Module 1:1 Marketing definitions
The Greek philosopher Socrates stated, ‘that clear definition is the beginning of knowledge’ with this adage in mind, it is prudent that we should invest time exploring and defining the language of marketing. This will provide a solid foundation to build our knowledge.
In this module, we define and explore the different meanings of the term ‘market’ [BTW: we also explore markets in the second module]. Then we will explore two marketing definitions – a classic definition of marketing and a contemporary definition. The classic definition provides an excellent insight to consumers and how consumers live their lives through marketing. The contemporary definition then defines marketing from an organisational and applied perspective.
Although the classic definition appears simple, it provides an ideal platform to identify some of the core marketing concepts and to tease-out what is inferred within this classic definition. We then introduce the contemporary definition of marketing as this provides the opportunity to elaborate on the classic definition and sets the overall direction for the remainder of the e-book.
With this knowledge, we will be equipped to explore the meaning of ‘the marketing concept’ and ‘a marketing concept’. This leads to our discussion of ‘a marketing philosophy’. To people without a background in marketing, the marketing concept and a marketing philosophy may appear very similar – some may think that we are getting bogged down in semantics. Although they are closely related, it is critical to be able to distinguish between the two and employ them appropriately.
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In this activity we take a virtual field trip of different markets around the world and whilst we can see how different markets in different countries may have a few small differenced the different markets have much in common. By understanding markets we can better understand the relationships between buyers and sellers and how both come together to satisfy needs and wants and provide an insight to marketing as a process. You will recognise that when we discuss ‘human values’ consumers around the world have more in common than we may realise.
In the above slide a montage of the different markets in different countries can be seen.
Marketing – the basis of society
Kotler (2017) states that everyone is involved in marketing and it is the very basis on which society is founded. Shaw (2020, p.277) states ”marketing systems occur, survive and grow is because a marketing system offers the most efficient means for supplying and distributing products and services that people demand relative to the opportunity cost of alternative methods for acquiring products and services”. [note services are products]
Marketing is sellers & buyers coming together to satisfy their needs
Many types of Markets
Not all markets are local markets and not all buyers and sellers meet face-to-face – there are a number of markets that are conducted at arm’s length. For example, international trade has been conducted for thousands of years. However, in recent years, technology has facilitated and enabled a greater number of people to engage in arm’s length marketing – we are living in an increasingly global 24/7 marketplace (Gillespie & Hennessey, 2016).
Marketing & society
The statement above reveals that marketing creates employment and with employment people, families and societies function.
We only have to consider the impacts of the COVID pandemic to see what happens when the process of marketing is disrupted.
The origins of the word – customer
Generally, marketing practitioners also refer to ‘the market’ as consumers or customers. Although the words – consumer and customer – are often used interchangeably in everyday conversations it is important to understand the difference. Consumers are all potential buyers and actual buyers, whereas customers are those who have made an exchange with an organisation.
Interestingly – the word customer has its origins as someone who frequented ‘made a habit of’ – ‘a custom of’ purchasing from a particular trader.
Exchanges may also be business to business
“You will have visited countless websites, retail shops, restaurants, cafes, you will have received the services of dentists, doctors, and mechanics, and, of course, you will have experienced events such as cinema, concerts, and sports”
What you may have noticed when you read this statement is that the examples were all business-to-consumer [B2C] examples. As we progress it is worthwhile to keep in mind that marketing is not just B2C exchanges; marketing also involves business-to-business [B2B] exchanges [and a few others].
What is also interesting, and often overlooked, is that most B2C exchanges are only possible after a number of B2B facilitating and supporting activities have been performed by channel partners. For example:
- Manufacturers most often require B2B services such as logistics and retailing
- Retailers require B2B services such as credit cards to enable B2C exchanges to take place.
- Businesses require a range of B2B services [e. g., accountants, insurance, communication specialists, IT services … etc]
We will discuss facilitating and supporting activities in greater detail when we discuss the service component of a product.
Although B2C represents a considerable proportion of gross domestic product [GDP] and is a substantial employer, it should be recognised that the B2B sector is a larger sector. This is worth noting, as often B2B activities are back-stage and ‘out of sight and out of mind’. The B2B sector is a large employer and provides many opportunities for marketing graduates.
Marketing is about customers and organisations. they both enter an exchange with different perspectives therefore two definitions provide a more comprehensive picture.
Defining marketing, to this depth, is important as it helps provide the foundation knowledge for the remainder of the e-book and also provides insight into marketing genres [e.g., services marketing, sports marketing, place marketing, retail marketing – etc.] and marketing applications [e.g., digital marketing, marketing communication, – etc.] that readers may study in the future.
In this slide we have a photograph of one of the wold’s finest cheeses. The producers go to extraordinary lengths to ensure that their cheese is regarded as a top quality cheese, that their animals are treated with respect, and that they produce the cheese in an environmentally sustainable fashion – including action on methane emissions.
In the previous slide we have a photograph of one of the wold’s finest cheeses. However, this cheese is a premium quality cheese with an appropriate price. Therefore, this company has a focus not on the entire market but a slice 😉 or segment of the market. Therefore, organisations must determine who are we best satisfying.
This contemporary definition was developed to provide a more operational perspective. It highlights that organisations must manage all encounters with customers and that customers may be internal to the organisation, channel partners that help bring the product to market and society.
The contemporary definition of marketing highlights that marketing involves: Listening, learning, & adapting [as in culture]. Organisations produce value by working with and adapting to the market. Customers & channel partners co-produce value. The goal is synergistic, symbiotic, sustainable, strategic, internal and external relationships. Profit4 for all parties the customer, organisation, channel partners and society. Including an overall benefit for society.
Unpacking the contemporary definition of marketing reveals that although we talk about profits for all parties, the word dividend which means a benefit resulting from action is probably a better descriptor. Therefore, in keeping with the ideals of relationships marketing should provide dividends for the customer, organisation, channel partners and society.
This definition explores marketing from an organisational perspective. It is operational in nature and it guides the remainder of the e-book.
We have discussed what is a market and two marketing definitions, therefore it is prudent to revisit the marketing concept, however, in light of our discussions we will discuss it in a little more detail.
This video highlights the importance and relationship of customer and organisational satisfaction and how organisations design, develop and implment an organisational philosophy.
A marketing philosophy
Building on our discussions on markets, our exploration of marketing definitions, and our explanation of the marketing concept we now have the necessary background information to discuss a marketing philosophy. A marketing philosophy is a unique philosophy one that details how a particular organisation will implement the marketing concept. The word philosophy is employed to describe a way of thinking about marketing – the marketplace, the ideas that are subsequently formed, and the roles and relationships with the marketplace.
A marketing philosophy could be defined as: How an organisation goes to market. A marketing philosophy is an organisation’s belief system – it guides the behaviour of the people within an organisation – it determines an organisation’s values and through those values how the organisation delivers value to their customers, their people, their channel partners, and society.
As we have stated marketing is a business philosophy and should always be thought of as how an organisation goes to market. Drucker (1954) stated that an organisation has two functions marketing and innovation, he then went on to argue that innovation was directed towards marketing and then stated that “any organisation has only two functions: one concerns marketing the other is marketing” (cited by Darroch, 2010, p 266).
Organisations that adopt the marketing concept need a framework for communicating, planning, implementing and controlling – we call this a marketing philosophy. A marketing philosophy influences every aspect of organisational culture and behaviour and is influenced by the language, theories and concepts that have been tested in the past [marketing principles]. At this point it is worth highlighting that every organisation faces unique situational factors and therefore requires a unique marketing philosophy – the situational factors [COMP factors] are the customer, the organisation the market, the product. It is worth noting that COMP factors includes the societal values in which the organisation operates.
Marketing is not philanthropy. Marketing involves a fair exchange [get something – give something] marketing involves at least, two parties [later we will explore the degree of involvement]. A marketing exchange is based on the premise that all parties voluntarily enter the exchange; that there is value for all parties; and that value is communicated and understood by all parties. Therefore, it should be recognised that consumers are also engaged in marketing when they enter the buyer decision process. This recognition of consumer involvement in the buyer decision process provides an insight as to how marketing as a business philosophy differs from other business philosophies and how marketing as a business function differs from other business functions.
Author’s comment: Generally, marketing scholars divide customers into two groups – internal customers [i.e., staff, and channel partners] and external customers. The idea behind calling staff – internal customers is that, people within an organisation perform services for other people within the same organisation; they are a type of customer – an internal customer – a creator of value. Similarly, there are some that suggest that at the top of an organisational tree is not the managing director but the external customer as the customer is the most important member of an organisation. Please note, when we use the word customer in the e-book we are referring to external customers unless otherwise specified. Being customer centric is not the same as the ‘customer is always right’, or, that customer needs are more important than organisational needs.
