Instead of interrupting, work on attracting.
- Dharmesh Shah
As consumers are exposed to more and more advertisements on social media, TV, outdoors, etc., marketers need to attract customers to the product or brand rather than interrupting their daily activities with them. How can marketers do this? By optimizing the marketing process. The marketing process is through which brands create customer value and thus build sustainable and profitable customer relationships. In this article, we'll explore the importance of the marketing process and how it can help achieve business goals. We'll discuss the definition of the marketing process, the steps involved and provide examples to illustrate how it works in practice.
Marketing Process Definition
The marketing process is the series of steps businesses follow to promote their products or services to potential customers. It involves identifying the target audience, creating a marketing strategy, implementing the plan, and capturing customer value. Essentially, it's the process of making people aware of what a business offers and convincing them to buy it.
The marketing process is a five-step process marketers use to create customer value and build long-lasting customer relationships.
A small online clothing store follows the marketing process by identifying its target market of young adults, creating a customer-driven marketing strategy that emphasizes trendy and affordable fashion, developing an integrated marketing plan that includes social media ads and influencer partnerships, fostering long-term relationships through personalized customer service and loyalty programs, and capturing value by offering competitive prices and encouraging repeat purchases.
Marketing Process Steps
Now, let's take a look at the marketing process steps. The five steps of the marketing process include:
- Understanding customers and the market,
- Creating a customer-driven marketing strategy,
- Creating an integrated marketing plan,
- Fostering long-term sustainable customer relationships,
- Capturing value from customers.
Figure 1 below outlines the marketing process steps.
Understanding Customers and Markets
The first step of the strategist marketing process includes understanding customers and markets. The foundations of this step include understanding customer wants and needs.
A customer need is something an individual needs in terms of survival. These include basic necessities such as food, water, shelter, or clothing.
A customer want is something that an individual desires. For instance, an individual needs food to survive; however, the individual might want different types of food, such as soup, pizza, or rice.
Customer wants and needs are what create demand in a market. The market is where customers and businesses can engage in exchange relationships. In turn, demand is fulfilled by the market, specifically market offerings. Market offerings are the different types of goods and services businesses create to satisfy customer demand.
Beyond just meeting demand requirements, marketers must ensure that a good or service creates customer value. Creating value can lead to satisfied customers who stay loyal to the brand. As a result, it is also crucial for building long-term customer relationships.
Creating a Customer-Driven Marketing Strategy
The following step involves creating a customer-driven marketing strategy. Now that we understand the basics of markets and customers, we must decide which customers and markets to serve.
Creating a marketing strategy involves market segmentation, targeting, and positioning (STP). The STP model helps marketers decide which customers to target and how.
Once marketers have selected a target customer group, it is essential to position and differentiate the product. Positioning and differentiation allow the product or service to stand out from competitors by highlighting the value it brings customers, thus, satisfying customer needs.
The business must also decide which overarching concept will lead its marketing strategy. The five key concepts are as follows:
The production concept follows the idea that customers will always demand products that are available on the market. Therefore, companies have to focus on maximizing production and distribution.
The product concept is the idea that customers demand high-quality products that have useful features and numerous benefits. Therefore, companies should focus on product innovation and differentiation.
The selling concept argues that customers will not value or purchase a product unless a brand specifically targets large promotional campaigns at them.
The marketing concept follows that companies should create products that satisfy customers' wants and needs better than competitors rather than focusing on production or selling. Therefore, understanding customers is key.
The social marketing concept is the most recent one. This concept argues that organizations should satisfy both the short and long-term needs of customers and society in general. The focus here is on maintaining the welfare of the company and society. Therefore, the focus should be on sustainability.
Creating an Integrated Marketing Plan
Once a marketing strategy has been established, it is time to create a marketing plan.
The marketing plan outlines how the organization or brand will generate customer value through different mediums.
The marketing plan broadly relates to the 4Ps of marketing: product, price, promotion, and place. The brand can deliver value to its target customers through the different elements of the marketing mix.
Want to refresh your memory? Take a peek at our marketing mix explanation.
Marketing Planning Process
The marketing planning process allows a company to plan out the various activities and tasks required to reach overall business goals. Some of the critical elements of the marketing planning process include:
Conducting a market analysis (internal and external),
Establishing marketing goals and objectives,
Establishing the marketing budget,
Implementing marketing tasks required to achieve goals,
Controlling the marketing process,
Evaluating marketing outcomes.
Check out our explanations of the Marketing Plan and Strategic Marketing Planning to explore this concept in further detail.
Fostering Long-Term Sustainable Customer Relationships
Once marketers have established an integrated marketing plan, they must focus on building customer relationships. Every brand aims to foster long-term customer relationships to sustain brand preference and customer loyalty.
Customer relationship management (CRM) is the overall process of interacting with customers to build long-term sustainable relationships.
The primary goals of customer relationship management are to:
Increase customer value perception by highlighting the benefits and features of products and services,
Increase customer satisfaction and mitigate customer dissatisfaction,
Engage customers through brand management and marketing communications on various channels,
Promote customer-generated marketing (e.g., user-generated content (USG) on social media, customer reviews, competitions, etc.).
Partnership Management
Another important aspect of customer relationship management involves partnership management. Partner relationship management includes nurturing key partner relationships that help the company create value for customers. Key partners may range from supply chain and channel partners to agencies, influencers, etc.
Capturing Value from Customers
Once the first four steps of the marketing process are complete, it is time for the company to capture value from customers.
What exactly does this mean? After ensuring customer value creation, the brand can also capture customer value. This ensures that the brand stays profitable in the long run.
How does a brand capture value? There are a few synergies that allow for this to happen, and they are as follows:
By creating brand preference within target customers and long-term customer relationships, the brand ensures repeat purchases (retention) and customer loyalty. This idea is known as customer equity.
The brand can capture value due to increased market share creating customer value and inducing retention.
Higher market share and customer loyalty lead to an increase in revenue and profit, contributing to the company's financial success.
As a result, the marketing process allows customers to gain value from brands and products, while brands can capture value from customer relationships.
Inbound Marketing Process
Inbound marketing focuses on attracting potential customers to a business through valuable content and experiences rather than interrupting them with irrelevant ads or messages. The inbound marketing process typically involves the following steps:
- Attract: Attracting potential customers by creating relevant and valuable content that solves their problems or answers their questions. This could include blog posts, social media content, videos, infographics, etc.
- Convert: Converting website visitors into leads by offering them something of value in exchange for their contact information, such as a free e-book, webinar, or consultation.
- Close: Nurturing leads through the sales funnel and closing deals by providing personalized and helpful information addressing their needs and concerns.
- Delight: Providing exceptional customer service and support to turn customers into brand advocates who will refer others to the business and continue to engage with the brand.
Marketing Process Importance
The marketing process is important as it allows brands to understand customers and capitalize on long-term customer relationships. Figure 2 below outlines the four different customer relationship groups.
The diagram outlines the relationship between customer loyalty and company profitability. The four distinguished customer relationship groups are labeled as follows:
Butterflies show high profitability potential for the company in the short term. Even by targeting these customers with effective marketing and CRM, the company might encounter little luck turning these customers into long-term loyal ones.
Strangers are short-term customers who bring low profitability to the company. It is not worth investing much CRM into these customers; the company should enjoy the fleeting short revenue these customers bring.
Barnacles exhibit limited customer-brand fit but are highly loyal to the brand. It can prove difficult to generate profits through these customers. However, the company can attempt to remove certain benefits or increase prices to drive profits from this segment.
True friends are loyal and profitable customers. The company should invest in significant CRM to engage and retain these customers.
Marketing Process Example
Before you head off, let's briefly examine a marketing process example. Imagine a new clothing brand entering the market.
Understanding customers and the market:
A company that sells athletic shoes conducts market research to understand the needs, preferences, and buying behaviors of its target customers, including their age, gender, income, and lifestyle. This information helps the company create products that meet the specific needs of its target market.
Creating a customer-driven marketing strategy:
Based on market research, the athletic shoe company develops a customer-driven marketing strategy focusing on product differentiation, superior customer service, and effective promotion. The company differentiates its products by offering the latest technology and innovative designs while providing exceptional customer service through personalized recommendations and fast delivery.
Creating an integrated marketing plan:
The company creates an integrated marketing plan that includes traditional and digital marketing channels to reach its target audiences, such as social media advertising, email marketing, influencer marketing, and sponsored events. The marketing plan also includes a clear value proposition and messaging that resonates with the target audience.
Fostering long-term sustainable customer relationships:
To foster long-term sustainable customer relationships, the company invests in customer loyalty programs, such as exclusive discounts, early access to new products, and personalized recommendations based on their purchase history. The company also regularly collects feedback from customers and uses it to improve its products and services.
Capturing value from customers:
The company captures customer value by setting competitive prices that reflect its products' quality and value, while offering promotions and discounts to encourage repeat purchases. The company also uses data analytics to track customer behavior and identify opportunities for cross-selling and upselling.
Marketing Process - Key takeaways
- The marketing process is a five-step process marketers use to create customer value and build long-lasting customer relationships.
- The five steps of the marketing process are:
Understanding customers and the market,
Creating a customer-driven marketing strategy,
Creating an integrated marketing plan,
Fostering long-term sustainable customer relationships,
Capturing value from customers.
Positioning and differentiation allow a product or service to stand out from competitors by highlighting the value it brings customers, thus, satisfying customer needs.
The marketing plan outlines how the organization or brand will generate customer value through different mediums.
Customer relationship management (CRM) is the overall process of interacting with customers to build long-term sustainable relationships.
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