What is MARKETING?

A market-focused, or customer-focused, organization first determines what its potential customers desire, and then builds the product or service. Marketing theory and practice is justified in the belief that customers use a product/service because they have a need, or because a product/service has a perceived benefit.

Two major factors of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (base management).

Once a marketer has converted the prospective buyer, base management marketing takes over. The process for base management shifts the marketer to building a relationship, nurturing the links, enhancing the benefits that sold the buyer in the first place, and improving the product/service continuously to protect the business from competitive encroachments.

Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Anthropology is also a small, but growing, influence. Market research underpins these activities. Through advertising, it is also related to many of the creative arts.

For a marketing plan to be successful, the plan must reflect the wants and desires of the consumers in the target market. Trying to convince a market segment to buy something they don't want is extremely expensive and seldom successful. Marketers depend on marketing research, both formal and informal, to determine what consumers want and what they are willing to pay for it. Marketers hope that this process will give them a sustainable competitive advantage. Marketing management is the practical application of this process.

Within most organizations, the activities encompassed by the marketing function are led by a Vice President or Director of Marketing. A growing number of organizations, especially large US companies, have a Chief Marketing Officer position, reporting to the Chief Executive Officer.

Transactional Marketing

First assumption

• There are a large number of potential customers.

• Customers and their needs are fairly homogenous.

• It is rather easy to replace lost customers with new ones.

Two Levels of Marketing: Marketing is understanding that marketing operates on 2 different levels.

Strategic Marketing — Strategic Marketing attempts to determine how an organization competed against its competition in a market place. In particular, it aims at generating a competitive advantage relative to its competition.When Jack Trout says that marketing is 'the war between competitors' and 'the conflict between companies' what he is really doing is defining marketing at the business level.

Operational Marketing — Operational Marketing executes marketing functions to attract and keep customers and to maximize the value derived from them.This includes the determination of the marketing mix, advertising execution etc...