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Hello and welcome to this tutorial on the basics of marketing. Now, as always with these tutorials, please feel free to fast forward, pause, or rewind as many times as you need to in order to get the most out of the time that you're going to spend here.
Now, we've all heard the term "marketing." So the question is, what is it exactly? Is it advertising? Is it selling? How does it relate to us in the world of business and the world at large?
Well, during this tutorial, we're going to be answering that question, what is marketing? We're also going to be looking at what the values are and the benefits to consumers of marketing. We're going to be looking at the different types of utility. And lastly, we're going to be comparing, how does marketing compare to advertising and public relations? The key terms for this lesson are going to be "marketing," "value," "advertising," and "public relations."
So let's get right into marketing. Well, marketing as we're going to define it is the process of developing a reciprocal exchange, including the development of information and promotional materials that stimulate demand. Well, marketing has this great association attached to it called the AMA, or the American Marketing Association. And in their view, to put it simply, marketing is simply a lot of different things, a lot of processes and activities that are involved in delivering and exchanging offerings that have value to you, me, society at large.
Now, you can kind of get an idea of how important marketing is by how much companies spend on it. For instance between 2009 and 2013, Apple Corporation went from spending $500 million on marketing to over a billion in order to stimulate the demand of their products. In that same time period, Samsung went from spending $2 billion a year in 2009 to over $4 and 1/2 billion. As you can see simply from the amount of money that companies invest in this thing that we call marketing, it's obviously pretty important to them.
Now, marketing can be a product, it can involve services, or it can involve ideas-- for example, a product, like a Coca-Cola or a service like tax help from H&R Block, which is designed to help save you money or deal with that uncomfortable situation like, oh, audits, also ideas such as anti-drug PSAs. This is your brain. This is your brain on drugs. And this is to help keep kids away from drugs or encourage them not to start.
Marketing is also involved for profit businesses and non-profit organizations alike.
Well, what's value and what are the values and benefits? Well, value is the corresponding usefulness, practicality, or significance. To put it another way, value equals benefit divided by the cost. What am I getting out of it for how much I'm going to pay for it? Marketing can create value for customers. It can inform customers about the benefits associated with a product that they may not already know about.
And they can describe benefits that are both tangible and intangible-- for example, tangible things like breathable cotton shirts or intangible things like the coolness or the fit or being able to fit in with your peers or in this case, as the picture suggests, the style and elegance that go along with owning a Rolls Royce automobile. A lot of times intangibles are associated, like Rolls Royce, specifically with brands, especially high end brands. Gucci, Omega, Mercedes, Rolls Royce are all examples of this.
Now, next we'll take a look at utility and the types of utility, things like time or the hours of operation. You see, utility is, what am I getting out of it? What is that benefit for me? What's best or good that fills my needs? For instance, an operation that is open for business at times when customers can come and see me, for instance, 24 hours a day or operating a business on the internet provides utility for me.
Also, the place or the physical location of a product-- 15 choices in a movie at a particular movie shop, a strip mall or a mall where I have a lot of different things in one place, this provides utility for the consumer. Ownership or the form of a business, for instance, I have very comfortable seats at my movie theater or coffee shop. I got really nice speakers if you want to listen to music there. And maybe I have Wi-Fi internet connectivity at that particular coffee shop.
So utility relates to a lot of different things within marketing as a whole. It helps provide define that benefit. What am I getting out of this particular product or service or idea?
So what's the difference between marketing, advertising, and public relations? Well, let's define a couple of key terms first. First of all, advertising. Now, advertising is the paid communication to inform about a product, idea, or service. Public relations is communication that's not directly paid for, but functions to inform about a product, idea, or service.
Now, advertising will be things like putting billboards up or paying for spots within a sports stadium, placement for solicitations. Public relations is still marketing. I'm still informing about benefits, cost versus service.
But these might be something that companies do to influence building goodwill-- for instance, sponsoring or putting their logo or hosting an event or a charity at their business. They may pay for it. They may simply provide a space to do it. But now I'm associating my product name and my company name with that particular charity or event so that I can build goodwill with the public.
So what did we look at today? Well, we covered what is marketing. We helped define what that broad general idea is. We looked at the values and the benefits that it provides to its consumers. We also looked at the different types of utility, or those things that I find useful, the things that are beneficial to me.
And how does marketing compare to advertising and public relations? While they're still part of marketing, they are just that, parts. They're not the whole thing.
As always, I want to thank you for spending some time with me today. Have a great day.
Communication that is not directly paid for, but functions to inform about a product, idea or service.
Paid communication to inform about a product, idea or service.
The corresponding usefulness, practicality or significance.
The process of developing a reciprocal exchange; including the development of informational and promotional materials to stimulate demand.