Marketing Process

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.

Marketing Process Steps

Now, let's take a look at the marketing process steps. The five steps of the marketing process include:

1. Understanding customers and the market,
2. Creating a customer-driven marketing strategy,
3. Creating an integrated marketing plan,
4. Fostering long-term sustainable customer relationships,
5. 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.

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 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.

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.

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.).

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:

1. 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.

2. The brand can capture value due to increased market share creating customer value and inducing retention.

3. 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.

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.