• Understand what marketing is
• Understand what the marketing concept is
• Understand what a value proposition is
• Understand the importance of managing the customer relationship
• Understand how consumers make decisions

What Is Marketing?

Marketing is a set of activities related to creating, communicating, delivering, and exchanging offerings that have value for others. In business, the function of marketing is to bring value to customers, whom the business seeks to identify, satisfy, and retain. This module will emphasize the role of marketing in business, but many of the concepts will also apply to nonprofit organizations, advocacy campaigns, and other activities aimed at influencing perceptions and behavior.

The Art of the Exchange

We can say that marketing is finding out the needs and wants of potential buyers (whether organizations or consumers) and then providing goods and services that meet or exceed the expectations of those buyers. Marketing is about creating exchanges. An exchange takes place when two parties give something of value to each other to satisfy their respective needs or wants. The exchange involves:

• the customer (or buyer): a person or organization with a want or need who is willing to give money or some other personal resource to address this need.
• the product: a physical good, service, experience or idea designed to fill the customer’s want or need.
• the provider (or seller): the company or organization offering a need-satisfying thing, which may be a product, service, experience or idea.
• the transaction: the terms around which both parties agree to trade value-for-value (most often, money for product).

Individuals on both sides of the exchange try to maximize rewards and minimize costs in transactions, in order to gain the most profitable outcomes. Ideally, everyone achieves a satisfactory level of reward.

One common misconception is that some people see no difference between marketing and sales. They are two different things that are both important to a company’s strategy. Sales has to do with actually selling the company’s products or service to its customers, while marketing is the process of communicating the value of a product or service to customers so that the product or service sells.

Marketing Creates Value for Customers

Marketing generates value by creating the connections between people and products, customers and companies. First, you must identify a want or need that you can address, as well as the prospective customers who possess this want or need. Next, you work to satisfy these customers by delivering a product or service that addresses these needs at the time customers want it. Key to customer satisfaction is making sure everyone feels they benefit from the exchange. Effective marketing also needs to retain customers by creating new opportunities to win customer loyalty and business.

As you will learn in this module, marketing encompasses a variety of activities focused on accomplishing these objectives. How companies approach and conduct day-to-day marketing activities varies widely. For many large, highly visible companies, such as Disney-ABC, Proctor & Gamble, Sony, and Toyota, marketing represents a major expenditure. Such companies rely on effective marketing for business success, and this dependence is reflected in their organizational strategies, budget, and operations. For other organizations, particularly those in highly-regulated or less competitive industries such as utilities, social services, medical care, or businesses providing one-of-a-kind products, marketing may be much less visible. It could even be as simple as a Web site or an informational brochure.