The Business Book

(Joyce) #1


y definition, marketing
is the field of management
devoted to selling. It is the
link between production and profit,
providing the expertise for taking
a product or service through the
most appropriate channels to find
the people most likely to buy it.
To fulfil this goal, it is crucial to
become adept at understanding
the market. This means closely
studying the behavior and lifestyle
of the customer so that a product
or service can be developed to be
irresistible in every way, from the
purpose, function, quality, and look
of it, to the speed at which it is
delivered, the places it is sold, its
price, and the level of customer
service support offered.

Knowing the customer
That is the theory. In practice,
making your customers love you
by always putting them first and
fulfilling their needs and desires is
the biggest challenge of marketing.
Collecting data about the purchase
history of customers is a starting
point. Combined with analyzing
any available demographic and
lifestyle statistics, such data can be
used to build a marketing model—
essentially a mathematical formula
that indicates potential purchase
rates for a given set of variables.

Naturally there are dangers
inherent in trying to predict
the future using this type of
forecasting. The marketer must
also be aware of changing tastes,
technology, politics, and economic
conditions, so that the business
can adapt quickly, avoiding what
management scholar Theodore
Levitt famously called “marketing
myopia.” For example, as consumers
have become increasingly reliant
on mobile phones and tablets,
businesses with foresight have
developed mobile-commerce
channels and reaped the benefits.
In the quest to anticipate
customer needs and wants, some
of the most progressive companies
gather data and examine it on a
daily basis so that key elements

of the “marketing mix”—such as
the product or service itself, the
places where it is sold, its price,
and any promotional offers—can
be adjusted accordingly. Japanese
camera company Konica Minolta,
for example, uses specialized
technology to monitor sales data,
competitor activity, and market
trends in real time so that
it can respond effectively.

Marketing strategies
Arguably the product or service
offered is the most critical
component of the marketing mix.
For most companies, each product
or service in its product portfolio
has its own cycle of growth, and
can be managed to maximize profit
by prioritizing the marketing
spend. For example, for food group
Mars, its best-selling namesake
chocolate bar has been a long-
standing source of profits, funding
the corporation’s expansion into
other areas, such as ice cream
and pet food.
To help decisions about
diversifying into such new markets,
companies can use a diagrammatic
tool such as Ansoff’s Matrix, which
plots existing and potential
products or services according
to the risk factors involved. If a
business decides to develop and


Marketing takes a day to
learn. Unfortunately it takes
a lifetime to master.
Philip Kotler
US marketing expert (1931–)


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