copyright © 2003 prentice-hall, inc. 1-1 chapter 1 defining marketing for the 21 st century

Copyright © 2003 Prentice-Hall, Inc.

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Chapter 1 Chapter 1 Defining Marketing for the Defining Marketing for the

2121stst Century Century


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The future is not ahead The future is not ahead of us. It has already of us. It has already happened. happened. Unfortunately, it is Unfortunately, it is unequally distributed unequally distributed among companies, among companies, industries and nations.industries and nations.

Kotler on Marketing


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Topics to Be Covered In this chapter, the following topics will be In this chapter, the following topics will be

Covered:Covered: Importance of MarketingImportance of Marketing Scope of MarketingScope of Marketing Marketing EntitiesMarketing Entities Composition Demand of MarketingComposition Demand of Marketing Key Customers MarketsKey Customers Markets Core Marketing ConceptsCore Marketing Concepts Company Orientations toward the Market PlaceCompany Orientations toward the Market Place Marketing Management TasksMarketing Management Tasks


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Importance of Marketing

Financial success often depends on marketing ability.Financial success often depends on marketing ability. Finance, operations, accounting and other business Finance, operations, accounting and other business

functions will not really matter if there is not sufficient functions will not really matter if there is not sufficient demand for products and services, so the company can demand for products and services, so the company can make a profit.make a profit.

Companies need marketing to cope up with the statement-Companies need marketing to cope up with the statement-

““Change or Die”Change or Die”


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The Scope of Marketing Marketing:Marketing: Typically seen as the task of creating, Typically seen as the task of creating,

promoting, and delivering goods and services to consumers promoting, and delivering goods and services to consumers and businesses.and businesses.

It is also about identifying and meeting human and social It is also about identifying and meeting human and social needs.needs.

A Brief Definition:A Brief Definition: The process by which, companies create value for customers The process by which, companies create value for customers

and build strong customer relationships in order to capture and build strong customer relationships in order to capture value from customers in return. value from customers in return.

Marketing management:Marketing management: The art and science of choosing target markets and getting, The art and science of choosing target markets and getting,

keeping, and growing customers through creating, delivering keeping, and growing customers through creating, delivering and communicating superior customer value.and communicating superior customer value.


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The Scope of Marketing (Cont.) The Marketing Process:The Marketing Process:

Understand the

Marketplace and

Customer Needs & Wants

Design a Customer-

Driven Marketing Strategy

Construct an Integrated Marketing

Program that Delivers Superior

Value

Build Profitable

Relationship and Create Customer Delight

Capture Value from Customers to Create

Profits and Customer

Equity

Create Value for Customers and Build Customer

Relationships

Capture Value from

Customers in Return

Figure: Marketing Process


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What is Marketed (Marketing Entities)

PlacesPlaces Ex: Beautiful Bangladesh, Incredible Ex: Beautiful Bangladesh, Incredible

India, Truly AsiaIndia, Truly Asia PropertiesProperties Ex: Real Estate or Stock & Bonds Ex: Real Estate or Stock & Bonds

CompaniesCompanies OrganizationsOrganizations Ex: Grameen Phone, SquareEx: Grameen Phone, Square InformationInformation Ex: Information Provided by CompaniesEx: Information Provided by Companies IdeasIdeas Ex: Smoking is Injurious to HealthEx: Smoking is Injurious to Health

Goods Goods Ex: Lux,Ex: Lux, SonySony ServicesServices Ex:Ex: Bangladesh Bank, Persona,Bangladesh Bank, Persona,

Jahangirnagar UniversityJahangirnagar University EventsEvents Ex: World Cup Cricket, 2011Ex: World Cup Cricket, 2011 ExperiencesExperiences Ex: Water Kingdom, VOOTEx: Water Kingdom, VOOT PersonsPersons

Ex:Ex: Filmstars, CricketersFilmstars, Cricketers


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Who Markets?? Marketers and Prospects :Marketers and Prospects :

1. Negative

Demand

A major part of the market dislikes the product and may even pay a price to avoid it—vaccinations, dental work, vasectomies, and gallbladder operations, for instance.

The marketing task is to analyze why the market dislikes the product and whether a marketing program consisting of product redesign, lower prices, and more positive promotion can change beliefs and attitudes.

2. No

Demand

Target consumers may be unaware of or uninterested in the product. Farmers may not be interested in a new farming method, and college students may not be interested in foreign-language courses. The marketing task is to find ways to connect the benefits of the product with people’s natural needs and interests.


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Stages of Demand

3. Latent

Demand

Consumers may share a strong need that cannot be satisfied by any existing product. Ex: Harmless Cigarettes, Safe Neighborhoods and More Fuel Efficient Cars.

The marketing task is to measure the size of the potential market and develop goods and services to satisfy the demand.

4. Declining

Demand

Consumers begin to buy the product less frequently or not at all. Ex: Churches have seen membership decline.

The marketing task is to analyze the causes of the decline and determine whether demand can be re-stimulated by new target markets by changing product features, or by effective communications.

(Creative Re-marketing)


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Stages of Demand

5. Irregular

Demand

Consumers purchase vary on a seasonal, monthly, weekly, daily or even hourly basis. Ex: Museums and libraries are under visited on weekdays and overcrowded on weekends.

The marketing task is to find ways to alter the pattern of demand through flexible pricing, promotion and other incentives.

(Synchro-marketing)

6. Full

Demand

Consumers are adequately buying all products put into the marketplace.

The marketing task is to maintain the current level of demand in the face of changing consumer references and increasing competition. The organization must maintain or improve its quality and continually measure consumer satisfaction.


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Stages of Demand

7. Overfull7. Overfull

DemandDemand

More consumers would like to buy the product that can be satisfied. Ex: Overcrowded Theme Parks on Festivals.

The marketing task requires finding ways to reduce demand temporarily or permanent taking steps like- raising prices and reducing promotion and services.

(De-marketing)

8. Unwholesome 8. Unwholesome DemandDemand

Consumers may be attracted to products that have undesirable social consequences. Ex: cigarettes, alcohol, hard drugs, handguns, X-rated movies and large families.

The marketing task is to get people who like something to give it up, using such tools as- fear messages, price hikes and reduced availability.

(Social Marketing)


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Who Markets??

Markets: Traditionally, a market is a physical place where Markets: Traditionally, a market is a physical place where buyers and sellers are gathered to buy and sell goods and buyers and sellers are gathered to buy and sell goods and services.services.

In In Marketing, Marketing, a market is a set of actual and potential a market is a set of actual and potential buyers.buyers.


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Figure: Structure of Flows in a Modern Exchange Economy


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Figure: A Simple Marketing System


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Key Customer Markets

Consumer Markets, Ex: Unilever, Sony Erricson etc Business Markets Ex: PHP Group Global Markets Ex: RMG Companies Nonprofit and Governmental Markets


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Core Marketing Concepts

Needs, Wants, and DemandsNeeds, Wants, and Demands

5 Types of Needs:5 Types of Needs:

- Stated Needs- inexpensive car- Stated Needs- inexpensive car

- Real Needs- a car with low operating cost- Real Needs- a car with low operating cost

- Unstated Needs-good service- Unstated Needs-good service

- Delight Needs-an onboard navigation system- Delight Needs-an onboard navigation system

- Secret Needs-savvy customer- Secret Needs-savvy customer

Target Markets, Positioning and SegmentationTarget Markets, Positioning and Segmentation Offerings and BrandsOfferings and Brands Value and SatisfactionValue and Satisfaction Marketing ChannelsMarketing Channels Supply ChainSupply Chain


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Marketing Conceptsand Tools

CompetitionCompetition

- Brand competition- Brand competition

- Industry competition- Industry competition

- Form competition- Form competition

- Generic competition- Generic competition Marketing EnvironmentMarketing Environment

Task environmentTask environmentBroad environmentBroad environment


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Figure: Marketing-Mix Strategy


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Company Orientations Toward the Marketplace

The Production ConceptThe Production Concept The Product conceptThe Product concept The Selling ConceptThe Selling Concept The Customer ConceptThe Customer Concept The Marketing ConceptThe Marketing Concept Societal Marketing ConceptSocietal Marketing Concept The Holistic Marketing ConceptThe Holistic Marketing Concept


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The Production Concept The Oldest concept in business.The Oldest concept in business. Consumers will prefer products that are widely available Consumers will prefer products that are widely available

and inexpensive.and inexpensive. Managers concentrate on achieving high production Managers concentrate on achieving high production

efficiency, low costs and mass distribution.efficiency, low costs and mass distribution. This application makes sense in developing countries, This application makes sense in developing countries,

where consumers are more interested in obtaining the where consumers are more interested in obtaining the product than in its features. product than in its features.


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The Product Concept Consumers will prefer products that offer the most quality, Consumers will prefer products that offer the most quality,

performance and innovative features.performance and innovative features. Managers focus on making superior products and Managers focus on making superior products and

improving them over time.improving them over time. Not that much valid, as, quality is subjective in nature.Not that much valid, as, quality is subjective in nature.


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The Selling Concept

Consumers and businesses, if left alone, will ordinarily not Consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products.buy enough of the organization’s products.

Consumers typically show buying inertia or resistance and Consumers typically show buying inertia or resistance and must be coaxed into buying it.must be coaxed into buying it.

Usually, applicable for the unsought goods.Usually, applicable for the unsought goods.


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The Marketing Concept The marketing concept emerged in the mid-1950s.The marketing concept emerged in the mid-1950s. It replaced the product-centered “It replaced the product-centered “make-and-sellmake-and-sell” ”

philosophy with the customer centered philosophy with the customer centered “sense-and-“sense-and-respond” respond” philosophy.philosophy.

The key to achieving its organizational goals consists of The key to achieving its organizational goals consists of the company being more effective than competitors in the company being more effective than competitors in creating, delivering and communicating superior customer creating, delivering and communicating superior customer value to its chosen target markets.value to its chosen target markets.


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Figure: Contrasts Between the Selling Concept and the Marketing Concept


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Figure: Traditional Organizational Chart versus Modern Customer-Oriented Company

Organization Chart


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The Customer Concept


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The Societal Marketing Concept

Is an appropriate philosophy in an age of environmental Is an appropriate philosophy in an age of environmental deterioration, resource shortages, explosive population, deterioration, resource shortages, explosive population, world hunger and poverty and neglected social services.world hunger and poverty and neglected social services.

The organization’s task is to determine the needs, wants The organization’s task is to determine the needs, wants and interests of target markets and to deliver the desired and interests of target markets and to deliver the desired satisfactions more efficiently and effectively than satisfactions more efficiently and effectively than competitors in a way that preserves or enhances the competitors in a way that preserves or enhances the consumer’s and the society’s well being. consumer’s and the society’s well being.


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The Holistic Marketing Concept

Relationship Relationship MarketingMarketing

CustomersCustomers ChannelsChannels PartnersPartners

Integrated Integrated MarketingMarketing

HolisticMarketing

Internal Internal MarketingMarketing

MarketingMarketingDepartmentDepartment

SeniorSeniorManagementManagement Other Other

DepartmentsDepartmentsCommunicationsCommunications

Products &Products &ServicesServices

ChannelsChannels

PerformancePerformanceMarketingMarketing

EnvironmentsEnvironmentsEthicsEthics

Brand & Brand & CustomerCustomer

EquityEquity

SalesSalesRevenueRevenue

LegalLegalCommunityCommunity


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Company Orientations Toward the Marketplace

Integrated MarketingIntegrated Marketing External marketingExternal marketing Internal marketingInternal marketing


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Company Responses and Adjustments

ReengineeringReengineering OutsourcingOutsourcing E-commerceE-commerce BenchmarkingBenchmarking AlliancesAlliances

Partner-suppliersPartner-suppliers Market-centeredMarket-centered Global and localGlobal and local DecentralizedDecentralized


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Managing Marketing Task

Developing Marketing Strategies and PlansDeveloping Marketing Strategies and Plans Capturing Marketing InsightsCapturing Marketing Insights Connecting with CustomersConnecting with Customers Building Strong BrandsBuilding Strong Brands Shaping the Marketing OfferingsShaping the Marketing Offerings Delivering ValueDelivering Value Communicating ValueCommunicating Value Creating Long-Term GrowthCreating Long-Term Growth


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Thank YouThank You

copyright © 2003 prentice-hall, inc. 1-1 chapter 1 defining marketing for the 21 st century

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