The Importance of Marketing for Business - Essay Example

 Table of Contents Introduction: 2 The importance of marketing to businesses: 3 Helps businesses create value for customers: 3 Helps businesses create lasting relationships: 4 Relating Directly: 4 Social CRM: 4 Business to Business (B2B) relationships: 6 Capturing Value from customers: 7 Customer loyalty and retention: 7 Growing share of customer: 7 Recommendations: 8 Works Cited 9 Introduction: The importance of Marketing to a business in the modern business era can be best understood with the example of Nike. The Nike “swoosh” is everywhere around us. Nike has turned the ever-present swoosh into one of the best known brand symbols on earth. To build its brand image and market share Nike spent generous amounts of money on big-name endorsements, flamboyant promotional events and in-your-face “Just do it” advertisements. But Nike’s marketing success has more to it than just promotional hype. Nike gives its customers far more than just good sports gear. They make sure the customer doesn’t just wear his Nikes, he experiences it. Nike doesn’t just market sports shoes or athletic wear; it markets a way of life[Kot081]. The Nike examples proves that through smart and innovative marketing businesses can create value for customers, build strong customer relationships and capture value from them in return. The importance of marketing to businesses: Helps businesses create value for customers: Marketing helps a business in creating value for its customers. Most companies today implement customer driven marketing strategies which allow them to create value for target customers. The process can be better understood through the following diagram: 1 Companies today identify and select marketing segments, develop products and marketing programs targeted to each and focus on the buyers who have more interest in the values that they create the best. They then decide on a value proposition by differentiating the market offering and positioning it in the minds of the target customers. Helps businesses create lasting relationships: The customer relationship management part of marketing is about maintaining and building profitable business relationships by delivering superior customer value and satisfaction. Just as companies are being very choosy about which customers to serve, they are serving the chosen customers in a more lasting way. Marketing today has become an art of finding, retaining and multiplying profitable customers Relating Directly: Apart from helping companies connect more deeply with their customers, marketing also helps companies connect to customers more directly. It helps customers buy virtually everything without going to a store through telephone, online, mail order catalogs etc. In fact, such has been the success of direct marketing that some companies such as Dell only use the direct channel to sell their products[Kot081]. Social CRM: Marketing also helps businesses build strong, lasting and profitable relationships with customers through social media. The benefits that businesses achieve by effective use of social media are: 1. By effective use of social media companies can quickly build a network of core customers and supporters[Ian101]. The feedback that loyal customers can provide is extremely valuable to businesses and can sometimes lead to major improvements in how a business offers a product or a service. Networks of loyal followers such as these can also help the company find new customers by referring the company’s product or service to others if they are pleased with what they have found. 2. Social media also helps a company attract more traffic to its website. The more traffic the company’s website continually obtains, the higher its ranking grows amongst the search engines[Ian101]. High ranking with the search engines, in turn, helps the company attain better online exposure and visibility. More traffic to the company’s website also helps the company spread information about new products and services quicker 3. Apart from attracting useful feedback social media also helps businesses engage its customers and potential customers in a constructive way. Many companies have benefitted from intriguing online competitions and contests. Customers are encouraged to upload photos and videos etc. And then other customers comment and “like” the uploaded content. In this way customers are engaged amongst themselves and buzz is created. Business to Business (B2B) relationships: Partners inside the company: As the late David Packard, cofounder of Hewlett-Packard wisely said, “Marketing is too important to be left only to the marketing department”[Kot081] Latest marketing concepts help companies link all departments together to create greater value for the customer. Businesses such as P&G are now forming cross functional teams comprising not just of sales and marketing people, but people from different departments such as operations, finance etc to help deliver more value to the retailer and ultimately to the customer. Marketing Partners outside the firm: Marketing also helps companies connect with suppliers, channel partners and even competitors in a better way. Companies these days are heavily connected to each other and each firm relies on its partnerships with other firms. Companies know that their fortunes rest not just with themselves but also with their partners. Success at the end of the day comes to the company whose supply chain performs better than the competitors’. This is why Supply Chain Management has become such an important part of marketing practices. [Kot081] Capturing Value from customers: Marketing helps firms capture value from customers in the form of profits, market share and current and future sales. Firms focus on creating superior value for customers so that highly satisfied customers can be created who stay loyal to the firm and buy more with the passage of time. This results in greater long term returns for the firm. Customer loyalty and retention: Good marketing helps companies create not just customer satisfaction but customer delight. Studies have proved that even a minute drop from complete satisfaction can create a mammoth drop in loyalty. Therefore it has become essential for companies to create customer delight. Marketing also helps companies realize that losing a single customer means losing far more than just a single sale. Losing a single customer means losing the whole stream of purchases that the customer would have made over a lifetime of patronage.[Kot081] Growing share of customer: Good marketing not just helps companies in retaining valuable customers to capture lifetime customer value but it also helps companies increase their share of customer. Share of customer refers to the share companies get of the customer’s purchasing in their product categories. To increase their share of customer, companies can offer greater variety to their existing customers. Good marketing practices also teach that in order to market more services and products to existing customers, they must cross and up-sell. Amazon.com is a great example of this phenomenon. It started out as an online bookseller but now it offers customers music, apparel, toys etc as well.[Kot081] Recommendations: Apart from practicing Social Customer Relationship Management (SCRM) companies should also practice Social Business to Business Relationship Management. Social Business to Business Relationship Management is all about social engagement with the aim of gaining the trust of the business client. The aim should be to build long term, mutually beneficial relationships. Effective use of B2B SRM can enable companies to avoid the perennial pitfall of pitching the wrong message at the wrong time[Soc10]. Companies sometimes cross the ethical line in their conquest for finding, retaining and growing existing customers. This should be avoided at all costs because as important as marketing and consumer insights are, company reputation should not be put at stake because of these. Companies that lose their reputation find it almost impossible to retain existing customers and find new ones. It is therefore essential that companies follow the ethical codes in their marketing practices. Works Cited Kot081: , (Kotler), Kot081: , (Kotler 173), Ian101: , (Richardson), Kot081: , (Kotler), Soc10: , (Social Networks and CRM), Read More