At the center of all business is the concept of exchange. Just like when early American traders provided fish in exchange for imported supplies the process of exchanging a value-laden thing (i.e. product or service) for another value-laden thing (i.e. money) still continues on today. It is the process of exchanging something of value for something else of value. Each product or service represents a component of effort, often measured in terms of money, to determine the value of this exchange. The goal of any company should be to sell additional products or services by ensuring the awareness of its perceived and tangible value to the customer. Marketing is all about the selling of value.
The American Marketing Association clarifies the value exchange of marketing management as “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” (2011). Marketing is a process of understanding the needs of one’s customers and offering products and services that fulfill the need of those customers. Firms that do well in managing such customer needs often generate higher sales and more shareholder value that allows the entity to find a sustainable position in the market.
To achieve their objectives companies often use a marketing concept. A marketing concept is a customer-oriented philosophy of how the business can achieve its objectives through the analysis and satisfaction of customer’s wants and needs (Finch, 2012). For example, understanding what customers want through polling and proper customer feedback allows companies to develop new products or improve upon existing products to maintain customer interest and value perceptions. It is a philosophy of how a company approaches the market.
To effectively manage marketing it is often necessary to understand both the market and the unique segments of that market. The market is any potential purchaser of products and services as represented through the economic value chain. In other words, anyone who purchases a product or service through commercial activity is part of the market. Within this wider market are market segments that are made up of prospective and current customers who would be naturally responsive to the company’s offerings. Segments can be separated into groups based on wants, needs, behaviors, locality, currency, nation, or any other differentiation.
A marketing mix helps a firm understand and relate to their target market. The marketing mix uses a variety of methods that follow the 4 P’s of marketing that include price, product, promotion, and place. As each demographic has their own unique interests and needs the marketing mix is often specifically designed to reach these audiences through the four conceptual vantage points.
In order to gauge the effectiveness of the marketing mix firms often use financial metrics (Mintz, et. al. 2013). These metrics create benchmarks of performance and response rates to determine the most effective use of financial resources in drawing in business. For example, the use of promotions along with text solicitations will have one response rate while newspaper advertising will have another.
Most companies have an entire department that work exclusively on marketing. Within those departments, firms often opt to either retain in-house certain skills or contract out certain skills in order to maintain their sales profitability. Depending on the size of the firm the use of graphic designers, programmers, artists, writers, psychologists, researchers, social media specialists, database managers, marketing representatives, community outreach specialists and a whole host of other talent may be used in the marketing process.
American Marketing Association. (2011). Retrieved from http://www.marketingpower .com/_layouts/Dictionary.aspx
Finch, J. (2012). Managerial marketing. San Diego, CA: Bridgepoint Education, Inc.
Mintz, et. al. (2011). What drives managerial use of marketing and financial metrics and does metric use affect performance of marketing-mix activities? Journal of Marketing, 77 (2).