Introduction To Marketing

INTRODUCTION TO MARKETING

THE MEANING OF MARKETING

Most people believe that marketing simply means the buying and selling of goods and services. Although ‘buying and selling’ fulfills the exchange function of marketing, the subject is broader than this narrow view. In order to know the real meaning of marketing, let us examine the definitions of the subject by two leading world professional marketing bodies:

1.Chartered Institute of Marketing (CIM) United Kingdom

“Marketing is the management process which identifies, anticipates, and supplies the customer requirements efficiently and profitably.”

The key words in this definition are: identify, anticipate, and supply. To identify means to find out what customers require, to anticipate means to know in advance what they will require, and supply means to deliver the customers’ requirements at the right place and time. However, marketers are not Father Christmas’ and so customer requirements have to be satisfied efficiently in such a way that they can make appropriate profit.

2.America Marketing Association (AMA)

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings (goods and services) that have value for customers, clients, partners, and society at large.”

In this definition the key words are: creating, communicating, delivering, and exchanging (goods and services). To create means to make something to exist, to communicate means to inform and let people know you and your products, to deliver means to supply goods and services to customers at the right place and time, and to exchange means to give and get back value. Apart from customers however, marketing activities should benefit clients, partners, and society at large.

The above definitions and brief explanation reveal that the purpose of marketing is to satisfy customers by identifying their needs and wants and finding out which of them the organization can profitably serve, and developing goods and services in the most efficient manner capable of converting prospects to customers through exchange.

The whole essence of marketing therefore is to satisfy customers. When customers are satisfied, they keep coming back for repeat patronage. Any business that does not have enough customers to buy its products (goods and services) will not survive.

1.2    MARKETING TERMS

There are basic terms in marketing, some of which have been mentioned in section 1.1 above, that are necessary for the full understanding of the subject. The terms are: Need, Want, Demand, Product, Value, Satisfaction, Exchange, Transaction, Markets, and Prospects.

Need

A need is something that is necessary for organisms to survive. For example, people require food, clothing, and shelter. These needs according to Kotler/Armstrong (2001) are not created by society or by marketers; they are natural. The individual does not have a choice concerning these needs. He or she must have them in order to survive.

Want

A want is something you would like to have. Here, the individual have a choice. For example a person may need food but may want pounded yam or rice, and not beans or plantain. Wants are sometimes cultural in nature in that they vary from society to society. Another tribe may reject the kind of food eaten by a particular tribe.

Demand

Demand is a want backed by purchasing power. It is a want for specific product, service or idea that is backed by the ability and willingness to buy them. A want becomes demand when supported by purchasing power. Many people want Mercedes Benz cars, only a few are able and willing to buy and pay for one. Companies must therefore measure not only how many people want their products, but also more importantly, how many would actually be willing and able to buy and pay for them.

Product

A product is anything that is offered for sale. It could be a physical good, an idea, object or service created as a result of a process and serves a need or satisfies a want. It has a combination of tangible and intangible attributes (benefits, features, functions, uses) that a seller offers a buyer for purchase. For example a seller of toothbrush not only offers the physical product but also the idea that the consumers will be improving the health of their teeth.

Value

This is the consumer’s estimate of the product’s overall capacity to satisfy his or her needs. It is the satisfaction of requirements at the lowest possible cost of acquisition, ownership and use.

Costs are correctly measured by the price paid for goods and services. A product does not have value if it cannot satisfy customer requirements.

Satisfaction

This is the extent to which a product’s performance matches a buyer’s expectations. If the product’s performance falls below expectations, the buyer is dissatisfied. If performance matches or exceeds expectations, the buyer is satisfied.

Exchange

This is the process by which two or more parties give something of value to one another to satisfy their respective needs and/or wants. As such, exchange is both the objective and common denominator of all marketing activities.

Transaction

A transaction is an agreement between two parties (buyer and seller) to exchange a good or service for payment. It is a business deal in which goods, services, and money is passed from one person to another with agreed terms and conditions. Transactions are more authentic when they are backed by law.

Markets

Markets according to W.J. Stanton, (1998) are people and organizations with wants and needs to satisfy, money to spend and the willingness to spend it. Thus in the market demand for any good or service, there are three factors to consider – people or organizations with wants and needs, their purchasing power and their buying behaviour.

Market is a meeting point where sellers and buyers come together to transact business. However, markets do not necessarily need to be a physical meeting place. Internet-based stores and auction sites for example are all markets in which transactions can take place entirely online and where the two parties do not need to physically meet. A market is therefore a medium that allows buyers and sellers of a specific good or service to interact in order to facilitate an exchange.

Prospects

These are people and organizations who are qualified to be your customers but right now they are not in business relationship with you. The company hopes to convert many of its prospects to repeat customers.

THE FUNCTIONS AND IMPORTANCE OF MARKETING

Functions of Marketing

The basic functions of marketing are: identifying needs and wants, creating, pricing and exchanging, promoting, and delivering goods and services, as well as customer service.

Identifying needs and wants of consumers

The most important function of marketing is to identify the needs and wants of consumers in selected target market(s), and then putting resources together to satisfy them. This function is carried out through information on the strength, accessibility of the market(s), as well as the ability of consumers and prospects to pay for the products (goods or services).

Creating goods and services

Marketing creates those goods and services that the company offers at a price to its customers and prospects. To create means to make something to exist. These goods and services must be capable of satisfying the needs and wants of customers.

Pricing and exchanging goods and services

Another function of the marketing manager is to set prices for the goods and services. Pricing is an important element in the marketing mix. The pricing strategy adopted by a company can make or mar its fortune.

Marketing also exchanges these goods and services of value to customers at agreed prices.

Promoting goods and services

The essence of promotion is to create awareness of the products and services of an organization. If a company produce goods or render services and keep it to itself, consumers will not know of the existence of such goods or services.

It is the function of marketing to create awareness by means of advertising, sales promotion, publicity, public relations personal selling and direct marketing. These constitute the elements of the promotion mix.

Delivering goods and services

It is the function of marketing to deliver goods and services to customers. This is carried out through a company’s supply chain. The supply chain includes a number of organizations and functions that deliver materials and products from manufacturers to consumers.

The actual group of organizations can vary greatly from industry to industry, and include wholesalers, transportation companies, and retailers. Logistics, or the actual transportation and storage of materials and products, is the primary component of supply chain management.

Customer Service

Customer service is a very important function of marketing. It involves pre sales counseling, after sales service, “handling the customer  complaints and  adjustments, credit  services, maintenance services, technical services and consumer information and follow up.

Importance of Marketing

The importance of marketing is summarized as follows:

Marketing maximizes consumption, consumer choice, satisfaction and quality of life

The result of marketing effort maximizes consumption by making goods and sen ices available for consumers to choose from. When consumers see the goods and services provided by marketers, the desire to acquire them arouses. This enables consumers to acquire goods and services for their satisfaction and the improvement of life quality.

It generates income and maximizes profits for companies

The published accounts of banks and other big organizations confirm that they make billions of naira income and profits annually through marketing. Other smaller businesses generate income and maximize profits by providing goods and services that satisfy customers.

Marketing creates employment

This is occasioned by the need to cope with the ever-increasing marketing activities. For example, new and existing companies need employees. Also the development of a new product or service by an organization might require more hands. People are employed to do various jobs.

Marketing creates utilities

In the first place, utility is the ability of a product or service to satisfy the needs of consumers and organizations. Marketing therefore creates place, time, form and possession utilities.

Place utility – getting the goods to where they are needed. For instance, if goods are produced in Kano and are needed in Port Harcourt, marketing activities through distribution will make the goods available in Port Harcourt

Time utility – storing the goods until they are needed. Producers have learnt to produce goods during off- peak periods and sell them during the peak periods. These goods are stored in warehouses and released when they are needed. For instance, most of the goods sold during Christmas are produced from say October or even earlier.

Form utility – making the goods available in the desired form. For instance most marketers wholesalers and retailers package their products thereby making them available in desired forms.

Possession utility – title of goods passing to the buyer through exchange. This means that when you buy a product or service, it becomes your property.

THE HISTORY OF MARKETING IN NIGERIA

The history of marketing in Nigeria shall be discussed under the following sub headings: 1. The pre-colonial age. 2. The colonial age. 3- The post-independence era.

The Pre-colonial age (100 AD to 1860)

In the history of marketing generally, this period is known as the simple trade era where everything available was made or harvested by hand and available in limited supply. Exploration and trade in resources was the focus of the economic activity. Commodities ruled the day. This era is described as having lasted from the beginning of time to 1860.

In Nigeria, cowries and other forms of money were in use during this era, trade by barter (exchange of goods for goods) dominated buying and selling.

The Colonial Era (1860-1960)

The simple trade era was replaced by the production era at the time of the industrial revolution. Mass production increased the availability of product options in the marketplace.

In Nigeria, there were a few industries undergoing mass production in parts of the country like the palm oil, the cocoa, and the groundnuts industries in the eastern, western, and the northern regions.

The sales era followed the production era as a result of consumer demand becoming saturated. No longer could businesses easily and readily sell everything they produced. Competition for sales of products increased. Companies had to work harder to sell their products to consumers.

The Post-independence age (1960-date)

Next was the emergence of the marketing department era where manufacturing firms realised that the sales orientation of the past was not enough with consumers. Businesses consolidated marketing-related activities (advertising, sales promotion, public relations, etc.) into a single department. This is the time when it was realised that marketing is the reason why business exists.

The marketing company era emerged once the idea of the marketing concept became widely accepted. The marketing concept, in brief, contends that businesses exist to address customer needs. That is, the customer is the focus of our business endeavours. No longer was marketing compartmentalized – it became the goal of the business. All employees became part of the marketing effort, either directly or indirectly, and the customer became king. It began in the 1960’s and is still in play.

Next was the relationship marketing era. The goal of the relationship marketing era according to Steve White (2010) is to build a long-term, mutually beneficial, relationship with the customer. The key to building relationships is trust, thus its importance as the central tenet of relationship marketing. Clearly, the relationship marketing era exists and is in play today.

Existing side by side with relationship marketing is the social/mobile marketing era. It focuses on real-time connections and social exchanges based on relationships driven by the consumers. In this era, businesses are connected 24/7 to current, future and potential consumers in real-time. Communication and exchange of information is a critical success factor. But much like the predecessor eras, trust and maintaining a positive image are just as important.

SUMMARY

The purpose of marketing is to satisfy customers by identifying their needs and wants and finding out which of them the organization can profitably serve, and developing goods and services in the most efficient manner capable of converting prospects to customers through exchange. The basic terms in marketing are: Needs, Wants, Demands, Products, Value, Satisfaction, Exchange, Transactions, Markets, and Prospects.

The functions of marketing start from identifying the consumer needs and end with satisfying the consumer needs. These functions include Identifying, Creating, Pricing and exchanging, Promoting, Delivering and Exchanging products and services, as well as customer service. Marketing is important in our society for the following reasons: It maximizes consumption consumer choice satisfaction and enhances quality of life. It generates income, maximizes profits for companies, and creates employment. Marketing also creates place, time, form and possession utilities.The history of marketing in Nigeria is divided into three sub headings: 1. the pre-colonial age. This period was characterized by simple trade where all products were planted and harvested by hand. 2. The colonial age. In this age, the simple trade was still going on but due to the industrial revolution in Europe, there were few industries given rise to mass production and sales. 3. The post-independence era. This era gave rise to marketing departments and marketing companies. And now we have relationship marketing, as well as social/mobile marketing.