On the Science of Marketing [Archives:2006/919/Business & Economy]

By: Bakr Hamud Al-Junaid
[email protected]
Due to the overwhelming rapid growth in digital technology, GSM operators worldwide have become a main contributor in the communication link between and within countries. I am a GSM employee and I'd like to give a brief account of proper marketing concepts in general.

There is little difference between beehives and the marketplace in terms of structure, work, productions, etc Bees have a Queen Bee, which is the marketing director, and worker bees are the employees. Bees collect nectar from flowers and produce services like honey, whereas we collect more than a million customers in four years.

I've been working in such a marketplace and have come to realize that one can be most productive when surrounded by loving staffers under the umbrella of reliable, straightforward, honest and visionary managers.

What does marketing mean? What are the most important points in marketing?

Many web sites claim to be knowledgeable about marketing. In fact, if you type 'marketing' into a search engine like Google, more than 16,000,000 web pages will be returned! When you have that many people claiming to be marketing experts, it's difficult to even know what marketing means. That's one of the problems with the web.

I noticed an article on a well-known marketing web site similarly entitled, “Just what is marketing?” It's a very good question and the answer typically ends up (as in the aforementioned article) listing tactics like advertising, brand management, sales, service, pricing, E-mail marketing, etc. That's a good start, but far from complete.

In my opinion, marketing is not tactics and I'll tell you why. When most people think of marketing, they think marketing tactics. They associate marketing with tactics, partly because they're fun. Advertising is fun, promotions are fun and so are E-mail campaigns and every other similar tactic. However tactics, while the most prominent aspect of marketing, are similar to sports tactics. They're very important, but useless without a sound knowledge base. So it is with marketing.

Marketing is far more than tactics. Marketing is analysis and a sound marketing strategy is based on this analysis. The type of analysis I am talking about is customer analysis, for example. Having a solid understanding of customers means having a solid understanding of how they behave – their perceptions, motivations and preferences. It means correctly segmenting the market and not the way most companies think about segmentation (if they even do). It means having a profound understanding of their attitudes, emotions and knowledge. Without such knowledge, marketing tactics are just blowing in the wind. You'll hope the tactics work, but you'll be blissfully unaware as to whether anyone wants to listen or pay attention.

I'd also like to discuss competitive analysis. Rarely do we see marketing sites deal with competitive analysis. Marketing also is about understanding competition, but not just listing one's competitors. It means thinking about their competitive objectives, reactions and capabilities, as well as understanding an industry's competitive forces. Too often I see firms acting as monopolies, as if their competitors are unlikely to react or have little interest in capturing a market. The internet provides a good example. How many internet companies really think seriously about entrenched players' potential competitive reactions? Do any of them consider long-term competitive reactions? What about creating robust plans toward future competitive reactions? No, marketing also is about competitive analysis, not just the “fun and interesting” tactics permeating the web.

What about company capabilities?

Once again, to think about marketing you also need to consider a company's ability to actually survive in the market. I'm not talking about financial ability, although that is part of the story. What about culture, sales force compensation, relationships with distributors, suppliers, etc? Some companies focus squarely on customers and don't even think about competitors. But these same companies often forget their ability to provide what customers need or incentives in their distribution system to actually get the job done. No, marketing is not just about tactics, it's also about understanding your own company, its abilities and weaknesses.

So, what is marketing?

The following is the proper definition I discovered from our director, Pier Emad. Marketing is analysis of customers, competitors and companies, combining such understanding into an overall understanding of what segments exist, determining the most profitable segments to target, positioning your product and then doing whatever necessary to deliver on that position.

How do you deliver on a position? This is where tactics enter – by branding and advertising correctly, communicating via E-mail, letter, SMS or whatever, but all in a way consistent with the analysis for which marketing really is responsible It's fine if you want to get involved in tactics. Consider artists, sports figures, doctors and scientists and ask yourself if it is just as necessary to understand tactics in these areas, which are as creative as marketing.

Tactics alone won't get you very far, but tactics along with a strategy based on great analysis will get you exactly where you want to go. So before you go hiring consultants and networking with other marketers, make sure you understand what marketing is so you don't just become a tactical pawn, but rather someone who ultimately can direct an entire marketing campaign like our director Emad.

Although customer satisfaction increasingly is seen as an important business objective, the extent to which it is taken seriously varies. Its measurement is problematic and the precise nature of its impact on financial performance and shareholder value remain the subject of debate.

While the existence of a link between customer satisfaction and business performance clearly is a central tenet of marketing theory, evaluating the existence, nature and strength of this relationship at a company level has proven problematic. Researchers have had much greater success when focusing on individual behavioral constructs such as quality and satisfaction and satisfaction and loyalty, and rather less success when exploring the link between behavioral outcomes and financial performance.

The American Consumer Satisfaction Index aimed to evaluate empirically the direct relationship between customer satisfaction and a range of financial performance measures. In general, data results suggested that customer satisfaction does have a positive financial impact but direct effects generally are small.

Telemarketing

In telemarketing, marketers contact customers via telephone. One of the original attractions of telemarketing was the speed with which marketing campaigns could be executed. While direct mail is cost-effective, it is relatively slow, as marketing pieces must be mailed Telemarketing lends itself well to products and services that are complex to buy, such as switching to another telephone company or purchasing a financial service. While certain types of transactions also may be subject to government regulation, telemarketing permits a company representative to walk customers through the purchase while ensuring compliance with laws.While not as varied as direct mail, telemarketing can take several forms:

* Outbound telemarketing: Calls made to customers using auto dialers and predictive dialers, thus call centers can phone a large number of customers.

* Inbound telemarketing: Promotions and offers are made when a customer calls the center.

* Voice messages: A number of firms employ special technology to call customers' answering machines.

Direct marketing

Direct marketing is a form of marketing that attempts to send its message directly to consumers using “addressable” media like mail. It differs from regular advertising in that it does not place its message on a third-party medium or in the marketplace as would a billboard or radio commercial. Instead, the marketed service or commodity is addressed directly to the end consumer.

Direct marketing is attractive to many marketers because its effectiveness can be measured directly in many cases. For example, if a marketer sends a million mail solicitations and 10,000 customers respond to it, the marketer can say with some confidence that the campaign directly led to the responses. In contrast, other media often must be measured indirectly, as there is no direct response from consumers

What can direct marketing do for my business?

A marketer's first duty is to avoid loss. Direct marketing can minimize risk because before you mail, E-mail or advertise to a large number, you always test on a small number. This can increase profitability because you always should test one approach against another, going with whichever makes the most money.

I began my article by defining marketing, so I'll end it with definitions and advice from director Emad: “Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably. Marketing is human activity directed at satisfying human needs and wants through an exchange process. Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others.” Emad gives five very important marketing concepts:

” Choosing and targeting appropriate customers

” Positioning your offer

” Interacting with those customers

” Controlling the marketing effort

” Continuity of performance

Emad added that successful marketing is:

” Profitable

” Offensive (rather than defensive)

” Integrated

” Strategic (future-orientated)

” Effective (gets results)

So, marketing is the right product, in the right place, at the right time and at the right price.
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