What Is Marketing? Definition, Strategy & Examples

Understanding Marketing

Effective marketing begins with a single key insight: understanding what customers genuinely value — and delivering it in a way that supports business growth. This concept is at the heart of this opening chapter.

This section introduces the foundational ideas of modern marketing. It sets the tone for everything that follows by exploring essential questions marketers and business leaders must answer:

• What does marketing really mean today?
• How do successful brands shape effective strategies — especially in dynamic markets like the Netherlands?
• How does the broader environment influence marketing decisions, and why does this matter?

In short, this part unpacks the what, how, and why of marketing. It reveals how marketing combines analytical thinking with practical action — empowering professionals to thrive in competitive settings. Beyond business, marketing helps us understand the forces that shape customer behavior in everyday life.

What You’ll Explore in This Blog

• The true meaning and scope of marketing
• Crafting marketing strategies and planning effectively
• The impact of environmental factors on marketing decisions

What Is Marketing?

Marketing is the process of identifying and addressing customer needs in a way that creates value — both for the customer and the organization. It extends far beyond promotion or sales; it’s a mindset that shapes how a company operates.

What You’ll Learn About Marketing

• A clear definition of marketing and its importance in today’s economy
• The connection between marketing and economic behavior
• An overview of macro, meso, and micro marketing levels — from global trends to industry-wide developments to individual businesses
• How marketing orientations have shifted over time, including changes in product development and delivery
• The marketing concept in action — how it guides business decisions and creates competitive value
• Why reputation, long-term customer relationships, and brand strength are critical for success
• How emerging trends and technologies are transforming the field of marketing

Marketing is constantly evolving. Whether you’re launching a startup or growing an established brand, marketing provides the framework to build stronger connections with your audience and improve market position.

In a world marked by rapid digital innovation, economic shifts, and rising consumer expectations, businesses must be more agile than ever. Customers expect better quality, lower costs, and faster service — and they’re not afraid to switch brands to get it.

Meanwhile, global competition keeps raising the bar. In this fast-moving landscape, one thing is clear:

Being customer-focused is no longer optional — it’s essential for survival and growth.

Leading companies stay relevant by adapting to market changes, investing in innovation, and refining their marketing approaches. Marketing is not just a department — it’s a driver of sustainable business success.

However, there’s still confusion around what marketing actually is. Many equate it with sales or advertising. But true marketing is more strategic and far-reaching.

It includes everything from analyzing customer data and performing market research to shaping new products and anticipating behavioral shifts. Marketing is both art and science: it relies on evidence, strategic thinking, and a deep understanding of human behavior.

This chapter demystifies marketing. You’ll gain a solid understanding of how it differs from general business economics, what roles marketers play, and which concepts are vital to grasp. The insights here will serve as a foundation for everything that follows.

The Meaning of Marketing

Marketing is a broad and dynamic concept that encompasses all the actions involved in connecting buyers with sellers. To fully grasp what marketing means, it’s important to distinguish it from sales and explore its components — such as the marketing mix and the value exchange between consumers and businesses.

Sales vs. Marketing: What’s the Difference?

At its core, every business does two things: it creates value through products or services, and it delivers that value to the market. In earlier times, this second step was often labeled simply as “selling.”

But there’s a key distinction:

• Sales focuses on pushing existing products to customers.
• Marketing is about designing offerings that customers already want — before they even reach the shelf.

Customer-centric organizations invest in truly understanding their audience. For them, marketing isn’t an afterthought — it’s a way of thinking. Their managers shift focus away from the product and toward customer needs, believing this approach drives long-term business sustainability.

“Marketing drives our growth — it’s about making smart choices and staying relevant.”

“Understanding how customer behavior evolves is key — marketing helps us keep up.”

“Every successful expansion we’ve had came from strategic marketing decisions.”

“Good marketing starts with choosing the right markets and aligning our offerings with them.”

In this way, marketing acts as a bridge between what a business can offer and what its customers are looking for. Both the product itself and the way it’s delivered must reflect those expectations.

In short:

• Selling means: “Trying to convince customers to buy what you already made.”
• Marketing means: “Creating something people already want to buy.”

Effective marketing eliminates the need for aggressive selling. By deeply understanding your customers, the product becomes a natural choice — no hard push needed.

In today’s market, relationship-building isn’t just an extra — it’s a core pillar of marketing success.

The Marketing Mix: More Than Just the Product

Having a great product is only part of the equation. Successful marketing also relies on choosing the right distribution methods, setting competitive prices, and promoting effectively. Together, these elements make up the marketing mix.

Formal Definition of Marketing

Marketing is the customer-oriented development, pricing, communication, and delivery of products, services, or ideas. These activities aim to create value, trigger desired responses, and strengthen the reputation and relationships between an organization and its stakeholders.

This definition makes it clear: marketing is not just about advertising or pushing products. It starts long before a product exists — with understanding customer needs and aligning business decisions accordingly.

So instead of being the last step in the production process, marketing begins at the strategic level — guiding product development, market targeting, and value creation from the very beginning.

The Marketing Mix

A successful marketing strategy is built on a balanced use of specific tools designed to influence the market. This set of tools is known as the marketing mix, commonly referred to as the

Four Ps:

• Product – What you’re offering and how it meets customer needs
• Price – The value exchange and pricing strategy
• Place – How and where the product is delivered or accessed
• Promotion – How you communicate value and engage your audience

These elements don’t operate in isolation. Changes in one area — such as price — will often affect others, like promotion or distribution. That’s why they must be coordinated as a cohesive strategy.

In this book, each of the Four Ps will be explored in more detail. For now, this overview gives you a foundation for understanding how strategic marketing decisions are made — and why they matter.

The Four Ps of the Marketing Mix

Product

The term product refers to anything offered to a market to satisfy customer needs — including goods, services, and ideas. It’s not just the physical item that matters, but also everything that influences a buyer’s decision: branding, design, packaging, warranty, service level, and variety within the product range.

Product strategy focuses on:

• Creating new products or services
• Enhancing or refining current offerings
• Phasing out products that no longer add value

Price

Price represents the amount of money a customer must give in exchange for a product or service. Determining the right price involves careful consideration of multiple factors:

• Cost of production and operations
• Pricing strategies used by competitors
• Perceived value and willingness to pay
• The potential consequences of price adjustments

Important pricing questions include:

• Should we aim for short-term profit or long-term customer loyalty?
• Are promotional discounts appropriate or necessary?
• Is there a market segment willing to pay more for personalization or premium features?

Place (Distribution)

Place, or distribution, is about how products are delivered to customers. It covers the entire path from manufacturer to end-user, including logistics, stock management, and channel selection. Often, the success of a product depends as much on its availability as on its quality.

Key elements of distribution strategy:

• Selecting the right sales channels (e.g., direct-to-consumer, retailers, wholesalers, e-commerce)
• Determining the number of sales outlets or partners
• Optimizing inventory and logistics processes
• Ensuring that products are accessible at the right time and location

Promotion

Promotion involves all the ways a company communicates with its audience to build awareness and drive demand. Since most products don’t sell themselves, promotional strategies are critical in reaching the target audience and persuading them to buy.

Promotion serves to:

• Inform potential customers
• Persuade them of the product’s value
• Reinforce the brand’s presence and benefits over time

From advertising and PR to content marketing and social media, the goal is to communicate the product’s value proposition clearly and effectively.

Target Audience & The Exchange Process

Target Audience

No single business can meet the needs of everyone. That’s why smart marketing starts with identifying a target audience: a specific segment of the market that shares similar characteristics and needs. By focusing on one or more of these segments, businesses can tailor their offerings for better results.

Targeting helps companies:

• Allocate marketing resources more efficiently
• Build stronger, longer-lasting customer relationships
• Improve return on investment through personalization and relevance

Market segmentation (based on demographics, behavior, needs, etc.) is the first step. After segmentation, a company selects which groups to focus on and crafts strategies accordingly.

The Exchange Process

At the center of every marketing activity lies the concept of exchange. This is the moment where value is transferred — a transaction in which both the customer and the company benefit.

Here’s how the exchange works:

• The customer offers something of value — typically money, but also time or effort.
• The company provides a product, service, or idea in return.

These exchanged items may be tangible or intangible. What matters is that both sides see the transaction as worthwhile. That’s what makes it a value-creating process: each party gives something and receives something they value more in return.

This mutual benefit is the essence of marketing — building trust and satisfaction through fair, valuable exchanges.

Understanding the Role of Economics in Marketing

To understand how marketing connects to economics, it’s helpful to first distinguish between three major branches of economic thought: general economics, business economics, and commercial economics.

General Economics

Every day, consumers make choices about how to spend their limited resources. Should they upgrade their phone or save for a holiday? Since financial resources are scarce, decisions must be made.

General economics — often called the science of choice — studies how individuals and societies allocate limited resources to maximize well-being. Traditional models assume that people act rationally and always pick the option with the highest utility.

However, real-life behavior doesn’t always follow this pattern. Emotional responses, habits, and subjective preferences often influence decisions. While economic theory may overlook these nuances, marketers aim to understand and influence behavior in more realistic, human-centered ways.

General economics includes two major perspectives:

• Macroeconomics: Focuses on large-scale economic systems, such as national markets, inflation, and employment.
• Microeconomics: Examines the behavior of individuals and organizations, like households and companies.

Together with business and commercial economics, these branches form the broader foundation of economic knowledge that informs marketing practice.

Business Economics

Business economics zooms in on the internal decision-making processes within companies. It’s concerned with how organizations operate efficiently and allocate resources wisely.

Key areas of focus include:

• Cost calculations and budgeting
• Financial forecasting and planning
• Organizational design and resource allocation

In essence, business economics helps companies understand how to function economically from the inside out.

Commercial Economics

The field of commercial economics arose around the mid-20th century, during a period of growing consumer wealth and demand for non-essential products. Traditional economics struggled to explain these new behaviors, giving rise to a new way of thinking focused on customer motivations.

Commercial economists began integrating insights from psychology and sociology to better understand what drives consumers — not just in terms of cost, but in how products and services fit into people’s lives.

This shift allowed businesses to move beyond competing on price and instead offer value by aligning with customer desires and lifestyle preferences. Customer-centric strategies helped companies expand their market share in a more sustainable way.

Despite its relevance, commercial economics — and its direct link to marketing — remains somewhat underrepresented in academic research and higher education curricula.

Contributions from Other Sciences

Marketing and commercial economics are closely related — often described as a “parent-child” relationship — but they are not identical. While some use the terms interchangeably, marketing is a distinct field shaped by a wide range of scientific disciplines.

Psychology plays a major role, helping marketers understand how individual attitudes, motivations, and personality traits affect buying behavior. Why do people prefer one brand over another? What emotional triggers drive loyalty? Psychology provides the tools to answer these questions.

Sociology complements this with insights into group behavior — such as how social class, cultural background, and family dynamics shape consumption habits. It reveals the broader context in which individuals make decisions.

On the analytical side, marketing draws heavily on mathematics and statistics. These disciplines support data-driven marketing efforts, such as:

• Designing and analyzing customer surveys
• Forecasting trends using statistical models
• Running market simulations and scenario planning

This cross-disciplinary nature is one of marketing’s greatest strengths. It allows marketers to approach problems from multiple angles — making the field adaptable across industries and responsive to both quantitative data and human behavior.

Levels of Marketing Systems

The roots of marketing lie in ancient trade practices — most notably bartering, where goods were exchanged directly without the use of money. Even in these early systems, people only exchanged items that held value for them. That means a basic form of market logic already existed.

While bartering still occurs in some parts of the world, modern marketing operates on several more complex levels. Each level offers a unique lens through which to understand and apply marketing strategies — ranging from company-specific decisions to nationwide initiatives.

When marketing efforts take place within a single organization aimed at a specific group, this is known as micromarketing. But marketing doesn’t stop there — it also plays a role at industry and societal levels. These are known as mesomarketing and macromarketing, respectively. Understanding these layers helps marketers operate more strategically in different contexts.

Macromarketing

Macromarketing looks at marketing as a system that serves society as a whole. Rather than focusing on one company, it considers how marketing contributes to broader economic and societal goals — such as equitable distribution, resource efficiency, and accessibility.

In this context, marketing helps connect supply and demand at scale. It ensures that goods and services are available to those who need them, when and where they’re needed. With advancements in digital platforms, logistics, and global communication, this process has become increasingly efficient.

A strong infrastructure — including transport, communication, and payment systems — boosts the effectiveness of marketing across regions and populations.

Marketing Level Overview

Mesomarketing

After exploring marketing at the societal (macro) and organizational (micro) levels, we now turn to mesomarketing — which bridges the two. This level of marketing focuses on collective efforts among businesses and institutions that operate within the same sector or market chain.

Mesomarketing typically takes place within the business chain — the sequence of parties involved in producing, distributing, and selling products to consumers. These participants may operate at different points in the chain but share aligned commercial interests.

Example: A joint campaign to promote milk, funded by dairy farmers, processors, and retailers, is a clear example of mesomarketing. Each stakeholder contributes to a shared promotional goal, even if they’re involved in different stages of the supply chain.

Other forms of mesomarketing include:

• Sector-wide awareness initiatives — such as insurers collaborating on fraud prevention campaigns
• Marketing efforts by groups with shared interests — such as retailers in the same shopping center
• Product-specific promotions — like poultry boards coordinating national marketing for chicken

Understanding the Business Chain

The business chain (also called the supply chain) consists of various horizontal links — each responsible for a specific role in moving a product from origin to end user.

Each link that fulfills a similar role for a given product category is referred to as a business sector. And within a sector, businesses with similar characteristics — such as product focus or production methods — form a branch.

Simplified Business Chain for Consumer Products

Two flows are active within this chain:

• Product flow: Goods move downstream from producer to consumer — supported by logistics and promotion.
• Value flow: Money and market insights travel upstream, helping producers refine offerings based on customer feedback.

Since retailers and wholesalers are closest to the end customer, they often provide critical feedback. However, if any link in the chain adds little value — for example, a wholesaler offering limited service or insight — it may become redundant and be bypassed entirely through direct-to-consumer strategies.

Micromarketing

Micromarketing focuses on how a single company manages its marketing activities to best serve its target audience. Also known as marketing management, this level is central to the daily decisions made by marketing professionals.

Definition of Marketing Management

Marketing management is the process of analyzing, planning, executing, and evaluating marketing actions aimed at aligning a company’s offerings with the needs and expectations of (potential) customers.

It includes:

• Developing new products or refining existing ones
• Creating effective pricing, promotion, and distribution strategies
• Navigating the competitive landscape to meet business goals

Marketing managers begin with customer insight — often gathered through research and analysis. This forms the foundation for decisions on what to offer and how to position it.

Once the product is shaped, the next steps involve:

• Setting the right price based on market expectations
• Selecting the most effective distribution channels
• Communicating value through advertising, content, or direct engagement

This structured process — from strategy through execution and refinement — defines professional marketing at the company level. It’s where theory meets action, and where business value is created through customer connection.

The Evolution of the Marketing Mindset

Today, putting the customer at the center of your business strategy seems obvious — but that wasn’t always the case. In the decades following World War II, supply shortages meant products often sold themselves. Companies were production-focused, not customer-driven.

From Production Thinking to Marketing Mindset

The shift toward customer orientation was sparked by international influences. Multinational companies like Unilever began adopting American marketing practices, especially after U.S. firms entered the European market in the 1960s with advanced market research and advertising strategies.

Since the Industrial Revolution, many industries have gone through a gradual evolution in their marketing approach. These stages reflect a shift from internal priorities to customer-focused strategies:

Phases of Market Orientation (1900–2000)

• Production Orientation
• Product Orientation
• Sales Orientation
• Marketing Orientation
• Relationship Marketing

Each stage represents a step closer to a more market-driven way of thinking. Not all businesses have reached the final phase — which emphasizes long-term customer relationships — but many are moving in that direction.

Early adopters of the marketing concept included consumer goods manufacturers. Later, industrial suppliers, service providers, retailers, and even nonprofit organizations followed — although often at different speeds.

Still, many organizations today remain stuck in production- or sales-oriented thinking. Fortunately, more leaders now recognize that understanding customer needs is essential to long-term success.

Production- and Product-Oriented Companies

In the early 20th century, especially after WWII, companies focused on producing as efficiently and cheaply as possible. This production orientation worked well during shortages — when anything produced was quickly sold.

Eventually, many firms moved toward a product orientation, believing that quality alone would ensure success. The idea was simple: “If the product is good enough, people will buy it.”

During this period, marketing was largely ignored. The assumption was that a well-made, affordable product would sell without much persuasion. Customer feedback or preferences were rarely considered.

Example: Healthcare Industry

Historically, the healthcare sector functioned with a similar mindset. Medical professionals made most decisions, with limited input from patients. However, rising expectations and increased competition — especially from private clinics — have led to more patient-centered care and marketing practices aimed at improving the customer experience.

Sales-Oriented Companies

As post-war production increased and shortages disappeared, supply started to exceed demand. The market shifted from a seller’s to a buyer’s market, where customers had more choice — and more power.

This shift gave rise to the sales concept, where the emphasis moved from production to selling. Companies adopted aggressive sales tactics to move products, but they still didn’t adapt their offerings based on customer needs.

The result was a stronger focus on sales strategy — without a fundamental change in mindset. Businesses continued to think in terms of what they could make, not what customers actually wanted.

Market-Oriented Companies

Eventually, companies began to recognize that aligning products with customer desires was key to avoiding unsold inventory and remaining competitive. This gave rise to a truly market-oriented approach.

Businesses started applying the marketing concept in everyday decisions — developing products based on actual customer needs, backed by research and strategic planning.

Example: The Dutch Dairy Sector

For many years, the dairy industry in the Netherlands operated with a production-first mindset. The goal was to produce as much milk as possible, as efficiently as possible. Branding and consumer needs were largely ignored.

“Cooperatives have always put their members — the farmers — first.”
— Market researcher, Dutch Dairy Bureau

Processors focused on volume and price, rather than customer appeal or product differentiation. But that changed as consumers became more informed and demanding. Global competition and shifting expectations forced the sector to evolve.

Today, dairy producers consider factors like taste, sustainability, packaging, and health benefits. Instead of asking “How much can we produce?” they ask “What does the customer actually want?”

This marks a clear shift from production-driven to market-driven thinking — a hallmark of modern marketing.

Market Orientation

Modern businesses increasingly operate with a market-oriented mindset. These organizations don’t just delegate customer focus to their marketing departments — they integrate it across every part of the business.

Unlike product- or sales-driven companies, market-oriented firms begin with the customer. They ask what people actually want, then develop their organization, operations, and offerings around those needs.

Comparison: Product Orientation vs. Market Orientation

Key Insight:

Marketing is broader than sales. It covers the full customer journey — from research and product development to post-sale loyalty. Sales is just one part of that bigger picture.

Market-oriented companies constantly gather feedback, monitor trends, and measure product performance in real-world contexts. They ask:

• Are we meeting customer needs in each segment?
• Where can we improve or innovate?

This approach helps organizations:

• Refine existing products
• Anticipate market shifts
• Develop offerings that truly match customer expectations
• Foster long-term customer relationships based on trust

This shift — from product-pushing to value-creation — defines modern marketing. It also explains why relationship marketing is the final step: building not just sales, but ongoing loyalty and mutual benefit.

Sales Orientation vs. Marketing Orientation

Societal Marketing Concept

In response to growing awareness of marketing’s broader impact, companies are increasingly adopting the societal marketing concept. This philosophy balances:

• Short-term customer satisfaction
• Long-term company profitability
• The well-being of society as a whole

For example, a product that meets immediate needs — like convenient single-use plastic — may harm the environment. Ethical marketers aim to avoid such trade-offs by creating solutions that benefit all stakeholders.

Responsible Marketing in Practice

Marketers must consider the impact of their strategies on:

• Customers — ensuring honest communication and value
• The company — delivering sustainable returns
• Society — promoting fairness, health, and sustainability

This is especially important in fields like sustainability and corporate social responsibility (CSR). More businesses now embed CSR principles into their operations — not just to comply with regulations, but to reflect their values and build trust.

Companies that embrace the societal marketing concept often:

• Use environmentally responsible materials and production
• Support ethical labor practices and fair trade
• Invest in social initiatives such as education or public health

While activist groups like Greenpeace often raise public awareness, many companies are proactively leading the way — and gaining long-term loyalty in the process.

Relationship Marketing

One of the most recent shifts in marketing thinking is the rise of relationship marketing. More businesses are moving beyond customer acquisition and focusing on nurturing long-term connections with both customers and suppliers.

The goal? Loyalty, trust, and sustained cooperation that benefit all parties involved.

A Different Approach

Unlike traditional transaction-based marketing — which emphasizes individual sales — relationship marketing is about ongoing engagement. It aims to create value over time through strong partnerships, shared interests, and mutual benefit.

This model is especially relevant in competitive industries where collaboration and service quality create long-term advantage.

Transaction vs. Relationship Marketing

Key takeaway: Every interaction with the customer matters. Relationship marketing turns each moment into an opportunity to build trust, satisfaction, and brand advocacy.

This long-term focus demands an integrated, strategic approach — deeply embedded in the company’s marketing philosophy.

The Marketing Concept

The marketing concept is more than a technique — it’s a guiding philosophy. It reflects the belief that the customer’s needs and wants should be the foundation of all business decisions.

In this mindset, every decision — from product development to after-sales service — is shaped by customer insight and market feedback.

Customer First, Company Second

For a business to truly embrace market orientation, this philosophy must be supported throughout the organization — starting with leadership.

Even when executives aren’t directly involved in day-to-day marketing activities, they must understand and advocate for its importance. Otherwise, internal focus (on production or operations) may take over and block customer-centered thinking.

Core Principles of the Marketing Concept

The marketing concept is grounded in six essential principles that guide successful market-driven organizations:

• Customer Satisfaction – The primary objective is to meet or exceed customer expectations.
• Profit Contribution – Marketing must support long-term profitability.
• Market Research & Targeting – Strategic decisions are based on data and insights from defined target groups.
• Competitive Analysis – Understanding the competition helps the business position itself effectively.
• Integrated Approach – All departments work together to achieve marketing goals.
• Broad Scope – Marketing touches every part of the organization — not just advertising or promotions.

By applying these principles, businesses move beyond just selling products. They begin creating real value — in ways that resonate with customers and differentiate the brand in a competitive marketplace.

Satisfied Customers

The phrase “The customer is king” captures the essence of modern marketing. Businesses that prioritize customer satisfaction aren’t just being courteous — they’re investing in long-term success.

Why Satisfaction Matters

Customer-focused companies build relationships by putting buyer needs at the heart of their decision-making. But delivering satisfaction isn’t easy. No company can serve everyone — which is why focus and segmentation are essential.

For example, a luxury restaurant may cater to business professionals rather than sports fans — and that’s a deliberate, strategic choice. What matters most is defining a clear target audience and maximizing satisfaction within that group.

Customer Satisfaction as a Growth Strategy

Successful brands often differentiate through service excellence, including:

• Understanding and anticipating customer needs
• Offering helpful product information and support
• Making products simple and intuitive to use
• Providing aftercare and complaint resolution
• Encouraging loyalty through relationship building

Benefits of Satisfied Customers

• Higher loyalty and repeat purchases
• Positive word-of-mouth
• Improved customer retention
• Increased market share through referrals

In short, customer satisfaction is one of the most valuable metrics a business can track — and it should be treated as a strategic priority.

Internal Organization in Marketing-Oriented Companies

In traditional companies, departments like sales, finance, and operations often work in silos — pursuing their own goals with limited coordination. This creates internal friction and disconnect from the customer.

In contrast, marketing-oriented organizations operate as integrated systems, with all departments aligned around customer needs.

Two Types of Organizational Models

The Integrative Role of Marketing

In customer-focused companies, market research and customer insights influence decisions across all departments. Marketing helps shape:

• Product development and innovation
• Pricing and distribution strategies
• Inventory and logistics planning
• Customer service and communication

Internal Marketing: Everyone Has a Role

To make this system work, companies must also practice internal marketing — aligning and motivating employees to embrace the company’s customer-first mindset. Every employee, from receptionist to CEO, plays a role in delivering the brand promise.

Broadly Defined Business Scope

Companies that focus solely on what they make — rather than the needs they fulfill — risk marketing myopia. This narrow vision overlooks innovation and fails to anticipate market changes.

Examples of Narrow Definitions

• “We produce PCs”
• “We make eyeglass frames”

These definitions don’t account for changes in customer behavior — such as the rise of tablets or contact lenses — which could make the product obsolete.

Adopting a Customer-Centric Mission

Market-driven businesses define their role in terms of the customer’s needs, not just their product line. They write mission statements that are:

• Forward-thinking and ambitious
• Focused on customer value
• Flexible enough to adapt to new trends

Examples of Market-Oriented Mission Statements

• Revlon: “In the factory we make cosmetics, but in the store we sell hope.”
• Shell & Texaco: Defining their business not just in oil, but in meeting energy needs through wind, solar, gas, and other sources.

Competitive Analysis

Even the most successful products won’t stay relevant forever. Forward-looking businesses conduct regular competitive analysis to maintain their edge.

Why Competitive Analysis Matters

Markets evolve — think of outdated products like cotton diapers, CDs, or phone booths. Companies must regularly assess:

• Market trends and potential threats
• The strengths and weaknesses of competitors
• Their own core competencies and positioning

A strong competitive analysis enables companies to:

• Identify new opportunities and unmet needs
• Refine their offerings through innovation
• Form strategic alliances or partnerships
• Outperform competitors in key market segments

Ultimately, this proactive approach helps businesses maintain relevance and strengthen their position in an increasingly dynamic marketplace.

Market Research and Target Group Selection

Smart marketing decisions start with solid data. While some insights can be gathered informally — such as brand representatives visiting retail partners — a structured and systematic approach to market research is essential for long-term success.

Effective research involves:

• Collecting, analyzing, and interpreting relevant market data
• Understanding who buys what, and why
• Segmenting the market based on behavior, preferences, or demographics

Once specific segments are identified, marketers select one or more as target groups. Products, positioning, and campaigns are then tailored to these audiences for maximum relevance and impact.

Profit Contribution

Marketers often say: “It’s better to have a market than a factory.” In other words: production capacity means little without demand.

Marketing exists to create value and help drive profit, not just revenue. A company may sell large volumes, but without profitability, it cannot survive — let alone grow.

Profit is essential for:

• Business continuity
• Future investments
• Innovation and expansion

That’s why marketing should always contribute to the bottom line — by attracting the right customers, improving conversion, and boosting loyalty.

The Role of Marketing in a Company

A common myth is that marketing only exists to increase demand. In practice, marketing often helps regulate demand — for example, by targeting more profitable customer segments or aligning demand with capacity.

Beyond Demand Generation

Marketing adds value by improving:

• Customer service and communication
• Complaint resolution and satisfaction management
• Brand perception and loyalty programs
• Post-sale support and retention efforts

In doing so, marketing helps shape lasting relationships — turning casual buyers into loyal customers.

Later in this guide: we’ll explore the Three R’s: Reputation, Relationship, and Response.

The First Task of Marketing

The first task of marketing is to identify and map customer needs and wants. This foundational process determines whether the business is aligned with what customers are actually looking for.

Through structured market research, marketers gain insights that shape:

• Target group selection
• Product development
• Positioning and messaging strategies

From Need to Demand: The Marketing Chain

Before a consumer can want or demand something, they must first recognize a need — a sense of discomfort or deficiency that triggers action.

• Needs: Basic desires — such as thirst, safety, or recognition.
• Wants: The form a need takes, influenced by culture, social media, price, and availability.
• Consumer behavior: How customers search, choose, and use a product or service.
• Demand: When desire becomes actionable — the customer is ready and able to purchase.

Visualizing the Process

Marketing bridges the gap between internal production and external demand by translating needs into actionable strategies:

This process guides every marketing activity — from positioning and promotion to product design and delivery.

Marketing’s Second Task

While purchasing is a key consumer behavior moment, it’s rarely the final goal for marketers. After identifying customer needs and wants, the second major task of marketing is to ensure that the company’s marketing mix (4 Ps) is aligned with market expectations and competition.

In saturated markets, many products look alike in terms of quality, price, and availability — especially on comparison websites. While some brands try to stand out through influencer campaigns or social media, building lasting preference is more difficult than ever.

That’s why marketers must go beyond transactions and work proactively to prevent dissatisfaction, using the Four Ps as tools for differentiation:

• Product – Deliver value and relevance
• Price – Be competitive and fair
• Promotion – Build trust and awareness
• Place – Ensure accessibility and convenience

Poor use of these tools leads to price wars, weak brand loyalty, and loss of market position — even when the product itself is solid.

Modern Marketing Priorities

Today’s marketers focus on:

• Delivering value through product, pricing, promotion, and distribution
• Aligning marketing with business goals
• Strengthening brand relevance and loyalty

Besides the 4 Ps, successful marketing strategy also focuses on the 3 R’s:

• Reputation
• Relationship
• Response

Together, the 4 Ps and 3 Rs form the foundation of marketing effectiveness.

From Insights to Action

[Identify needs and wants of the target group]
          ↓
[Conduct market research]
          ↓
[Define ‘ideal’ product and service concepts]
          ↓
[Develop and position offerings]
          ↓
[Respond to demand with the right marketing mix]

↓  Four Ps: Product | Price | Promotion | Place
↓  Three Rs: Reputation | Relationship | Response
  

The Three R’s of Marketing

Reputation

Your brand’s reputation is how customers perceive you — based on direct experience, word-of-mouth, and market positioning. A great product alone isn’t enough. Long-term service, transparency, and authenticity all contribute to a positive reputation.

For example, trusted brands act like a family doctor: consistent, reliable, and caring. Goodwill built through service, sponsorship, or social actions strengthens public trust.

Relationship

When most products are comparable, customers don’t just ask, “What should I buy?” — they ask, “Who do I want to buy from?”

Marketers foster relationships through personalization, service, and two-way communication. Tools like email, direct mail, live chat, and loyalty programs support this relationship-building process.

Response

Modern customers expect more — and quickly. Marketing must ensure that the brand is top of mind when the buying moment arrives. Whether through habit, relevance, or emotional connection, strong branding increases the chance of a customer choosing you repeatedly.

Examples: A supermarket like Albert Heijn promoting weekend snacks, or a coffee brand like Douwe Egberts triggering purchase with lifestyle messages.

Summary

Marketers who effectively build Reputation, foster Relationships, and trigger the right Response create a stronger brand and a more sustainable business.

Value of the Customer Base

Many companies focus heavily on acquiring new customers to drive growth. But if this comes at the expense of existing customers, it can harm long-term success.

To ensure sustainable growth, businesses must invest in increasing the value of their customer base — also known as customer equity.

Customer Equity

This is the total financial value of all customer relationships — including both immediate revenue and long-term potential.

Ways to grow customer equity include:

• Reducing the cost of acquiring new customers
• Increasing customer retention and satisfaction
• Cross-selling or upselling higher-value products
• Improving profit per customer over time

From Strategy to Value

Marketing-oriented business strategy
      ↓
Deliver maximum customer value
      ↓
Create fully satisfied customers
      ↓
Build loyalty and increase lifetime value
      ↓
Grow customer base profitability
      ↓
Increase total business value
  

By focusing on long-term relationships — not just short-term sales — companies can build a brand that’s resilient, relevant, and more profitable over time.

Customer Lifetime Value

The value of a company’s customer base is determined by the lifetime value (LTV) of all its customers combined. LTV refers to the total expected profit a customer will generate over the entire duration of their relationship with the business.

Loyal customers who make repeat purchases — and recommend the brand to others — are significantly more profitable than one-time buyers. Referrals via social media or word-of-mouth increase this value even further.

Examples:

• A regular pizza customer might generate over €7,000 in lifetime value.
• A loyal Mercedes-Benz driver could be worth more than €100,000 to the brand.

Because of these numbers, modern marketing focuses on building loyalty and long-term relationships instead of maximizing short-term sales.

Handling Customer Complaints

Customer complaints should never be ignored or minimized. When addressed properly, they offer an opportunity to strengthen relationships and reinforce brand reputation.

Unfortunately, many businesses approach complaints defensively — asking what went wrong and who’s responsible — without considering the emotional dimension of the issue.

Best Practice: Show Empathy First

Instead of focusing on internal problems, begin with the customer’s experience:

“That sounds really frustrating — thank you for bringing it to our attention. Can you tell me more about what happened?”

Then, seek a resolution together — one that not only solves the problem but builds trust:

“What would be a fair solution for you? Would you agree if we…?”

Handled with empathy and strategy, a complaint can become a moment of loyalty-building. As the Chinese word for crisis suggests — combining “danger” and “opportunity” — complaints contain hidden potential for brand growth.

Marketing Applications and Outlook

Historically, manufacturers of fast-moving consumer goods (FMCG) — like food and household items — were the first to adopt the marketing concept. Much of this guide focuses on those applications.

However, marketing has since proven valuable in many other sectors. Whether for-profit or not, any organization involved in an exchange — product, service, or idea — can benefit from a marketing mindset.

Areas of Application

The principles of marketing are universal. Successful marketers always approach decisions from the market’s point of view and work in a customer-oriented way.

• Consumer Marketing: Focused on individual end-users.
• Business-to-Business (B2B) Marketing: Directed at other businesses.
• Retail Marketing: For and by retailers such as Albert Heijn.
• Service Marketing: For intangible services (e.g., finance, insurance).
• International Marketing: Targeting cross-border consumer groups.
• Direct Marketing: Personalized outreach via email, phone, or mail.
• Database Marketing: Using data insights to customize campaigns.
• Demarketing: Intentionally reducing demand (e.g., for environmental or ethical reasons).
• Internal Marketing: Aligning internal teams with customer promises.
• Not-for-Profit Marketing: Strategic marketing for charities and NGOs.

Marketing for Non-Profits

Marketing is just as essential for non-profit organizations as it is for commercial businesses. Research shows that companies partnering with charities enjoy improved brand perception — while consumers penalize unethical brands through boycotts or criticism.

For partnerships to succeed, values and audiences must align. For example, Renault and Amnesty International may be compatible due to overlapping supporter demographics.

Charities that understand the preferences of their donors or supporters can approach potential partners more strategically. Similarly, they must compete for attention and loyalty in crowded nonprofit landscapes.

Core marketing tools — such as market research, segmentation, and strategy development — are just as critical in non-profit marketing.

Example: Universities must market themselves to both daytime students and working professionals with tailored messaging and flexible programs.

In Short:

Marketing is not an extra — it’s a strategic necessity, even for mission-driven organizations.

Summary

1. The Essence of Marketing

Marketing is more vital than ever in a competitive landscape. Companies that fail to understand and meet customer needs risk losing their audience to competitors. An effective marketing approach is no longer optional — it’s essential.

Marketing is not just about advertising or clever selling. While promotion is a visible part, marketing encompasses the entire process of connecting buyers and sellers through value-based exchange.

One of the primary roles of marketing is to identify unmet needs in the market. With a clear target group in mind, businesses can tailor their product, pricing, promotion, and distribution strategies to build long-term customer relationships. The better these strategies align with customer expectations, the higher the chance of success.

2. Relationship with Other Disciplines

Marketing draws from several other fields — including economics, psychology, sociology, and statistics. This interdisciplinary foundation helps marketers understand behavior, measure outcomes, and develop effective campaigns across all sectors.

3. Macro, Meso, and Micromarketing

Marketing can be viewed on three levels:

• Macromarketing: Focuses on society-wide systems and exchanges
• Mesomarketing: Involves industries, sectors, and supply chains
• Micromarketing: Focuses on individual organizations and is the core focus of this guide — also known as the marketing management perspective

4. Management Approaches in Business

Marketing as a business philosophy evolved from earlier stages of focus — production, product, and sales orientation — toward today’s customer-first approach.

A marketing orientation begins with the customer. Their wants and needs drive all strategic decisions, from product development to communication. This shift in thinking is known as the marketing concept.

5. The Marketing Concept

The marketing concept is a management philosophy built on three pillars:

• Understanding and satisfying customer needs
• Creating profitable solutions for both business and buyer
• Building lasting, value-based relationships

Rather than pushing products, companies must work backward from the market. All marketing activities — product innovation, research, positioning — are coordinated into one integrated plan that evolves with changing customer preferences.

6. Reputation, Relationship, and Response

Today, companies struggle to create unique 4P strategies. That’s why they also focus on the Three R’s to strengthen competitiveness:

• Reputation – How the brand is perceived
• Relationship – The strength and quality of customer bonds
• Response – The desired action (purchase, loyalty, advocacy)

Marketing is defined here as the market-oriented development, pricing, promotion, and distribution of products, services, or ideas — plus all other activities that create value for customers and stakeholders alike.

By choosing the right target audience and continually analyzing demand, a business can apply the Four P’s and Three R’s in an integrated way — strengthening alignment between business goals and market needs.

7. Marketing in Practice

In practice, marketers dedicate much of their time to identifying and analyzing the needs and desires of current and potential customers. With these insights, they develop and launch products strategically — using tactics tailored to audience behavior and preferences.

This approach not only boosts market share but also strengthens long-term competitiveness. And it’s not just for businesses: non-profit organizations also benefit from marketing principles in communication, fundraising, and outreach.

In short: a deep understanding of marketing is essential in any context where value is exchanged — from commercial enterprises to public institutions.