Modern Marketing Approach – Understanding Marketplace and Customer Needs

Modern Marketing Approach – Understanding Marketplace and Customer Needs. The first step in Modern Marketing Approach is “Marketers need to understand customer needs and wants and the marketplace within which they operate.” There are five core customer and marketplace concepts:

  • Needs, wants and demands;
  • Marketing offers (products, services and experiences);
  • Value and satisfaction;
  • Exchanges and relationships; and
  • Markets.

Customer Needs, Wants and Demands

The most basic concept underlying Modern Marketing is that of human needs. Human needs are states of felt deprivation. They include basic physical needs for food, clothing, warmth and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. These needs were not created by marketers; they are a basic part of the human make-up.

Modern Marketing Approach - Understanding Marketplace and Customer Needs
Modern Marketing Approach – Understanding Marketplace and Customer Needs

Wants are the form human needs take as they are shaped by culture and individual personality.

A hungry person needs food but wants a burger, fries and a soft drink. A person in Mauritius needs food but wants a mango, rice, lentils and beans.

Wants are shaped by one’s society and are described in terms of objects that will satisfy needs. When backed by buying power, wants become demands. Given their wants and resources, people demand products with benefits that add up to the most value and satisfaction.

Outstanding marketing companies go to great lengths to learn about and understand their customers’ needs, wants and demands. They conduct consumer research and analyse mountains of customer data.

Marketing people at all levels – including top management has to stay close to customers to have better understanding and to build relationships.

Market offerings – products, services and experiences

Consumers’ needs and wants are fulfilled through a market offering, Some combination of products, services, information or experiences offered to a market to satisfy a need or want.

Market offerings are not limited to physical products. They also include services, activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Market offerings also include other entities, such as persons, places, organisations, information and ideas. Many sellers make the mistake of paying more attention to the specific products they offer than to the benefits and experiences produced by these products. These sellers suffer from marketing myopia. They are so obsessed with their products that they focus only on existing wants and lose sight of underlying customer needs. They forget that a product is only a means to solve a consumer problem.

Customer value and satisfaction

Consumers usually face a broad array of products and services that might satisfy a given need. How do they choose among these many market offerings? Customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly. Satisfied customers buy again and tell others about their good experiences.

Dissatisfied customers often switch to competitors and disparage the product to others. Marketers must be careful to set the right level of expectations. If they set expectations too low, they may satisfy those who buy but fail to attract enough buyers. If they raise expectations too high, buyers will be disappointed. Customer value and customer satisfaction are key building blocks for developing and managing customer relationships.

Exchanges and Relationships

Marketing occurs when people decide to satisfy needs and wants through exchange relationships. Exchange is the act of obtaining a desired object from someone by offering something in return. In the broadest sense, the marketer tries to bring about a response to some market offering. The response may be more than simply buying or trading products and services.

Marketing consists of actions taken to build and maintain mutually beneficial exchange relationships with target audiences involving a product, service, idea or other object. Beyond simply attracting new customers and creating transactions, the goal is to retain customers and grow their business with the company. Marketers want to build strong relationships by consistently delivering superior customer value.

Markets

The concepts of exchange and relationships lead to the concept of a market. A market is the set of actual and potential buyers of a product. These buyers share a particular need or want that can be satisfied through exchange relationships.

Marketing means managing markets to bring about profitable customer relationships. However, creating these relationships takes work. Sellers must search for buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them. Activities such as product development, research, communication, distribution, pricing and service are core marketing activities.

Although we normally think of marketing as being carried on by sellers, buyers also carry on marketing. Consumers do marketing when they search for the goods they need at prices they can afford. Company purchasing agents do marketing when they track down sellers and bargain for good terms.

We think of marketing as serving a market of final consumers in the face of competitors. The company and its competitors send their respective offers and messages to consumers, either directly or through marketing intermediaries. All the actors in the system are affected by major environmental forces (demographic, economic, physical, technological, political / legal, social/cultural).

Each party in the system adds value for the next level. All of the arrows represent relationships that must be developed and managed. Thus, a company’s success at building profitable relationships depends not only on its own actions, but also on how well the entire system serves the needs of final consumers.

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