Click to read the original article for details.
The great Peter Drucker said that the purpose of a business is to guide consumption and create customers. If no consumers are willing to pay, then all products, technology, equipment, and personnel are meaningless because they cannot create value. Customers are the cornerstone of a business's survival and the lifeline of a brand's continuity.
To create customers, Drucker also said that a business has only two basic functions: marketing and innovation. Everything else is a cost.
(Peter Drucker)
The purpose of marketing is to fully understand customers and turn their potential psychological needs into actual purchasing behavior.
For a business, what it wants to produce is not important; what matters most is what customers need you to produce and what products they want to buy.
As the equally great Philip Kotler said, "Marketing decision making"—the market determines production—hits the nail on the head.
It is customer demand that determines the nature of a company's products, defines the company's identity and mission, and determines whether the company can succeed.
That's why when someone asked Kotler, "Which word can precisely define marketing?" he unhesitatingly gave his answer: Demand Management.
Understanding customer needs and managing customer needs—that is what marketing does.
(Philip Kotler)
So, how do you satisfy customer needs? That relies on innovation.
Innovation is creating value in ways that surpass the past to meet customer needs.
With the development of technology and social productivity, better solutions to meet customer needs always emerge in the market. For example, cars replaced horse-drawn carriages.
Although consumers' need for faster, more comfortable, and more convenient travel has remained unchanged, the solutions have evolved: from horseback riding and carriages to bicycles and cars, and now to ride-hailing apps and shared bikes.
If a company does not innovate, it will soon fail to adapt to new customer demands and face decline or elimination.
Understanding customer needs and creating user value—these are the two basic functions of a business.
Therefore, a company's entire business activities must start with customers and end with customers: start with understanding customer needs, and end with creating value for customers and achieving exchange.
Because "marketing + innovation" are the basic functions of a business, marketing and innovation are not monopolized by one department; they are not tasks for a single link in the business but encompass the entire business operation.
Innovation is not just the R&D department's job. Besides product design and production, every aspect of the business—from pricing to service, from channels to management—needs innovation.
As we mentioned earlier with travel solutions, new energy vehicles and autonomous driving are technological and product innovations, while shared bikes and ride-hailing apps are business model innovations.
Similarly, marketing runs through every aspect of a company: R&D, production, sales, and service. All departments must participate in marketing.
As early as 1952, General Electric stated this view in its annual report:
"This approach brings marketing people in at the beginning of the product cycle, not at the end, so marketing can be integrated into all areas of the company's activities.
In this way, through market research and analysis, the marketing department can tell engineers, designers, and manufacturing departments: what customers need in a product, at what price they are willing to buy, and when and where they will need these products.
Whether in product planning, production scheduling, and inventory control, or in sales channels and product services, marketing plays a dominant role."
In this sense, marketing is much broader than sales. If a company is like a football team, formulating the game strategy is marketing, while the striker's final shot is sales.
However, due to the word "营销" (yingxiao), many people interpret it as "营" (ying, meaning to operate or manage) plus "销" (xiao, meaning to sell), as if marketing is just creating an atmosphere for sales, some flashy preparation for sales, like the standard suit a salesperson changes into before visiting a client.
This is a huge mistake. Marketing is not a servant to sales. In fact, without marketing, salespeople would be like headless flies, not knowing who to sell to, what to sell, or at what price.
Moreover, what many people call "marketing" refers only to the series of activities that the marketing department uses to present the product to consumers after it is produced. But this is not marketing; it is promotion, and promotion is just one tactical execution element of the 4Ps of marketing.
Just as we often say holiday marketing, event marketing, or conference marketing, these actually refer to using tactical forms like holidays, events, or conferences to implement promotion. Here, "marketing" is actually just "promotion."
The two characters "营销" have caused much misunderstanding and ambiguity. It has been misinterpreted as the outpost of sales and reduced to a means of communication and promotion. Therefore, translating the English word "Marketing" as "营销" is wrong; the correct translation should be "市场学" (the study of markets).
So, what is a market?
Simply put, it is demand + purchasing power.
Customers are willing to pay money to satisfy their needs. As I said earlier, marketing is about turning customers' potential psychological needs into actual purchasing behavior.
For a company, how do you define its target consumers? You cannot simply regard everyone with a potential need for your product as your target user; rather, those who are willing to consider you when making a purchase decision are your target users.
A company should not treat customers as wallets to be taken from at will, but as people who can make their own purchase decisions based on their needs and wishes.
In an era of explosion, customers hold the choice and dominance in consumption. Companies must do everything possible to influence customers' purchase decisions.
In this sense, the essence of marketing (市场学) is exchange.
A company exchanges products that have value to users for customers' purchasing power, thereby satisfying customer needs.
For a company to achieve exchange with consumers, three conditions must be met:
1. Exchange object 2. Information exchange 3. Exchange occasion
Consumers exchange because they have needs. Companies can exchange because they create value.
Exchange is essentially a need-value exchange, which is the core of the consumer purchase decision.
In this purchase decision, on one hand, customers consider how to minimize costs and maximize benefits. On the other hand, in the implementation path of the purchase decision, customers are influenced by internal factors (individual variables) and external factors (group variables).
Therefore, the parent sciences of marketing are economics and social behavior (including psychology). Economics is the father of marketing, and social behavior (psychology) is the mother.
In the traditional marketing era, to influence customer decision processes, marketers focused more on psychological variables such as cognition, attitude, emotion, learning, and memory, and the various communication theories derived from them, such as brand and positioning.
In the modern marketing era, with the empowerment of big data, marketers focus more on behavioral variables that affect customer decisions, such as contact, retention, activity, monetization, and sharing.
Traditional marketing emphasizes psychology, while modern marketing emphasizes behavior.
To achieve this "need-value" exchange, we also need two prerequisites: information and occasion.
First, there must be information symmetry between the company and customers: the company must understand customer needs, and customers must recognize the value of the company's products.
Customers' perceived value determines how much a company's products are worth, how much profit the company can obtain, and whether customers are willing to buy.
So an important part of marketing is communicating value to consumers, which is what communication and promotion do.
Today's "operations" (运营), which is all the rage in marketing and internet industries, is essentially promotion empowered by digital technology. It uses various new technologies and media to deliver value and acquire customers, such as self-media, search, information feeds, communities, and various viral tools.
The difference is that traditional promotion was more about buying traffic with money, while digital-era promotion—operations—is about managing your own traffic.
But in essence, whether promotion or operations, they are a subset of market (marketing) strategy, a tactical execution measure.
Besides information, another important prerequisite for successful exchange is the exchange occasion: where to complete the exchange with consumers. Is it offline in a supermarket or online in a mall? Should you find distributors or sell directly? Should you build a large sales team to sell door-to-door, or wait for customers to come to you through advertising and brand building?
So to summarize, to achieve exchange with consumers and acquire customers, marketing must consider three questions:
1. Need-value exchange—market strategy: This is the core of marketing. It defines who the company's users are, what the company's products should look like, and where the company's market is.
2. Information channels—communication, promotion & operations: Besides various traffic management, brand is also an important information channel because brand is the psychological carrier of product value.
3. Sales channels—sales: Once the market strategy is clear and communication and promotion are complete, the next step is the final shot.
Philip Kotler said, "Excellent companies satisfy needs, while great companies create markets."
Yes, that's right.
People in marketing who haven't heard of Kotler are like Americans who don't know Washington or French people who don't know Napoleon.
Source: 空手 (ID: firesteal13)