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What is Marketing?

If you can think of a blog as a market, then this (and future blog posts) represents the product that I am putting into the exchange. Your reading it is the price you pay (but I really hope my writing isn't that bad).

In each blog, I'll summarize the lectures and mention examples from my own experiences with business marketing. See what I just did there? I promoted my product! The places I will deliver AND promote my product are on Twitter and in the Coursera discussion forums--and, of course, this RebelMouse blog itself.

Now that I've subtly introduced the Four P's of Marketing, I will return to beginning: What is marketing? Professor Kahn defined it as the study of markets, with markets representing an exchange, usually between a buyer and a seller, of some good or service. Although simple, that definition doesn't quite align with my virgin view of marketing as a verb (that's almost synonymous with advertising) and not a field of study.

So based on Dr. Kahn's otherwise solid lecture notes,* here is my definition of marketing:

Marketing is all the things you do when you're trying to sell something, including, but not limited to, how you promote or place it.

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What are some things sellers do? Focusing on for-profit companies, I'll attempt to explain Dr. Kahn's four types of marketing orientations:

  1. Product Orientation. A product-focused company focuses on--surprise--the product. It tries to increase profit margins and gain larger market share by innovating, selling in volume, lowering operational and manufacturing costs, and convincing the customer why its product is better than the competition's. From personal experience, I would put McDonald's, Google, GM Motors, and Spirit Airlines in this category. These are all companies I patronize mainly because I like their product, not because they like me. Such companies focus on Product Differentiation, one of the three principles of marketing.
  2. Customer Orientation. Customer-focused companies focus on delivering "value" (still not quite sure how to neatly define this word) to its chosen set (or segment) of customers. By doing so, it can charge a premium price, commensurate with the "value" the customer perceives he or she is getting in exchange. Instead of market share, such companies aim to increase customer loyalty (thus reducing customer acquisition costs) and to cross-sell to its repeat customers. Customer-focused companies I've dealt with include Allen Edmonds, Costco, and Amazon. (I'm happy to defend these choices, but not right now.) These companies in particular apply the marketing principles of Customer Value and Segmentation, Targeting, and Positioning.
  3. Experience Orientation. Thanks to globalization, the internet, and social media, some companies are wise enough to know they need to be transparent and manage the customer's entire experience, not just the transaction/exchange. In this way, the customer becomes a co-creator of the product. I would put Southwest Airlines (see image above), Amazon, Hampton Inn, and most mobile app developers into this category.
  4. Trust Orientation. I'm not 100% sure on this one, but I suppose that Trust-based companies go a step further by developing relationships with their customers, not just responding to isolated experiences. They deliver "genuine value" by cutting costs and being disciplined. I suppose I would put Aldi's and Uber into this category? Companies in this category would likely focus on all three marketing principles.
So there you have: the basic principles of marketing in a nutshell. Leave a comment, please. I want us to develop trust, and that can only happen if you supply feedback.

*All due respect to Dr. Kahn and the other instructors, Wharton, and Coursera. Any glib comment that appears above (or below) is only done for reading effect and not to insult or criticize. In fact, I invite critiques from them, my fellow classmates, and the real experts out there.


Leaders pick their lane and stick to it

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In the third lecture of Wharton's Introduction to Marketing course, Dr. Khan introduced a framework for "figuring out how to think competitively to become a leader in your market." The framework is based on the book The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market (Basic Books, 1997) by Michael Treacy and Fred Wiersema."

The first principle in the framework is to know your markets: do market research, focus on the customer, anticipate their reactions, etc.

The second principle, in a nutshell, is to be great at one of the categories in the figure above and "pretty good" at the other two.

How did these categories come about? Khan claims that the framework is built on the assumption that these are the categories, or "bundles" as she calls them, that customers use when making market-based decisions. I can't argue with these bundles; it seems reasonable that these are what I use when evaluating a potential transaction.


Here's how I understand the three bundles:

  • Operations: This involves such factors as deliver, service, and reliability. I would summarize this is operations efficiency, which general results in being cost competitive. In this bundle, pretty good is called "Operational Competence." Great is called "Operational Excellence," and I would put the following companies in that category: Amazon; UPS; Ikea; Carmax; Spirit Airlines; and Aldi's.
  • Performance: This covers the features and attributes of a product, including design. A pretty good product would be a least distinguishable; perhaps one of its features stands out. But a great product would be best in class. I'm no Apple fan (only because I swear my allegiance to Android), but the iPhone is best in class. Other companies, besides Apple, that strive for "Performance Superiority" include: BMW; Nike; and HBO.
  • Customization: In the third bundle, customers look for products or services that are most tailored to them. For example, hiring a financial advisor would lead to a more customizable experience than getting advice from Mint.com. But customization comes at a cost! Companies that I find to strive for "Customer Intimacy" include: Nordstroms; Wegmans; and Allen Edmonds.


But is Dr. Khan right? Should you just strive be great at just one and settle for pretty good at the other two? She may be right for three reasons:

  1. Even if you're pretty good, or great, at all three, the customer, who is always right, puts more weight one bundle and settles for "good enough" on the others. For example, BMW and Kia may both be pretty good at Customization, but I may make my decision based on Cost, so I would go with Kia. But if I were a Performance-driven customer, I'd buy a BMW.
  2. But if, let's say BMW, decides to cut costs, more than likely, customization and or Performance will suffer. That's why BMW doesn't try to compete with Chevy on cost, and Chevy does not try to compete with BMW on Performance.
  3. It's probably impossible logistically and financially to be a leader at all three.

In summary, know what your customers want, then pick your lane and stick in it.

Using RebelMouse as a blogging platform

You can blog directly on RebelMouse. We've recently added new fonts for full-length posts that make it easier to read directly on the page. Here are some ways to start:

  • Add more to any tweet or link you've shared. Edit any post on your site to turn it into a full-length blog post you can share with anyone! Often times a link inspires us to write more and this is an easy way to do it on the fly.
    Read more...
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