Data mining is everywhere these days. We found someone to explain how marketers use that data.
I’m Deidre Popovich. I’m an assistant professor of marketing in the Rawls College of Business at Texas Tech. And I teach marketing research and analysis, and I also teach consumer behavior.
Marketing is the ability to interact with your customer as a company, so marketing is really about building relationships with customers and getting them interested in your product or your service and conveying to them that you’re offering them some sort of value.
So sometimes that value is very functional value, like you’re just going to use the product in a very functional way. But often times, companies that are really good at this convey value that’s more emotional or needs-based. It could be even something like increasing the customer’s self-esteem when they use your product. So companies that are really good at that, offer functional value but that they also offer kind of additional value and that value creation process is the role of marketing.
It is something that the companies should be able to monetize and know that they’re offering that additional value and that that additional value is worth something to the customer. In other words, companies don’t charge a price for their product based on how much it cost them to manufacture it. They charge that plus whatever value the customer is gaining from using that product.
It’s a huge piece of making a profit for a company. In fact, marketing is, I would argue, the critical function of being able to do that in a business. Because if your customers aren’t buying, you’re not making a profit. And marketing is responsible for that relationship with the customer, and creating value for the customer. So it’s a critical function of profit.
I think we can go back as far as the 1920s, at least, to start thinking about marketing in its earliest forms. But back then people thought about marketing as ‘We’ll just create a great product or service and people will buy it. The marketing will kind of take care of itself.’ And it wasn’t really until the 1950s, if you think of the show “Mad Men” when they were working on all the advertising campaigns on Madison Avenue. That’s when they really started to say ‘OK, we’re going to inundate customers with all these ads and sales, and that in combination will get people to buy our product.’
I think marketing is evolving from that and continues to evolve, so in the 1990s, early 2000s, people started really thinking about relationships with customers and more of the one-on-one marketing or giving you as a customer exactly what you’re looking for. So should we send you a certain coupon? Should we send you a certain promotion? Are you the type of customer who wants more from us on social media? And those types of things. So we’re continuing to evolve and collect data about customers and that’s driving this one-on-one, personalized marketing these days.
A lot of marketing now is driven by word of mouth. So if your friend tells you, ‘I bought this product and I loved it,’ that’s more likely to cause you to at least gain some interest in that product than a company inundating you with an advertisement, say on a billboard or on TV or something like that.
So advertising is still a huge piece of what marketers do, but I think that marketers are starting to think about other avenues in terms of how to promote their product.