Understanding the marketplace and customer needs is of prime importance for marketers. There are five core customer and marketplace concepts:
- Needs, wants, and demands
- Market Offerings or Availability of Products, Services, and Experiences
- Customer Value and Satisfaction
- Exchanges and Relationships
Important Concepts to understand marketplace and customer needs
Let us examine these concepts in detail.
1. Customer Needs, Wants, and Demands
Just how essential it is to identify the target market, it is also vital for the marketer to understand its fundamentals, like needs, wants, and demands. There are specific needs that people are born with, such as water, air, food, clothing, shelter, education, recreation, etc. The marketers cannot force this need into their customers, but they can monetize machines.
Need– Need is a state of deprivation, where the consumer feels the urge to have the given product or service.
Want– Wants is the desire to fulfill the needs. For example, Thirst can be quenched by drinking water, juice, tea, or coffee.
Demands– Demands are wants that are correlated with buying power. They are always supported with the ability and willingness to buy a product or service.
For example, Honda means basic transportation, low price, and comfortable. On the other hand, Audi means comfort, luxury, and status. Demands are based on benefits that maximize satisfaction according to wants and resources.
Steps that ensure better understanding and learning of needs wants, and demand and helps determine marketing strategies are:
- Conducting consumer research on focus groups.
- Analysis of customer complaints, queries, and service data.
- Training sales personnel to look for unfulfilled customer needs.
- Observing customers and interviewing them in detail regarding their preferences on your product vs. the competitors.
2. Market offerings or Availability of Products, Services, and Experiences
A market offering of products or services satisfies customers’ needs, wants, and demands. A market offering combines product information, experiences, and services. These are not just limited to tangible products but also include services or activities offered for sale that can be intangible and do not offer ownership of any sort. Examples of intangible benefits include hospitality, banking, healthcare, and education. Market offerings also comprise other entities such as places, people, organizations, ideas, and information.
How is Availability important?
Once the marketer knows what the customer wants, they need to look for available information. You want to ensure that your product is unique; it puts you in competition with products with an existing customer base. It is easier to gain new customers than attract an existing loyal client base. When looking for comparable products or services, ensure looking for solutions that help you offer a similar benefit, rather than just finding an equivalent company.
3. Customer Value and Satisfaction
Customer value is the satisfaction a customer gains from purchasing products and services. Customer value and satisfaction are the building blocks for managing and developing customer relations. With an immense choice in the market for similar products, what you offer beyond the product is what makes the customer choose you. For example, after-sales service, call center service, warranty services can make a difference.
A successful marketing process depends on the company’s ability to match customer expectations. Customer Value can be defined as the difference between a customer’s value from availing of a product and the cost. The more the benefits, the higher the customer value. However, customer satisfaction is also derived if the expectation matches the product’s performance. Satisfied customers will repurchase and also inform others about their experiences. In contrast, unsatisfied customers will not only dismiss your product but will also make a switch over to one of your competitors.
Product Quality is closely related to Customer Satisfaction.
Product performance largely depends on the quality and then derives customer satisfaction. Quality Management Control programs are designed to monitor the production and marketing of products and services. Customer Satisfaction and Value are proportional to the quality of products and services.
4. Exchanges and Relationships
Exchange is the act of obtaining an object in return for something. Marketing is when people fulfill their needs and wants through exchange. For an exchange to occur, there have to be two interested parties, offering something of value to each other, with the freedom to accept or reject the offer. Exchange is a core marketing concept because it is the only way to communicate their needs and obtain the desired product or service in return for some monetary value.
The transaction is the marketing tool of measurement. It is a trade between two involved parties, agreeing upon things of value at a given time and place. The basic unit of exchange in business is a transaction. Both the trading parties involved make gains out of this transaction. Transactions are the basis of relationship marketing.
For instance, you go out to buy a pair of sunglasses worth Rs 10,000. When you make the actual purchase, you pay Rs 10,000 to the seller, making the transaction a monetary fain for him, while you receive the product of desire and want.
Relationship marketing is the process of creating, enhancing, and maintaining strong, value-driven relationships with customers. Marketing has witnessed a shift in focus from just selling products to maximize profits on each transaction to building customer relationships by offering more than just products. The current market scenario focuses on client relationship due to rising competition and public awareness.
A Market can be defined as a set of potential buyers and sellers of a particular product. The market comprises anything that holds value; goods, services, people, or ideas. The market size depends on the number of people with resources and the need to participate in the exchange. Marketing techniques are used to maximize profitable customer relationships. Modern Economics thrives on markets.
Producers purchase resources like raw material labor from their respective resource markets. They then turn these resources into consumable goods and services made available to the consumers via intermediaries.
Core marketing activities are:
- Customer research
- Product development
- Distribution of products and service
Marketing is an art that allows creating a strategic framework to satisfy human wants and maximize profits. Understanding market place and what the market demands and needs are fundamental. Proper research and analysis promote a healthy and profitable business while keeping the customers happy and engaged at all times.