What is Marketing and the Marketing Process?
A tutorial for Understanding Marketings Definition and the Marketing Process.
Lesson Objective: In this marketing tutorial, you will learn:
- The definition of marketing
- The marketing process
Before I get into a discussion on what marketing is and the marketing process, let me first give you a few definitions of marketing:
This site, Marketing Binder, defines marketing as: an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
The American Marketing Association (AMA) defines marketing as: 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.
Yet, Marketing Management textbooks may define marketing as: the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.
Regardless of which definition of marketing you prefer to use, marketing is a business discipline that creates value for customers and the company.
What is Marketing?
Peter Drucker (See Sidebar Below) stated, “Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
The biggest mistake people think about marketing is to define it too narrowly. Too often, businesses treat marketing as something done after a product (or service) is developed and then decided it simply needs to be sold. They basically treat marketing as just advertising and just sales. Nothing can be further from the truth with marketing today.
Marketing can no longer be viewed as just making a sale – “telling and selling”, but rather as a way of satisfying customer needs by creating value for the customer and in turn, the customer creates value for the company. Again, Peter Drucker states that, “the aim of marketing is to make selling unnecessary.”
In essence, marketings job is to create value for customers, not just communicate value that’s already been created. Marketing does this by answering three key questions:
- Who are my customers?
- What do they value?
- How can I deliver that value better than the competition?
To better understand how to capture value for customers and build customer relationships, let’s take a look at the marketing process.
The following is a basic, five-step, model that outlines the marketing process for creating and capturing customer value. The first four steps of the marketing process are steps that show how companies work to understand consumers, create customer value, and build strong brands. The final step outlines how companies benefit from creating exceptional customer value. By creating value for consumers, companies can capture value form the consumer in the form of sales, profits, and long term customer equity or the value of potential future income from the consumer.
The five steps in the marketing process include:
- Understand the marketplace and customer needs and wants.
- Design a customer-driven marketing strategy.
- Construct an integrated marketing program that delivers exceptional value.
- Build profitable relationships and create WOW customer experiences.
- Capture value from customers to create profits and customer equity.