Unit A: What Is Marketing?

Unit A.14 – Putting It Together: What Is Marketing?

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Putting It Together: What Is Marketing?

Marketing is a powerful tool that serves a variety of functions for organizations, individuals, and society. Let’s take a moment to revisit some notable examples of marketing activity from earlier in the module.  What’s happening to make each of these examples effective?

Marketing sells products.

Marketing informs organizations about what people want, and it informs people about products and services available to feed our wants and needs. From overt advertising to covert “recommendations” about things you might like based on other things you’ve purchased, marketing shows us different choices and tries to influence our buying behavior.

As you view its site, Amazon.com gleans information about you and what you’re shopping for. Then it suggests other products that might interest you: items similar to what you viewed, special deals, and items other people bought who were shopping for the same things as you. The genius of this technique is that it’s marketing masquerading as helpful information sharing.

Results of an Amazon "recommendation." The text reads, "Recommendations for You," and shows five book covers: Little Lost Unicorn, Unicorn Wings, Glitter Tattoos: Unicorns, 50 State Commemorative Quarters, Unicorns Coloring Book.

Source: Amazon recommendation engine

Marketing changes how you think about things.

Effective marketing shapes people’s perceptions of the world around them, for better or for worse. Marketing can cause you to think differently about an issue, product, candidate, organization, or idea. When you are attuned to marketing forces and practices, you can exercise better judgment about the information you receive.

So, you think you know what big pharmaceutical companies are all about? With this ad below, using a strong dose of emotional appeal, Pfizer wants you to think again.

Marketing creates memorable experiences.

Some of the most imaginative marketing is not a message or an image. Instead it’s an entire experience that gives people a deepened understanding, enjoyment, or loyalty to whomever is providing the experience.

This IKEA event created a slumber party atmosphere for avid fans of the home furnishing store, inviting them to stay in the store overnight and live temporarily in the store display. It’s a great way to encourage people to interact more deeply with your product.

Marketing alters history.

Marketing has been known to unleash attitudes and forces that alter the course of history. Today, marketing plays a pronounced role in political campaigns, policy debates, and mobilizing citizen support for public affairs initiatives.

This 1984 ad for Ronald Reagan’s presidential campaign capitalized on widespread anxiety among Americans about national security during the Cold War. Some strategists credit this piece with shifting middle-of-the-road voters decidedly into the Reagan camp.

How does marketing affect you?

Pause for a moment to consider your immediate environment and your activities for the day. Where do you encounter evidence of marketing? How does it influence the choices you make? What impact does it have on your attitudes and perceptions? Why are various marketing activities effective or ineffective at reaching you as a customer or consumer?

Throughout the rest of the course, take this challenge:

See marketing, and learn.

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This courseware was assembled by Christopher VanOosterhout from a variety of resources copyrighted and openly licensed by multiple individuals and organizations.  See our Copyright and Attribution page for additional details.  For details about permission to use please contact me at c@vanosterhout.com with the phrase  Courseware Usage Inquiry.  If you believe that this courseware violates your copyright, please contact me at c@vanoosterhout.com with the phrase Copyright Inquiry in the subject.  Details about the collector of these resources and Licentia LLC can be found at www.vanoosterhout.com

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Unit A.13 – The Value of Marketing

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What you’ll learn to do: explain how marketing creates value for the consumer, the company, and society

For some people, marketing has a reputation as being fluffy, superficial, and light. Certainly a lot of marketing activities have earned that reputation over the years. One goal of this course is to help you understand the important role marketing plays in business and everyday life in today’s globally connected world.

Are we arguing that marketing is an inherently good thing? No, we’re arguing that it is an inherently useful and potentially powerful thing.

Is marketing a matter of life-and-death importance? Generally, no.

Does marketing save lives? Actually, sometimes it does.

The specific things you’ll learn in this section include:

  • Explain the benefits consumers derive from marketing activity
  • Explain the benefits companies and organizations derive from marketing activity
  • Explain the benefits society derives from marketing activity
  • Describe how an understanding of marketing makes people more informed as both consumers and participants in society

Marketing can mobilize attitudes and behavior around a common vision. It is a powerful medium for expression, creativity, and sharing across an increasingly global society. Marketing can be an agent of change in the diffusion of ideas and innovation. It can also be self-serving and manipulative, playing on human fears and insecurities to separate people from their money and from one another.

With all this in mind, what value does marketing provide?

Left: A smiling Santa Claus smokes a cigarette. A card in front of him reads, A Gift of Pleasure: My spirit, the Spirit of Christmas-giving, is abroad in the land. A gift that expresses that spirit, and brings pleasure to every home, both great and small, is rare indeed. Such a gift, my friends, is LUCKY STRIKE. Santa Claus. Below Santa are the words Luckies, a light smoke of rich, ripe-bodied tobacco. It's toasted. Right: Some bright red shoelaces are laced through a white background to form a loose silhouette of Africa and the words Lace up Save lives. A caption reads Designed to fight AIDS in Africa. The Nike logo with the superscript RED is in the bottom corner.

Left: Lucky Strike ad, LIFE Magazine, 1936. Right: Ad promoting Product Red, a licensed brand that partners with companies like Nike, Apple Inc., Converse, and others to raise funds to eliminate HIV/AIDS in Africa. Fifty percent of the profits generated by Red products is donated to the Global Fund to Fight AIDS.

Marketing remains an active, dynamic field because it serves useful purposes for organizations, individuals, and society.

Marketing Can Benefit Organizations

As explained earlier in this module, organizations use marketing to identify, satisfy, and retain customers. Marketing helps businesses know which problems to solve and which products, services, and experiences to offer. Effective marketing drives product improvements and determines the terms of profitable transactions. Marketing efforts help organizations build and sustain productive relationships with the people and groups they serve. Without effective marketing, companies become islands that retain no meaningful connection to their customers. When an organization loses its audience, eventually it ceases to exist.

Marketing Can Benefit People

Individuals are not just targets of marketing; they can also be beneficiaries. Marketing helps people navigate the world around them to find the things that address their wants and needs. Marketing is responsible for the creation of products that delight people, improve their productivity, and alter their quality of life. In recent years, marketing has contributed to the pervasive information now available to help people make advantageous consumer choices. Marketing reduces the friction and hassle around transactions. Imagine, without marketing you would never know that many of the products you need exist, let alone how to find them.

Marketing and Society

Because marketing is grounded in commercial, profit-seeking behaviors, some would argue that society is a net loser rather than a net winner when it comes to marketing influence.  However, effective marketing helps create the conditions for healthy competition and market efficiency, where companies and consumers communicate and exchange mutual value.

Like virtually any tool, marketing can be used for noble purposes or nefarious ones. Regardless, it has a pervasive presence in the modern world. As you learn about marketing and begin to practice its principles, you will see more clearly how it influences your daily life. You will identify opportunities where marketing skills can help you become more effective at achieving your personal and professional goals. With a foundation in marketing, you will become a more informed consumer of the products, services, experiences and ideas you encounter throughout your life.

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This courseware was assembled by Christopher VanOosterhout from a variety of resources copyrighted and openly licensed by multiple individuals and organizations.  See our Copyright and Attribution page for additional details.  For details about permission to use please contact me at c@vanosterhout.com with the phrase  Courseware Usage Inquiry.  If you believe that this courseware violates your copyright, please contact me at c@vanoosterhout.com with the phrase Copyright Inquiry in the subject.  Details about the collector of these resources and Licentia LLC can be found at www.vanoosterhout.com

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Unit A.11 – How Organizations Use Marketing

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What you’ll learn to do: describe how different types of organizations, such as nonprofits, consumer product (B2C) firms, and business-to-business (B2B) organizations, use marketing

Although marketing activities come in many different forms, the fundamental principles of marketing apply, regardless of what you’re trying to sell, advocate, or promote. Grounding your marketing efforts in a customer-oriented mindset and staying focused on the relationships you build with those customers will always steer you in the right direction.

At the same time, different organizations use marketing in different ways to achieve their goals. The next reading will give you more insight into how marketing supports the success of several common types of organizations.

The specific things you’ll learn in this section include:

  • Explain the difference between a customer and a consumer
  • Define different types of organizations including B2C, B2B, and nonprofit organizations
  • Provide examples of how each type of organization uses marketing

Although we often think of marketing in the context of for-profit businesses and product sales, a wide variety of organizations use marketing to achieve their goals.

For-Profit Marketing Versus Nonprofit Marketing

For-profit organizations are typically privately owned or publicly traded companies with a primary purpose of earning money for their owners. Nonprofit organizations also earn money, but their primary purpose is to use these funds for a specific charitable purpose. Types of nonprofit organizations that may engage in marketing include schools and colleges, hospitals, museums, charitable organizations, and churches, among others.

As the terms denote, the difference between for-profit and nonprofit marketing is in the organization’s primary objective. For-profit marketers measure success in terms of profitability and their ability to pay dividends or pay back loans. Continued existence depends on the level of profits they can generate. The primary focus of marketing is usually to sell products, services, experiences or ideas to target customers and to make these customer relationships as profitable as possible.

Left: Photo taken at a Race for the Cure event: Four pink-haired people clothed all in pink hold a sign that says, Proud to be a fundraising team! Team Janet forever and always. Right: Photo taken at a Red Bull Flugtag event: A person rides a small biplane that looks like a badger. The plane's wings are brightly colored, feature cartoon snakes, and read Badger. The plane is in front of a giant Red Bull sign and above several inflated cans of Red Bull.

Left: Global Race for the Cure opening ceremony, Washington, DC. Right: Red Bull Flugtag competition, London.

Nonprofit institutions exist to benefit a stated mission or purpose, regardless of whether profits are achieved. Owing to their socially beneficial purpose, nonprofit organizations are subject to an entirely different set of laws—notably tax laws. While they are allowed to generate profits, they must use these funds in specific, philanthropic ways in order to maintain their nonprofit status. Marketing efforts focus on activities that promote the organization’s mission. A school, college, or university might use marketing to attract students, improve academic reputation, and solicit donations from alumni. A museum or nonprofit theater company uses marketing to attract visitors, ticket sales, event sponsors, and philanthropic donations. Marketing for nonprofit hospitals usually focuses on attracting patients and strengthening reputation as a high quality health care provider.

Business-to-Consumer and Business-to-Business Marketing

Many boxes filled with bags of healthy chips.

An important distinction in how organizations use marketing is whether their efforts target business-to-consumer (B2C) transactions or business-to-business (B2B) transactions. In business and marketing, the consumer is the individual who actually uses the product. The customer is the individual who buys the product from a business. In some transactions, these are the same person, but in other transactions they are different entities.

Suppose you take a break from studying and walk to a corner store to buy a snack bar that’s made by a local health-food company. From the perspective of the corner store owner, you are both the customer and the consumer in this transaction. However, from the perspective of the health-food company that made the bar, you are only the consumer, because although you consumed the product, you didn’t buy it from them. The health-food company’s customer is the corner store owner who decides whether or not to stock their snack bars in her store.

In marketing, this distinction is important because it helps marketers better understand where to focus their attention. Business-to-business (B2B) marketers sell to other businesses or institutions that consume the product as part of operating the business, or use the product in the assembly of the final product they sell to consumers. Business-to-consumer (B2C) marketers focus their efforts on consumers, the individuals who consume a finished product.

A B2B Emphasis

The tools of marketing are available to both B2B and B2C organizations, but some tactics tend to be more effective than others in each type of marketing. Business-to-business marketers use more personal selling, in which a sales force builds personal relationships with individuals in decision-making roles to facilitate sales within the organizations they target. Professional conferences and trade shows provide opportunities for meeting and networking with a B2B marketer’s target customers. Company Web sites are a primary way for B2B organizations to share information and promote their offerings. Since they usually target a narrow, specialized sliver of the population, B2B marketers have little need for mass advertising. Because B2B sales tend to be higher-priced, larger-ticket items, marketing tactics often include extensive adjustments in factors such as the selling price, product features, terms of delivery, and so forth.

A B2C Emphasis

For B2C marketers, such as consumer goods manufacturers, there is a dual focus. B2C marketers typically invest a lot in generating demand for their products among the general population. Mass marketing tactics designed to reach a large audience nearly always have a B2C focus: think Superbowl ads, Macy’s Thanksgiving Day Parade, and anything hailing the return of McRib at McDonalds. At the same time, B2C marketers face a constant battle getting their products into retail outlets anywhere they don’t sell directly to consumers.

People sitting on a great variety of lounge chairs.

IKEA Store, Beijing

A Dual Emphasis: B2B and B2C

Organizations may conduct both B2B and B2C marketing, targeting different types of customers. The Swedish home-furnishing company IKEA, for example, markets its ready-to-assemble, eco-friendly furniture and furnishings all over the world. IKEA’s B2C marketing targets families, young professionals, and penny-pinching college students. Meanwhile, its B2B marketing focuses on small-business owners and start-up companies.

Whether to have a B2B or a B2C focus depends on whose perceptions you want shape, what behaviors you want to influence, and where the most promising opportunities are for making the impact your organization wants to achieve.

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This courseware was assembled by Christopher VanOosterhout from a variety of resources copyrighted and openly licensed by multiple individuals and organizations.  See our Copyright and Attribution page for additional details.  For details about permission to use please contact me at c@vanosterhout.com with the phrase  Courseware Usage Inquiry.  If you believe that this courseware violates your copyright, please contact me at c@vanoosterhout.com with the phrase Copyright Inquiry in the subject.  Details about the collector of these resources and Licentia LLC can be found at www.vanoosterhout.com

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Unit A.09 – Marketing and Customer Relationships

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What you’ll learn to do: describe the role of marketing in building and managing customer relationships

The marketing concept provides exactly the right mindset for what we ultimately want to achieve: building strong relationships with customers. Next we’ll explore how marketing plays a central role in each stage of building and managing customer relationships.

The specific things you’ll learn in this section include:

  • Define the concept of customer lifetime value
  • Explain why customer relationship building is a central purpose of marketing
  • Explain engagement marketing and how it alters a customer’s relationship with a brand. 

Customer Relationship Management: A Strategic Imperative

We have stated that the central purpose of marketing is to help organizations identify, satisfy, and retain their customers. These three activities lay the groundwork for what has become a strategic imperative in modern marketing: customer relationship management.

To a student of marketing in the digital age, the idea of relationship building between customers and companies may seem obvious and commonplace. It certainly is a natural outgrowth of the marketing concept, which orients entire organizations around understanding and addressing customer needs. But only in recent decades has technology made it possible for companies to capture and utilize information about their customers to such a great extent and in such meaningful ways. The Internet and digital social media have created new platforms for customers and product providers to find and communicate with one another. As a result, there are more tools now than ever before to help companies create, maintain, and manage customer relationships.

Maximizing Customer Lifetime Value

Central to these developments is the concept of customer lifetime value. Customer lifetime value predicts how much profit is associated with a customer during the course of their lifetime relationship with a company.[1] One-time customers usually have a relatively low customer lifetime value, while frequent, loyal, repeat-customers typically have a high customer lifetime value.

How do companies develop strong, ongoing relationships with customers who are likely to have a high customer lifetime value? Through marketing, of course.

Marketing applies a customer-oriented mindset and, through particular marketing activities, tries to make initial contact with customers and move them through various stages of the relationship—all with the goal of increasing lifetime customer value. These activities are summarized below.

TYPICAL MARKETING ACTIVITIES DURING EACH STAGE OF THE CUSTOMER RELATIONSHIP

Stage 1: Meeting and Getting Acquainted

  • Find desirable target customers, including those likely to deliver a high customer lifetime value
  • Understand what these customers want
  • Build awareness and demand for what you offer
  • Capture new business

Stage 2: Providing a Satisfying Experience

  • Measure and improve customer satisfaction
  • Track how customers’ needs and wants evolve
  • Develop customer confidence, trust, and goodwill
  • Demonstrate and communicate competitive advantage
  • Monitor and counter competitive forces

Stage 3: Sustain a Committed Relationship

  • Convert contacts into loyal repeat customers, rather than one-time customers
  • Anticipate and respond to evolving needs
  • Deepen relationships, expand reach of and reliance on what you offer

Another benefit of effective customer relationship management is that it reduces the cost of business and increases profitability. As a rule, winning a new customer’s business takes significantly more time, effort, and marketing resources than it does to renew or expand business with an existing customer.

Customer Relationship As Competitive Advantage

A woman wearing a cocktail dress and heels.

As the global marketplace provides more and more choices for consumers, relationships can become a primary driver of why a customer chooses one company over others (or chooses none at all). When customers feel satisfaction with and affinity for a specific company or product, it simplifies their buying choices.

For example, why might a woman shopping for a cocktail dress choose to go to Nordstrom rather than Macy’s or Dillard’s, or pick from an army of online stores? Possibly because she prefers the selection of dresses at Nordstrom and the store’s atmosphere. It’s much more likely, though, that thanks to Nordstrom’s practices, this shopper has a relationship with an attentive sales associate who has helped her find great outfits and accessories in the past. She also knows about the store’s customer-friendly return policy, which might come in handy if she needs to return something.

A company like Nordstrom delivers such satisfactory experiences that its customers return again and again. A consistently positive customer experience matures into a relationship in which the customer becomes increasingly receptive to the company and its products. Over time, the customer relationship gives Nordstrom a competitive advantage over other traditional department stores and online retailers.

When Customers Become Your Best Marketing Tool

Customer testimonials and recommendations have always been powerful marketing tools. They often work to persuade new customers to give something a try. In today’s digital media landscape there is unprecedented opportunity for companies to engage customers as credible advocates. When organizations invest in building strong customer relationships, these activities become particularly fruitful.

For example, service providers like restauranteurs, physical therapists, and dentists frequently ask regular patrons and patients to write reviews about their real-life experiences on popular recommendation sites like Yelp and Google+. Product providers do the same on sites like Amazon and CNET.com. Although companies risk getting a bad review, they usually gain more by harnessing the credible voices and authentic experiences of customers they have served. In this process they also gain invaluable feedback about what’s working or not working for their customers. Using this input, they can retool their products or approach to better match what customers want and improve business over time.

Screenshot of Yelp page showing reviews for Por Que No?, a taqueria in Portland, Oregon. The website shows the restaurant's location, their average rating (4 stars over 1145 reviews), their price range (two on a scale of five), a series of customer photos of food taken at the restaurant, the restaurant's operating hours, a link to their full menu, and several highlights of customer reviews. The page also provides several buttons for a user to take the following actions: write a review, add a photo, share the webpage, and save the webpage.

Additionally, smart marketers know that when people take a public stance on a product or issue, they tend to become more committed to that position. Thus, customer relationship management can become a virtuous cycle. As customers have more exposure and positive interaction with a company and its products, they want to become more deeply engaged, and they are more likely to become vocal evangelists who share their opinions publicly. Customers become an active part of a marketing engine that generates new business and retains loyal customers for repeat business and increased customer lifetime value.

Engagement Marketing: Making Customers Part of the Brand

A further step beyond customer evangelism is engagement marketing, the practice of reaching out to customers and encouraging them to become full participants in marketing activity and the growth of a brand. Sometimes called “live marketing,” this approach is becoming more common as media and technology provide more interactive, visible, and sharable ways for consumers to connect with brands and companies.

A mind shift is under way, away from one-way, company-to-consumer communication toward marketing activities that invite consumers to shape and become part of the value a brand provides. In an increasingly crowded marketplace, many organizations find that they can distinguish themselves and their products by creating “tribes” of fans who not only advocate for the brand, but also actively make it part of their daily activities and lifestyle. Customers might even become involved in developing marketing programs, producing content that can be used for marketing purposes, and cultivating one-on-one relationships with a company or brand.

Creative marketers have invented many ways to foster engagement marketing. The self-promotional mindset and proliferating tools of social media are a natural fit for making customers part of a brand. People “check in” at their favorite restaurants and post photos to communicate with friends when they are having fun. Bloggers routinely name-check favorite products, review them, and carry on conversations about them in their posts.

The phenomenon of engagement marketing helps explain the meteoric rise in popularity of GoPro cameras. When company leaders realized that their customers had an unquenchable appetite for sharing videos of amazing outdoor adventures (shot with GoPro cameras, of course), they built the company brand and marketing strategy around engaging customers in viral sharing. The following video, produced by YouTube, explains this engagement marketing success story.

  1. “Customer Lifetime Value.” Cambridge Dictionary. Accessed September 10, 2019. http://dictionary.cambridge.org/us/dictionary/english/customer-lifetime-value ↵

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This courseware was assembled by Christopher VanOosterhout from a variety of resources copyrighted and openly licensed by multiple individuals and organizations.  See our Copyright and Attribution page for additional details.  For details about permission to use please contact me at c@vanosterhout.com with the phrase  Courseware Usage Inquiry.  If you believe that this courseware violates your copyright, please contact me at c@vanoosterhout.com with the phrase Copyright Inquiry in the subject.  Details about the collector of these resources and Licentia LLC can be found at www.vanoosterhout.com

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Unit A.07 – The Marketing Concept

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The Marketing Concept

What you’ll learn to do: demonstrate a clear understanding of the marketing concept

You’re probably very skilled at recognizing the signs of marketing. We’ve all had the experience of being on the receiving or customer end of marketing efforts—whether through advertising or sales tactics. In this section you’ll get to understand the marketing orientation, or marketing concept, from the standpoint of setting priorities and doing business. You’ll learn that the marketing orientation is a mindset grounded in one thing: knowing and satisfying the customer. Not all businesses follow a marketing orientation, however—some are focused on other priorities, such as product and production. In this section you’ll see what sets the marketing concept apart.

The specific things you’ll learn in this section include:

  • Define the production concept, the product concept, the selling concept, and the marketing concept

Company Orientation and the Marketing Concept

In every transaction between a buyer and seller, there is an underlying dynamic that governs the parties’ perception of the exchange. Sometimes the exchange is very one-sided, with one party exercising most of the power and the other only in a position to react. In some cases, deception and lying permeate the exchange. Other exchanges are more equitable, with each party receiving about the same value as the other. The customer’s need is satisfied, and the business makes a reasonable profit.

With the emergence of the Internet and e-commerce, the nature of the exchange has changed dramatically for many businesses and customers. Today, people have access to far more and far better information than they did previously. They also have many more choices. To remain competitive, businesses must match or exceed the practices of competitors that are quick, smart, and open twenty-four hours a day.

A central aim of marketing is to help organizations understand and respond to customer needs and expectations, while keeping the customer informed about how the organization can address those needs. When you employ marketing correctly, you know that this process is easier if you keep in constant contact with the customer. It doesn’t necessarily mean that you must write and call regularly (although it could), but that you must take steps to know a great deal about the characteristics, values, interests, and behaviors of its customers. It means that you monitor these factors and how they change over time. Although this process is not an exact science, there is evidence that marketers who do this well tend to succeed.

The Marketing Concept

An organization adopts the marketing concept when it takes steps to know as much about the consumer as possible, coupled with a decision to base marketing, product, and even strategy decisions on this information. These organizations start with the customers’ needs and work backward from there to create value, rather than starting with some other factor like production capacity or an innovative invention. They operate on the assumption that success depends on doing better than competitors at understanding, creating, delivering, and communicating value to their target customers.

The Product Concept

Both historically and currently, many businesses do not follow the marketing concept. For many years, companies such as Texas Instruments and Otis Elevator have followed a product orientation, in which the primary organizational focus is technology and innovation. All parts of these organizations invest heavily in building and showcasing impressive features and product advances, which are the areas in which these companies prefer to compete. This approach is also known as the product concept. Rather than focusing on a deep understanding of customer needs, these companies assume that a technically superior or less expensive product will sell itself. While this approach can be very profitable, there is a high risk of losing touch with what customers actually want. This leaves product-oriented companies vulnerable to more customer-oriented competitors.

The Sales Concept

Other companies follow a sales orientation. These businesses emphasize the sales process and try to make it as effective as possible. While companies in any industry may adopt the sales concept, multilevel-marketing companies such as Herbalife and Amway generally fall into this category. Many business-to-business companies with dedicated sales teams also fit this profile. These organizations assume that a good salesperson with the right tools and incentives is capable of selling almost anything. Sales and marketing techniques include aggressive sales methods, promotions, and other activities that support the sale. Often, this focus on the selling process may ignore the customer or view the customer as someone to be manipulated. These companies sell what they make, which isn’t necessarily what customers want.

The Production Concept

An old photograph of people building hubcaps on an assembly line.

Ford assembly line, 1913, Highland Park, Michigan

The production concept is followed by organizations that are striving for low-production costs, highly efficient processes, and mass distribution (which enables them to deliver low-cost goods at the best price). This approach came into popularity during the Industrial Revolution of the late 1800s, when businesses were beginning to exploit opportunities associated with automation and mass production. Production-oriented companies assume that customers care most about low-cost products being readily available and less about specific product features. Henry Ford’s success with the groundbreaking assembly-line–built Model T is a classic example of the production concept in action. Today this approach is still widely successful in developing countries seeking economic gains in the manufacturing sector.

Seeing the Whole Picture

Savvy businesses acknowledge the importance of product features, production, and sales, but they also realize that the broader focus of the three-step process described below will help them be most effective:

  1. Continuously collect information about customers’ needs and competitors’ capabilities;
  2. Share the information across departments; and
  3. Use the information to create a competitive advantage by increasing value for customers.

This is a true marketing orientation.

 

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This courseware was assembled by Christopher VanOosterhout from a variety of resources copyrighted and openly licensed by multiple individuals and organizations.  See our Copyright and Attribution page for additional details.  For details about permission to use please contact me at c@vanosterhout.com with the phrase  Courseware Usage Inquiry.  If you believe that this courseware violates your copyright, please contact me at c@vanoosterhout.com with the phrase Copyright Inquiry in the subject.  Details about the collector of these resources and Licentia LLC can be found at www.vanoosterhout.com

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Unit A.05 – Marketing in Action

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What you’ll learn to do: identify evidence of marketing in everyday life

In this section, you’ll get a chance to explore the concept of marketing further and see how it’s at work in the world around you.  It may surprise you to discover how much the term encompasses . . .

The specific things you’ll learn in this section include:

  • Recognize marketing activities in daily life
  • Explain the differences between marketing, advertising, branding, and sales

Marketing is all around you. Enter a store, walk down the street, visit the Internet, or glance through your closet. Whether you realize it or not, some aspect of marketing is likely at work in each of these activities.

In the following scenarios, consider the lengths to which marketers go to identify, satisfy, and retain you as a customer. See if you can draw examples from your own experience that demonstrate marketing in action.

Scenario #1: Life on the Streets

A storefront for Urban Outfitters. Near the front of the store are mannequins wearing the store's clothing. The inside of the store has industrial spotlights, a cement floor, aisles of clothing, and more mannequins.You’re walking down an urban street and, on impulse, you head into a trendy-looking clothing store. Right away, you pick out the obvious signs of marketing: shop signs, posters, window displays, sale notices, product displays, and brand names. Then come the less obvious, “environmental” things: the interior design, colors, aromas, the background music, announcer messages, the pricing structure, the way store clerks approach you–or leave you alone. All these details are part of a coordinated marketing strategy aimed at creating an ideal environment to separate you from your money. You may or may not be aware of how this is happening, but rest assured it is at work.

Scenario #2: Virtual Reality

Suppose you’re taking a short break from studying and doing a little online browsing—there’s news to read and Facebook to check. And you need to find a birthday present for your aunt . . . What kinds of marketing are ready to intrude?

What jumps out at you immediately are the ads on the Web sites you visit: Facebook, Instagram, email, even your Google results. Annoyingly, you have trouble finding the X to close a pop-up banner ad that has taken over your screen. But that’s not all.

Before you’re allowed to navigate to an article you want to read, you’re invited to take a “very short” user feedback survey. Back to your aunt: you head to Amazon.com to read a couple of customer reviews of the book you have in mind for her. Amazon recommends several other books, and one looks ideal. You compare prices at other booksellers, but Amazon beats them, so you place your order. In the end, you find exactly what you want, and it will be shipped that day. Thank you, marketing!

Screenshot of a product page on Amazon.com for a book called “Mini Farming: Self-Sufficiency on ¼ Acre.” On the far left of the page is an image of the book cover. The middle of the webpage shows the name of the book, the author, overall rating and the number of reviews for the book, two buying options that include Kindle and paperback, and a short description of the book. There are also promotions in the center of the webpage that read “Get it Before Christmas: Select delivery options are checkout” and “Take an Extra 25% off Any Book* Restrictions Apply, See Details.” On the far right of the page there is a form displaying the price, a promotion for free shipping on orders over $35, an option to select free two-day delivery, and a button labeled “Add to Cart.”

Scenario #3: In My Room

Now imagine you’re back at home, hanging out in your room. How is “marketing” invading your personal space?

A room full of pop-culture-themed posters, books, and movies.

In the privacy of your own home, the presence of marketing might seem less obvious, but it’s definitely there. Pouring yourself a bowl of cereal, you see the back of the cereal box is inviting you to enter a sweepstakes contest. When you switch on the TV, a few ads slip by, even though you’re watching shows recorded on your DVR. Between programs, logos and messages from broadcasting networks tell you about other shows you don’t want to miss. As you’re becoming more attuned to the presence of advertising, you start to notice how all the characters in your favorite sitcom are drinking Pepsi products. Is that just a coincidence? Probably not.

You look at the clock and realize it’s time to change for work. Opening your closet, you notice the logos on your favorite shirts. Not only do you love how those clothes fit, but you recognize an emotional connection: those clothes–and brands–make you feel confident and attractive.  How’s that for invasive marketing?

Marketing Is Everywhere

The purpose of this course is not to start making you suspicious or even paranoid about the influence of marketing in your everyday life.

In fact, marketing can play an important and beneficial role by connecting you to information, people, and things. It can make you aware of things you care about but wouldn’t otherwise encounter. When marketing is working well, the new information it brings to you also aligns with what you’re already interested in doing or exploring.

At times, marketing might feel more like an assault than an assist. Visual images on posters or billboards scream for your attention. Sponsor announcements persistently remind you which organizations are making your entertainments possible. Sleek product designs beckon you to try on clothing or try out gadgets. Sales promotions create a sense of urgency to spend now or lose out.

The right balance between “helpful” and “annoying” varies, depending on who you are and what type of relationship you have with the entity doing the marketing. When the balance starts to get off-kilter, it’s a clue that something isn’t working as well as it should in the marketing strategy and execution.

Marketing Activities

Marketing encompasses all the activities described above. It covers an entire spectrum of techniques focused on identifying, satisfying, and retaining customers. For people new to the concept of marketing, it can be easy to confuse marketing with some of the powerful and visible tools that marketers use.

Marketing vs. Advertising

Advertising uses paid notices in different forms of media to draw public attention to a company, product, or message, usually for the purpose of selling products or services.[1] While advertising is a common and useful tool for marketing, it’s just one of many tactics marketers may use to achieve their goals.

Marketing vs. Branding

Branding is the process of “creating a unique name and image for a product in the consumer’s mind.” [2] Brand is a powerful tool for shaping perceptions about a company or product in order to attract and retain loyal customers. Marketing processes and activities build brands, and branding is an important strategic consideration in any marketing effort. At the same time, marketing refers to a broader scope of activity than just branding.

Marketing vs. Sales

Sales refers to the process of actually selling products or services, leading up to the point where the exchange of value takes place. Effective marketing aligns well with the sales process and leads to increased sales. While marketing and sales are intertwined, the scope of marketing is generally considered broader than just supporting sales. Marketing helps identify prospective customers and prepare them to enter the sales process as as informed, receptive, qualified sales leads.

This course will explore all these marketing activities in much more detail to give you a clear picture of how these tools can be employed to support an organization’s broader marketing goals.

  1. “Advertising.” The Free Dictionary. Accessed September 10, 2019. http://www.thefreedictionary.com/advertising ↵
  2. “Branding.” Business Dictionary. Accessed September 10, 2019. http://www.businessdictionary.com/definition/branding.html) ↵

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This courseware was assembled by Christopher VanOosterhout from a variety of resources copyrighted and openly licensed by multiple individuals and organizations.  See our Copyright and Attribution page for additional details.  For details about permission to use please contact me at c@vanosterhout.com with the phrase  Courseware Usage Inquiry.  If you believe that this courseware violates your copyright, please contact me at c@vanoosterhout.com with the phrase Copyright Inquiry in the subject.  Details about the collector of these resources and Licentia LLC can be found at www.vanoosterhout.com

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Unit A.03 – Marketing Defined

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What you’ll learn to do: define marketing

Marketing is more than just banner ads, television commercials, and people standing on roadsides dressed up like the Statue of Liberty during tax time. It’s a complex set of activities and strategies that influences where we live, what we wear, how we conduct business, and how we spend our time and money. Marketing activities are conducted in an environment that changes quickly both in terms of customer demand and the methods by which consumers obtain information and make purchases. However, before you learn about these complex variables, you will need a good working definition of marketing. The following video has one (actually two).

Let’s move ahead so that you can gain a richer definition and understanding of marketing.

The specific things you’ll learn in this section include:

  • Explain how the marketplace addresses customer wants and needs by creating opportunities for the exchange of products, services, and experiences
  • Describe the role marketing plays in facilitating the exchange of value

Panoramic color photo of busy Hong Kong intersection (not unlike Time Square in NYC) showing brightly lit digital ads and hundreds of people sitting in the street and on the sidewalks.

What Is Marketing?

Marketing is a set of activities related to creating, communicating, delivering, and exchanging offerings that have value for others. In business, the function of marketing is to bring value to customers, whom the business seeks to identify, satisfy, and retain. This course will emphasize the role of marketing in business, but many of the concepts will apply to non-profit organizations, advocacy campaigns, and other activities aimed at influencing perceptions and behavior.

The Art of the Exchange

In marketing, the act of obtaining a desired object from someone by offering something of value in return is called the exchange process. The exchange involves:

  • the customer (or buyer): a person or organization with a want or need who is willing to give money or some other personal resource to address this need
  • the product: a physical good, a service, experience or idea designed to fill the customer’s want or need
  • the provider (or seller): the company or organization offering a need-satisfying thing, which may be a product, service, experience or idea
  • the transaction: the terms around which both parties agree to trade value-for-value (most often, money for product)

Individuals on both sides try to maximize rewards and minimize costs in their transactions, in order to gain the most profitable outcomes. Ideally, everyone achieves a satisfactory level of reward.

Marketing creates the goods and services that the company offers at a price to its customers. The entire bundle consists of a tangible good, an intangible service, and the price is the company’s offering. When you compare one car to another, for example, you can evaluate each of these dimensions—the tangible, the intangible, and the price—separately. However, you can’t buy one manufacturer’s car, another manufacturer’s service, and a third manufacturer’s price when you actually make a choice. Together, the three make up a single firm’s offer.

Marketing is also responsible for the entire environment in which this exchange of value takes place. Marketing identifies customers, their needs, and how much value they place on getting those needs addressed. Marketing informs the design of the product to ensure it meets customer needs and provides value proportional to what it costs. Marketing is responsible for communicating with customers about products, explaining who is offering them and why they are desirable. Marketing is also responsible for listening to customers and communicating back to the provider about how well they are satisfying customer needs and opportunities for improvement. Marketing shapes the location and terms of the transaction, as well as the experience customers have after the product is delivered.

Marketing Creates Value for Customers

According to the influential economist and Harvard Business School professor Theodore Levitt, the purpose of all business is to “find and keep customers.” Marketing is instrumental to helping businesses achieve this purpose. It’s a way of thinking about business, rather than just a collection of techniques. It’s much more than just advertising and selling stuff and collecting money. Marketing generates value by creating the connections between people and products, customers and companies.

How does this happen? Boiled down to its essence, the role of marketing is to identify, satisfy, and retain customers.

Before you can create anything of value, first you must identify a want or need that you can address, as well as the prospective customers who possess this want or need.

Next, you work to satisfy these customers by delivering a product or service that addresses these needs at the time customers want it. Key to customer satisfaction is making sure everyone feels they benefit from the exchange. Your customer is happy with the value they get for what they pay. You are happy with the payment you receive in exchange for what you provide.

Effective marketing doesn’t stop there. It also needs to retain customers by creating new opportunities to win customer loyalty and business.

Title: The Role of Marketing. Three main items on list: Identify Customers, Satisfy Customers and Retain Customers. Identifying customers includes understanding customer wants and needs, and identifying whom to target and how to reach them. Satisfying customers includes making the right product or service available to the right people at the right time and making everybody feel better off from the exchange. Retaining customers includes giving customers a reason to keep coming back and finding new opportunities to win their business. As you will learn in this course, marketing encompasses a variety of activities focused on accomplishing these objectives. How companies approach and conduct day-to-day marketing activities varies widely. For many large, highly visible companies, such as Disney-ABC, Proctor & Gamble, Sony, and Toyota, marketing represents a major expenditure. Such companies rely on effective marketing for business success, and this dependence is reflected in their organizational strategies, budget, and operations. Conversely, for other organizations, particularly those in highly regulated or less competitive industries such as utilities, social services, medical care, or businesses providing one-of-a-kind products, marketing may be much less visible. It could even be as simple as a Web site or an informational brochure.

There is no one model that guarantees marketing success. Effective marketing may be very expensive, or it may cost next to nothing. What marketing must do in all cases is to help the organization identify, satisfy, and retain customers. Regardless of size or complexity, a marketing program is worth the costs only if it facilitates the organization’s ability to reach its goals.

COPYRIGHT

This courseware was assembled by Christopher VanOosterhout from a variety of resources copyrighted and openly licensed by multiple individuals and organizations.  See our Copyright and Attribution page for additional details.  For details about permission to use please contact me at c@vanosterhout.com with the phrase  Courseware Usage Inquiry.  If you believe that this courseware violates your copyright, please contact me at c@vanoosterhout.com with the phrase Copyright Inquiry in the subject.  Details about the collector of these resources and Licentia LLC can be found at www.vanoosterhout.com

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  • What Is Marketing?, Marketing Creates Value for Customers. Authored by: Lumen Learning. License: CC BY: Attribution
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Unit A.01 – Why It Matters: What Is Marketing?

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Why explain what marketing is and how it’s used?

When you hear the term “marketing,” what comes to mind?

Based on what you know about marketing right now, what one word would you use to describe it? Take a moment to write it down. We’ll come back to it shortly.

Marketing is a tool used by companies, organizations, and people to shape our perceptions and persuade us to change our behavior. The most effective marketing uses a well-designed strategy and a variety of techniques to alter how people think about and interact with the product or service in question. Less-effective marketing causes people to turn off, tune out, or not even notice.

Why should you care about marketing? Marketing is an ever-present force in modern society, and it can work amazingly well to influence what we do and why we do it. Consider these points:

Marketing sells products.

Results of an Amazon "recommendation." The text reads, "Recommendations for You," and shows five book covers: Little Lost Unicorn, Unicorn Wings, Glitter Tattoos: Unicorns, 50 State Commemorative Quarters, Unicorns Coloring Book.

Source: Amazon recommendation engine

Marketing changes how you think about things.

Marketing creates memorable experiences.

Marketing alters history.

Marketing can use a variety of elements to shape perceptions and behavior: words, images, design, experiences, emotions, stories, relationships, humor, sex appeal, etc. And it can use a wide variety of tactics, from advertising and events to social media and search engine optimization. Often the purpose is to sell products, but as you can see from the examples above, the goal of any specific marketing effort may have little to do with money and much more to do with what you think and do.

By the time you finish this course, you will have a broader understanding of marketing beyond TV commercials and billboards and those annoying pop-up ads on the websites you visit. You’ll learn how to see marketing for what it is. You’ll learn how to be a smart consumer and a smart user of marketing techniques when the need for them arises in your life.

Go back to that word you jotted down to describe marketing at the top of the page. Now that you’ve had a little more exposure to the concept, what word comes to mind to describe “marketing”? Is it the same word you chose earlier, or are you starting to think differently?

Stay tuned for more!

Learning Outcomes

  • Define marketing
  • Identify evidence of marketing in everyday life
  • Demonstrate a clear understanding of the marketing concept
  • Describe the role of marketing in building and managing customer relationships
  • Describe how different types of organizations, such as non-profits, consumer product (B2C) firms and business-to-business (B2B) organizations, use marketing
  • Explain how marketing creates value for the consumer, the company, and society

COPYRIGHT

This courseware was assembled by Christopher VanOosterhout from a variety of resources copyrighted and openly licensed by multiple individuals and organizations.  See our Copyright and Attribution page for additional details.  For details about permission to use please contact me at c@vanosterhout.com with the phrase  Courseware Usage Inquiry.  If you believe that this courseware violates your copyright, please contact me at c@vanoosterhout.com with the phrase Copyright Inquiry in the subject.  Details about the collector of these resources and Licentia LLC can be found at www.vanoosterhout.com

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