1. What is Marketing (Kotler’s definition)
Definition of ‘Marketing’
What is Marketing: According to Philip Kotler, “The term Marketing is defined as a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others” is known as Marketing.
Dr. Philip Kotler defines marketing as-
“The science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.”
Based on my understanding with regards to the definition of Marketing, it is a science which means it undergoes step by step by process that results to a certain product or services that are needed by the consumers or buyers. The main goal of marketing is to sustain and fulfill the unlimited wants and needs of human, also to uplift the quality of life of people and companies are producing products and services based on the demand of the people. Simply, to guarantee the profit of the company. It is a managerial process because it includes management techniques and social because it socially considerate in manner.
2. Enumerate and Discuss the goals of marketing.
THE GOALS OF MARKETING
Marketing according to Kotler and Armstrong (1987) affects so many people in so many ways that is inevitably stirs controversy. They went further by saying that some people intensely dislike modern marketing activity, charging it with running the environment, bombarding the public with senseless advertisements, creating unnecessary wants, teaching greed to youngersters and committing several other sins.
Many business executives according to Kotler and Armstrong believe that marketing’s Job should be to stimulate consumption, which will in turn create maximum consumption which will in turn create maximum production employment and wealth.
The assumption is that the more people buy and consume the happier they are. “More is Better” is the war cry. Yet some people doubt: that increased material goods mean more happiness. They see to many affluent people living unhappy lives. Their philosophy is “less is more” and “small is beautiful”.
MAXIMIZE CONSUMER SATISFACTION
The second goal suggested for the marketing system Kotler and Armstrong is maximizing consumer satisfaction, not consumption. To them chewing more gum, owning more clothes, for instance counts only if this results in more consumer satisfaction.
However there are a lot of problems associated with measurement of consumer satisfaction. These problems according to Kotler and Armstrong are:
- Nobody has figured out how to measure the total satisfaction created by a particular product marketing activity.
- The satisfaction that individual consumers got from the “goods” of a product or service must be offset by the “bad” such as pollution with environment damage.
- The satisfaction people get from consuming certain goods such as status goods, depend s an few other people having these goods. Thus it is hard to evaluate the marketing system in terms of how much satisfaction it deserve.
Kotler and Armstrong also state that some marketers believe that the goal of a marketing system should be to maximize product variety and consumer choice. The system according to Kotler and Armstrong would enable consumers to find those goods that exactly satisfy their tastes. Consumers would be able to maximize their life styles and therefore their satisfaction.
Unfortunately, maximizing consumer choice can only be achieved at a cost in the following ways.
- Goods and services will be more expensive, since great variety will increase production and inventory costs. And higher prices will reduce consumer’s real income and consumption.
- The increase in product variety will require greater consumption search and effort consumers will have to spend more time learning about and evaluating the different products.
- More products will not necessarily increase the consumer’s real choice. For instance there are many brands of beer but most of them taste the same. When a product category contains many brands with few differences, consumers are being offered a false choice.
Finally, great product variety is not always welcomed by all consumers. For some consumers, 100 much choice leads to confusion and frustration.
MAXIMIZE LIFE QUALITY
Most people would agree that quality of life is worthwhile goal for the marketing system, but they recognize that it is not easy to measure satisfaction they create, but also by the impact they have on the quality of the physical and cultural environment.
Maximum Consumption simply means that one of the goals of marketing is to practice the theory of maximize utility that leads to maximize production of goods and services and due to this, it gain profit to the company as well as satisfaction and happiness to the consumers or buyers. The second one, is the Maximum Consumer Satisfaction, according to Kotler and Armstrong, it is very hard for us to define how satisfied an individual to a certain product and service because we can’t actually measure their satisfaction towards the services/products but one of the goals of marketing is to fully satisfied the consumers or buyers of our product. In order for us to satisfy them, we need to do our best in terms of services and good quality in terms of product to fully gratify them. Second to the last is what we called the Maximize Choice. It simply states that we need to know what are consumers want and what are the demands. If this demand and wants and also the needs of the consumers are known by the producers of the product and services( such as companies, factories, etc.) we can now fully maximized their choice to select or pick to the products that the producers have been made because it sustains the needs and wants and even their lifestyle. And lastly, is the “Maximize Life Quality” it’s just explain that one of the goals of Marketing is to uplift the quality of life of the consumers or those who buy and even consume the products and services. We can know that by the impact to the people who those utilized a certain product or service. Is it positive or negative impact to the people and even to the environment.
3. Discuss the concept of customer value and its importance to successful marketing.
CUSTOMER VALUE CONCEPT
We are living in a world that is most unstable and dynamic. World is not only changing but the rate of change is accelerating. We are experiencing change in our daily life and in marketplace too. Customer needs, wants, expectations are changing more rapidly; customers are increasingly demanding better quality and reliability in products and services; new products and services are coming to market more quickly, competition is getting more intense and global; and technology is changing rapidly.
Businesses are operating in an uncertain, highly competitive, and highly complex environment. Not only small but big players are also facing difficulties and challenges. Top companies are loosing market share and new companies are taking their place. In cell-phone industry Nokia was the market leader, but it is not so today, Samsung took its place.
Today, the leading edge companies are giving importance to customer satisfaction, loyalty, and value. They are providing higher customer value to attract new customers and retain existing customers and it leads to their long term profitability and growth.
Definition of Customer Value
According to Woodruff (1997, p. 142) – “Customer value is a customer’s perceived preference for and evaluation of those product attributes, attribute performances, and consequences arising from use that facilitate (or block) achieving the customer’s goals and purposes in use situations”.
Customer value is the difference between the values the customer gains from owning and using a product and the cost of obtaining the product.
Customer value is the difference between total customer value and total customer cost. Total customer value is the sum of product value, service value, personnel value, and image value. Total customer cost is the sum of monetary cost, time cost, physics cost, and energy cost.
For me, the concept of customer value simply defines as a way on how you will going to show to your consumers that they are worthy and you need them. How they are going to still love and patronize the products/services that they are being deliver/render. It is said to be the difference between the result of buying and utilizing the product and the cost of obtaining it. It is also the difference or base on my own understanding, my equational representation for this is (total customer – total customer cost). Product value+service value+ personnel value+ image value=TOTAL CUSTOMER VALUE while monetary cost+ time cost+physics cost+ energy cost= TOTAL CUSTOMER COST.
IMPORTANCE OF CUSTOMER VALUE
Customer Value…The Ultimate Path To The Best Strategies, Products & Services
What customers will buy at a profitable price is the one thing that can consistently help companies make the best choices about strategies, products and services.
All strategies such as improving quality, enhancing service, lowering operating cost, changing distribution channels, altering the go to market approach, raising productivity through technology, discounting prices and so on depend on customer value. Why do strategies that are successful for some firms turn into abysmal failures for others? Why don’t some of the success principles espoused in countless books actually work all the time? Why does the opposite of these success practices yield good results sometimes? These supposed holy grails of success actually only work in certain situations and not others. What links them all together is customer value.
Value versus price
Customer Value versus price
The customer’s perceptions of value determine what they will buy, what they won’t buy, what they will pay a profitable price for, and what they won’t buy at any price. What customers will buy at a profitable price is the one thing that can consistently help companies make the best choices about strategies, products and services. When customer value drives strategy, firms can grow faster, generate higher profits and deliver better shareholder value.
Customer Value Lies Inside The Mind Of The Customer
Value lies inside the mind of the customer. It does not lie inside products, services, quality, excellence or strategy. That value drives every single decision to buy whether for consumers, business to business, non-profits, government, educational institutions or anything else that exists on this planet. What makes products, services and strategies successful comes down to how closely aligned they are with customer value.
If you look at any market through the eyes of its customers’ perceived value, you can figure out why certain strategies succeeded while others failed. You can see why a super quality approach worked for one firm and failed for another. You can understand why great service won the day for one firm and tanked another. You can understand why deep discounting of marginal quality products succeeds sometimes.
It’s all about what causes customers to make a decision to buy or not buy and how that changes with each offering. Examine this realistic snapshot of one persons approach toward buying a variety of products and services and you can see how customer value connects back to strategy
They buy a Lexus or BMW because they want the very best quality and reliability in their car not to mention the status. But they buy their suits at Men’s Warehouse because they don’t believe most people can tell the difference between their suits and the name brand ones. They turn around and buy the most expensive ties imaginable because they feel that makes an important statement. They get their haircut at the cheapest discount barber because one haircut is like another.
At the office, they buy the cheapest discount copy and laser printer paper because they think the name brands are a waste of money. They buy the best engineered and most expensive production equipment possible for the manufacturing floor then turn around and pay their people the lowest wages in their local area. To boost employee morale (which sags all too easily), they are always throwing company picnics, recognition and reward events, and offer free soft drinks.
At the super market, they buy the cheapest generic paper towels and only when they are on sale. They will fill their cart with all kinds of everyday products but bypass this certain brand of cheese they love because they can buy it at Wal-Mart for $2.00 less a pound. When their local market replaced their favorite brand of floss with another brand, they went on the internet to buy it. But for meats, fish and produce, they only buy at Whole Foods to get natural, organic products without pesticides or antibiotics even though they pay a lot more.
The apparent inconsistencies in these buying decisions are quite common. In fact, virtually everyone exhibits some type of inconsistency in their reasons for buying different products and services. Welcome to the world of Homo sapiens otherwise known as human beings and for the purposes of our discussion they are called customers. Our choices about what we will and won’t pay money for come down to what is important to us.
Customer Value is really important for a company or a firm to grow and develop and even to gain profit as well. Customer Value will going to help in order for you to succeed in business world simply because the product that you’re going to produce is coming from the desire of your consumers or customers, they are the one who will going to tell you what are the needs and wants of them. And producing the product and services that they need is customer value. Now, on the other side, if you’re going to produce a certain product without even researching about the demands of people around you as your perspective, you are not valuing your customer and due to this the product or services that your providing or producing is not needed by your perspectives and this may result to failure of the firm or company because they don’t consider the household and even value their target customer. Failure is not the only thing that the company will meet if customer value is disregard, they are also loosing the chance to gain more profit. That’s why customer value is really important before producing a certain product or services because they are the one who will going to choose their needs and wants, unguarantee profit will be the result of not considering your customer.