Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others.
The above is a current definition of marketing given by Professor
Kotler. This definition highlights several important points that all marketers (and by marketing, I mean people who are in marketing positions as well as those who are in sales positions) need to keep in mind.
First of all, marketing is a process. A process by definition is a series of actions directed towards an end. So if marketing is a process, then by implication it is not a one time affair or something that is added on at some point between the time a product leaves the factory (or a service is produced) and the time it is finally consumed. It is not a nice optional extra that can be safely cut when economic conditions are bad and restored when they are good. Infact research indicates that entities which cut marketing in hard economic conditions are not able to take full advantage of an economic upturn. So marketing is an integral part of an organization. The set of activities that constitute marketing are crucial to a company's success and viability. Remember that marketing and its essential component sales are the only set of activities that bring in revenue. Everything else is a cost and plays a supporting role. This is not to deny their importance. All the other processes that a company engages in have their place. No company can ignore them for long. However, without marketing and the revenues that marketing brings in, there will be no organization.
The second important point is that marketing is a social process and not just a managerial one. This is an important distinction. Managers who view marketing as being managerial also tend to view marketing as being adjunct to the main business; something that can be tacked on and removed at will without consequence. On the other hand, if marketing is a social process, then it becomes central to all entities. This distinction also makes clear that marketing involves not just a company but all stakeholders. This includes customers, suppliers, employees, even competitors. This point also makes it clear that marketing is not just reserved for corporations. It plays an essential role for all professions including doctors, lawyers, engineers etc.
The third important point about the definition above is that it talks about individuals/groups; in other words, it talks about consumers. Marketing is all about consumers. More specifically it is all about providing information to consumers. No marketing activity can succeed without a focus on the consumer. If we look at any successful brand, there is always an unrelenting focus on the consumer. Whenever companies have lost sight of this, their marketing efforts have faltered and become useless.
IBM is an excellent example of this. The company bet the farm on the launch of System/360 in the 1960s. This was a computer system designed with the customer in mind and it was a phenomenal success because of this reason. Indeed IBM created a new genre of computers - the mainframe with the introduction of this machine. By the 1980s however, the company had fallen in love with its technology. The customer came a distant second to the technological marvels of the hardware. Needless to say, customers were not impressed and mighty IBM flirted with bankruptcy before refocusing itself on the customer once again.
Apple is another example of a relentless focus on the customer. The company has completely redefined two product categories and created a third one by focusing on the customer and their needs.
Sony had a lock on the portable music player industry until Apple redefined what a music player could be. The result: the Sony Walkman - the industry leader for 30 years - has now been discontinued. In the mobile phone industry,
Nokia has been shaken so badly that they have been forced to jump in bed with Microsoft in order to compete effectively. Again this was due to
Apple's strong customer focus.
Very importantly, the definition above talks about needs and wants. There is a clear distinction between the two and entities that do not recognize this difference tend to underperform with respect to their peers and eventually fade into obscurity and irrelevance. I will be talking about the distinction between needs and wants in later posts.
Finally, the definition above talks about "creating, offering and exchanging products of value". It is irrelevant how a company views its own products and services. What is relevant is how are its products viewed by others? Why does Gucci command a premium over competitors? It is because customers place a higher value on its products than on its competitors. Similarly, why does
Harvard University command a premium over
State University of New York (SUNY)? Potential customers place a greater value over the education obtained at Harvard than at SUNY irrespective of the teaching quality at either institution. It is not relevant what SUNY thinks of itself or how Harvard views itself. The value that customers place on either is what counts. So the definition above is a strong indictment of inward thinking.
