash flow.

  The societal marketing concept widens the circle beyond customers to employees and local communities. Firms that adopt it tend to practice triple bottom line reporting, publishing financial, social, and environmental impact reports. Sustainable marketing, also called green marketing, extends this idea.

• 7. The Four Letters

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  The 4Ps name four broad categories of marketing decisions: product, price, promotion, and place. Their origins trace to the late 1940s, with the first known mention attributed to James Culliton, a Professor of Marketing at Harvard University. The modern form arrived in 1960 from E. Jerome McCarthy, inside a managerial approach covering analysis, consumer behavior, market research, segmentation, and planning. Phillip Kotler popularised the model and helped it spread.

  Product covers the actual goods or services and how they meet the end-user's needs and wants. It spans design, new product innovation, branding, packaging, labeling, and supporting elements like warranties, guarantees, and support. Price is what is exchanged for the offering, and it need not be money; it can be time, energy, or attention. Place, sometimes called distribution, is how the product reaches the customer through channels and intermediaries such as wholesalers and retailers. Promotion gathers all marketing communications, from advertising and public relations to personal selling, product placement, event marketing, and trade shows. Social media outlets let brands open two-way conversations and can carry viral marketing.

  The model has drawn steady criticism. It leans on an inside-out view, where an organization sets goals around what it has always done, then sells those products outward; an outside-in approach starts instead with the consumer's needs. The categories also overlap rather than staying mutually exclusive. The fourth P splits into communication and promotion. Personal selling can land under promotion or under place. Promotional pricing can count as price or as promotion. Critics add that the mix lacks a strategic framework and so fails as a planning instrument when uncontrollable external forces matter.

  Those gaps spawned extensions. Services marketing, shaped by intangibility, perishability, heterogeneity, and the inseparability of production and consumption, adds people, process, and physical evidence to reach 7 Ps. In 1990 Robert F. Lauterborn proposed the 4Cs, a more consumer-oriented rewrite fit for the shift from mass marketing to niche marketing: consumer, cost, convenience, and communication. Cost captures not just the monetary value but anything else sacrificed, like time spent on transportation. Communication, unlike one-way promotion, includes the two-way exchange of social media.

• 8. Reading The Market

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  PESTLE is the acronym a firm uses to read the macro-environment it barely controls, weighing Political, Economic, Social, Technological, Legal, and Ecological factors on a large scale. Closer in sits the micro-environment of customers, employees, suppliers, and the media, where control is greater though never total. Closest of all is the internal environment: labor, inventory, company policy, logistics, budget, and capital assets.

  Marketing research is the systematic analysis that feeds these judgments, moving through five stages: define the problem, plan research, research, interpret data, and implement findings. It should not be confused with market research, which gathers information about one target market and is a subset of the larger discipline. The field's standing is marked by journals like the Journal of Consumer Research, the Journal of Marketing, the Journal of Marketing Research, and Marketing Science, all named Premier AMA Journals by the American Marketing Association.

  Segmentation organizes the chaos through the STP acronym: Segmentation, Targeting, and Positioning. Firms split consumers by geographic, psychographic, demographic, and behavioral criteria, then test a target with the DAMP test, asking whether a segment is Discernable, Accessible, Measurable, and Profitable. They choose a level of differentiation, undifferentiated, differentiated, or niche, and finally position the product, often plotting a perceptual map of price against quality as consumers perceive it.

  Every product then runs a clock. The product life cycle moves through introduction, growth, maturity, and decline, on the assumption that no product lasts perpetually. Advertising runs high at launch to build awareness, more entrants crowd in during growth, prices fall as maturity sets in, and demand tapers in decline. A firm may then discontinue the product, unless it serves a niche market or complements another product, in which case manufacture can continue despite low sales.