Core Concepts of Marketing: Definition
Core concepts of marketing refer to the very basic idea of how marketing works. It explains what marketing is made up of, what are its basic components, and how it works.
This idea of marketing core concepts is put forward by the Marketing Thinker Dr. Philip Kotler. He outlined the five core concepts of marketing – 1. Need, Want, and Demand, 2. Product, Service, and Experience, 3. Market, 4. Exchange, Transaction, and Relationship, and 5. Customer Value and Satisfaction.
In this article, we delve into what each core concept of marketing is and how each works to complete the marketing definition.
The 5 Core Concepts of Marketing: Defining
Let’s explore the 5 core concepts of marketing in detail.
Need, Want, and Demand
The core concepts of marketing revolve around the fundamental principles of Need, Want, and Demand. These concepts form the cornerstone of understanding consumer behavior and shaping effective marketing strategies.
Need: A need is a basic requirement essential for human survival and well-being. It is a state of felt deprivation, encompassing necessities like food, shelter, clothing, and safety. Needs are inherent and universal, arising from human nature. They remain constant regardless of external influences.
Want: Wants stem from needs but are shaped by cultural, social, and individual factors. Wants are specific desires for products or services that fulfill a need. For instance, while everyone needs sustenance, cultural influences dictate whether someone wants a burger or traditional cuisine like sushi.
Demand: Demand goes a step further. It not only involves wanting a product or service but also possessing the ability and willingness to pay for it. Demand is influenced by factors like consumer income, price, preferences, and economic conditions.
Influencing Factors: External factors, such as cultural norms, societal influences, personal preferences, and marketing efforts, play a crucial role in shaping wants and demands. For instance, a cultural preference for organic products can lead to a higher demand for organic foods.
Examples: Imagine a scenario where the weather turns cold. The need for warmth arises as a fundamental requirement. Now, an individual’s want may manifest as a desire for a cozy blanket. If they have the means and willingness to spend, the demand for that blanket emerges. In this case, marketing strategies might involve showcasing the blanket’s comfort, quality, and warmth to influence the demand.
Read Also: What is a Marketer?
Product, Service, and Experience
The building blocks of marketing include Product, Service, and Experience – three interconnected concepts that shape how consumers interact with businesses.
Product: A product is anything that can meet a customer’s need or want. It’s not just physical items; it encompasses services, ideas, and experiences that provide value. Think of a product as something you can touch, like a smartphone, or something intangible, like a software subscription.
Service: Services are intangible offerings that fulfill specific needs. These can range from professional advice, repairs, healthcare, or even entertainment experiences. Unlike products, services are about the assistance, expertise, or performance provided to customers.
Experience: Experience is the feeling or perception customers get from using a product or service. It goes beyond the physical or functional attributes and involves emotions, satisfaction, and engagement. A positive experience creates a lasting impression and fosters customer loyalty.
Influencing Factors: Consumer preferences, technological advancements, cultural trends, and market competition influence how products, services, and experiences are designed and delivered. For instance, the rise of digital technology has transformed traditional services like banking into online experiences.
Example 1: Consider a smartphone – that’s a product. But the services it offers, like apps, customer support, and regular updates, enhance its value. Now, imagine buying that smartphone online – the ease of navigation, customer support responsiveness, and hassle-free return process contribute to the overall experience.
Example 2: Think of a coffee shop. The product is the coffee, the service is how it’s brewed and served, and the experience encompasses the ambiance, comfort, and interactions with staff. A well-brewed cup of coffee served in a cozy setting creates a positive experience that keeps customers coming back.
Market
The market consists of actual and potential customers who share a need or want and are willing and able to make an exchange. It’s where sellers offer their products or services, and buyers decide what to purchase.
Influencing Factors: Market size depends on the number of people with a particular need or want, their resources, and their willingness to exchange. Factors like trends, economy, and competition shape market dynamics.
Examples: Imagine a smartphone market. People seeking communication and connectivity needs from the market. Various brands offer different smartphones to meet these needs, influencing choices and competition. Similarly, the streaming service market caters to those who want entertainment on-demand. Netflix and Hulu compete within this market to serve consumers’ preferences.
Exchange, Transaction, and Relationship
Exchange, Transaction, and Relationship: These concepts are like the gears that make the marketing engine run smoothly, enabling the flow of goods and services.
Definition: Exchange is like a give-and-take dance – getting something you need by offering something valuable in return. A transaction is a formal agreement where goods, services, or money are traded. The relationship involves building trust and connection with customers over time.
Influencing Factors: In exchange, factors like trust, perceived value, and communication influence whether people are willing to participate. Transactions rely on fair terms and agreements that both parties find satisfactory. Building strong relationships requires consistent quality, clear communication, and meeting customer needs.
Examples: Imagine swapping your old video game for a friend’s toy – that’s an exchange. When you buy a toy using your allowance, you’re engaging in a transaction. Building a relationship happens when you choose the same bakery every weekend because they always have your favorite pastries ready.
In the business world, the exchange might be a customer giving money for a new gadget. Transactions include buying a concert ticket online. Building relationships involve companies remembering your preferences and offering personalized recommendations based on your past purchases. Just like in friendships, trust, value, and communication are key to these marketing concepts.
Customer Value and Satisfaction
Customer Value and Satisfaction: This is the last component of the core concepts of marketing. Think of this as the smiley face of marketing – when customers are happy with what they get and feel it’s worth it.
Definition: Customer value is like a math problem – it’s what you gain (benefits) minus what you give (costs). Customer satisfaction is the warm feeling you get when a product or service meets or exceeds your expectations.
Influencing Factors: Value is like a puzzle with pieces – quality, price, and service. If the puzzle fits, customers are satisfied. Also, if the product does what it’s supposed to and doesn’t break easily, that’s value. When it’s worth the money you paid and even a bit more, that’s satisfaction.
Examples: Imagine buying a cool toy. If it’s fun to play with, doesn’t break right away, and you got it for a good price, you’ve got value. And if it’s even more fun than you thought, you’re satisfied. On the other hand, if you paid a lot and the toy broke in a day, you’re not happy – no value or satisfaction there.