Entrepreneur's Handbook
BASIC CONCEPTS ABOUT MARKETING
Marketing is the set of activities that concern the whole business and requires very detailed studies. In order to develop a correct approach in the planning and management of these activities and to fit the marketing concept better in the minds, brief explanations on some basic concepts are given below.
2.1. Need and Request
As mentioned in Chapter 3, needs and wants constitute the most fundamental issue of enterprise and marketing. As seen in its definition, the main task of marketing is to identify and meet the needs and requests of people. Therefore, knowing the meanings of these concepts and the differences between them is important for the entrepreneur. Because in daily life, the concept of need is often used to define products that must be consumed such as bread, water, clothing, and the concept of desire is used to describe products that can be considered luxury other than these. However, this understanding is extremely flawed and can lead the entrepreneur to the wrong places. Therefore, these two concepts must be understood correctly.
In short, need can be defined as unsatisfied impulses (Engel, Blackwell, & Miniard, 1998). Human needs can be collected under certain headings such as food, air, water, clothing, education, accommodation and entertainment. Some of these needs can be grouped as essential for human life, such as food, air and water, some as essential for a good life, although not necessarily such as education and entertainment. However, as detailed in Chapter 3, Abraham Maslow put forward the most famous classification on this subject. Recall that the needs are divided into five groups according to Maslow's Hierarchy of Needs (Figure 3.5). At the bottom, there are needs such as food, water and air necessary to live. These needs are followed by security, belonging-being loved, respecting and self-realization. The important point is that these needs develop in a hierarchical order. In other words, when the person is hungry, the need for security or the respect of the group of friends will not matter, they just want to meet their needs.
As can be understood from these classifications, our needs are limited enough to be collected in certain groups. However, the requests, which are very closely related to needs, can be unlimited in contrast to the needs. Desires can be defined as the form that human needs take by integrating with culture, personality and environmental characteristics. For example, thirst is the most basic human need. We can meet this need by drinking water, as well as by drinking soda, cola, ayran and soda. This situation is shaped by the culture, environmental conditions or individual preferences of the country where people live. While someone living in Germany prefers to drink soda when they are thirsty, Anatolian people traditionally prefer to drink ayran. Therefore, desires can be defined as objects that meet needs.
The similarities and differences between these two concepts are very important for the entrepreneur. Because as societies develop, even if the need groups of people do not differ much, their importance changes, and their desires change shape. For example, there are serious differences between the way our social needs were met 50 years ago and today. While there was a phone in a house in the neighborhood at that time, today every adult has a smartphone in his pocket and we can fulfill many of our requests and needs with it. While face-to-face communication was more common 50 years ago, digital interaction has become widespread today. For this reason, many communication companies that were successful in the past have been removed from the market due to their inability to manage requests and needs well.
In addition, the entrepreneur must very well understand which consumer group can meet which demands and needs. Because products are designed not to meet a single request and a single need, but to meet a set of requests / needs. For example, a consumer looking for a "good car" or a "quality hotel" should understand well what the entrepreneur really wants and investigate if this creates a market / innovation opportunity. In this context, needs should be examined in five groups. (Kotler and Keller, 2012) :
- Apparent needs (Consumers want cheap cars.)
- Real needs (Consumers prefer cars with low fuel and maintenance costs, not cheap ones.)
- Unseen needs (Consumers expect good service when they go to the car dealership.)
- Pleasing needs (The consumer will be pleased with the car dealer who adds a free navigation system to the car.)
- Hidden needs (Consumers want their immediate environment to consider them an intelligent consumer.)
The entrepreneur's focus only on the apparent needs will cause many market opportunities to be missed and the business to disappear from the market over time. For example, when yemeksepetim.com first came to the market, the majority of consumers were not even aware that they needed such a service. However, an entrepreneur who saw the market opportunity achieved significant success in the market by offering such a service. The entrepreneur should not confuse needs and desires and manage them well in order not to experience marketing myopia¹.
2.2. Consumer, Customer and Demand
The consumer should be the focus of all marketing activities. In terms of marketing discipline, consumer is defined as the person or organizational unit that uses or consumes a product. Consequently, consumer expression includes both individuals and legal entities such as businesses. The customer refers to the person or organizational unit that actually makes the purchasing decision. For example, a person using a mobile phone becomes a consumer, while a person using an Apple branded mobile phone becomes a customer of this brand. Demand is defined as the consumer's request supported by his purchasing power. Since there is no limit to the desires of people, it is impossible for every wish to turn into a demand. Consumers will turn their request into demand by choosing the product / service that they think will provide the best benefit for them. Therefore, the entrepreneur should understand and manage not only the desire but also the demand, which is supported by purchasing power.
Consumer, customer and demand concepts generated by them; Although they are close to each other, these concepts are not determinative on who to direct marketing activities. Because in some products, the user, decision maker and purchaser of the product may be different people. For example, the baby who uses the product in diaper consumption may be the mother who decides which brand to buy, and the father who does the purchasing business. For this reason, in such cases, the entrepreneur should think carefully about how the demand is formed and whom to initiate marketing communication to convince.
2.3. Product, Value and Satisfaction
When it comes to products, physical objects such as bread, telephone, and pencil come to mind. However, the concept of product is broader in the marketing discipline. Accordingly, product refers to anything that is put on the market for exchange. Apart from physical objects, that is, goods, services, experiences, people, places, organizations and ideas are also included in this concept. For example, an artist has to carry out marketing activities in order to take part in better concerts, a region to attract better tourists, and a hairdresser to serve more customers. Therefore, in terms of the marketing concept, the product can be anything that meets the demands and needs of consumers and has commercial value. For this reason, when it comes to product, not only the goods, but all the elements listed above should come to mind.
The concept of value, which is closely related to the product, expresses the benefit obtained from the product. The value of a product to the consumer is the difference between the money (cost) paid to obtain the product and the expected benefit from its consumption (Karafakioğlu, 2006). When this difference increases, the value of the product will increase, otherwise it will decrease. Therefore, the entrepreneur should reflect on how to create the highest value while designing the value proposition embodied with his product. The value desired to be created for the customer consists of the combination of quality, service and price, and this is called the customer value triad. (Kotler and Keller, 2012). The perception of value will increase when the quality of the product and the services provided with the product increase, but this perception will decrease when the price increases. The entrepreneur will also need to create the highest value proposition (quality, service and price combination) while designing the product.
The effort of the entrepreneur to increase the value proposition offered to his customers is undoubtedly aimed at gaining a positive place in the minds of his customers. The measure of achieving this positive place is closely related to the concept of customer satisfaction. Accordingly, it is possible to define the concept of customer satisfaction as the degree to which the product meets customer expectations. When the performance of the product falls short of expectations, the customer will not be satisfied, when the expectation is met, they will be satisfied.
In line with these concepts explained above in summary, the focus of marketing is to create a meaningful value proposition by taking into account the wishes and needs that the consumer is aware of or not, and to satisfy the customer through this value proposition. It should be kept in mind that the essence of marketing activities is “to make a promise”, that the promises made should be kept and that the promises to be kept are a set of activities that should be done in this direction for long-term success.