CHAPTER I

DEFINING MARKETING FOR THE 21ST CENTURY

What Is Marketing ?

• Definition of Marketing• Marketing deals with identifying and meeting human and social

needs.

• Exchange and Transaction• Exchange, which is the core concept of marketing, is the process

of obtaining a desired products from someone by offering something in return.

• For exchange potential to exist, five conditions must be satisfied:• 1.there are at least two parties.• 2.each party has something that might be of value to other party.• 3.each party is capable of communication and delivery.• 4.each party is free to accept or reject the exchange offer.• 5.each party believes it is appropiate or desirable to deal with • the other party.• A transaction is a trade of value between two or more parties.• A transaction differs from a transfer.

What Is Marketed ?

• Marketing people are involved in marketing 10 types of entities:• Goods Physical goods constitute the bulk of most countries production and marketing effort.• Services As economies advance, a growing proportion of their activities is focused on the production of services.• Events Marketers promote time-based events, such as major trade shows, artistics performances, and company anniversaries.• Experiences By orchestrating several services and goods, a firm can create, stage, and market experience.• Persons Celebrity marketing is a major business.• Place Cities, states, regions, and whole nations compete actively to attract tourist, factories, company headquarters, and new

residents.• Properties Properties are intangible rights of ownership of either real property (real estate) or financial property (stocks and

bonds).• Organizations Organizations actively work to build a strong, favourable, and unique image in the minds of their targets publics.• Information Information can be produced and marketed as a product.• Ideas Every market offering includes a basic idea.

• Who Markets ?• A marketers is someone who seeks a response (attention, purchase, a vote, a donation) from another party, called the prospects.if

two parties are seeking to sell something to each other, we can call them both marketers.• Eight demand states are possible:• 1. Negative demand• 2. Nonexistents demand• 3. Latent demand• 4. Declining demand• 5. Irregular demand• 6. Full demand.• 7. Overfull demand• 8. Unwholesome demand Traditionally, a “market” was a physical place where buyers and sellers gathered to buy and sell goods.• Economists describe a market as a collection of buyers and sellers who transact over particular product or product class ( the

housing market or grain market).

• Key Customer Markets• 1.Consumer Market.• 2.Business Markets. • 3.Global Markets. • 4.Nonprofit and Governmental Markets.

• Marketplaces, Marketspace, and Metamarkets• ¨      The marketplace is physical, as when you shop in a store• ¨      Marketspace is digital, as when you shop on the internet.• ¨      Mohan Sawney has proposed the concept of a metamarket to describe a cluster of complementary

products and services that• are closely related in the minds of consumers but are spread across a diverse set of industries.

• How Business and Marketing Are Changing·        1.Changing Technology.• 2.Globalization. • 3.Deregulation. • 4.Privatization. • 5.Customer empowerment. • 6.Customization. .• 7.Heightened competition convergence.• 8.Retailers transformation• 9.disintermediation

Company Orientations Toward the Marketplace

The product concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.

The production concept is one of the oldest concept in bussines. It hold that consumers will prefer product that are widely available and inexpensive.

The selling concept holds that consumers and bussines and practiced most aggressively with unsought goods, goods that buyers normally do not think of buying.

The marketing concept holds that key to achievingorganizationalgoals and consist of the company being more effective than competitors in creating, n delivering

The Holistic marketing concept is based on the development, design, and implementation of marketing program, process, and activities that recognizes their breadth and interdependencies,

The Holistic MarketingRelationship marketing has the aim of building mutually satisfying long-term relationship with

key parties customers, supplier, distributor and other marketing partner.

Integrated marketing

Internal marketing is the task of hiring, training, and motivating able employees

who want to serve customers well.

Social responsibility marketing

Fundamental Marketing Concept, Trends, and Tasks

NEEDS, WANTS, DEMANDNeeds are the basic humam

requirements.These needs become wants when

they are directed to specific objects that might satisfy the need.

Demands are wants for specific product backed by an ability to pay.

…..• Target Market, Positioning and Segmentation• Offering,the Intangible value proportion. Brand is offering

from A known source.• Value, reflect the Percieved tangible & intangible benefit &

Cost toCustomers. Satisfaction, reflect a person’s comparative judgements resulting from product percieved performance in relation to experience.

…….

Marketing Channels’ Communication channelsDistribution channelsService channel

Supply ChainCompetitionMarketing Environment

Task environmentBroad environment

Marketing planning

CHAPTER IIDEVELOPING MARKETING STRATEGIES AND PLANS

Marketing and Consumer Value

The Value Delivery Process

(a) Traditional physical process sequenceThe traditional view of marketing

is that the firm makes something and then sells it.

Sell the productMake the product

ProcureDesignproduct Make Price Sell Advertise/

promote Distribute Service

(b) Value creation & delivery sequence The value delivery process begins before there is a product and continues while it is being developed and after it becomes available.

STRATEGIC MARKETING Tactical marketing

Choose the ValueCust. Segmentation / Market selection or focus / Value potsitioning

Provide the ValueProduct dev. / service dev. / pricing / sourcing&making / distributing&servicing

Communicate the ValueSales force / sales promotion / advertising

ILLUSTRAT

ION

Japanese Have 5 Zero Concepts

Zero customer feedback

time

ZeroSetuptime

ZeroPurchasing

time

ZeroProduct

Improvementtime

Zerodefects

The Generic Value ChainMichael Porter of Harvard has purpose the VALUE CHAIN As a tool for identifiying ways to create more customer value

Firm InfrastructureFirm Infrastructure

Human Resource ManagementHuman Resource Management

Technology DevelopmentTechnology Development

ProcurementProcurement

InboundLogistics

InboundLogistics OperationsOperations Outbound

Logistics

OutboundLogistics

Marketingand

Sales

Marketingand

SalesServiceService

Marg

in

Primary Activities

SUPPORT

ACTIVITIES

It source of competitive

advantage in that it makes

significant contribution to

perceived customers benefits.

It has applicatio

ns in awide

variety of markets.

It is difficult

for competit

ors to imitate.

CHARACTERISTIC

OF

CORE

COMPETENCIES

COMPETITIVE ADVANTAGEDistinctive capabilities tend to describe excellence in broader bussiness process.

CORE COMPETENCIESDistinctive capabilities tend to refer to areas of special tehnical and production expertise.

IllustrationDISTINCTIVE CAPABILITIES

Netflix rent as many DVDs as you want and watch movies instantly on your PC for one

low price

Netflix has distinctive capabilities that promise to keep the company on top even as competitors like Blockbuster

and Walware company masquerading as DVD rental service

Ansoff’s Product-Market Expansion Grid

4. Diversificationstrategy

2. Marketdevelopmentstrategy

Newmarkets

1. Market penetration

strategy

Existingmarkets

Existingproducts

3. Productdevelopmentstrategy

Newproducts

Business Unit Strategic Planning

The Business mission, each business unit needs to define its specific mission within the broader company mission.

External & internal environment

Marketing opportunity is an area of buyer need and interest in which there is a high probability that a company can profitably satisfy that need.

.

It involves monitoring the external and internal marketing environment.

Strategic formulation

• Overall cost leadership• Differentiation• FocusFirms pursuing the same strategy directed to the

same target market constitute a strategic group.

Strategic Alliances, companies are also discovering that they need strategic partners if they hope to be effective. Four major categories:

1. Product or service alliances2. Promotional alliances3. Logistics alliances4. Pricing collaborations

Market Opportunity analysis, to determine the attractiveness and probability of success

Environmental threat is a challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to lower sales or profit.

Goal formulation, process to develop specific goals for the planning period.

The business unit sets manages by objectives (MBO) system to work, must meet four criteria:

1. They must be arranged hierarchically2. Objectives should be stated quantitatively3. Goal should be realistic4. Objectives must be consistent

Feedback and control

• As it implements its strategy, a firm needs to track the results and monitor new developments.

Product planninga marketing plan is a writen document that

summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives.

Contents of the Marketing PlanΔ Executives summary and table of contentsΔ Situation analysisΔ Marketing strategyΔ Financial projectionsΔ Implementation controls