Marketing Theory


Marketing Theory

Marketing is not the same as sales. Although marketing does encompass aspects of sales; for example, developing a marketing plan, advertising campaigns, and sales and service programs, they are distinct concepts. In fact, marketing is the process by which an organization undertakes to identify its target market, develop solid relationships with them, create value in return for that value, and then capture that value in exchange for payments. Marketing therefore, includes various measures such as research, development of products and services, and the promotion of those products and services. Sales on the other hand, involves activities such as collecting payments and delivering the products and services.

Marketing myopia can be a major cause of product concept constraining the strategy adopted by marketers. Many companies view marketing as something about which they should know absolutely nothing. Consequently, these companies fail to recognise the importance of the marketing concept in creating consumer demand and making their products and/or services accessible to consumers. Moreover, many marketers and business owners also fail to understand the concept of value creation, which is essentially the difference between what consumers pay for a product and what they are able to obtain for the same price.

This lack of understanding of the concept of value creation distorts the process of marketing, which results in uncoordinated marketing efforts, less profit and higher marketing cost. For example, if a company adopts a two-tier marketing approach, whereby lower-priced products are advertised in response to high-priced products, then it will not be able to achieve significant profit. On the other hand, if a company adopts a coordinated marketing effort, in which all of the marketing activities are coordinated to provide maximum value to customers, then a company can reap greater benefits from its marketing activities, as customers will be attracted to its products or services, and will be prepared to pay more for them. Thus, a well-planned coordinated marketing campaign can help a company to realise maximum benefits from its marketing efforts, by ensuring that all marketing activities are carried out in a manner consistent with the value creation concept. This enables marketing organisations to increase their profit and reduce costs. Therefore, organisations that want to reap the maximum benefits from their marketing activities should ensure that they understand and implement the concept of value creation.