Hello, I'm Barbara Kahn, and I'm a professor
of marketing at the Wharton school, and I'm here to talk to you about marketing.
So this segment is the Marketing 101, the basics of principle of marketing.
And my focus is going to be on building strong brands, because,
of course, the essence of marketing is to have a very strong brand.
So let's start off with the first question, a very basic question,
but maybe not as obvious as you might think.
Which is what is marketing?
And I'm going to argue that marketing is the studies of a market.
So what's a market?
A market is an exchange between two partners.
Frequently a buyer and a seller, but marketing also applies to non-profit or
things where there isn't necessarily money being transacted.
But what you need for marketing to exist or for a market to exist
is to have an exchange, and what I'm going to argue is that what marketing
means is going to differ as a function of different aspects of those exchange.
So let's look at the basic exchange.
You have one buyer and one seller, and
I'm going to give a very simplified view to make a point.
No markets are ever quite this simple, and
I'm going to look at the two extremes just to make my point here.
And the real markets are somewhere in the middle but you'll see,
when I start defining this that it's very useful to use this kind of simplification.
So if we think of an exchange between buyers and sellers, on one extreme,
we could have what's called a seller's market.
And in the seller's market what that means is the seller has the product and
if you want that product you have to come to the seller.
So the seller has all the power.
The opposite of that would be a buyer's market where there's lots of competition,
a lot of products out there, and the buyer has the power.
And what I would argue, and
I think would make sense to you too if you think of that.
It is marketing should not be the same in the sellers market
as in the buyers market.
So, in the sellers market, what marketing tends to be is what we call,
product focus marketing.
You have the product.
If the customers want it, they're going to come to you.
In that case, you should develop that product to the best of your ability,
you should innovate in that product, you should try to reduce costs, and
you should really focus on the product.
Your business objective in a product-focused market
is to sell as much as you can.
And profitability from a product-focused market is going to come from volume,
selling as much as you can.
In the past, when we studied product-focused markets,
we've shown that profitability is tied to market share.
So market share becomes your business objective, and
why does market share increase profitability?
Because the bigger your market share, the more your revenues, and the bigger your
market share and your volume, the lower the product cost, enhanced profitability.
Higher revenues, lower cost, more profit.
That's really the goal of a product-focused market.
And when your product-focused, where do you get growth?
Will you develop new products based on your product experience or
you go to new markets?
That's product-focused market.
So what's customer focus marketing?
Is it the opposite?