[MUSIC] Hello learners. In this lesson of our fifth course in our specialization, how to start a business, we have reached step three of our five steps to a capstone experience. In this lesson, we will begin our discussion on marketing, one of, if not the, essential function or activities of your business. Throughout this course, we have stressed concepts like strategic thinking, effectual logic, validated learning, and the lean principles of the new business paradigm. All stressing creativity, flexibility, and resourcefulness in decision making. In this context, whether they teach specific marketing strategies and techniques, we hope to give you a more in-depth insight into marketing's assets. So that by the end of the lesson in this module, you can apply its principles and create a unique ways that fit your circumstances and resources. A very famous quote from Peter Drucker, who some described as the father of modern business consulting, is that the sole purpose of a business is to create a customer. Now that fact has certain implications in his mind. He indicated that because of that the cost of sole responsibility was to create a customer, the business only had two basic functions. Innovation and marketing. Innovation to actually conceive and in a sense produce the value and marketing to then help in the creation then communicate, deliver and capture that value. So even though all of us have a pretty good insight into marketing, we deal with it on the other side constantly marketed to. We think it's worthwhile just to have a brief discussion on exactly what is marketing. And we're going to start off discussing in a sense, what marketing is not. It's not personal selling. It includes that, it involves that marketing is more than just personal selling. In the same sense, it's not just advertising nor retailing, marketing research, again an important part, that marketing itself goes beyond the research process. It's not branding What is marketing? And, again, in its essence, marketing is simply the creation of a customer. Now, what's the difference, you might ask? Well, in the same sense that the engine and the technology involved in that engine, in essence it's not the car, it's not the feeling or the attitude you have when you drive that car. Your outward appearance doesn't really necessarily reflect of who you are, the essence of your personality. In the same sense, marketing is a unique concept in which all those other factors, branding, retailing, etc., all those related terms are directed by the marketing activity. They're structured and woven together in order to create the value that in turn will create the customer. So we make that distinction. Marketing Is primarily the activity that creates the customer. And in a sense, all of these other activities facilitate that activity. And so they perform one function or another, but they have to be combined, they have to be orchestrated in a way that again creates the value that ultimately creates the customer. We gave you a specific example of this in the assigned reading where a basic product like Brach's Candy in a sense, if altered a bit, if changed in terms of its form or format how it's positioned could be a lot more valuable in the sense of a lot higher price when placed in the different format. So this reformatting, this repositioning of this basic candy product in essence created value, which created a large number of customers that would not have bought the product, if it had remained simply as a candy product. Just look at marketing in a little bit broader sense, marketing is a very comprehensive concept. It operates in three domains, so domain is an area of authority, an area in which something has influenced. So marketing operates in three domains, societal, business and even at the individual level. At the societal level, we have what we call macro-marketing. And we see the definition here. It's a social mechanism, we're going to explain that to you, that fuels economic development and improves the quality of life really for all mankind. Let's try to explore this in a little bit more detail as explained in the assigned reading. So if we look at the dawn of the ages if you will, At the point of enlightenment, along with investment and consumption, [MUSIC] When mankind discovered tools and engaged in tool making, We reached the point of enlightenment and production became an additional social mechanism. Again, a social mechanism is a process in which society deals with its survival needs. Let's explore this in a little more detail. At the dawn of ages, so to speak, the social mechanisms, again, social mechanisms are economic functions, economic activities any society engages in to address their survival needs. So at the very, very beginning, the basic social mechanisms were simply investment, exertion of oneself, and consumptions. Picking berries, drinking from the stream, etc. Then at what we might call the point of enlightenment, [SOUND] Mankind discovered tools and at that point we had an additional social mechanism that being production. Now, once division of labor occurred, hut makers, arrow makers, hunters, shoemakers, etc. Once we had division of labor, we then required society demanded an additional social mechanism, that being marketing. So the hut maker could exchange their wares for the shoes, or for food, etc. You get the idea. And so marketing became that thread that tied together all of economic development. We go back to maybe your early economics class. Division of labor specialization is at the heart of economic development and the improvement of quality of life. And as we see here, marketing is at the very heart of specialization. We also have the business domain, well we refer to as micro-marketing. And this is the typical to classic definition of marketing that you might see on Wikipedia or if you were simple to Google marketing, this would be the definition that you would most likely run into. The set of activities, again, for creating, communicating, delivering, and capturing value. Drucker went on to say that the aim of marketing is to know and understand the customer so well that in essence they sell themselves. You basically give them what they want at the price they're more than willing to pay. Finally, marketing does have an impact at the individual level. In essence, our ability connect with one another. Our ability to network, our ability to communicate and effectively achieve our goals in the context of a group or broader network. It's fundamentally, what's at the heart of marketing. So let's look at the essence of marketing, exactly what is it and it's core. What connects marketing today in the 21st century with marketing when it first came on scene in terms of the human existence? So let's talk about this essence of marketing. What is it and its core that connects marketing today in the 21st century, when marketing first came on the scene in terms of our human existence? The essence of marketing is to form connections and relationships. Physical connections and emotional connections we call those relationships. And we use those as a platform to again create, communicate, deliver and capture value. So the essence of marketing is to connect physically, as well as emotionally. We can illustrate that. In essence, we start off by building community Understanding customers' wants and needs As result of our inter-relationship with them, as a result of being part of their community. [SOUND] Now that we understand their needs, we use those as a platform along with our connections and relationships, to then create value. We then deliver, communicate and capture that value, from the perspective of a sale. We can break this definition of the essence of marketing into two stages. What we would initially refer to as Market Creation, the formation of those initial connections, relationships, understanding needs and wants. And then once we have that platform built, exploring that market in terms of the creation of the values that create a customer. So we have market creation and customer creation. So again, focusing in on the essential role on marketing as a connector. Marketing connects the citizens and your business being a citizen of your environment, your society connects the business to the community, to some greater cause. Marketing also obviously connects you the seller to your buyers through physical connections, through channels. And marketing gives meaning, gives motivation to your customers to purchase your product. Communication relationships. So, in summary, our focus, here, is to look at the very essence of marketing. Again, instead of giving you specific strategies to execute here, or execute there, in a sense, giving you the fish, we try to give you some insights into the core or the essence of this activity, so that you can learn to fish for yourself, that you can use your own creativity, and innovation, in terms of how you go about forming physical connections so that your customers can get their hands on your product or service. And those emotional connections in the sense that you're giving them something they already want at a price you already know they're willing to pay. [MUSIC]
