Chapter-1 Marketing at 21st Century

In today's world, new and innovative products emerge daily, advertised

through television, radio, websites, social media, and more. These ads
target us, the consumers. Businesses engage in various activities like
procurement, production, and logistics to develop products. But how do
these products reach us or how do we learn about them? This is achieved
through marketing. Companies have dedicated marketing research
departments that handle communication of their products and services. With
the advent of technology, establishing this function is crucial for any
business to stay competitive.

1.01- What is Marketing?

Marketing is a process in business which helps to generate, communicate

and transfer value about a product or service to customers, partners and the
potential market.

Marketing involves processes like market research, advertising, marketing

communication, branding etc which showcases the customers the value
proposition offered by companies. Marketing helps create brand awareness
among the potential market and drives the business.
It also focuses on customer service, PR activities and other means which
help a business grow. Marketing along with finance, human resources and
operations forms the backbone for any business to increase sales revenue.
All the activities managed within an organization fall under marketing
management.
In the olden days, there was no clear difference between advertising and
marketing. But now, marketing is much wider than advertising, and
advertising is just a part of one of the components of marketing. It is a
whole concept of acquiring customers, servicing them, providing them with
after-sale services, and retaining them for as long as possible.

1.02- Components of Marketing

Marketing is a big domain in business covering important aspects of a

business related to the product, service, customer, recognition, brand
awareness etc. Some of the most important components are:
1. Marketing research- Understanding the business and customers by
studying the market, industry, demographics etc which is a part of research.
2. Advertising- Using mediums of communication like TV, print, online etc
by promoting brand through advertisements and sponsorships are essential
components
3. Pricing- It helps to understand the optimum price of a product which a
company should keep for maximum sales and high margins
4. Customer support- Providing service to customers in terms of after sales
service, customer relationship management etc all come under customer
support
5. Media Planning- Utilizing the correct channel for brand promotion is
studied by understanding different types, costs and effectiveness of media
6. Public Relations- It helps companies spread a positive word about the
products and services through news channels, newspapers, magazines etc
and help build strong PR relations.
7. Sales- Marketing and sales go hand in hand in ensuring that a company’s
business is prosperous as both are interdependent.
8. Brand promotion- Brand building exercises are done by effective
strategies which help to build a loyal customer base for a business.

The above image shows the various components in marketing.

1.03- Steps in the Marketing Process

The 5-step process involves understanding the marketplace and customers,
developing a marketing strategy, delivering value, growing customer
relations, and capturing value from customers.
Step 1: Understand Both the Marketplace and Customers

Before you can start the marketing process, you need to have a good idea of
what your marketplace looks like. This means answering some basic
questions about your customers, like who they are, their income and
purchasing power, and how much they’re likely to spend (particularly on
your products or services). If you decide to sell at lower prices in order to
attain higher unit sales volume, your marketing strategy would look very
different than if you decided to sell fewer products at a higher price.

Another way to approach this is to create separate brands and compete in

both arenas. Consider Volkswagen. You might immediately think of the VW
Beetle or the Jetta, but the company’s brand portfolio extends beyond VW
passenger cars and SUVs. It’s also the parent company for Audi, Bentley,
Lamborghini, Porsche, and others, and these vehicles sell at very different
price points than VW passenger cars.
Step 2: Develop a Customer-Driven Marketing Strategy
Marketing strategy refers to a business’s overall “game plan” to focus its
limited resources in order to reach prospective customers and turn them into
paying customers, hopefully for the long run.

It’s said that there are two basic types of marketing strategy: a product-
driven, “build-it-and-they-will-come” strategy and a customer-driven
strategy, in which you analyze prospective consumers and then—and only
then—create something that they want or need. We’re going to focus on the
latter strategy. What happens in a customer-driven marketing
strategy is that the company shifts the focus from the product or service
itself to its users. Customers’ needs are the central focus and the point of
beginning, not an afterthought. Your primary goal in a customer-driven
marketing strategy is to determine what users want and/or need and then
satisfy those users. Instead of being product-centric, it’s about being
customer-centric and developing a mutually beneficial relationship with
customers.

In a nutshell, it’s about establishing a connection and a relationship. It’s

about understanding who your customers are, what their needs and wants
are, and how you can best meet those needs and wants. It’s about knowing
your target market better than your competitors do and creating a
strong value proposition for those users—a promise of value that
communicates the benefits of your company’s products or services. In short,
it’s what makes your product or service desirable to potential customers,
helps them understand why they should buy it, how your company’s product
or service differs from those of its competitors, and how your offerings are
superior to similar offerings from your competitors.

Step 3: Deliver High Customer Value

Customers have myriad buying options and alternatives today. Given that,
how can a company attract and—even more importantly—retain its
customers? The answer is relatively simple: you give them value for their
money. By definition, customer value is the ratio between the perceived
benefits and costs incurred by the customer in acquiring your products or
services.

The mathematical formula is simple:

Value =Benefits/ Price(V=B/P)

But “value” from the customer’s perspective is a complex term, because we’re
really considering four different values types:

 Functional value: what the product “does” for the customer in terms of
solving a particular want or need
 Monetary value: what the product actually costs relative to its
perceived worth
 Social value: how much owning the product allows the customer to
connect with others
 Psychological value: how much that product allows the customer to
“feel better”

Value is increased by boosting the benefits (in the form of product, place, or
promotion) or minimizing the price.

Step 4: Grow Profitable Customer Relations

The bottom line is that profitable customer relationships are the “secret
sauce” of any business. This step in the marketing process is where marketers
acquire, keep, and grow customer relationships. Successful marketers know
that acquiring customers is one of the hardest (not to mention one of the
most expensive) elements of marketing. However, when you know clearly
who those potential customers are, you can more effectively determine how to reach
them, thus maximizing your marketing dollars.

It isn’t enough to have a one-and-done sale. You want repeat buyers, so

marketers need to remind customers about the company’s products and/or
services and how those products and services have met their needs and
improved their lives so they make repeat purchases. Marketers need to
consider how to reach customers about their offerings and make it easy and
convenient for those customers to make continued purchases.

When customers have a positive relationship with a company or its products

or services, they’re more likely to become repeat buyers. Satisfied customers
are also more likely to be interested in buying additional products or services
from your company, and they tend to recommend products to others, further
reducing the company’s costs of getting new customers.
Step 5: Capture Customer Value in the Form of Profits
The goal of successful customer relationship management (CRM) is creating
high customer equity—the potential profits a company earns from its
current and potential customers. It’s a relatively simple concept: increasing
customer loyalty results in higher customer equity.

Increasing customer equity is the goal of marketers because it’s a bellwether

for financial success. Think about it in simple terms: the higher a company’s
customer equity, the more profit the company generates, and the more
valuable that company (and its products or services) becomes on the market.

1.04- Advantages of Marketing

There are several advantages of marketing for a business. Some of the

benefits are:
1. It helps a business reach out to many customers across geographies by
advertising
2. It helps understand the customer needs and requirements in a more
systematic way.
3. The price of products which can give maximum profit to a business can be
understood by marketing.
4. A good market research can help develop new products, improve existing
products and capture a bigger market.
5. It helps companies have a loyal customer base as they provide a good
after sales service, customer support etc
6. Brand awareness is spread by promotion as most of the people are
unaware about the products or services available worldwide
1.05- Disadvantages of Marketing

Even though marketing is pivotal for every business, there are certain
drawbacks. Some of them are:
1. It becomes extremely costly for a company which is involved in promoting
its products by extensive promotion
2. A lot of time is invested into ensuring that the right kind of communication
is given
3. Despite all investments, communication and business strategies,
customers do not buy the product or service, which can lead to severe losses
to a company.

1.06- Benefits of Marketing in Business

1. Helps in business planning and decision making: Marketing

helps in business planning as it helps to shape the product from its
production to it reaching the customers. The 4Ps of marketing help the
business to make sure what alternatives are better for the growth of the
business and help to make decisions that prove beneficial for the
customers.
2. Product development: The product part of the 4Ps provides
alternatives for developing the product regarding its branding,
labeling, packaging, and how it should be brought into the market.
Moreover, customer feedback and market research provide a blueprint
of how the product has to be further modified to suit the needs of the
consumers.
3. Effective consumer engagement: with the use of various
platforms online and offline, the company can gain consumer
engagement in some form or another. In personal selling, for example,
salesmen interact with the customers and get to know their needs.
4. Builds relationships among customers: marketing always tries
to establish a cordial relationship with the customers. Modern
marketing deals with the customers as they are the king. Hence
continuous efforts make customers satisfied. And this helps them stay
with the brand or company for a long time.
5. Marketing creates revenue options: When marketing techniques
convert the leads to actual sales. It ultimately increases revenue.
Hence, marketing is crucial to generating and increasing revenue by
communicating the products with potential customers.
6. Set better goals for your business: Marketing helps the business
know about the customers' demands and needs. They could set their
goals according to these.
7. Build a reputation for your brand: effective marketing tends to
impact the customers' minds. Hence, they build brand awareness
among them.

1.07- The 4P's of Marketing

Below are the 4Ps that every business must focus on:

1. Product: The product is what a business offers to customers. It can be

a physical good, idea, viewpoint, institution, culture, or place. A
marketer must understand the product's attributes and ensure it
provides maximum utility compared to competitors. Branding should
make the product stand out, labeling must include all important
information, and packaging should suit the product's nature.
2. Price: Pricing is crucial after defining product features. Pricing
decisions must consider competitor prices, production costs, and profit
margins. Methods include penetration pricing, cost-based pricing,
target return pricing, competition-based pricing, bid pricing, demand-
based pricing, and perceived value pricing. Set objectives, determine
demand and costs, consider competitor pricing, and select an
appropriate pricing method.
3. Promotion: Promotion involves communicating product features to
potential customers. Major modes include advertising (via print
media, broadcast media, internet, mobile phones, posters), personal
selling (direct customer approach by salesmen), and sales promotion
(discounts, gifts, free samples) to boost sales.
4. Place: Place concerns the physical distribution of goods from
producer to consumer. Distribution channels vary: direct channels
(producer to consumer), one-level channels (involving wholesalers),
two-level channels (wholesalers and retailers), and three-level
channels (wholesalers, retailers, and agents).

1.08- Objectives of Marketing

1. Customer satisfaction: Customer satisfaction is the main objective

of marketing because only a satisfied customer will remain loyal to the
company for an extended period.
2. Create demand: Marketing increases the demand for the marketed
product or service. Therefore, it tends to develop the customers'
interest and attract them to the products.
3. Build organizational goodwill: marketing tends to build and
maintain the organization's goodwill by understanding the customer's
preferences and delivering the same to them.
4. Ensure profitability: Profitability is ensured in marketing by
continuously monitoring various activities and combined efforts of the
whole team of marketers.
5. Enhance product quality: Marketing involves market research and
tends to know about customer preferences. This helps the organization
to enhance product quality and serve the customers better.
6. Increase sales volume: All the objectives lead to an increment in
the sales volume of the proposed products and services.
7. Create time and place utility: Marketing tends to create time
utility by providing auxiliaries like warehousing, performed as a
function under physical distribution. On the other hand, place utility is
created by providing transportation as a function under distribution
channels.
1.09- Recent trends in Marketing for 21st Century

 Rise of Digital Marketing

Marketing in the 21st century combines both traditional and digital channels
to promote products and services. Before the 21st century, organizations
had no advertising options other than conventional channels such as
newspapers, television, flyers and radio to reach their target customers.
They focused on mass marketing campaigns to create awareness in the
target market and influence potential customers to make purchasing
decisions.

The arrival of the internet transformed the concept of promotion into

inbound marketing from outbound marketing. Inbound marketing facilitates
two-way interactive communication between organizations and customers
through search engines and social media platforms, emails and content
strategies.

 Social Media Marketing

Organizations use social networking platforms such as Facebook, Twitter,
LinkedIn and Instagram extensively to engage target audiences in
interaction and influence their behavior. Social media has become a
platform for people to share opinions and purchase experiences. With
appropriate marketing efforts to channel these opinions and purchase
experiences, organizations spread positive word-of-mouth through social
media platforms and increase conversion rates. The benefits of social
media marketing for organizations are low cost and high response rate .

 Personalized Email Marketing

Marketing in the 21st century focuses on adding value to customers by
educating and entertaining them through digital platforms. Email marketing
is a widely used tool for sending personalized messages to customers and
persuading them to make purchases. Organizations in the 21st century
have created opt-in email lists to execute an email marketing campaign. An
opt-in email list comprises email addresses of individuals who have shown
an interest in services or products offered by an organization.
 Content Marketing Strategy
Content is king when it comes to marketing in the 21st century. Small and
medium-scale organizations extensively use search engine marketing
techniques to reach target customers online. High-quality, unique and
value-added content is essential for websites to achieve high ranks on
search engines such as Google, Yahoo and Bing. The Google search
engine, in particular, emphasizes quality content when ranking websites.
The content marketing strategy in the 21st century is to help organizations
achieve objectives such as engaging customers, persuading them to make
purchase decisions, and developing brand identity.