What is Marketing? Definition, Marketing mix and Types of Marketing? What is Marketing research?

 

Marketing

 Marketing is an organizational function and a set of processes for creating, promoting, and providing a product or service to customers and managing relationships with them for the benefit of the organization.

What is Marketing in 2022

More briefly, marketing is an activity aimed at satisfying market needs to make a profit. In a broad sense, the purpose of marketing is to " identify and satisfy human and social needs ".

Marketing definition

In modern literature, there are a huge number of definitions of marketing. Here are some of them:

Marketing is a type of human activity aimed at satisfying needs and requirements through exchange.

- Philip Kotler

Marketing is a social process aimed at satisfying the needs and desires of people and organizations by providing a free competitive exchange of goods and services that are of value to the buyer, etc.

- Lambin Jean-Jacques 

Marketing, in its broadest sense, is a social management process through which individuals and groups of people, through the creation of products and their exchange, get what they need.

— Golubkov E. P. 

From a legal point of view, marketing is the management of the market by suppliers and customers of commercial products (including potential suppliers and customers) in terms of reimbursable assignments of property rights to it.

– Prof., Doctor of Economics O. N. Dmitriev 

Marketing is the process of planning and envisioning, pricing, promoting, and selling ideas, goods, and services through an exchange that satisfies the goals of individuals and organizations.

— American Marketing Association (AMA) 

Marketing is a market philosophy, strategy, and tactics of thinking and action of subjects of market relations: not only manufacturers and intermediaries in commercial activities but also consumers, as well as suppliers, practical economists, scientists, entire organizations, up to government bodies

- A.P. Pankrukhin 

Story

In 1926, the National Association for Marketing and Advertising was created in the United States. On its basis, the American Society of Marketing was formed, and in 1973 this organization was renamed the American Marketing Association - AMA. 

Later, similar associations and organizations appeared in Western Europe, Canada, Australia, and Japan.

In the future, marketing began to develop within the framework of management as a synthesis of economic theory and economics of individual sectors of the economy, gradually becoming its new philosophy. In the 1940s and 1950s, marketing joined with management theory, forming a new market-oriented management theory. 

Along with sales, economists included detailed market analysis in it, and then in the 1960s and 1970s, they added programs for establishing long-term economic relations with consumers ( CRM-concept ) and market segmentation. Later, methods of crediting the buyer, after-sales service, etc. were developed.

A new marketing stage is announced as strategic management based on a marketing approach, in which part of its functions is transferred to the strategic level.

Basic concepts of marketing

The following are the basic concepts of marketing:

• Need is a feeling of a lack of something felt by a person.

• Need is a need that has taken a specific form to the cultural level and personality of the individual.

• Demand is a need backed up by purchasing power.

• Offer is a concept that reflects the behavior of a company in the market and its readiness to produce (offer) any amount of goods and services for a certain period der certain conditions.

• Good is everything that can satisfy a need or need and is offered to the market to attract attention, purchase, use, or consumption.

• Exchange is the act of receiving the desired object from someone with an offer of something in return.

• A  transaction is a commercial exchange of value between two parties.

• Market is a set of existing and potential buyers of the goods.

• A  market segment is a large, well-defined group of buyers within a market with similar needs and characteristics as opposed to other target market groups.

• Suppliers are the subjects of the marketing system, whose functions include providing partner organizations and other companies with the necessary material resources.

• Competitors are legal entities or individuals competing, that is, acting as a rival to other business structures or entrepreneurs at all stages of the organization and implementation of business activities.

• Intermediaries are legal entities or individuals who help manufacturing organizations promote, deliver to consumers and sell their products.

• Consumers are legal, individual individuals or their potential groups, ready to purchase goods or services that are on the market, and have the right to choose a product, or seller, and present their conditions in the process of the sale.

• Assortment is a composition of the products sold by the company by groups, types, types, varieties, sizes, and brands. It differs in breadth (the number of product groups) and depth (the number of models, and brand types in each group).

• A trademark is a  sign, symbol, word, or combination thereof that helps consumers to distinguish the goods or services of one company from another.

• Competitive advantages are factors that determine the superiority of a company over competitors, measured by economic indicators such as additional profit, higher profitability, market share, and sales volume 

• Macro environment is a factor influencing the company's microenvironment. These include: demographic, economic, natural, scientific and technical, political, and cultural.

• The company's microenvironment is a factor closely related to the company and affects its ability to serve target customers. It includes the company itself, intermediaries, suppliers, competitors, target consumers, and contact audiences.

Main tasks, goals, and functions of marketing

One of the leading management theorists, Peter Drucker, puts it this way: “The goal of marketing is to make sales efforts unnecessary. Its goal is to know and understand the client so well that the product or service will fit the latter exactly and sell itself.

- Fundamentals of Marketing, Philip Kotler 

The main tasks of marketing:

• The study of the market as such, the study of consumers, the structure of firms' goods, and analysis of the internal environment of enterprises.

• Research, analysis, and assessment of the needs of real and potential consumers of the company's products in areas of interest to the company.

• Marketing support for the development of new products and services of the company.

• Analysis, assessment, and forecasting of the state and development of the markets in which the company operates or will operate, including the study of competitors, quality management, and competitiveness of finished products.

• Organization of logistics.

• Formation of the assortment policy of the company.

• Development of the company's pricing policy, and development of a mechanism for changing prices in changing conditions.

• Participation in the formation of the strategy and tactics of the company's market behavior, including the development of pricing policy.

• Sales of the company's products and services.

• Marketing communications.

• Service maintenance.

• Organization of incentives for buyers and consumers.

There are 4 blocks of complex functions in marketing:

• analytic Function,

• production function,

• sales function,

• command and control function. 

Some experts, in addition to these 4 functions, add one more: Formative (persuade and stimulate).

The place of marketing among other organizational business processes

Marketing and management have similar terminology, but the meaning of the terms often differs. The reason for this state of affairs is that marketing interacts with the external environment of business organizations, the participants of which are independent and act on their interests and goals. 

In contrast, management interacts with the internal environment, all elements of which are objects of management. Therefore, in management, managers can purposefully direct and control the actions of subordinates, and in the external environment, marketers consider the influence and development of interest among the audience to be the main type the influence. 

In the external environment, the source of decisions is the market situation, and in the internal environment, the decisions of managers. Managers manage the costs of the organization, that is, those that they can influence directly. Marketers, on the other hand, manage the profits of the organization, which is influenced indirectly by offering consumers demanded goods. 

In the internal environment, competition is perceived as a struggle, and in the external environment, competitors are engaged in adaptation to the needs of consumers.

Marketing Methods

All of the above tasks and functions are performed by the following marketing methods:

• analytics;

• surveys;

• observations;

• planning and forecasts;

• conducting A/B testing;

• development of pricing policy;

• information methods;

• PR and advertising methods;

• personal selling;

• consultations;

• loyalty programs;

• propaganda

Marketing mix 

A marketing mix is ​​a set of marketing tools that influence consumer demand, as well as the combined and coordinated use of these tools.

The theory and practice of marketing are based on the marketing mix. In the classical view, the marketing mix consists of four elements that make up different types of marketing policies: product, price, place, and promotion policies. 

At the same time, the marketing mix is ​​a minimal algorithm for developing a marketing plan and analyzing the marketing activities of a business. 

According to one version, the term "marketing mix" was introduced in 1953 by Neil Borden, referring to the work of James Culliton.  And the already canonical 4Ps ( Product, Price, Place, Promotion ) were proposed by Jerry McCarthy in 1960.  

4P

• Product is everything that can satisfy any needs (physical objects, services, people, enterprises, activities, ideas). Once a product is priced and placed on the market, it becomes a commodity. Therefore, the term "goods" is used on a par with the term "product".
  Price is the price is understood as the amount of money requested for a product or service number of goods, valuand es ​​that a consumer is willing to sacrifice in exchange for purchasing a certain product or service.
  Place or methods of distribution or bringing the product to the consumer - the main content of the element of the marketing mix "bringing the product to the consumer" is the choice of the optimal scheme for delivering the product from the manufacturer to the consumer, its physical embodiment (organization of transportation, storage, handling of cargo), as well as after-sales (service) customer service.
  Product promotion is a set of various activities to bring information about the merits of the product to potential consumers and stimulate their desire to buy it.

Development of the 4P theory

Sometimes the marketing mix includes other elements that begin with the letter R.

In 1981, Booms and Bitner, developing the concept of marketing in the service sector, proposed to supplement the marketing mix with three additional Ps:

• People are all people directly or indirectly involved in the process of providing a service, for example, employees and other customers.

• Process is a procedure, mechanisms, and sequences of actions that provide the provision of services.

• Physical environment is the environment or environment in which the provision of the service takes place, as well as any tangible objects used in the service processor transmitting certain information to the consumer.

Based on the marketing mix, models such as "4A", "4C" and "4D" also appeared, as well as Michael Porter's " 5 forces " model.

Yagdishm Shetom focused the attention of marketers on the main criteria that guide the consumer in his choice: Awareness, Acceptability, Affordability, and accessibility.

Robert Lauterborn proposed the 4C concept, according to which the four "P" of the supplier company correspond to the four "C" of the Customer, Cost, Convenience, and Communication.

Thomas Gad became the founder of the theory of 4D branding, in which D is Dimension. There are four dimensions in this model: Functional, Social, Mental, and Spiritual.

Marketing Management Concepts

The concept of marketing is a science-based plan (project) for organizing activities in general and/or marketing activities in particular, which is based on a specific guiding idea, an effective strategy, and the necessary operational tools for entrepreneurship to achieve results determined by the strategic plan of the enterprise or simpler this is a set (single complex) of the main views and methods of doing business, which is aimed at achieving the company's strategic goals: customer satisfaction and profit.

Traditionally, in marketing theory, the following marketing concepts are distinguished, which developed as the economic situation changed:

• The concept of production improvement comes from the fact that consumers will be sympathetic to goods that are widely distributed and affordable, and, therefore, management should focus on improving production and increasing the efficiency of the distribution system.

• The concept of product improvement comes from the fact that consumers will show interest in products that offer the highest quality, best performance, and properties, and, therefore, the organization should focus its energy on continuous product improvement.

• The concept of intensifying commercial efforts comes from the fact that consumers will not buy the company's products in sufficient quantities if it does not make sufficient efforts in the field of marketing and promotion.

• The concept of marketing comes from the fact that the key to achieving the goals of the organization is to determine the needs and requirements of conditional markets and provide the desired satisfaction more efficiently and productively than competitors. The object of attention in the concept of marketing is not the product, but the company's customers with their needs and requirements. In this case, the company receives profits by creating and maintaining customer satisfaction.

• The concept of social and ethical marketing proceeds from the fact that the task of the company is to establish the need, and interests of target markets and provide the desired satisfaction in a more efficient and more productive ways more efficient and more productive way while maintaining and strengthening the well-being of the consumer and society as a whole.

• The concept of relationship marketing is the main idea of ​​interaction marketing is that the object of marketing management is not a cumulative solution, but relationships (communications) with the buyer and other participants in the sale and purchase process.

— F. Kotler

• The concept of international marketing is a concept that provides for systematic, constant, active work on the international market at various stages of promoting commercial products and services to the consumer. A distinctive feature of international marketing is a complete and clear focus on a foreign consumer, the desire to satisfy his needs and requirements.

• The concept of holistic marketing is based on the planning, development, and implementation of marketing programs, processes, and activities, taking into account their breadth and interdependence. Holistic marketing recognizes that everything matters in marketing and that an extended, integrated approach is often needed. Holistic marketing has four components: relationship marketing, integrated marketing, internal marketing, and socially responsible marketing. Thus, holistic marketing is an approach that attempts to recognize and balance the various competencies and complexities of marketing activities.

• The concept of brand management is a new direction in the theory of marketing management.

This concept was formed relatively recently after it was concluded that the concept of pure marketing was insufficient from the standpoint of environmental protection, lack of natural resources, and several other social and ethical problems. 

“Relationship marketing is the practice of building long-term mutually beneficial relationships with key partners interacting in the market: consumers, suppliers, distributors to establish long-term privileged relationships.”

Ultimately, the concept of pure marketing does not address the problem of possible conflicts between the needs of the buyer and his long-term well-being. The concept of socially ethical marketing requires a balance of three factors: the company's profits, purchasing needs, and the interests of society.

Marketing research

Marketing research is a systematic and objective identification, collection, analysis, dissemination, and use of information to improve the efficiency of identifying and solving marketing problems (opportunities).

The marketing research process is a  set of actions of six stages, each of which has its own task, the solution of which is necessary for conducting marketing research. These include defining the problem, developing an approach to solving the problem, formulating a research plan, conducting fieldwork, preparing and analyzing data, and preparing and submitting a report.

• Problem identification research is research undertaken to help identify non-obvious problems either present or those that may arise in the future.  This type of research provides information about the marketing environment and helps diagnose the problem.

• Problem-solving research is research undertaken to help solve specific marketing problems  

definition of the objectives and goals of the study:

• determining the need for marketing research,

• task definition,

• formulating marketing research goals,

research plan development:

• choice of marketing research methods,

• determining the type of information required and the sources of its receipt,

• determining the methods for collecting the necessary data,

• development of data collection forms,

• development of a sampling plan and determination of the sample size,

implementation of the research plan:

• data collection,

• data analysis,

• interpretation of the results obtained and their communication to the management (preparation and presentation of the final report).

Quantitative research involves conducting various surveys based on the use of structured closed questions, which are answered by a large number of respondents. The main task of quantitative research is to obtain a numerical assessment of the state of the market or the reaction of respondents to a certain event. 

Such methods are apartment, street, and telephone surveys, expert surveys, hall surveys, home tests, desk research, and audit of retail outlets.

A marketing Information System ( MIS ) is a  formalized procedure for obtaining, analyzing, storing, ng, and disseminating regularly the necessary information for those responsible for making decisions in the field of marketing (provides information continuously, and not only the based on held from time to time).

According to generally accepted views, four stakeholders are involved in the marketing research process: the marketing researcher himself, his client, the respondent, and the public.

The marketing research process includes the following steps and procedures:

Data collection methods in marketing research can be classified into two groups: Quantitative and Qualitative.

Qualitative research is unstructured, exploratory in nature, based on small samples, and can use popular qualitative methods such as focus groups (group interviews), word associations, and in-depth interviews.

Types of marketing

Depending on the stages of the evolution of marketing, the scope of its application, and the nature of demand in the market for goods and services, such characteristics of marketing as types, forms, and types of marketing are distinguished.

G. L. Bagiev and A. N. Asaul in the book “Organization of Entrepreneurial Activity” give the following classification of marketing:

Depending on the type of activity of an individual or organization, it can be organization marketing, individual marketing ( ego marketing ), place marketing, mark marketing others.

According to the scope of application, consumer, industrial, investment marketing and marketing of services are distinguished.

According to the sphere of exchange or on a territorial basis, national (regional, local) marketing and international (export, global, world) marketing are most often distinguished.

Depending on the purpose of the exchange, the results of a particular activity, commercial and non-commercial marketing are distinguished.

But individual marketing schools (American, Scandinavian, Western European, and others) classify marketing in different ways.

Below is a classification of marketing depending on the state of demand in the market and on the coverage of the market.

Depending on the state of market demand

• Conversion marketing is used in conditions of negative demand when a significant part of the market does not accept the product and may even pay a certain price for not using it. The task of conversion marketing is to change the negative attitude of consumers towards the product. Conversion marketing tools are: reworking the product, promoting it more effectively, and lowering the price.

• Promotional marketing is associated with the presence of goods and services for which there is no demand due to the complete indifference or disinterest of consumers. The promotional marketing plan should take into account the reasons for this indifference and identify measures to overcome it.

• Developing marketing is associated with the emerging demand for goods (services).

• Remarketing revives demand during a certain period of extinction in the life cycle of goods or services.

• Synchromarketing is used in conditions of fluctuating demand. For example, seasonal goods.

• Supportive marketing is used when the level and structure of demand for goods fully correspond to the level and structure of supply.

• Counter marketing is used to reduce the demand that is perceived as irrational by society or the consumer (e.g. liquor, tobacco products).

• Demarketing is used to reduce demand for your product in a situation where demand exceeds supply and there is no way to increase production. Such results can be achieved, for example, by increasing the price of a product and reducing advertising or promotional efforts. The purpose of demarketing (as opposed to counter marketing) is not to destroy demand for a product, but only to reduce it by balancing it with production capacity.

• Personal marketing  was undertaken to create, maintain or change the behavior of the public about a particular person.

• Innovation marketing is a marketing activity aimed at creating a market o-oriented innovations. Innovation marketing is a set of mechanisms for identifying goods and technologies that have new properties and are aimed at creating, expanding, or stabilizing the market for new goods and services. The novelty level of innovation in innovation marketing determines its innovative potential ( competitiveness ).

• Network marketing is a form of non-store retailing through personal selling.

Based on market coverage

• Mass marketing involves targeting the widest possible range of consumers without taking into account the differences between them. (I produce what everyone needs). The goal of the enterprise is to set low prices, the and costs of mass production and promotion are reduced.

• Concentrated (targeted) marketing  - focusing on a specific segment, trying to satisfy its needs as much as possible (goods for newlyweds, ritual services). Advantages: maximum satisfaction of needs, used by small companies. Disadvantages: the segment can unexpectedly shrink, limiting the company's possible growth.

• Differentiated marketing  - the desire to capture a large part of the market as a whole and at the same time offer several varieties of the same product, which differs in its consumer qualities and can satisfy the needs of many segments (dairy companies Products of different fat content, cheese, cottage cheese, yogurt). Benefits: satisfaction of needs.