Each marketing expert has its own definition of marketing. Since 1980s, many business owners have accepted marketing was necessary for business growth. However, some confuse marketing as advertising, while others obscure marketing as public relation. I mention some definitions of marketing which are prominent in both academic and business worlds. Also, I scrutinize how these definitions influence marketing operations.
Simplest marketing definition
Marketing is engaging customers and managing profitable customer relationship.
This is the simplest definition of marketing I found in books and online. There are two parts in this definition. One is how to engage customers and other is to maintain sustainable profit by managing the best customer relationship. Depending on industry, ways to engage customers may differ, but we should care every touch point with customer as important as possible. Instantly, neat and smart staff uniforms and appealing product shelves are vital in retail shops. Retail is detail, right! It also means that you should care your ecommerce store too.
Inbound marketing is a useful tool because it supports purchase decision when customer reaches every touch point in marketing funnel. By email marketing, you can send postcards, push notifications for free webinars, and exclusive discounts to your customer mailboxes. Some car dealers use drive tests as an engaging channel to customers in road shows, while some firms use product training to get brand engagement.
Maintaining an active customer relationship is not difficult if you understand your customers. Repeat customers improve your profit meanwhile it reduces your marketing costs. In the long run, it is more profitable to repair one customer’s generator than selling 10 generators to 10 customers. Toyota gets its major profit from repeat customers who buy its car again after 5 years. Here comes customer lifetime value. It is total profit you get from your customer in the long term. Customer retention strategy plays an important role to increase customer lifetime value.
Advantages when you love
If you are fond of this definition, your marketing may mostly focus distribution and retail channels of your business. You try to improve impression from your customers as much as you can. Your retail shops and headquarters may be fully embellished with modern furniture and artistic interior decoration. You prefer your employees to wear professionally, rather than tees and jean pants. Also, you may set up a dress code for them. You try every material your customers can see, hear or touch to be creative and persuasive. Your marketing department is also busy with follow up calls and loyalty programs. You may prefer to retain current customers rather than exploring new market because you want to maintain a healthy marginal profit. Customer first policy becomes a major key to your business success.
Engaging and retaining customers make your business sustainable, but it is difficult when your business is in a saturated market. If your products or services are not competitive, all your effort become a waste. You may forget to analyze prices strategy, may neglect service quality, and you think your business may overcome any risks.
Customer value is important
Marketing is the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return.
– Philip Kotler (Principles of Marketing)
This is an extended version of the first definition of marketing. It includes creating customer value to get sustainable business growth. Here, we need to define what customer value is. Companies need to understand their customers and marketplaces firstly to create values. Based on needs and wants, customers demand products or services which are beneficial to them. Hence, firms’ offerings must satisfy customers’ demand. Expectations play a vital role, and satisfied customers spread good experiences to others.
Once, companies understand their customer’s needs, wants and demand, they can decide which customer segments they will serve and how the value is provided. It is very important to serve right customer with right product or service. Therefore, choosing right target customer answers which value a company should create. Customer value is a set of benefits a brand promises to deliver to its customers. So, your brand motto, slogan or vision become a part of customer value. Jet Blue’s “humanity back to travel”, and Hyatt Regency’s “It’s good not to be home” are good examples. Consumers use AirBNB for its affordable pricing, wear ZARA for its fast fashion, drives Toyota for its reliable service, and supports Manchester United for its team spirit.
Every purchase decision has its own reason, and your brand’s customer value should be the reason. Choosing a brand rather than its competitors depends on its customer value, so it is difficult to grow unless you are clear which customers you serve and what you deliver to them. Cheap pricing is not always customer value. Uniqueness sometimes becomes customer value like iOS of Apple products. Confidence, which is a customer experience, can also be a customer value when you drive a Mercedes SUV. Consumers play Lego toys because it reflects their childhood, watch HBO’s Game of Thrones to be surprised, and drink Starbucks for its taste. Customer value may be a very simple need or a complex want of consumers. It can be tangible or intangible, but it should enhance the business growth by nourishing customer loyalty.
Advantages when you love
If you like above definition of marketing, you focus the quality of product or service. Instead of ostentatious materials, you emphasize promises you should deliver to customers. You get impression from customers not by big billboards or expensive exhibitions but by preserving benefits your customers expect. Your brand’s slogan will reflect emotions your customers feel when they use your product or service. You also try hard to innovate the quality so that you outshine your competitors even in hard economic times. Market research and market segmentation are regular activities of your marketing department. You ask your staffs to go outside and meet as many customers as possible to understand their changing behaviors. You prefer to enlarge your market share, so you always try to modify customer value so that more customer segments enjoy your product or service.
Creating customer value is a meticulous process because every department involves brainstorming which benefits the customers demand. You also need to do market analysis, and risk analysis. For example, mystery shopping can help to understand whether your brand maintains promises to customers. Your marketing budget will go to research and development sector rather than advertising and retail shops. Instead of deciding customer value, selling a product or service with the help of a viral advertisement may seem easier to get success. However, hardworking pays big return in the long run. If you can provide right customer value to right customer, expensive advertisements or showy shop decorations can be avoided later. Moreover, it can help a business which is in a saturated market, to get back economic profit. Zappos is one of the good examples how customer value sustains its business growth.
Marketing is everything in business
Marketing starts long before a product is produced.
– Philip Kotler
This kind of definition is strange because it excludes communication and customer value most definitions mention earlier. This definition places marketing as a first place in a business plan. It states there is no business without marketing. How awesome this definition is! Marketing in this definition actually focus on how to create or develop a product or service that can deliver customer value most customer segments demand in the market. Beyond creating customer value, it considers a suitable product or service beforehand. Second definition states we need to create customer value of our product or service but this last definition suggests we need to consider a product or service that ensures a sustainable business growth. Is it possible?
Most accept marketing is a way of communicating to customers, retaining profitable customers, or boosting sales, but they rarely think about reinventing the wheel. However, the third definition is useful for entrepreneurs. Every business success starts with smart marketing thinking followed by a mystery product or service that overwhelms the market. Entrepreneurs innovate a new market or a new product or service in the existing markets.
Elon Musk sell electric cars which is new product but in existing automobile industry. AirBnB reconsider the way of house rent, Apple started smart phone industry, Netflix changed streaming industry, and Youtube replaced traditional media platform. They all start with an inspiring idea, then they create a business with appealing product or service. Paypal is one of them and it changes financial industry, most saying disrupting the market. Trying to provide a personal computer at every home, Bill Gates made Microsoft OS.
All entrepreneurs want financial success, but they firstly focus to think which product or service would serve consumers better, would make consumers comfortable or smart, and which product consumers would love to use (from Steve Jobs’s speech). This is marketing, creating a product that makes a business grow sustainably! However, it is difficult to fulfill because you don’t know what your consumers love to purchase. Only with passionate hardworking, a few entrepreneurs succeed to shake the markets in the world.
Advantages when you love
Actually this third definition includes above two definitions. It starts with a creative idea, continues producing feasible product or service, and engages consumers with sustainable customer value. If you consider this definition feasible, you may have a very good entrepreneurship mindset. You are creative and you try to develop new ways rather than traditional style. You may change the product design or may renovate retail shop to serve better customer experience than your competitors or may restructure organization structure to make business processes faster and more effective. If you are new to business, you may think beforehand what product may produce high return. Then you analyze the market and feasibility of your new product. If you have enough creativity and tenacity, you can a new billionaire like Zuck or Musk.
Useful for start-ups
It is not easy to start a successful business but if you understand marketing comes before production, it is sure that your business takes off in the market. Not all people are born creative, but good news is you can learn creativity. Nobody in 1990s expects smart phones or electric cars, now consumers demand autonomous vehicles and they love to use Siri or Cortana. Almost every disrupting firm in 21st century bases on technology, so you need to learn computer science if you want to create a new billionaire business. Very often you may waste time thinking a multi-millionaire project. Moreover, there are many limitations on the way to new business. Elon Musk is one of the idols for this marketing definition.
Every marketer has his or her own strengths and weaknesses. Similarly, every definition had its own pros and cons. Depending on the industry you are working, your focus may differ. Anyway, these above-mentioned definitions of marketing can help you understand how to choose right target market, how to engage consumers and how to build a profitable relationship with them. Moreover, they suggest you to be creative beforehand.