Marketing: “The process by which companies create value for customers and build strong customer relationship in order to capture value back from customers is called Marketing”.
The Marketing Process: Following figure represents the simple five-way model of the marketing process:
Step 1: This step is also known as Market Scanning. In this step the marketer understand the market place, customer needs, wants and demand. Market Place is a particular place where customer and the marketer exchange their views with another. Market place may be a super mart, retail or a virtual store. Needs are states of felt-deprivation. Needs may be shelter, food or clothing. Needs are transformed into wants. Want are things that are desired. Having a wish to buy designer clothes or dining out are examples of wants. Wants are transformed into demand. Demand is the willingness and ability to purchase. If people buy 300 bananas per week for the price of Rs. 2 per banana; then, it will be called the quantity demanded per banana at the price of Rs.2 for 1 week.
Step 2: Customer-oriented marketing strategy is designed by selecting the target market, choosing a value proposition and marketing management orientation. Target Market refers to type of customers that the marketer wants to target. Target market may be adults, kids, woman or man. Value Proposition is the set of benefits or values that company wants to deliver its customers. For instance, cleaning and fragrance is a value proposition for beauty soap. Marketing Management Orientation is based on five philosophical concepts. Marketing management designs its market strategies with the help of those concepts. Those philosophical concepts are as follow:
- Production Concept: This concept says that people will prefer those products which are available in the market at lower cost. This concept is a shortsightedness in marketing because companies adopting this orientation run a major risk of focusing too narrowly on their operations and forget their real marketing objective – satisfying customer needs and building customer relationships. English Toothpaste adopted this concept.
- Product Concept: This concept says that people will prefer those products that offers the most in quality, performance and features. This concept can also lead to marketing myopia. For example, railroad managers once thought that users wanted trains rather than transportation and overlooked the growing challenge of airlines, buses, trucks and automobiles. Nokia adopted this concept for its mobile phones.
- Selling Concept (Inside-Out Approach): The concept is based on chasing and persuading customers to promote the product. Insurance is an example of this concept.
- Marketing Concept (Outside-In Approach): This concept says that people will prefer those products which best satisfy their needs. Apple follows this concept.
- Societal Marketing Concept: This concept is based on satisfying customers in short-term and safe-guarding the interest of customers. The Body Shop follows this concept.
Holistic Marketing Concept is followed by modern companies which says: “Everything matters“. Samsung follows this concept.
Step 3: Marketing program is constructed with the aid of marketing mix tools which are Product, Price, Place and Promotion. This step guides to deliver the right product (customer desired product) for the right customer (target market) at the right price (price at which both customer and marketer will be profitable) at the right place (where the product should be delivered) with right promotion (communication i.e. suitable for both customer and the marketer).
Step 4: Profitable relationship with customers is built with the help of Customer Relationship Management (CRM). “The overall process of building and maintaining profitable customer relationships by delivering a superior value to customer and satisfying them is called Customer Relationship Management”. CRM is based on customer perceive value, efforts for retaining customers and customer loyalty. In CRM, the marketer should perceive the customer perceive value to determine whether the customer is satisfied or dissatisfied with the product. Next, marketer should effort to retain the customer. Superstores give patronage discount to customers to retain them. Marketing efforts make customers loyal, so they start buying the product of a company again and again.
Step 5: Good CRM makes customer delighted, so they become loyal to company and start talking favourable about the company. In this way, a company capture value back from its customers.