defining marketing for the new...

Chapter 1

Defining Marketing

for the New Realities

Copyright © 2016 Pearson Education Ltd. 1-1

The Scope of Marketing

•Marketing is about identifying and meeting humanand social needs

•AMA’s formal definition: Marketing is the activity, setof institutions, and processes for creating,communicating, delivering, and exchanging offeringsthat have value for customers, clients, partners, andsociety at large

Copyright © 2016 Pearson Education Ltd.

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The Scope of Marketing

One of the shortest good definitions of marketing is “meeting needs profitably.”


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Marketing Management

The art and science of choosing target markets andgetting, keeping, and growing customers throughcreating, delivering, and communicating superiorcustomer value.

Marketing management takes place when at least oneparty to a potential exchange thinks about the means ofachieving desired responses from other parties.

COPYRIGHT © 2016 PEARSON EDUCATION, INC.1-4


What is Marketed?

• Goods

• Services

• Events

• Experiences

• Persons



What is Marketed?

• Places

• Properties

• Organizations

• Information

• Ideas



Demand States

Negative demand—Consumers dislike the product andmay even pay to avoid it.

The Product Might Be Beneficial But The Customer Does NotWant It.



Demand States

• For Example – Dental Work Where People Don’t Want Problems WithTheir Teeth And Use Preventive Measures To Avoid The Same.

• Insurance, Which People Should Have But They Delay Buying AnInsurance Policy. Similarly, People Would Like To Avoid.

• Heart Attacks And Hence May Pay For A Full Body Check Up Where TheResults Might Be Negative, But Still The Customer Has To Pay.

• The Marketer Has To Solve The Issue of No Demand By Analysing Why The Market Dislikes The Product And Then Counter Acting With The

Right Marketing Tactics.



Demand States• Nonexistent demand—Consumers may be unaware of or

uninterested in the product.

• For instance, the demand for Ford’s Model T in the21st century is pretty much non-existent. A product could havealso lost popularity for its high price tag or if it was phasedout to make way for a newer version.

• For instance, demand for luxury cars such as Rolls-Royce,Lamborghini, Bentley, etc. will be non-existent in poorer orbackward economies.



Demand States• Latent demand—Consumers may share a strong need that

cannot be satisfied by an existing product.

• For examples: Harmless cigarette, safer neighbourhood, morefuel efficient car.

• Declining demand—Consumers begin to buy the product less frequently or not at all.

• For examples Private colleges have seen application falls.



Demand States• Irregular demand—Consumer purchases vary on a seasonal,

monthly, weekly, daily, or even hourly basis.

• For examples: Museums are under visited in week days and over crowded on week days.

• Full demand—Consumers are adequately buying all productsput into the marketplace.

• For example Ideal Situation where supply is equal to demand.



Demand States

Overfull demand—More consumers would like to buy the product than can be satisfied.

For example National park is terribly overcrowded in thesummer.

Unwholesome demand—Consumers may be attracted to products that have undesirable social consequences.

For example Cigarettes, hard drinks, alcohol.



Structure Of Flows In A Modern Exchange Economy



A Simple Marketing System


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Key Customer Markets•Consumer markets

•Business markets

•Global markets

•Nonprofit & governmental markets



Key Customer Markets

Consumer Markets: Companies selling mass consumer goods andservices such as juices, cosmetics, athletic shoes, and air travelestablish a strong brand image by developing a superior product orservice, ensuring its availability, and backing it with engagingcommunications and reliable performance.

Business Markets: Companies selling business goods and servicesoften face well-informed professional buyers skilled at evaluatingcompetitive offerings. Advertising and Web sites can play a role, butthe sales force, the price, and the seller’s reputation may play agreater one.



Key Customer Markets

Global Markets: Companies in the global marketplace navigatecultural, language, legal, and political differences while deciding whichcountries to enter, how to enter each (as exporter, licenser, jointventure partner, contract manufacturer, or solo manufacturer), how toadapt product and service features to each country, how to set prices,and how to communicate in different cultures.

Nonprofit and Governmental Markets: Companies selling to nonprofitorganizations with limited purchasing power such as churches,universities, charitable organizations, and government agencies needto price carefully. Much government purchasing requires bids; buyersoften focus on practical solutions and favor the lowest bid, otherthings equal.



Core Marketing Concepts

•Needs: the basic human requirements such as for air, food, water, clothing, and shelter

•Wants: specific objects that might satisfy the need

•Demands: wants for specific products backed by an ability to pay




• A U.S. Consumer Needs Food But May Want A Chicago-style“Deep-dish” Pizza And A Craft Beer.

• A Person In Afghanistan Needs Food But May Want Rice, Lamb,And Carrots. Our Wants Are Shaped By Our Society.

• Many People Want A Mercedes; Only A Few Can Buy One.




• Target markets

• Positioning

• Segmentation




•Value proposition: a set of benefits thatsatisfy those needs

•Offerings: a combination of products,services, information, and experiences

•Brands: an offering from a known source




• Marketing channels


COMMUNICATION

DISTRIBUTION

SERVICE


Marketing channels

To Reach A Target Market, The Marketer UsesThree Kinds of Marketing Channels.

Communication Channels Deliver And ReceiveMessages From Target Buyers And IncludeNewspapers, Magazines, Radio, Television,Mail, Telephone, Smart Phone, Billboards,Posters, Fliers, Cds, Audiotapes, And TheInternet.

Marketing channels

Distribution Channels Help Display, Sell, orDeliver The Physical Product Or Service(s) ToThe Buyer Or User.

It can include wholesalers, retailers, distributors and even the internet itself.

Service Channels That Include Warehouses,Transportation Companies, Banks, AndInsurance Companies.


•Value: a combination of quality, service, and price.

•Satisfaction: a person’s judgment of a product’sperceived performance in relationship toexpectations.

•The sum of the tangible and intangible benefits and costs. If performance falls short of

expectations, the customer is disappointed. If it matches expectations, the customer is satisfied. If

it exceeds them, the customer is delighted.




•Supply chain: a channel stretching from raw materials to components to finished products carried to final buyers



The New Marketing Realities

• Technology

• Globalization

• Social responsibility




Technology: Massive Amounts of Information andData About Almost Everything Are Now Available ToConsumers And Marketers.

Globalization: The World Has Become A SmallerPlace. Globalization Has Made CountriesIncreasingly Multicultural And Changes InnovationAnd Product Development As Companies Take IdeasAnd Lessons From One Country And Apply Them ToAnother.


Social Responsibility: The Private Sector Is TakingSome Responsibility For Improving Living Conditions,And Firms All Over The World Have Elevated TheRole Of Corporate Social Responsibility.

Company Orientation towardthe Marketplace

The Production Concept Is One Of The OldestConcepts In Business. It Holds That Consumers PreferProducts That Are Widely Available And Inexpensive.

Managers Of Production-oriented BusinessesConcentrate On Achieving High ProductionEfficiency, Low Costs, And Mass Distribution.

The Product Concept Proposes That ConsumersFavor Products Offering The Most Quality,Performance, Or Innovative Features.

Company Orientation towardthe Marketplace

The Selling Concept Holds That Consumers AndBusinesses, If Left Alone, Won’t Buy Enough Of TheOrganization ’ s Products. It Is Practiced MostAggressively With Unsought Goods—goods BuyersDon’t Normally Think Of Buying Such As InsuranceAnd Cemetery Plots—and When Firms WithOvercapacity Aim To Sell What They Make, RatherThan Make What The Market Wants.

The Marketing Concept, The Job Is To Find Not TheRight Customers For Your Products, But find theRight Products For Your Customers.

Holistic Marketing Dimensions

Holistic marketing acknowledges that everythingmatters in marketing—and that a broad, integratedperspective is often necessary.

Four broad components characterizing holisticmarketing: relationship marketing, integratedmarketing, internal marketing, and performancemarketing.

Holistic Marketing Dimensions


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Internal marketing

•The task of hiring, training, andmotivating able employees who want toserve customers well.


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Performance marketing

Performance Marketing RequiresUnderstanding The Financial And NonfinancialReturns To Business And Society FromMarketing Activities And Programs.

Integrated marketing

•Devise marketing activities and programs that create, communicate, and deliver value such that “the whole is greater than the sum of its parts.”


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Relationship marketing


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CUSTOMERS

EMPLOYEES

MARKETING PARTNERS

FINANCIAL COMMUNITY

Fig. 1.5 Marketing Mix Components (4 Ps)


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MODERN MARKETING MANAGEMENT


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PROCESSES

PEOPLE

PROGRAMS

PERFORMANCE

MODERN MARKETING MANAGEMENT

Marketing Will Only Be As Good As The People InsideThe Organization.

Processes Reflects All The Creativity, Discipline, AndStructure Brought To Marketing Management.

Programs Reflects All The Firm’s Consumer-directedActivities.

We Define Performance As Financial And NonfinancialImplications (Profitability As Well As Brand AndCustomer Equity) And Implications Beyond TheCompany Itself (Social Responsibility, Legal, Ethical, AndThe Environment).


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