One of the most important functional areas in business is marketing, as it deals with customers more than any other function. Companies such as Google, Swiss Bank, Deutsche Bank, Gucci, Airbus, Apple, McDonalds, and Toyota have a passion for understanding their customers and satisfying their needs in "well-defined target markets" (Kotler & Armstrong, 2014, p. 4). Basically, marketing is a managerial and social function through which companies and consumers create and exchange value.
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" (AMA, 2013, para. 1).
Kotler and Armstrong (2014) 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" (p. 5).
On the other hand, Kotler and Keller (2015) define marketing management as the science and art of selecting target markets, and the practice of acquiring, maintaining, and growing customers through the creation, delivery, and communication of superior customer value—all while maintaining profitability.
The Marketing Process
Selecting a product or a service to develop is a demanding process that requires cross-functional teams to research, select, develop, and launch new products. In addition, the company needs to evaluate the attractiveness of a new business. Sometimes the company may seek external help to develop a new product, as it may lack the necessary technical expertise, market knowledge, or resources, or may simply want to spread the financial risk involved (i.e., open innovation, or innovation using strategic alliances.)
The marketing process involves five steps (Kotler & Armstrong, 2014, p. 5):
- understanding the marketplace and consumer needs and wants
- designing a consumer-driven marketing strategy
- constructing an integrated marketing program that delivers superior value
- building profitable relationships and creating consumer satisfaction
- capturing value from customers to create profits and customer equity
To effectively engage in the marketing process, a business needs to understand the following elements:
- how to acquire market knowledge (primary and secondary research)
- how to turn that knowledge into products that are needed and wanted by a group of consumers
- how to create market offerings that not only create value for the consumer but profitability for the organization
- how to accomplish these tasks while being socially responsible and engaging in ethical behavior
Furthermore, there are five major customer value themes (Kotler & Armstrong, 2014, p. XVI):
- creating value for the consumer in order to capture value from them in return
- creating and managing strong local and global value-creating brands
- capitalizing on new marketing technologies, such social media (i.e., digital marketing)
- assessing and managing return on marketing investment
- sustainable global marketing
AMA. (2013). Marketing definition. Retrieved from www.ama.org
Kotler, P. & Armstrong, G. (2014). Principles of marketing (15th ed.). Upper Saddle River, NJ: Pearson.
Kotler, P., & Keller, K. (2015). Marketing management (15th ed.). Upper Saddle River, NJ: Pearson.