In this introductory video lesson on marketing, you'll learn what marketing is, how it's used to reach consumers and why it's important to businesses. You'll also see how exchange is related to marketing.
What is Marketing?
Marketing to children has more than doubled since 1992
How would you explain marketing? The first few words that usually pop into a person's head are 'marketing equals sales!' Marketing is NOT just personal selling or even just advertising. Most people define marketing in a very limited way. Marketing includes activities such as public relations, sales promotion, advertising, social media, pricing, distribution and many other functions.
Companies have increased their marketing budget's dramatically. For example, it is estimated that companies spend over 15 billion dollars annually on marketing to JUST KIDS. This is an increase of over 2.5 times more than they were spending in 1992. The cumulative function of marketing is to communicate, deliver and create value to the consumer. In addition, companies must take into consideration their employees, stakeholders and society. The most successful companies around engage in very consumer-oriented marketing. They spend enormous amounts of time, money and resources examining the everyday lives of their customers and create products to fill a need. Examples of companies that are known for creative, leading-edge marketing are Disney, Pepsi, Apple and Procter & Gamble.
The Four P's
Marketing is made up of four elements: product, place, promotion and price. The elements must be used in a cohesive plan to effectively target the consumer. A product can be either a physical product or service. Place is where the product is purchased. Price is the amount a consumer pays for the product and promotion consists of the communication tools used to effectively get the company's message out.
Official Definition of Marketing
The official definition of marketing is it is a philosophy whose main focus is providing customer satisfaction. Marketing is 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. Also included in the definition are all of the activities that help businesses reach their target market effectively.
The ultimate outcome for marketing is when a successful exchange occurs. For example, today you desire a fast food lunch. As a consumer, you must give up something to receive something that you would rather have. Most consumers will relinquish money to receive a product or service. In order for the exchange to qualify as successful, there are some basic rules that must be met:
- The exchange is successful if there are at least two parties.
- Both parties must be also be exchanging something of value to each other.
- An exchange will be successful if both parties communicate clearly their intentions.
- Finally, the parties should accept the offer and want to engage in a deal with each other.
In our example, the fast food restaurant wants your business and will take your money. You freely pay for the food because you are very hungry.
An exchange is not always successful. You might really want to buy a sports car, but one of the exchange steps might not occur. For example, you might not have the money to accept the salesperson's offer.
Marketing is 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. In the end, marketing's central focus is the end user of a business' product or service.
Marketing's four elements of product, place, price and promotion are the core of a company's marketing plan. These elements must all be focused on the final consumer. Companies want to provide a long-term, supportive relationship and bring value to the consumer. Marketers have to understand the importance of focusing on the customer.
The ultimate goal of a marketer is to have an exchange successfully occur. There must be at least two parties, and each party must have something of value to offer the other. The parties must be capable of delivering value and be able to accept the offer. Finally, each party must want to deal with the other party.
The most successful companies conduct plenty of marketing research to determine what needs or problems consumers are facing in their lives. The smartest companies will create a product to solve a consumer need and provide value.
After you've finished this lesson, you should be able to:
- Explain what marketing is
- Identify the four p's of marketing
- Discuss the basic rules that must be met for an exchange to be successful