American Marketing Association: Marketing is “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
The traditional view was the 4 Ps, Products, Promotion, Place, and Price.
Now, it's 4 Components of marketing
Creating - The process of collaborating with suppliers and customers to create offerings that have value.
Communicating - Offerings learning from customers.
Delivering - Getting offerings to consumers.
Exchanging - Trading value.
However, the four Ps are not exactly the same as the 4 Components of marketing. They fail to capture all the activities of marketing.
For instance, "exchanging" requires the transfer of "ownership", not just a price or place. When you buy a car, you must sign documents that transfer the car’s title from the seller to you.
The goal of marketers is to create a profitable exchange for consumers.
Value is at the center of everything marketing does, but what does value mean?
The term value means the benefits buyers receive that meet their needs. Also means, what the customer gets by purchasing and consuming a company’s offering.
Notice that although the offering is created by firms, the value is determined by their customers.
By profitable, we mean that the consumer’s personal value equation is positive. The personal value equation is value = benefits received – [price + hassle]
Hassle is the time and effort the consumer puts into the shopping process.
The equation is very personal since the benefits customers receive from a product will vary, as well as the time and effort they put into shopping. For instance, because your tastes vary, the benefits you received varied. Although the same dish in the same restaurant, the benefits are still depending on your own personal taste.
Market-Oriented
The value varies from customer to customer based on each customer’s needs. Marketing requires that marketers seek to satisfy customer wants and needs.
Production Orientation
However, businesses don’t always embrace market orientation. The Industrial Revolution in the late 1800s was an example of production orientation. During that period, companies believed that the best way to compete was by reducing production costs, which means "good products would sell themselves". Ford’s production line made the automobile cheap and affordable for just about everyone was an example of production orientation.
Selling Orientation
From the 1920s until after World War II, companies tended to be selling orientation, which means it was necessary to push their products by advertising and sales
The Product Orientation
In the post–World War II environment, demand for goods increased as the economy soared. Some products, limited in supply during World War II, were surplus. Companies now have to do product innovation for product differentiation from their competition.
As consumers had many choices available, the new challenge is to create what customers wanted.
Therefore, leading to the development of the marketing concept.
Service-Dominant Logic
Service-dominant logic is an approach to business that recognizes that consumers want value.
Defining and labeling are difficult. Value and one-to-one are both natural extensions of the marketing concept, and still in the marketing era.
Creating Offerings That Have Value
Marketing creates those goods and services that the company offers at a price to its customers or clients. It consists of the tangible good, the intangible service, and the price (the company’s offering).
However, you can’t buy one manufacturer’s car, another manufacturer’s service, and a third manufacturer’s price when you actually make a choice.
Marketing people do not create the offering alone. For instance, when the iPad was created, Apple’s engineers were also involved in its design. Apple’s financial personnel had to review the costs of producing the offering and provide input on how it should be priced. Apple’s managers needed to evaluate the manufacturing requirements the iPad would need. The dealers provided input regarding the service policies and warranty structure.
Marketing has the most responsibility to ensure that it will deliver value.
Communicating Offerings
Communicating means describing the offering and its value to your potential and current customers and learning from customers what it is they want and like. Customers get a chance to tell the company what they think as well.
Delivering Offerings
Marketing can’t just promise value, it also has to deliver value. Value is delivered in part through a company’s supply chain.
Exchanging Offerings
To communicating and deliver the benefits to consumers, we must do the actual transaction.
In most instances, we consider the exchange to be cash for products and services. But, what if we pay with "cashback points" or something like that? The transactions would not require cash.
When consumers acquire and consume products and services, exchange occurs. Like Apple’s “One-to-One” program, you can pay a yearly fee in exchange for additional periodic product training sessions with an Apple professional.
The Disposing Services
Apple has a Web page where consumers can fill out a form and ship old devices to Apple. Apple then pulls out the materials that are recyclable.
Reference
Tanner, J. & Raymond, M.A. (2010). Principles of Marketing 2.0. Lardbucket.org. Licensed under a Creative Commons by-nc-sa 3.0.
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