Chapter One

Introduction to – Marketing

Just a few stands make up the Mason Area Farmers Market on Saturday summer mornings, yet they buzz with customers all craving the local products that the market guarantees. “Bigger isn’t always better,” said Don Eberhard, of Eberhard Farm in Mason, Ohio. Don has run the Mason market for the past few years and explained how this year’s market has five vendors, whereas last year housed nearly eight. Eberhard said he isn’t afraid of other larger markets running him out of business — he knows the personal feel at his small market is unmatched. “This stuff is as local as you could get,” Eberhard said.
The Eberhard Farm Market has an interesting business model. The customer shops without assistance, determines what they owe and deposits that amount in an orange pumpkin. At first you might think that this business model built upon trust would never work. This model is the basis of two of today's fastest growing companies; Airbnb and Uber. It is also the marketing model used for the purchase of this eBook. To make your purchase go here: Link to checkout
Theodore Levitt, an academic at Harvard Business School, is famous for an article published in 1960 entitled “Marketing Myopia”. The article first appeared in the Harvard Business Review, the magazine he edited for 30 years. Levitt wrote the article only a year after joining the Business School faculty, and is seen as a turning point in the acceptance and respectability of marketing. “Marketing Myopia” argues that companies paid too much attention to producing products and too little to satisfying customers. For example, he points out how the train had lost out to the airplane and motor car because it thought it was in the business of running trains rather than that of providing customers with transport. After 110 years producing automobiles the Ford Motor Company recently announced that they are a product and mobility company and, ultimately, will help change the way the world moves.
Quote Icon Marketing is not the art of finding clever ways to dispose of what you make. Marketing is the art of creating genuine customer value. It is the art of helping your customers become better off. Quote Icon reference: Marketing Insights from A to Z: 80 Concepts Every Manager Needs to Know; By Philip Kotler

 

This eBook presents the principles of marketing with a focus on building strong brands and happy customers. We will define Marketing as the culmination of activities involved in the transfer of goods from the producer/seller to the consumer/buyer, including promotion, shipping, storing, and selling.

What is a market?

A market is an exchange between two partners; a buyer and a seller. For a market to exist, there must be an act of giving one thing and receiving another of the same type or value in return. However, the definition of marketing is going to differ as a result of different aspects of the exchange.
Let us start by looking at the basic exchange where there is one buyer and one seller. If we think of the exchange between buyers and sellers, on one extreme we could have what's called a seller's market. In the seller's market, the seller has a product, and if the buyer wants that product, the buyer must come to the seller. In the seller’s market, the seller has all the power.
Line to buy popcorn
A sellers market for popcorn
The opposite of that would be a buyer's market where there is a lot of competition, a lot of product, a lot of seller's and the buyer has the advantage in the exchange. Low prices result from this excess of supply over demand.
Food Market
A buyers market...
A company's or individual's marketing strategy will not be the same in a buyer's market as in the seller's market. In the buyer’s market, marketing becomes product-focused marketing. When the customers want a product in a product-focused market, they are going to be pursued by the seller. The seller needs to develop products, to the best of their ability, that meets the needs of the customer. 
The product must be innovative and cost effective, in order to capture the highest percentage of the market. Growth in a product-focused market comes from developing new products based on product experience and innovation, resulting in product-focused marketing. Your business objective in a product-focused market is to sell as much as you can.
Profitability in a product-focused market is going to come from volume of sales. Historically in product-focused markets profitability and market share are directly correlated. Market share is your business objective. The bigger your market share, the greater your profit. For example, if 100% of the market volume was obtained, it would result in a monopoly. The company with a monopoly has full control of product volume and price. In addition, in theory the bigger your market share and volume, the lower the product cost and the higher your profitability. This occurs from economies of scale and the ability to spread fixed costs over greater volume. Bottom line, higher revenue and lower cost equals more profit. That is the goal of a firm in a product-focused market.
What is customer-focused marketing?  Customer-focused marketing means that you focus on the customer in order to persuade them to purchase your product or service rather than your competitors. What's the best way to get the customer to buy from you rather than from the competition? It starts by understanding the wants and needs of the consumer, and deliver a product that meets these needs. In product-focused marketing, you (the seller) are the expert, and you create the very best product you can based on your expertise. In a customer-based market, you are going to focus on what the customer values, and tailor the product to meet the customer's need. Some people call product-focus marketing "inside-out" and customer-focused marketing "outside-in".
To better understand how to deliver customer satisfaction, we must first examine the wants and needs of the customer. Who is the customer? What does that customer value? It is impossible to satisfy every need for every potential customer, since as consumers we all place different value on different things. The reason why a buyer's market or customer-focused marketing is so different from a product-focused market, is that every customer out there wants something different. If we try to give everybody what they want, we'll go out of business.
The strategy of customer-focus marketing is to target certain customers and deliver the highest value to those customers. If you say yes to some customers and say no to other customers, we find ourselves with the process of segmentation. Market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.
The different types of marketing orientations can be summarized as follows. Product orientation is where you focus on the product and you persuade the customer to want what the firm has to sell. Customer orientation is where the firm offers what the customer wants and they produce it. That's a customer focused approach. The experience/holistic

Characterized by the belief that the parts of something are intimately interconnected and explicable only by reference to the whole

orientation requires that the firm not only think about the transaction, and think about the transactions over time, but try to manage the customer's entire experience with the firm. One of the tools we will study, Customer Journey Maps will help to define touch points where the company can focus on the customer's experience with the product and the brand.
Holistic marketing is often considered to include four components: relationship marketing, integrated marketing, internal marketing, and socially responsible marketing. Through combining these four components of marketing, a holistic marketing strategy will focus on putting forward a vision and brand that is meaningful to consumers across the entire market. Source: Boundless. “Marketing Orientation.” Boundless Marketing Boundless, 20 Sep. 2016. Retrieved 19 Dec. 2016 from Boundless. “Marketing Orientation.” When times get tough or customers stop trusting markets, then you must concentrate on building a relationship of authenticity, trust, and discipline. This is accomplished by branding. “The process that creates visceral distinctions to evoke immediate responses in people.” Wally Olins, reference : Brand Thinking and Other Noble Pursuits, Debbie Millman
In summary, there are three principles of marketing that we have discussed. This is the essence of what marketing is. The first principle is Customer Value. Providing a product or service of value to the customer making certain that they buy from you rather than the competition. This requires that you give them real, genuine Customer Value. The second principle is the Principle of Differentiation. You have to provide customer value to your customer and must do so better than the competition. This requires that you differentiate your offering. The third principle is the Principle of Segmentation. You target or choose a customer segment you want to focus on, and position your brand to meet the needs of that target segment. Targeting and positioning dictates that when you're in a customer focused market, you cannot deliver value to everybody and make money. It's impossible. As a result, you segment the market into different segments. What are the tools that you use to deliver these three marketing principles? They're the four P's of Marketing; product, place, promotion, and price.
Today, businesses are utilizing the four P’s in clever and unique ways that has led to exciting new business models.
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