Marketing helps to win and keep customers. It therefore has a direct impact on revenues and the smooth operation of a company.
Marketing means the processes, as a whole, through which a company wins and keeps customers, and therefore increases its sales. There are three main processes:
- Building new markets. A company can, for example, pull business away from its competitors. When they were launched, low-cost airlines like easyJet managed to capture part of the market of traditional airlines thanks to lower prices. Ikea did the same thing on the furniture market.
- Improving market penetration. A company can prompt larger transactions with its existing customers or generate more frequent repeat business. Example: the Zara chain of clothing stores changes its collection every three or four weeks to be more responsive to new trends. Customers come back more often because they know they will find something different each time.
- Diversification. A company can expand its new product offerings, generating additional sales volume. Apple, whose Macintosh computers were in decline, experienced a real renaissance in the early 2000s with the launch of new product ranges like the iPod, iPhone and iPad.
Before launching the development of a marketing plan, companies need to ascertain what their objectives are: do they want to win new markets, improve market penetration or diversify? They also need to decide on a time scale to achieve these goals: is this a short term objective or a goal they would like to achieve in five or ten years’ time?
Sources: Small Business Marketing Kit For Dummies, Barbara Findlay Schenck, John Wiley & Sons Inc, 2012; Purple Cow: Transform Your Business by Being Remarkable, Seth Godin, Penguin Group.