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Principles of Marketing

What is Marketing?

Marketing is 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.

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Some of you may believe that you already have some idea about what marketing is all about. That is good. Our purpose here is to build up and work with what you know, so that we can integrate everything into a clear and cohesive framework that maps out what marketing is really all about.

At this point, what is marketing to you? Perhaps some (or all) of the following will come to mind:

  • Advertising
  • Selling
  • Sales people
  • Retail stores and merchants
  • More selling
  • Promos and giveaways
  • Press releases
  • Product development
  • Still more selling

The good news is that, yes, all of the above do fall under the realm of marketing. But it should also be pointed out that marketing is actually a superset of all of the above and more. By this, we mean that marketing is more than the sum of all the above-mentioned elements.

To a layman, marketing will indeed be all about selling a product. But to a marketing professional, marketing is a process. It is a process that begins right at the moment when an aspiring entrepreneur or business development manager (or marketing manager) realizes that there is an opportunity to build up a business.

You can think of marketing as a discipline or a field of management, in much the same way that finance is a management field and human resource development is a management field. At the same time, it helps if marketing is understood by the entire organization because marketing is such an integrative field. Effective marketing needs the involvement and support of all the other fields of management—operations, finance, human resources, information systems, and even corporate planning.

Marketing is also about communication. In fact, there is a trend toward using the term “marketing communications” rather than just “marketing.” This reflects the fact that selling a product (i.e., the layman’s definition of marketing) is really all about properly communicating that product to the market and to the world at large. It will, therefore, help to keep this in mind as we proceed throughout this course.

Peter Drucker once said that the aim of marketing is to “make selling superfluous” (Drucker 1973). In other words, he believed that marketing is all about making products somehow sell themselves, so that getting products to move become easier. As subtext, however, it may help to know that a whole lot of work will be involved in order to reach that ideal. Marketing, in this respect, is a bit like an iceberg: what we get to see—namely the selling and the advertising—is only a small percentage of the marketing process, much of what needs to be done should have already happened even before the product gets out the door.

A Definition of Marketing

We begin with a definition of marketing as presented by the American Marketing Association:

“Marketing is 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.”

Marketing is an organizational function because it is a core task that is expected of a modern organization, whether or not it operates for profit. While marketing is now considered as an imperative for commercial enterprises, even non-commercial sectors benefit from a marketing orientation. For instance, when the Department of Health tries to convince the public to avoid cigarette smoking, it is actually engaging in a marketing campaign. Except that instead of selling a tangible product, it is selling a healthier lifestyle.

Marketing is also a set of processes because there are essential tasks that have to be engaged in order to produce a viable marketing strategy. These tasks shall be outlined as we go along through this course. 

There is also the delivering of value to customers. This is an important element that we shall be taking some time to discuss later in this chapter. For now, do take note of the subtext here that marketing is not out to fool customers, to cheat them of their money, or to sell them something that they do not want. In fact, the building of customer relationships is very important in marketing. So if a company tries to fool a customer with a subpar experience, then this is not a marketing-oriented company.

Finally, a key takeaway that we can infer from the above definition is that there is a give-and-take relationship that lies at the heart of marketing. Marketers seek to provide valuable products and services to customers. In return, they also need to benefit from it. Of course, this generally happens through the revenues that companies receive from customers (in the case of profit-oriented enterprises). But there are other ways through which a marketing exchange leads to mutually beneficial transactions:

  • Politicians offer promises and hope to potential voters in exchange for their votes that bring them to office.
  • TV stations broadcast soap operas to homes in exchange for viewers (hopefully) watching the ads that in turn would provide profit for the stations.
  • Facebook offers its services to its millions of users for free in return for the users allowing paid ads to occasionally show up in their feeds.

These are all examples of exchange transactions that seek to benefit the parties involved. Some transactions can be complex (as in the case of TV stations and its tertiary dealings with outside advertisers), but the typical transaction that we are most familiar with is the common everyday pay-for-product merchant transaction.

Every time you go to a convenience store to buy a snack, it is actually the end result of a marketing process. It begins with the snack manufacturer doing research in order to identify what snacks are already in the market, what customers are looking for, and spotting potential market gaps that can still be filled. Next, the manufacturer profiles the intended market, understanding their demographics, economic class, lifestyle, and a whole slew of other data. The manufacturer then conceptualizes the product; down to elements such as package design and branding, as well as its suggested retail price. Next, the manufacturer identifies the most feasible channels through which the product should be pushed in order to reach the consumers—in this case, convenience stores being one. Finally, the manufacturer may engage in communication efforts in order to alert the market about the existence of its product. All of that would have happened before you finally get to buy the snack from your neighborhood store.

On a broader scale, marketing is all about changing behavior through communications in order to achieve objectives. Getting consumers to buy your products may be the most obvious manifestation of a change in behavior, but it is not the only possible marketing objective. Marketing can also be about changing customer attitudes and perceptions about your product, such as getting the customers to actually like it in order to get them to eventually buy it. It could be as simple as making the market realize that your product actually exists—again, in order to get them to eventually buy it.

If there is a way to describe what marketing is all about in a very concise manner, then it can be this: Marketing is about meeting needs profitably (Kotler and Keller 2006). You go into business so that you get to satisfy the needs of the market and, in doing so, you also get to satisfy your organization’s own needs.

Throughout this page, we shall be using the word “product” a lot. Just to be very clear, product in the context of marketing does not just refer to tangible products such as grocery items and automobiles. The word “product” applies to anything that is being marketed, whether it is a tangible product, an intangible good, a service, a place, or even a person.

Here are some other examples of products:

  • Amusement parks
  • Apps on smartphones
  • Banking services
  • Coffee shop: the coffee, the food, and the place itself
  • Hotel accommodations
  • Legal advice
  • Musical bands
  • Pet care
  • Radio stations
  • Social media sites
  • Telecommunication services
  • Television programs
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