Enterprise (0454) | The purpose of marketing

🔥 Markets and Customers: The Purpose of Marketing (Syllabus 8.1)

Hello future entrepreneur! This chapter is super important because it answers the fundamental question: Why do businesses bother with marketing?
Many people think marketing is just posting on social media, but it's much deeper. It’s the essential tool an enterprise uses to connect with customers and achieve its biggest goals. Don't worry if this seems tricky at first; we will break down the two main perspectives: the enterprise's view and the customer's view.

What Exactly is Marketing?

Before we look at the purpose, let’s quickly define what we mean by marketing.

Marketing is the management process responsible for identifying, anticipating (predicting), and satisfying customer requirements profitably.

• Think of it as everything an enterprise does to understand its customers and persuade them to buy its product or service.
• Analogy: If your enterprise is a great student, marketing is the process of writing a fantastic CV (Curriculum Vitae) and attending interviews (sales) to get hired!

The Purpose of Marketing: The Enterprise's Perspective

Enterprises use marketing to achieve their overall business aims and objectives (like profit or growth). The syllabus highlights three main goals marketing helps an enterprise reach:

1. Increasing Consumer Awareness of the Enterprise or Product

The most basic goal of marketing is simply to let people know you exist. If potential customers don't know about your good or service, they can't buy it.

• Definition: Consumer Awareness means how familiar consumers are with your brand or product.
• How marketing helps: Advertising (like placing an ad in a local newspaper), social media campaigns, and giving away free samples all increase awareness.
• Example: A new food stall at a market hands out small tasters of its food. This is marketing aimed purely at increasing awareness so people know what they sell.

2. Establishing and Maintaining Brand Loyalty

It is usually much cheaper and easier to keep an existing customer than to find a new one. Marketing helps build a strong relationship so customers return again and again.

• Definition: Brand Loyalty is when customers repeatedly purchase the same brand of a good or service over time, rather than switching to competitors.
• Establishing Loyalty: This involves consistent quality and messaging. If your brand is seen as reliable and trustworthy, loyalty builds up.
• Maintaining Loyalty: This uses tools like loyalty cards, special discounts for existing customers, and excellent customer service.
• Example: Why do some people only buy ‘Brand X’ phones or coffee? Because the marketing (and product experience) has established a strong, positive connection, making them loyal.

3. Increasing or Defending Sales, Market Share or Profit

Ultimately, most businesses are focused on financial success, and marketing is the main driver.

A. Increasing Sales

Marketing techniques like special offers (e.g., "Buy one, get one free") or new product launches directly lead to higher sales volumes.

B. Market Share

Market Share is the percentage of total sales in a specific market that your enterprise holds.

• Increasing Market Share: This usually means stealing customers from competitors, often through competitive advertising or lower prices.
• Defending Market Share: This means keeping your current percentage slice of the market, especially when a new rival enters the scene. You might need strong marketing campaigns to remind customers why they chose you in the first place.

C. Profit

If marketing increases sales revenue without increasing costs too much, the enterprise will achieve higher **profit** (Revenue - Expenditure).

The Purpose of Marketing: The Customer's Perspective

While the enterprise uses marketing to sell, customers actually benefit a lot from good marketing! If marketing is done correctly, it provides customers with valuable information.

1. Greater Knowledge of the Enterprise and Product

Marketing acts as an information service for the customer.

• Imagine buying a new laptop. You rely on the manufacturer's marketing materials (website specs, adverts, brochures) to learn key facts, like screen size, battery life, and processing speed.
• The better the enterprise communicates these details, the more knowledgeable the customer becomes about what is available.

2. The Ability to Make More Informed Decisions

When customers have greater knowledge, they can compare options effectively.

• If a customer sees three different advertisements for three competing mobile networks, they can use the marketing information (e.g., cost, data limits, coverage maps) to decide which network is the best fit for their needs.
• This reduces the risk for the customer because they are more likely to be satisfied with their purchase if they have researched it properly.

Key Takeaway Summary

Marketing serves two masters: the business and the buyer.

For the Enterprise:

The core purpose is to drive financial success by increasing visibility (Awareness), securing repeat business (Brand Loyalty), and boosting monetary performance (Sales, Market Share, Profit).

For the Customer:

The core purpose is to provide the information needed for them to fully understand the product and ultimately make the right choice (Informed Decisions).