Now that we understand how marketing came to become an important component of the economy, let us look at the definition of marketing and the marketing concept in more detail:
Marketing is defined by the American Marketing Association as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large .” If you read the definition closely, you see that there are four activities, or components, of marketing:
- Creating. The process of collaborating with suppliers and customers to create offerings that have value.
- Communicating. Broadly, describing those offerings, as well as learning from customers.
- Delivering. Getting those offerings to the consumer in a way that optimizes value.
- Exchanging. Trading value for those offerings.
To address these activities, marketing personnel are tasked with developing and implementing the Marketing Mix. The Marketing Mix is commonly referred to as the 4Ps:
- Product. Goods and services (creating offerings).
- Promotion. Communication.
- Place. Getting the product to a point at which the customer can purchase it (delivering).
- Price. The monetary amount charged for the product (exchanging).
None of these components can be delivered effectively without good marketing research. Marketing research is how a company understands their customers and the best ways to meet their needs.
Occasionally, you may hear the 4Ps referred to as the 5Ps. The fifth P stands for people. It is my professional opinion that the 4Ps should revolve around the target market (people) as opposed to be considered on equal footing.
The marketing concept is the use of marketing data to focus on the needs and wants of customers to develop marketing strategies that not only satisfy the needs of the customers but also the accomplish the goals of the organization. An organization uses the marketing concept when it identifies the buyer’s needs and then produces the goods, services, or ideas that will satisfy them. The marketing concept is oriented toward pleasing customers (be those customers organizations or consumers) by offering value. Specifically, the marketing concept involves the following:
- Focusing on the needs and wants of the customers so the organization can distinguish its product(s) from competitors’ offerings. Products can be goods, services, or ideas.
- Integrating all the organization’s activities, including production and promotion, to satisfy these wants and needs
- Achieving long-term goals for the organization by satisfying customer wants and needs legally and responsibly. Typically, profitability is one of these goals, but non-profits can effectively use the marketing concept as well as for-profit entities.
 American Marketing Association, “Definition of Marketing,” http://www.marketingpower.com/AboutAMA/ Pages/DefinitionofMarketing.aspx?sq=definition+of+marketing (accessed December 3, 2009).