What is marketing? In a hyper-connected or liquid society, to quote Bauman, marketing, especially after the advent of the digital revolution, has practically exploded, and its race seems unstoppable.
Marketing has become a key asset in any industry to promote your product or service, brand, or personal branding.
But what exactly are we talking about when we refer to “what is marketing?”
What is Marketing: definitions
Let’s start with the definition: “what is marketing?”. The term marketing has its origins in the English verb to market, literally inserting and adapting to the market, to commercialize. Defining this concept is extremely complex as it has evolved, and above all, there is no single definition given the transversality of the subject in question.
The first definition of the concept of marketing dates back to 1953 when the National Association of Marketing Teachers (NAMT) defines marketing as “the set of business activities carried out to govern and direct the flow of goods and services from those who produce to those who consume“.
Subsequently, around 1955, the NAMT joined with the American Marketing Society and was born the American Marketing Association, the leading global organization of professionals working in marketing. The American Association also maintains the definition given by NAMT and, as we will see later, will be modified only years later.
Therefore, marketing focused on the concept of exchange or the management of exchange between producer and consumer. Marketing is mainly focused on a product-oriented vision, and the protagonist was the product and the company.
The consumer had a more marginal role; think of the famous 4P, the strategic levers of the marketing mix created by Kotler:
- point of sale
But what happens when social, economic, and cultural dynamics are transformed? It simply happens that the strategic role of marketing becomes even more of a protagonist but, this time, it is the customer who plays a key role.
Marketing: evolution of a concept
As we mentioned earlier, defining marketing is a very complex matter.
Among the most shared and accepted definitions, there is certainly that of the father of marketing, Philip Kotler, who, at first, defines marketing as “the identification and satisfaction of human and social needs”.
With this definition, we note that the concept’s focus is no longer the exchange in the material sense. There is no longer the centrality of the product, but we talk about needs and society, understood as values, needs, and people.
Marketing becomes the protagonist in the society that evolves and transforms, for this reason, the same Kotler expands the first definition, and you get to define marketing as a “social process through which individuals and groups get what they need through the creation, supply, and exchange of products and services of value“.
Therefore, the concept of co-creation of value and, therefore, of a shared value between the company and the client becomes central. Still, above all, the strategic asset and the value proposition focus on the relationship and listening with the client himself.
In fact, Peter Drucker states that there is “only one valid definition of the purpose of business: to create a satisfied customer” (The practice of management, 1954). This statement effectively places the customer at the center of a company’s business.
In 1955, the American Marketing Association put in place a new definition of the concept of marketing, stating that “marketing is the process of planning and implementing the concept, pricing, promotion and distribution of ideas, goods, and services to create an exchange that enables the satisfaction of goals of individuals and organizations”.
Subsequently, due to the digital transformation and the advent of new technologies and new online tools to support marketing activities, the American Association provides, in 2004, a new definition: “marketing is an organizational function and a set of processes aimed at creating, communicating and transferring value to customers and at managing relationships with them in a way that generates value for the organization and its stakeholders“.
The latter are the stakeholders, internal and external, such as employees, customers, trade associations, suppliers.
Starting from this definition, Kotler himself structures a theoretical framework called CCDVTP, by now a mantra for marketers.
The meaning of this acronym is precisely that of creating, communicating, and transferring value to the target market, made up of people, to generate profit for the organization.
As we can see, the value becomes the central element of the exchange process, no longer the product or the service, but generating and knowing how to communicate the value that represents the distinctive element of the value proposition that an organization offers its customers.
But what has changed today, in the society in which we live, has led to this transformation in the now transversal and multidisciplinary discipline of marketing?
The real great revolution in marketing is due to the network, relationships, and phenomena such as open innovation, the constant sharing of knowledge, seeking and implementing the best solutions from all over the world, thanks, precisely, to the network.
The brand, therefore, today becomes a promise, must have the ability to inspire, to involve consumers in the mind and heart, being able to excite.
Customer management is the third point undergoing a profound transformation in “modern” marketing. In the past, the relationship with the client was built through databases of information from which direct mail and online mail strategies were implemented.
Today this is no longer enough. Today it is necessary to meet the customer, to get to know him. Organizations today ask the customer for help. They want to listen and understand what he wants, precisely to activate that process of co-creation of value that leads customers to be satisfied and loyal to a brand.
Today, with our customers, we co-create products, services, and advertising: this is the radical change that has taken place in marketing, supported by digital transformation.
In 2013, in light of this profound transformation, the American Association proposed a further definition of the subject: “marketing is the activity, the set of institutions and processes to create, communicate, offer and exchange offerings that have value for consumers, customers, partners and society as a whole“.
We continue in this topic “what is marketing?” by talking about orientations.
As stated above, when we refer to marketing, we talk about a concept that has transformed over time. This is due to the relationship between the company and the market concerning the historical, social, and economic period in which companies operate.
The marketing of the 50s, marketing with a strong market orientation focused on production, is certainly very different from the marketing of 2021, with a customer orientation aimed at creating and co-creating value.
In the last thirty years, we can affirm that we have witnessed a true revolution in marketing which, like other disciplines, has a common shared theoretical base but presents countless different theories.
During these years, the evolution of marketing is characterized by a different approach implemented by companies concerning the market. We can synthesize the different approaches by identifying the four main phases of marketing.
The first phase of marketing began in the 1920s. If we imagine the economic and social scenario, we know that only a few years before, the First World War ended and marked countries and populations, indiscriminately, all over the world.
Businesses aim to produce at a low cost allowing consumers to satisfy their primary needs, that is, all those physiological needs that the scholar Maslow inserts at the base of his famous pyramid.
The objective of the enterprises is to produce in greater quantity to lower costs to allow the consumers, nearly the totality with low income, to acquire the primary products.
The main function of marketing is focused mainly on distribution and logistics to enter more markets at competitive prices.
The second phase of marketing began in the 1950s, and there is a saturation of markets due to increasing competition.
In this phase, the enterprises are concentrated on the logistic function but, above all, on the function of sale. This happens because, given the numerous competitors and the market saturation, it is necessary to have competitive prices. Still, it becomes fundamental to start persuading the customer towards the product and purchasing the same.
The promotional activity becomes the protagonist, and if, in the ’20s was central the role of production, in the ’50s is central the role of sales, which become the main means to generate profit.
The third phase of marketing focuses on customer satisfaction; the company understands that listening to the customer is essential to achieve success and build loyalty.
An unsatisfied customer will not repeat the purchase, and looking for new customers has a higher cost than building and maintaining a lasting relationship with the consumer.
This is the first phase in which we find that listening to the client begins to become part of the company’s strategies and logic. In this case, we are no longer talking about sales orientation but rather market orientation.
The fourth phase of marketing, which began in the 1980s, saw a recession in demand. This is a complicated phase for marketing, as businesses must come to terms with customers’ needs, potential and current, and expectations. Also, companies must begin to consider society as a whole and the complexity of a marketplace that features people.
With the advent of innovation and the rapid evolution of information and communication technology, the marketplace becomes a place of listening made by people for people.
At this point, a pivotal element in marketing strategies comes into play: the 4Ps, protagonists of the marketing mix levers, are implemented and begin to give more and more space to the customer. No longer just product, price, promotion, and point of sale, but also people, perception, and process.
From the 4P, we move on to the 7P of marketing, which has characterized the company’s strategic choices for a long time and still plays a central role today.
About the product, working strategically on this lever of the marketing mix means conceiving, designing, and producing a product or service that meets the needs of a specific target for a specific market.
Price, on the other hand, is a particularly delicate aspect of absolute importance. Managing a pricing policy is really complicated because, from economics, we know that the exchange is a cost-benefit relationship. Hence, a customer is willing to spend his money to receive something in return.
Therefore, the price is a very subjective variable that greatly influences the perception of the potential customer. For example, a meager price can affect the perception of quality.
On the contrary, an excessively high price, even compared to competitors, can push the customer to buy from another company, whose price he considers fairer with his needs and perceptions.
The lever is defined as place concerns instead of the distribution channels selected following the study of the target and its purchasing habits and interests.
Promotion includes all those organizational, creative, and economic activities that focus on communicating and transferring the values and characteristics of the brand, product, or service. With the 7P, what is added to the traditional marketing mix levers are the following variables:
- people all current and potential customers who belong to a specific target. The knowledge of the person allows understanding his desires, needs, and requirements. In this way, communication activities can be managed and declined more personally and directly through targeted actions such as remarketing. The customer is listened to carefully and becomes itself a witness to the reputation of the brand.
- Process: are all the processes put in place to deliver the product or service through customer support systems and efficiency of the process itself.
- Physical evidence: it is tangible proof, a testimony for the quality of the product or service. This is a critical process because it allows a potential customer to create a mental image, define his perception of the brand, product, or service.
4C a new perspective of marketing
Lauterborn’s 4C model focuses all attention on the customer, and the variables that are analyzed are:
- customer value: which is the value perceived by the customer. Companies must become their customers, impersonate themselves and understand what their needs and wants are.
- Customer costs: The price that the consumer is willing to pay while remaining satisfied from a financial point of view.
- Convenience customer: search for the most appropriate distribution channels according to the consumer’s needs.
- Communication: building a brand with a strong identity, which allows the consumer to believe in that promise. Thus, it is then necessary to decline a communication activity to define one to one, exactly the opposite of a one to many advertising.
The 4C model fully highlights the metamorphosis that has taken place in marketing, which requires companies to approach the market flexibly to understand the needs of the consumer, to devise marketing strategies focused on the customer and his satisfaction.
In today’s post-modern society, a company can no longer only apply tools defined as traditional. This happens because the companies themselves must understand the changes in society that bring about new needs and awareness on the part of the consumer.
Today, the latter is defined as prosumer, that is, producer and consumer at the same time, the protagonist of the company’s processes and communication with it.
A valid strategy of marketing that answers to the necessities of the modern market must aim to the sharing understood like the great ability to create and manage relationships, ties, and promises. Markets are populated by a network of individuals who want to satisfy their needs and desires.
The net is a constant dialogue in which the persons express their opinions, judgments, and requirements. The distance between companies and consumers no longer exists, and they are the protagonists of successful marketing strategies.
Let’s listen to the customer. Let’s learn to go beyond and immerse ourselves in the dynamic and personal scenario that technology has put at the service of the business.
That’s it! Now you have a clearer answer to the question: “What is Marketing?”. You just have to visit our list of tools and resources curated by our Desircle team, see you next time!