Chapter 1
Defining Marketing
for the 21st Century
What is Marketing?
Marketing is an organizational function
and a set of processes for creating,
communicating, and delivering value
to customers and for managing
customer relationships in ways that
benefit the organization and its
stakeholders.
CREATIVE
CREATIVE
Successful Relationships
Value, Satisfaction, and Retention
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Customer Value
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Defined as the ratio between the
customer’s perceived benefits
(economic, functional and
psychological) and the resources
used (monetary, time, effort and
psychological) to obtain those
benefits
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What is Marketing Management?
Marketing management is the
art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value.
What is Marketed?
• Goods (products)
• Services
• Events (Disney)
• Experiences (Bunzi)
• Persons
• Places (Lankawei)
• Properties
• Organizations
• Information (XRAY, MRI)
• Ideas (Drugs Abuse Campaign)
Whom to Market?
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A MARKETER is someone who seeks a response from
another party, called PROSPECT
Marketer possesses the skill to stimulate demand:
Negative Demand: Pay a price to avoid it (Avoid heart attacks,
pay full body check up where the result can be negative)
Nonexistent Demand: Consumer may be unaware or
uninterested in the product.
Latent Demand: Share a strong need that can not be
satisfied with current product.
Irregular Demand: Seasonal, Monthly or Weekly
Full Demand: Consumers are adequately buying all products
put into the marketplace.
Overfull Demand: Would like to buy more than can be
satisfied.
Unwholesome Demand: Should not desire the product, but
want it badly and have undesirable social consequences.
Tobacco, Drugs, Guns….
Key Markets?
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Consumer Markets: Selling consumer goods and services.
Such as; drinks, cosmetics, air tickets
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Business Markets: Companies selling business goods and
services. Such as; Caterpillar, Elevator etc.
Global Markets: Companies selling goods and services in
the global marketplace. Such as; Pamper-Japan and cultural impact
Non-Profit and Governmental market: Companies selling
their goods to nonprofit organization. Like; universities,
mosque, charitable organization (Medicine to Lion Eye Hospital)
Marketplaces, Marketspaces and
Metamarkets
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Marketplace: It is physical…..When we shop in the
store.
Marketspace: It is digital……When we shop on the
internet.
Metamarket: A cluster of complementary products
and services that are close related in the minds of
consumers but are spread across a diverse set of
industries.
Example: Yatra.com for travelers; Shaadi.com for marriage service
Like; automobile manufacturers, new car and used car dealers, financing
companies, insurance companies, mechanics, spare parts dealers, service shops,
auto magazines etc.
Core Concepts
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Needs, wants, and demands
Offerings and brands
Target markets, positioning, segmentation
2. Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands
Needs
• States of deprivation
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
Wants
• Form that human needs take as they are shaped by
culture and individual personality
Demands
• Human wants backed by buying power
2. Understanding the Marketplace
and Customer Needs
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Market offerings are some combination of
products, services, information, or experiences
offered to a market to satisfy a need or want
Brand is offering from a known source. A
brand name such as Pizza Hut carries many
associations in people minds that make up
image of…..Pizza, Cleanliness, Convenience,
Speed, Courteous Service….
3. Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve
Market segmentation refers to dividing the
markets into segments of customers
Target marketing refers to which segments to
go after
3. Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve
Demarketing is marketing to reduce demand
temporarily or permanently; the aim is not to
destroy demand but to reduce or shift it
3. Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Production
concept
Product
concept
Selling
concept
Marketing
concept
Societal
concept
Production concept is the idea that consumers will
favor products that are available or highly
affordable
Product concept is the idea that consumers will
favor products that offer the most quality,
performance, and features. Organizations should
therefore devote its energy to making continuous
product improvements.
Marketing myopia is focusing only on existing wants and losing sight of
underlying consumer needs
Selling concept is the idea that consumers will
not buy enough of the firm’s products unless
it undertakes a large scale selling and
promotion effort
Marketing concept is the idea that achieving
organizational goals depends on knowing the
needs and wants of the target markets and
delivering the desired satisfactions better
than competitors do
Societal marketing concept is the idea that a
company should make good marketing
decisions by considering consumers’ wants,
the company’s requirements, consumers’
long-term interests, and society’s long-run
interests
Holistic Marketing
Holistic Marketing
Holistic Marketing:
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Holistic marketing recognizes that “everything matters” with
marketing. There are four components:
Relationship Marketing: Aim of building mutually satisfying
long-term relationships with key parties-customers, suppliers,
distributors etc. Create marketing network….among the
stakeholders.
Integrated Marketing: Fully integrated marketing programs to
create, communicate and deliver value for consumers.
Internal Marketing: Internal marketing is the task of hiring,
training, and motivating able employees who want to serve
customers well. The sales force thinks product managers set
prices or sales quotas “too high”.
Performance Marketing: Ethical, environmental, legal and
social context of marketing activities and programs. Renault:
Nissan. Electric car for conserving environment.