{"id":6254,"date":"2016-08-17T17:28:15","date_gmt":"2016-08-17T17:28:15","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/masterybusiness2xngcxmasterspring2016\/?post_type=chapter&#038;p=6254"},"modified":"2024-05-03T15:39:32","modified_gmt":"2024-05-03T15:39:32","slug":"marketing-defined","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-introductiontobusiness\/chapter\/marketing-defined\/","title":{"raw":"Marketing Defined","rendered":"Marketing Defined"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Define the term marketing<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2>What Is Marketing?<\/h2>\r\n<strong>Marketing<\/strong> is a set of activities related to creating, communicating, delivering, and exchanging offerings that have value for others. In business, the function of marketing is to bring value to customers, whom the business seeks to identify, satisfy, and retain. This module\u00a0will emphasize the role of marketing in business, but many of the concepts will also apply to non-profit organizations, advocacy campaigns, and other activities aimed at influencing perceptions and behavior.\r\n<h2><img class=\"aligncenter wp-image-2055\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/08\/16210720\/15433515476_9a0732ae5c_k-1024x245.jpg\" alt=\"several streets intersecting in Hong Kong with a lot of people \" width=\"1078\" height=\"258\" \/><\/h2>\r\n<h2>The Art of the Exchange<\/h2>\r\nIn marketing, the act of obtaining a desired object from someone by offering something of value in return is called the <strong>exchange process<\/strong>. The exchange involves:\r\n<ul>\r\n \t<li style=\"font-weight: 400;\"><strong>the customer (or buyer):<\/strong> a person or organization with a want or need who is willing to give money or some other personal resource to address this need.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>the product:<\/strong> a physical good, service, experience or idea designed to fill the customer's want or need.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>the provider (or seller):<\/strong> the company or organization offering a need-satisfying thing, which may be a product, service, experience or idea.<\/li>\r\n \t<li style=\"font-weight: 400;\"><strong>the transaction:<\/strong> the terms around which both parties agree to trade value-for-value (most often, money for product).<\/li>\r\n<\/ul>\r\nIndividuals on both sides of the exchange try to maximize rewards and minimize costs in transactions, in order to gain the most profitable outcomes. Ideally, everyone achieves a satisfactory level of reward.\r\n\r\nMarketing creates <span style=\"color: #000000;\">a <strong>bundle of<\/strong><\/span><strong>\u00a0goods and services<\/strong> that the company offers at a price to its customers. The bundle consists of a tangible good, an intangible serv<span style=\"color: #333333;\">ice or benefit, and the price of\u00a0the offering. When you compare one car to another, for example, you can evaluate each of these dimensions\u2014the tangible, the intangible, and the price\u2014separately. However, you can\u2019t buy one manufacturer\u2019s car, another manufacturer\u2019s service, and a third manufacturer\u2019s price when you actually make a choice. Together, the three make up a single firm\u2019s offer or bundle.<\/span>\r\n\r\nMarketing is also responsible for the entire\u00a0environment in which this exchange of value takes place.\r\n<ul>\r\n \t<li>Marketing identifies customers, their needs, and how much value they place on getting those needs addressed.<\/li>\r\n \t<li>Marketing informs the design of the product to ensure it meets customer needs and provides value proportional to what it costs.<\/li>\r\n \t<li>Marketing is responsible for communicating with customers about products, explaining who is offering them and why they are desirable.<\/li>\r\n \t<li>Marketing is also responsible for listening to customers and communicating back to the provider about how well they are satisfying customer needs and opportunities for improvement.<\/li>\r\n \t<li>Marketing shapes the location and terms of the transaction, as well as the experience customers have after the product is delivered.<\/li>\r\n<\/ul>\r\n<h2>Marketing Creates Value for Customers<\/h2>\r\nAccording to the influential economist and Harvard Business School professor Theodore Levitt, the purpose of all business is to \"find and keep customers.\" Marketing is instrumental in helping businesses achieve this purpose and is much more than just advertising and selling products\u00a0and collecting money. Marketing generates value by creating the connections between people and products, customers and companies.\r\n\r\nHow does this happen? Boiled down to its essence, the <strong>role of marketing<\/strong> is to <em>identify, satisfy, and retain customers<\/em>.\r\n\r\nBefore you can create anything of value, first you must <strong>identify<\/strong> a want or need that you can address, as well as the prospective customers who possess this\u00a0want or need.\r\n\r\nNext, you work to <strong>satisfy<\/strong> these customers by delivering\u00a0a product or service that addresses\u00a0these needs at the time customers\u00a0want it. Key to customer satisfaction is making sure everyone feels they benefit from the exchange. Your customer is happy with the value they get for what they pay. You are happy with the payment you receive in exchange for what you provide.\r\n\r\nEffective marketing doesn't stop there. It also needs\u00a0to <strong>retain<\/strong> customers by creating new opportunities to win customer\u00a0loyalty and business.\r\n\r\n<img class=\"aligncenter wp-image-14007 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/3006\/2016\/08\/21175057\/IMG_RoleofMarketing.png\" alt=\"Title: The Role of Marketing. Three roles: Identify customers, satisfy customers, and retain customers. Identifying customers includes understanding customer wants and needs and identifying who to target and how to reach them. Satisfy customers includes making the right product or service available to the right people at the right time and making everyone feel better off from the exchange. Retaining customers includes giving customers a reason to keep coming back and finding new opportunities to win their business.\" width=\"601\" height=\"519\" \/>\r\n\r\nAs you will learn in this module, marketing encompasses a variety of activities focused on accomplishing these objectives. How companies approach and conduct day-to-day marketing activities varies widely. For many large, highly visible companies, such as Disney-ABC, Proctor &amp; Gamble, Sony, and Toyota, marketing represents a major expenditure. Such\u00a0companies rely on effective marketing for business success, and this dependence is reflected in their organizational strategies, budget, and operations. Conversely, for other organizations, particularly those in highly-regulated or less competitive industries such as utilities, social services, medical care, or businesses providing one-of-a-kind products, marketing may be much less visible. It could even be as simple as a Web site or an informational brochure.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/766d6e0e-f5d5-40a2-a9f0-28e25b869ca8\r\n\r\n<\/div>\r\nThere is no one model that guarantees marketing success. Effective marketing may be very expensive, or it may\u00a0cost next to nothing. What marketing must do in all cases is to help the organization identify, satisfy, and retain customers. Regardless of size or complexity, a marketing program is worth the costs only if it facilitates the organization's ability to reach its goals.","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Define the term marketing<\/li>\n<\/ul>\n<\/div>\n<h2>What Is Marketing?<\/h2>\n<p><strong>Marketing<\/strong> is a set of activities related to creating, communicating, delivering, and exchanging offerings that have value for others. In business, the function of marketing is to bring value to customers, whom the business seeks to identify, satisfy, and retain. This module\u00a0will emphasize the role of marketing in business, but many of the concepts will also apply to non-profit organizations, advocacy campaigns, and other activities aimed at influencing perceptions and behavior.<\/p>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-2055\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/143\/2016\/08\/16210720\/15433515476_9a0732ae5c_k-1024x245.jpg\" alt=\"several streets intersecting in Hong Kong with a lot of people\" width=\"1078\" height=\"258\" \/><\/h2>\n<h2>The Art of the Exchange<\/h2>\n<p>In marketing, the act of obtaining a desired object from someone by offering something of value in return is called the <strong>exchange process<\/strong>. The exchange involves:<\/p>\n<ul>\n<li style=\"font-weight: 400;\"><strong>the customer (or buyer):<\/strong> a person or organization with a want or need who is willing to give money or some other personal resource to address this need.<\/li>\n<li style=\"font-weight: 400;\"><strong>the product:<\/strong> a physical good, service, experience or idea designed to fill the customer&#8217;s want or need.<\/li>\n<li style=\"font-weight: 400;\"><strong>the provider (or seller):<\/strong> the company or organization offering a need-satisfying thing, which may be a product, service, experience or idea.<\/li>\n<li style=\"font-weight: 400;\"><strong>the transaction:<\/strong> the terms around which both parties agree to trade value-for-value (most often, money for product).<\/li>\n<\/ul>\n<p>Individuals on both sides of the exchange try to maximize rewards and minimize costs in transactions, in order to gain the most profitable outcomes. Ideally, everyone achieves a satisfactory level of reward.<\/p>\n<p>Marketing creates <span style=\"color: #000000;\">a <strong>bundle of<\/strong><\/span><strong>\u00a0goods and services<\/strong> that the company offers at a price to its customers. The bundle consists of a tangible good, an intangible serv<span style=\"color: #333333;\">ice or benefit, and the price of\u00a0the offering. When you compare one car to another, for example, you can evaluate each of these dimensions\u2014the tangible, the intangible, and the price\u2014separately. However, you can\u2019t buy one manufacturer\u2019s car, another manufacturer\u2019s service, and a third manufacturer\u2019s price when you actually make a choice. Together, the three make up a single firm\u2019s offer or bundle.<\/span><\/p>\n<p>Marketing is also responsible for the entire\u00a0environment in which this exchange of value takes place.<\/p>\n<ul>\n<li>Marketing identifies customers, their needs, and how much value they place on getting those needs addressed.<\/li>\n<li>Marketing informs the design of the product to ensure it meets customer needs and provides value proportional to what it costs.<\/li>\n<li>Marketing is responsible for communicating with customers about products, explaining who is offering them and why they are desirable.<\/li>\n<li>Marketing is also responsible for listening to customers and communicating back to the provider about how well they are satisfying customer needs and opportunities for improvement.<\/li>\n<li>Marketing shapes the location and terms of the transaction, as well as the experience customers have after the product is delivered.<\/li>\n<\/ul>\n<h2>Marketing Creates Value for Customers<\/h2>\n<p>According to the influential economist and Harvard Business School professor Theodore Levitt, the purpose of all business is to &#8220;find and keep customers.&#8221; Marketing is instrumental in helping businesses achieve this purpose and is much more than just advertising and selling products\u00a0and collecting money. Marketing generates value by creating the connections between people and products, customers and companies.<\/p>\n<p>How does this happen? Boiled down to its essence, the <strong>role of marketing<\/strong> is to <em>identify, satisfy, and retain customers<\/em>.<\/p>\n<p>Before you can create anything of value, first you must <strong>identify<\/strong> a want or need that you can address, as well as the prospective customers who possess this\u00a0want or need.<\/p>\n<p>Next, you work to <strong>satisfy<\/strong> these customers by delivering\u00a0a product or service that addresses\u00a0these needs at the time customers\u00a0want it. Key to customer satisfaction is making sure everyone feels they benefit from the exchange. Your customer is happy with the value they get for what they pay. You are happy with the payment you receive in exchange for what you provide.<\/p>\n<p>Effective marketing doesn&#8217;t stop there. It also needs\u00a0to <strong>retain<\/strong> customers by creating new opportunities to win customer\u00a0loyalty and business.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-14007 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/3006\/2016\/08\/21175057\/IMG_RoleofMarketing.png\" alt=\"Title: The Role of Marketing. Three roles: Identify customers, satisfy customers, and retain customers. Identifying customers includes understanding customer wants and needs and identifying who to target and how to reach them. Satisfy customers includes making the right product or service available to the right people at the right time and making everyone feel better off from the exchange. Retaining customers includes giving customers a reason to keep coming back and finding new opportunities to win their business.\" width=\"601\" height=\"519\" \/><\/p>\n<p>As you will learn in this module, marketing encompasses a variety of activities focused on accomplishing these objectives. How companies approach and conduct day-to-day marketing activities varies widely. For many large, highly visible companies, such as Disney-ABC, Proctor &amp; Gamble, Sony, and Toyota, marketing represents a major expenditure. Such\u00a0companies rely on effective marketing for business success, and this dependence is reflected in their organizational strategies, budget, and operations. Conversely, for other organizations, particularly those in highly-regulated or less competitive industries such as utilities, social services, medical care, or businesses providing one-of-a-kind products, marketing may be much less visible. It could even be as simple as a Web site or an informational brochure.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"assessment_practice_766d6e0e-f5d5-40a2-a9f0-28e25b869ca8\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/766d6e0e-f5d5-40a2-a9f0-28e25b869ca8?iframe_resize_id=assessment_practice_id_766d6e0e-f5d5-40a2-a9f0-28e25b869ca8\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<p>There is no one model that guarantees marketing success. Effective marketing may be very expensive, or it may\u00a0cost next to nothing. What marketing must do in all cases is to help the organization identify, satisfy, and retain customers. Regardless of size or complexity, a marketing program is worth the costs only if it facilitates the organization&#8217;s ability to reach its goals.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-6254\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>What Is Marketing?, Marketing Creates Value for Customers. <strong>Authored by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Revision and Adaptation. <strong>Authored by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>Practice Question. <strong>Authored by<\/strong>: Robert Danielson. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Chapter 1: Introducing Marketing, from Introducing Marketing. <strong>Authored by<\/strong>: John Burnett. <strong>Provided by<\/strong>: Global Text. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/solr.bccampus.ca:8001\/bcc\/file\/ddbe3343-9796-4801-a0cb-7af7b02e3191\/1\/Core%20Concepts%20of%20Marketing.pdf\">http:\/\/solr.bccampus.ca:8001\/bcc\/file\/ddbe3343-9796-4801-a0cb-7af7b02e3191\/1\/Core%20Concepts%20of%20Marketing.pdf<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><li>20140929 Hong Kong Umbrella Revolution. <strong>Authored by<\/strong>: Pasu Au Yeung. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.flickr.com\/photos\/studiokanu\/15433515476\/\">https:\/\/www.flickr.com\/photos\/studiokanu\/15433515476\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":26,"menu_order":3,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"What Is Marketing?, Marketing Creates Value for Customers\",\"author\":\"Lumen Learning\",\"organization\":\"\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"Chapter 1: Introducing Marketing, 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