Business management | Introduction to marketing

Introduction to Marketing: Understanding Your Customer (Unit 4.1)

Welcome to Unit 4: Marketing! This is often the most engaging section of the course because it deals directly with how businesses interact with the world around them—how they convince you to buy their products, what they prioritize, and how they understand what you need.

In this introductory chapter, we will unlock the fundamental ideas behind marketing. Don't worry if this seems like just "advertising" right now; marketing is much deeper! It’s the philosophy that guides the entire business toward serving its customers effectively.

1. What is Marketing?

At its core, marketing is the process of identifying, anticipating, and satisfying customer needs and wants profitably.

A simple definition:

Marketing is the bridge that connects the business's products or services to the people who need them (the customers). It is NOT just selling; selling is only one small part of marketing.

Key Distinction: Needs vs. Wants

Marketing must first differentiate between these two concepts:

• Needs: Things required for survival, like food, shelter, clothing, and safety. (Example: You need transportation.)
• Wants: Things that are desired but not essential for survival; they are often shaped by culture, personality, and marketing itself. (Example: You want a luxury sports car instead of a basic bicycle for transportation.)

Marketing’s Job: To identify a basic human need (e.g., communication, transportation) and then create products and services that satisfy that need in a specific, desirable way (the "want").

Analogy: Think of marketing like being a detective. The detective (marketer) figures out what the customer is missing or craving, and then the business rushes in to provide the solution.

2. The Role of Marketing in Business

Marketing is not a sideline department; it should be integrated into every decision a business makes. Its primary roles include:

A. Identifying Customer Needs (Market Research)

This involves understanding the market—the people, their preferences, and the competition. Without strong market research (covered in 4.4), a business is just guessing what customers want, which is risky.

B. Anticipating Changes

Good marketing looks ahead. What will customers need next year? How will technology change their habits? Businesses like Netflix didn't just satisfy a current need; they anticipated the shift from physical DVDs to streaming.

C. Satisfying Customers Profitably

The goal is not to give away products for free or sell them at a loss. Marketing ensures that the product is offered at a price that customers are willing to pay, while still covering costs and generating a profit for the business.

D. Developing the Marketing Mix (The 7 Ps)

Marketing is responsible for creating the blend of tools used to satisfy customers. This involves decisions about the Product, Price, Promotion, and Place (distribution), plus the three additional Ps for services (People, Process, Physical Evidence). We will explore the 7 Ps in detail in Unit 4.5.

3. Marketing Objectives

Just like any other department, marketing needs clear goals, known as marketing objectives. These must align with the overall strategic objectives of the entire organization.

Common Marketing Objectives:

• Increase Market Share: This is the percentage of the total market sales held by the business. (Example: A business wants to grow its market share from 10% to 15% within three years.)
• Increase Sales Revenue: Simply selling more units or selling units at a higher price.
• Increase Brand Awareness: Ensuring customers recognize and recall the brand easily. This is vital for new companies.
• Achieve Brand Loyalty: Encouraging customers to consistently choose their product over competitors' products. Loyal customers cost less to keep!
• Develop New Products: Responding to research by designing and launching innovations.
• Enter New Markets: Moving into new geographic regions (e.g., expanding from Asia to Europe).

Quick Review: Marketing objectives should be SMART (Specific, Measurable, Achievable, Relevant, Time-bound).

4. Marketing Orientations: The Business Mindset

The marketing orientation is the philosophy or approach a business uses when dealing with its customers and market. It dictates how they spend their time and resources. Choosing the right orientation is a key strategic decision.

Orientation 1: Production Orientation

This approach focuses on achieving high output volume and efficiency. The assumption is that customers are primarily interested in low prices and wide availability.

Focus: Manufacturing and efficient distribution.
Mindset: "If we can make it cheaply, they will buy it."
Example: Early mass production by Henry Ford, focusing only on efficient assembly lines and offering the Model T only in black to reduce costs.

Orientation 2: Product Orientation

This approach focuses on the quality, performance, and features of the product itself. The assumption is that customers will buy the highest quality or most innovative item, regardless of marketing efforts.

Focus: Research & Development (R&D) and product improvement.
Mindset: "If we build the best mousetrap, the world will beat a path to our door."
Example: Specialized engineering companies or luxury watchmakers who prioritize craftsmanship over customer research.

Common Mistake Alert! Do not confuse Production (focus on cost/efficiency) with Product (focus on quality/features).

Orientation 3: Sales Orientation

This approach focuses on aggressive selling and promotion tactics to push the product onto the customer. It is typically used when a business has high inventories or when demand is low.

Focus: Selling, promotion, and convincing customers.
Mindset: "We need to sell what we make, rather than make what the market wants."
Example: Door-to-door sales, or companies selling products that consumers don't typically seek out (like some insurance or financial schemes).

Orientation 4: Market/Consumer Orientation

This is generally considered the most effective modern approach. It focuses on identifying customer needs and wants *before* developing the product, and then designing the marketing mix around those findings.

Focus: Market research, customer relationships, and adapting products.
Mindset: "Make what you can sell, instead of trying to sell what you make."
Example: A food delivery app constantly surveys users to improve features (faster delivery, new payment methods) and adapts its services based on real-time feedback.

Orientation 5: Societal Marketing Orientation (HL students focus here!)

This orientation goes one step further than the Market Orientation. It considers not only the customer's needs and the firm's profit but also the long-term interests of society (ethics and sustainability).

Focus: Customer satisfaction + ethical practices + minimizing environmental impact.
Mindset: "What is good for the customer, the company, and the planet?"
Example: A coffee company that uses 100% compostable packaging, ensures fair wages for farmers (Fair Trade), and clearly markets these sustainable benefits to appeal to ethically conscious consumers.

Did you know? Moving toward a Societal Marketing Orientation often requires businesses to embrace the concept of sustainability, one of the four key interdisciplinary concepts in the IB Business Management course!

Summary of Orientations (The 5 P’s of Philosophy)

Orientation	Primary Focus	Key Question Asked
Production	Efficiency and availability	How can we make it faster/cheaper?
Product	Quality and features	How can we make it better?
Sales	Selling and promotion	How can we get rid of this inventory?
Market/Consumer	Customer needs and research	What do our customers want right now?
Societal	Customer, Profit, and Society	What is the most ethical and sustainable choice?

Key Takeaway from Unit 4.1

The essence of modern, successful marketing is understanding and adopting a Market (Consumer) Orientation or, ideally, a Societal Marketing Orientation. These approaches ensure the business is outward-looking, focused on long-term relationships, and responsive to the dynamic marketplace. Businesses that remain stuck in Production or Sales orientations often fail because they ignore changing customer demands.