Section targeting
Marketing, in economics, is a social and managerial function that is concerned with the flow of goods and services from producer to consumer. In traditional understanding, it may be defined as the allocation, circulation and sale of goods. Marketing is associated with the process of researching, developing, promoting, selling, and distributing a product or service. In a modernized capitalist economy, where almost all production is directed for a market, such activities are just as vital as the production of merchandises.
The practice of marketing is almost as old as humanity itself. Whenever a person has an item or is capable of performing a service, and he or she seeks another person who might want that item or service, that person is involved in marketing. A market was originally simply a gathering place where people with a supply of items or capacity to perform a service could meet with those who might desire the items or services.
Such meetings embodied all the aspects of today's marketing methods, although in an informal way. Sellers and buyers sought to understand each other's needs, capacities, and psychology, all with the goal of getting the exchange of items or services to take place. Open markets throughout the world, with buyers and sellers mingling are today's example of this basic activity.
Most companies today have a customer orientation. This implies that the company focuses its activities and products on customer needs. Generally there are two ways of doing this: the customer-driven approach and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic marketing decisions. No strategy is pursued until it passes the test of consumer research. Every aspect of a market offering, including the nature of the product itself, is driven by the needs of potential consumers. The starting point is always the consumer. The rationale for this approach is that there is no point spending funds developing products that people will not buy. History attests to many products that were commercial failures in spite of being technological breakthroughs.
The next big thing is a concept in marketing that refers to a product or idea that will allow for a high amount of sales for that product and related products. Marketers believe that by finding or creating the next big thing they will spark a cultural revolution that results in this sales increase.
In a product innovation approach, the company pursues product innovation then tries to develop a market for the product. Product innovation drives the process and marketing research is conducted primarily to ensure that a profitable market segment exists for the innovation. The rationale is that customers may not know what options will be available to them in the future so we should not expect them to tell us what they will buy in the future. Many firms, such as research and development focused companies, successfully focus on product innovation. Many purists doubt whether this is really a form of marketing orientation at all, because of the ex-post status of consumer research. Some even question whether it is marketing.
For a business marketing to be successful, product, pricing, promotion and distribution must reflect the wants and desires of the consumers in the target market. Trying to convince a market segment to buy something they don't want and is extremely expensive, would only cause failure. Marketers should engage in marketing research, both formal and informal, to determine what consumers want and what they are willing to pay for. By doing so, it would give them sustainable competitive advantage.
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