Most successful firms today practice the marketing concept – that is, marketers first identify customer needs and then provide products that satisfy those needs, ensuring firms long term profitability.
1. Needs, Wants and Demands
The most basic concept here is the human needs, human needs are nothing but state of felt deprivation, this include physical, social and individual needs.
The form which human needs take are called as wants, these are shaped by culture and individual personality, for instance and Indian when he feels hungry he would look for a road side, whereas a person in US would look for a Burger or McDonald.
When a need is backed by buying power it becomes demand.
2. Market Offerings
Consumer needs and wants are fulfilled by market offerings – some combination of products, services, information, or experiences offered to a market to satisfy a need or a want. Market offerings are not limited to physical products. They also include services – activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Examples include banking, airline, hotel, tax preparation, and home repair services.
More broadly, market offerings also include other entities, such as persons, places, organizations, information, and ideas.
Many sellers make the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products. These sellers suffer from marketing myopia. Marketing myopia is defined as the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products. They are so taken with their products that they focus only on existing wants and lose sight of underlying customer needs.
3. Value and satisfaction
Consumers usually face a broad array of products and services that might satisfy a given need. How do they choose among these many market offerings? Customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly. Satisfied customers buy again and tell others about their good experiences. Dissatisfied customers often switch to competitors and disparage the product to others.
Marketers must be careful to set the right level of expectations. If they set expectations too low, they may satisfy those who buy but fail to attract enough buyers. If they set expectations too high, buyers will be disappointed. Customer value and customer satisfaction are key building blocks for developing and managing customer relationships
4. Exchanges and Relationship
Marketing occurs when people decide to satisfy needs and wants through exchange relationships. Exchange is the act of obtaining a desired object from someone by offering something in return. In the broadest sense, the marketer tries to bring about a response to some market offering. The response may be more than simply buying or trading products and services.
Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product, service, idea, or other object. Beyond simply attracting new customers and creating transactions, companies want to retain customers and grow their businesses. Marketers want to build strong relationships by consistently delivering superior customer value
The concepts of exchange and relationships lead to the concept of a market. A market is the set of actual and potential buyers of a product or service. These buyers share a particular need or want that can be satisfied through exchange relationships.
Marketing means managing markets to bring about profitable customer relationships. However, creating these relationships takes work. Sellers must search for buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them. Activities such as consumer research, product development, communication, distribution, pricing, and service are core marketing activities.
The below figure represents the marketing system
Marketing involves serving a market of final consumers in the face of competitors. The company and competitors research the market and interact with consumers to understand their needs. Then they create and send their market offerings and messages to consumers, either directly or through marketing intermediaries. Each party in the system is affected by major environmental forces (demographic, economic, natural, technological, political, and social/cultural).
The arrows represent relationship that must be developed and managed to create customer value and profitable customer relationship
Each party in the system adds value. Wal-Mart cannot fulfill its promise of low prices unless its suppliers provide low costs. Ford cannot deliver a high quality car-ownership experience unless its dealers provide outstanding service.
Source: Marketing Management – Philip Kotler