What is marketing – product service

What is marketing

Marketing refers to activities that conducted by a company in a purpose of promoting their product or service to consumers or other businesses. It includes advertising, selling, and delivering products to consumers or other businesses. Marketers always seek to get the attention of targeted audiences through advertising. It may involve in celebrity endorsements, catchy jingles, phrases or slogans, nice packaging or graphic designs and overall media exposure. The main purpose for a company to conduct marketing activities is because the company wants to create value for customers and build customer relationships, in the return that capture value from customers which is gaining customer’s loyalty and retention.

5 Marketing Processes

From figure 1, we can see that the marketers work on the first four processes are because they want to create value for customers and build customer relationships. The processes are starting from:

1. Understand the marketplace, customers’ needs and wants

Marketer should do research on the marketplace, what customers really needs in their daily life (necessary products) and what kind of products are just on their desire list. By managing marketing information and customer data, marketers can analyze the demand of the product whether is elastic or inelastic when the price changed. Therefore, marketer can choose to promote which product.

2. Design a customer-driven marketing strategy

In this process, marketers can select customers to serve by using segmentation and targeting strategy. Segmentation strategy is an organizational strategy used to break down a target market audience into smaller, more manageable groups with a homogenous need. is dividing into 4 categories:

Demographic segmentation
Demographics are the most common form of segmentation. They divide customers by the structure of certain population traits:

  1. Age group (eg: 20 – 30-year-old, 40 – 50-year-old, etc.),
  2. Gender (eg: Male, Female)
  3. Income (eg: Rm 1000 and below, Rm 1001 – Rm2000, etc.)
  4. Occupation and so on

Geographic segmentation
Geographic segmentation can help marketer sell products and services, based on where customers located. It can divide based on:

  1. State (eg: Kuala Lumpur, Kelantan, Pahang)
  2. Country (eg: Malaysia, Singapore)
  3. Regional Area ( eg: South East Asia, European)

Psychological segmentation
Psychographic segmentation targets customer hobbies and interests. This segmentation strategy caters to the most niche markets, where attractiveness, quality, and brand recognition are more important than price.

  1. Personality Type
  2. Social Classes (High, Medium, Low)
  3. Lifestyle

Behavioral Segmentation
Behavioral segmentation is relatively new in the digital age and takes into consideration information a company has collected through customer data reports, surveys, or marketing trends.

  1. Patterns of Use (Ex-user, Current user, Potential user)
  2. Price Sensitivity (Not sensitive, Very sensitive)
  3. Brand Loyalty (Not loyal, always change to another brand because of the price changed)
  4. Benefits Sought (Product quality, Nice design)

After accessing the market segmentation, marketers can start to target which group of customers they want to serve for. Besides, marketers can design a value proposition such as differentiation strategy and positioning strategy. Differentiation strategy is used to distinguish a product or service, from other similar products, offered by the competitors in the market. Positioning strategy is used to place your product image into your consumer’s mind, whether the product is a luxury product, or a cost-effective product.

3. Construct a marketing mix program (4Ps)
In this process, marketer can design their 4Ps in order to sell their product or services to customers more effectively.
The first P is products (or services). Marketers can design their packaging nicely so that the product can attract more customers to buy. The product can be differentiated as core product (what the product can give you when using the product) , the actual product (the physical product that you can feel and touch ) and the augmented product (it is not part of the product, but add as extra benefits or services, such as product warranty).
The second P is price. What is the price range of the product you want to set for in order to attract your customers to purchase your product? It depends on the product quality itself; you may set a premium price if your product quality is extremely good and people may buy it because of the good product quality or you may set a price skimming that most of the customers are affordable to pay for it.
The third P is place. The distribution of the product will be based on the product and pricing strategy. If the product is selling at a premium price, it won’t be found everywhere. They might be found at some luxury shopping malls or outlets. However, if the product is selling at a lower price, people will find it easily at supermarket or some retail shop because marketers wants to gain more market share.
The fourth P is promotion. It is depending what kind of the promotional tools will be used by the marketers in order to build awareness to the product. The promotional tools may be personal selling, advertising, sales promotion, direct marketing and publicity. Some company will use all the promotional tools that stated above if it is required.

 

4. Build profitable relationships and create delight

Marketers are not only focus on the product- based activities, but also need to build Customer Relationship Management (CRM) such as providing good customer service to customers and also build Partnership Relationship Management (PRM) such as giving some trade promotion to your partner so that they will help you to promote the product that offered by your company instead of competitor’s product.

 

5. Capture value from customers in return

By doing all the 4 processes above, marketers can create customer satisfaction and delight, capture customer lifetime value such as gaining customer loyalty so that you can increase market share and share of customers.

The Marketing Process

The Marketing Process

 

 

Figure 1: 5 Marketing Processes
Source from: https://marketing-insider.eu/marketing-process/

Reference:
https://www.marketing91.com/marketing-mix-4-ps-marketing/

https://www.marketing91.com/4-types-market-segmentation-segment/