Marketing is a word often thrown around as an umbrella term for a wide variety of functions within organizations, ranging from the running of social media accounts to inside sales, and anything in between.
Marketing and Value Proposition
The truth of the matter is that a successful marketing strategy is deeply rooted in a firm’s ability to build positive relationships with consumers by consistently providing a high-quality product, exemplary service, and an outstanding customer experience. This ability is often referred to in the business world as the firms’ value proposition. In other words, what unique offerings does the company propose to the consumer to entice them to want to buy their products or services over the competition’s?
If consumers are satisfied by a firms’ value proposition, they will organically create a certain level of brand awareness among their peers, and ultimately inspire a certain extent of brand loyalty. It’s easy to think of this as the reason why certain consumers instinctively refer to tissue paper as Kleenex©. That’s brand awareness. And if those consumers explicitly only purchase Kleenex© tissue papers, they are said to possess a high amount of brand loyalty.
Before diving into the complexities of the wide and varying scope of marketing as a function within organizations, it is important to fully grasp the ever-critical Marketing Mix.
The Marketing Mix is essentially a firm’s attempt to optimize on its offerings of Products through effective Prices, Places, and Promotions. The Marketing Mix is utilized by firms in a wide variety of business channels, as companies have begun to realize that the best revenue and profit results are reached when there is a cohesive and effective marketing strategy in place.
First, the firm must identify, produce, and market (sell) the right products and services to fulfill their target markets’ wants and needs. This decision-making process takes place during the Product function of the Marketing Mix. Then, the firm needs to optimize the price of said products and services to coincide not only with what the target consumer is willing to pay, but also with what is profitable and sustainable for the business in the long run.
Finding the proper balance between the elasticity of demand (how much the public is willing to pay) and profitability is a critical part of the Price function of the Mix. Next is typically when the firm begins severely scrutinizing and pinpointing possible strategies for the optimal physical placement of products, as well as the optimal geographical locations where the product needs to be sold (i.e. which retailers should carry the product).
In the Place phase of the Marketing Mix, firms begin to pay much more attention to the demographics of their buyers versus their target demographics and how well both match. This is usually to strategize and try to come up with solutions on how to fill whatever gap might exist between actual customers and potential ones. It is important to note that Price and Place are extremely co-dependent functions of the Marketing Mix. In other words, a product can have the best shelf space available, at the best and biggest retailers in the world, and still have abysmal sales if it is being sold at the incorrect price point. This is because certain consumers are willing to pay more (or less) for different features and conveniences built into a product or service.
Customers still want to know they are being treated fairly and wish to feel as if they are getting decent deals, especially when they first take the risk of trying or testing a new product or service. A big aspect of attracting customers initially is delivering them a large amount of value through “can’t miss” Promotions. It is critical to know which types of promotions will attract which types of customers, and if that customer matches your target demographic. For example, mailed paper coupons will reach and entice stay-at-home parents and senior citizens. However, digital coupons, online referral codes, and free shipping deals will attract younger consumers, such as millennials, who are more familiarized with the e-commerce (aka online shopping) experience.
Marketing to Different Channels
The function of marketing at its core is to make a business’ product or service more relevant and desirable, as well as ultimately transform that product or service from a desire to a necessity for the targeted market. The end customer can vary widely in identity, goals, and desires.
Business to Consumer
For example, business-to-consumer marketing focuses mostly on conveying the value proposition of the brand’s product or service directly to the end consumer. Business to consumer marketing is by far the most popular of the different types of marketing channels, simply because of the sheer amount of businesses that provide a product or service directly to the consumer. Think of this as the neighborhood pizza shop. They sell pizzas directly to customers, not through a wholesaler or another retailer.
Business to Business
Business to business marketing is different, however, in that it is businesses selling their products or services directly to other businesses. An easy example of business to business marketing is a payroll company providing a small business with payroll services and human resources tools. Furthermore, industrial marketing tactics usually involve either wholesalers or distributors, and typically entails the selling of raw parts and materials to be used as inputs for other final products.
Non-profit to Consumer
Nonprofit marketing is extremely dependent on brand and issue awareness, which are all deeply rooted in the education of the public. An extremely effective example of nonprofit marketing campaign in recent years has been the “Truth about Smoking” campaign, which has resulted in a sharp decrease of the smoking rate among teens from 23% in 2000 to 6% today. Most nonprofit marketing is mildly aligned with or supported by the government, as this type of marketing tends to tackle public safety concerns and alleviate the financial burden of epidemics on the already strained federal budget. This is the reason why it is said that government marketing can be quite effective in raising awareness regarding many issues, as well as civil epidemics.
Marketing and the Internet
Most companies today are savvy enough to realize that some of the best outcomes come from utilizing and heavily endorsing electronic marketing efforts, as more and more of the world gains stable access to the world-wide web. Over the last ten years, the importance of marketing has grown within organizational structures due to the immense amount of globalization occurring. Plus, the more countries that join the industrialized world, the more opportunities that will be available for their domestic businesses to grow their sales internationally. Therefore, a great brand presence online can be extremely beneficial in courting customers from all over the world. Businesses are no longer limited to their physical locations, or even posting advertisements on the local newspaper in the hopes of receiving the necessary foot traffic to keep their doors open. They now have the opportunity and ability to tap and capitalize on a much wider market of consumers, all thanks to the many ways in which firms can market their products and services online. Additionally, it has become much more effective for businesses to utilize the internet to market their products and services since many of the tools they sell their products with are free, such as Facebook, Twitter, Instagram, and Snapchat. This lesson is part of the PersonalFinanceLab curriculum library. Schools with a PersonalFinanceLab.com site license can get this lesson, plus our full library of 300 others, along with our budgeting game, stock game, and automatically-graded assessments for their classroom - complete with LMS integration and rostering support!
This lesson is part of the PersonalFinanceLab curriculum library. Schools with a PersonalFinanceLab.com site license can get this lesson, plus our full library of 300 others, along with our budgeting game, stock game, and automatically-graded assessments for their classroom - complete with LMS integration and rostering support!Learn More