Just wondering how digital marketing works and what should I know? Then this is the right place to begin. Let us know the basic set of jargons first to begin with:
Kotler defines marketing as "The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return."
In general, marketing is considered to be only selling ad advertising. But the term marketing has a much deeper meaning, and as a function, it is a gamut of sub activities, including, but not limited to selling and advertising. Modern day marketing is a vibrant function of finding, satisfying, retaining, and re-inviting customers, by way of varied activities.
Marketing as a function is applicable not only to companies, but to people as well. Every individual is performing marketing at some point in his/her life. This can be seen in a very common example in every person's life. A guy sees a girl, and wants to woo her. He does this by:
- Find ways to talk to her: Networking
- Get talking to her: Communication
- Project a good image of himself to her: Branding
- Attract her: Advertising
- Knows what she is and how she reacts to situations:Â Understanding consumer behaviour
- Make her like him: Conversion and Sale
- Make her stay with him for life: Retention and loyalty
This as it can be seen is not just a list of independent activities. These activities only when interrelated, create true value. If a name has to be given to the group of activities put together, it would be called Marketing.
A BMW 5series, a Rolex, a pack of Surf Excel detergent, eBay. Which among these can be defined as a product?Well, everything listed above are products. A product is anything that can satisfy a want or need. Products include physical objects, services, events, concepts, places, people, ideas, organizations, or experiences. Anything which is offered to a market with an intention to address or satisfy a want or need, is a product.
3. Product Life Cycle (PLC)
Just like how a plant has a life cycle, which begins with the sowing of the seed, goes on to sprouting, shooting leaves and establishing roots, and finally shrinking and withering away, every product also has a life cycle.
The product life cycle happens in four different stages
Introduction: It is a stage when the product is totally new to the market. The stress is not on immediate profits, but on creating awareness about the product. A price skimming strategy is employed. The product has no, or very few competitors.
Growth: Competitors are attracted into the market. They begin offering similar products. Product becomes more profitable. The stress is on advertising and brand building. Market share starts stabilizing.
Maturity: Â The survivors of the earlier stages tend to stay longest in this stage. Sales grow at declining rates. Producers leave the market because of poor margins. Sales promotion and price wars are rampant and find prominent part in this stage.
Decline:Â This stage marks the downturn of the market. Sales grow negatively. Many products are withdrawn from the market. Profits are ensured by cost cutting and reduced marketing spend.
All products need not go through all these stages. There are products which go from introduction to decline. The length of each stage also varies enormously. The decisions of the marketers also change the stage. For example a steep price rise can take the product from growth to decline, or a shift from decline to maturity can be experienced by a price cut.
4. Marketing Channel
Also known as 'Channel of Distribution' or 'Distribution Channel", a marketing channel is the path through which goods/services flow from one end to another(marketer to consumer), and monetary flow happens the other way around(consumer to marketer).
A marketing channel can be short, i.e. Manufacturer to Consumer, or a long chain, involving many intermediaries Manufacturer to wholesaler to a retailer, before reaching the final consumer. Each link in the chain receives the product at one pricing point and forwards it to the next link at a higher pricing point making his margin.
5. Marketing Mix
The term "Marketing Mix" is also known as the 4Ps of Marketing. This is a tool for making Marketing decisions. All decisions fall broadly into 4 major categories. These decisions are subject to external constraints of the marketing environment.
Each Category has its own set of parameters like, for example, the Product category may have decisions regarding design, color, packaging, functionality, Â quality, etc. This concept was used during the early stages of the evolution of marketing. The newer concept does not have 4Ps, but it has 7Ps, providing a comprehensive categorization of Marketing decisions which a marketer would have to take.