The fundamentals of marketing are essential to the practice of marketing in B2C as well as B2B. In essence, marketing fundamentals are about the description of the main principles of marketing. They make up the basis of this discipline for its most common applications, especially in the areas of consumer marketing. Here we will see, apart from its definition, its application in the field of B2B.
Defining Marketing Fundamentals and how they can be applied to B2C and B2B
The basics of marketing fundamentals (let us begin with the beginning and we’ll come back to B2B later on).
Marketing fundamentals are about the description of the fundamentals of traditional marketing. They describe what marketing is and is not. Let us start with the founding manifesto of this discipline.
Here is a short transcript of this text by Robert Keith:
‘In today’s economy, the consumer, the man or woman who buys the product, is at the absolute dead centre of the business universe. Companies revolve around the customer, not the other way around.
Growing acceptance of the concept of the consumer has had and will have, far-reaching implications for business, achieving a virtual revolution in economic thinking.
As the concept gains ever greater acceptance, marketing is emerging as the most important single function in business.’
In this text, Keith uses a metaphor about the planets. Placing ‘customers at the absolute dead centre of the business universe’. A metaphor which he further reinforces in the following paragraph by drawing a parallel with the Copernican revolution.
This text, therefore, includes the notion – apparently but falsely new – of ‘the customer at the centre of business’, to use an often-repeated phrase, and also a comparison which tends to give a ‘scientific’ character to the marketing discipline.
Finally, Keith describes marketing as this discipline whereby everything revolves around the customer. The revolution in the business world is, therefore, a revolution in consumer, or B2B, marketing.
What seems to be missing, is the subject of intermediate goods and services (aka B2B). Which are excessively difficult to quantify, but for which experts agree to assign a weight of about 2/3 of the economy. Measuring this is of utmost difficulty on account of intermediate goods and services not included in GDP numbers.
The Fundamentals of Marketing in Plain English
3 main marketing approaches: production, sales and marketing
If we take the example of a manufacturing company, one may highlight three main available perspectives:
- The production-driven approach. For which the manufacturing department appears as the most prominent of all departments within the company. This way of doing things will therefore pay off when demand is greater than supply.
- Second, a business asks its engineers to design and manufacture great products – from their own point of view . While admittedly devising plans for selling such manufactured products. In this case, the company adopts a sales-driven approach. This assumes that the consumer will not buy enough from the company on his own. Unless the company makes a big effort to stimulate his interest in the product (Kotler & Dubois). This option reinforces the role of the sales department. Which will have the objective of pushing whatever products or services are being offered.
- The third way is to admit that the technical quality of a product and the sales staff’s efficiency are insufficient. Especially to ensure the lasting economic success of any manufacturing activity. The best way for the business to thrive is to produce what consumers desire. The company then adopts a marketing-driven approach. ‘The marketing perspective considers that the company’s primary task is to determine the needs and desires of the target markets and to produce the desired satisfaction in a profitable manner because it is more efficient than the competition’ (Kotler). In this case, the marketing department, therefore, plays a very important role. It advises and guides, as it were, the other departments of the company.
The Three Main Functions Described by the Fundamentals of Marketing
In addition to the three approaches described above, there are three main ways of complying with the marketing concept:
- Provide information about the market
- Process market data and information (in order to devise the right product or service that the consumer needs, to manufacture it as cheaply as possible cost, and ‘marketing’ it per se).
- Coordinate all other departments while communicating about points one and two
However, it is worth noting that the marketing concept is not limited to companies of the type we have just described. It applies to all companies and organisations, whether for-profit or not.
Marketing Fundamentals: Reversing the Logic of Manufacturing and Sales
Make what you can sell instead of trying to sell what you can make.
As symbolised by the above quote (often attributed to Peter Drucker but more certainly the result of popular wisdom), the logic of marketing is reversed in relation to that of production. The marketing perspective thus starts with customers and their needs and ends up with the design of the products and derives its benefits from customer satisfaction.
So much for the basis of marketing fundamental theory. But from theory to practice, there is often a huge gap that needs to be bridged. This is even more true in B2B, where the rules are often very different from those of business-to-consumer marketing.
The definitions and principles summarised above (and further descriptions of which can be found in the document referenced at the end of this glossary entry) raise a number of questions.
We have listed five of them, among those which seem the most striking to us:
- These theories’ deterministic and mechanistic nature may give the false impression that success hinges on a simplistic equation. Such as the marketing mix formula. Marketing mix = Product + Price + Distribution + Communication. This is undoubtedly the greatest limitation of these theories. Which – without being necessarily misleading – tends to favour a pseudo-scientific aspect of marketing that unfortunately doesn’t stand the test of time, at least not in the field.
- The ‘Make what you can sell’ motto also seems self-evident, and it’s even a staple of business-school marketing: marketing starts with the customer (demand), while production starts with the product (supply). Except that this is not entirely true, or at least not always, when it comes to innovative and technological products for instance, where the demand is unknown or even has to be found. See our explanations in the chapter of this glossary dedicated to segmentation.
Real-life Example: The Launch of 5G in Europe in 2021
To detail these limitations, let’s take an example with an impact on B2B and B2C, the launch of 5G** in Europe in 2021. This is a market that is essentially business-oriented (the main uses are geared towards IoT even though some experts are explaining that alternatives exist, particularly for businesses to equip themselves without the help of telcos but which – strangely enough – primarily concerns private individuals. Here is an attempt to shed some light on the real complexity of a market in B2B – and B2C. As well – in the context of technological innovation, and will prove the limits of fundamental marketing theories. Particularly in B2B.
Let’s take the example of 5G, which, at the dawn of 2021, does not seem to attract demand uniformly in all countries. Consumers – and even businesses in this particular case – are not particularly demanding.
Technological innovation such as this one requires evangelisation efforts and education. It is up to the entire industry and cannot fall on the shoulders of a single company.
The main target of 5G is B2B – through the Internet of Things for the purpose of simplification – . However, they are waiting for the business market to mature. Meanwhile, telcos are to launch them for consumers, who are not excited about this innovation. Particularly in Southern European countries, where reticence towards new technologies is often very strong in the initial phases of adoption.
Pressure from countries that are highly committed to these new generations of wireless technologies, such as China, can make a difference as it might force lagging countries to catch up.
Besides, the alternative offer – i.e. keeping one’s existing 4G/4G+ plans and phones – can be purely and simply made redundant – because it is a regulated oligopoly – to force customers to migrate faster.
Next, as was the case with the introduction of 4G. New features may emerge – streaming in the case of the previous mobile phone generation . That does not yet exist and may hasten market acceptance by consumers and business customers, therefore ending procrastination.
All telcos, be their allies or fierce competitors – through syndicates and associations – are educating the market in common or separately.
In this sense, market research – be it among consumers or businesses – may not be sufficient to ensure marketing success. Hence the need to assess the entire business ecosystem in order to be more successful in its markets.
It is important not to lose sight of the fact that the achievement of the company’s objectives depends on its capacity to implement the marketing concept. In addition to its skills, strengths and weaknesses.
The set definitions of marketing fundamentals have not necessarily adapted to the marketing of technology products and services in B2B. We prefer the analyses and views of the man who invented the marketing of technology products and services, Regis Mc Kenna, the man with the little green books.
Below, we are making available the complete and downloadable version of a document on marketing fundamentals. This is still relevant for understanding the fundamentals of marketing. When you compare it with knowledge of business in the field and pepper it with a dose of common sense.
Further Reading About Marketing Fundamentals
The following document is a remarkable textbook about the principles of marketing. It is made available with a Creative Commons Attribution-Noncommercial-Share Alike 3.0 Unported License by Mary Anne Raymond. A professor of marketing at Clemson University and John F. – Jeff – Tanner, Jr. A professor of marketing and associate dean of faculty development and research at the Hankamer School of Business, Baylor University. It can be downloaded from the University of the People Website.
Following is a presentation about marketing fundamentals. Made available by Pr PV Sundar Balakrishnan from the University of Washington – Bothell School of Business.