To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 1©2003 Prentice Hall, Inc.

Chapter 1Chapter 1

Defining Marketing for Defining Marketing for the Twenty-First the Twenty-First

CenturyCentury

PowerPoint by Karen E. JamesPowerPoint by Karen E. JamesLouisiana State University - ShreveportLouisiana State University - Shreveport

To accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 1©2003 Prentice Hall, Inc.

ObjectivesObjectives

Understand the new economy.

Learn the tasks of marketing.

Become familiar with the major concepts and tools of marketing.

Understand the orientations exhibited by companies.

To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 1©2003 Prentice Hall, Inc.

ObjectivesObjectives

Learn how companies and marketers are responding to new challenges.

To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 1©2003 Prentice Hall, Inc.

The New EconomyThe New Economy

Consumer benefits from the digital revolution include:

– Increased buying power.– Greater variety of goods and services.– Increased information.– Enhanced shopping convenience.– Greater opportunities to compare product

information with others.

To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 1©2003 Prentice Hall, Inc.

The New EconomyThe New Economy

Firm benefits from the digital revolution include:

– New promotional medium.

– Access to richer research data.

– Enhanced employee and customer communication.

– Ability to customize promotions.

To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 1©2003 Prentice Hall, Inc.

Marketing TasksMarketing Tasks

Marketing practices may pass through three stages:

– Entrepreneurial marketing– Formulated marketing– Intrepreneurial marketing

As marketing becomes more formulated, creativity is inhibited.

To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 1©2003 Prentice Hall, Inc.

What Can Be Marketed?What Can Be Marketed?

Goods

Services

Experiences

Events

Persons

Places

Properties

Organizations

Information

Ideas

To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 1©2003 Prentice Hall, Inc.

Marketing DefinedMarketing Defined

Kotler’s social definition:

“Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.”

To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 1©2003 Prentice Hall, Inc.

Marketing DefinedMarketing Defined

The AMA managerial definition:

“Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.”

To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Target markets and market segmentation

Marketplace, market-space, metamarkets

Marketers & prospects

Needs, wants, demands

Product offering and brand

Value and satisfaction

Exchange and transactions

Relationship and networks

Marketing channels

Supply chain

Competition

Marketing environment

Marketing program

To accompany A Framework for Marketing Management, 2nd Edition Slide 11 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Target markets & segmentation

– Differences in needs, behavior, demographics or psychographics are used to identify segments.

– The segment served by the firm is called the target market.

– The market offering is customized to the needs of the target market.

To accompany A Framework for Marketing Management, 2nd Edition Slide 12 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Shopping can take place in a:

– Marketplace (physical entity, Lowe’s)– Marketspace (virtual entity, Amazon)

Metamarkets refer to complementary goods and services that are related in the minds of consumers.

Marketers seek responses from prospects.

To accompany A Framework for Marketing Management, 2nd Edition Slide 13 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Needs describe basic human requirements such as food, air, water, clothing, shelter, recreation, education, and entertainment.

Needs become wants when they are directed to specific objects that might satisfy the need. (Fast food)

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

To accompany A Framework for Marketing Management, 2nd Edition Slide 14 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

A Product is any offering that can satisfy a need or want, while a brand is a specific offering from a known source.

When offerings deliver value and satisfaction to the buyer, they are successful.

To accompany A Framework for Marketing Management, 2nd Edition Slide 15 in Chapter 1©2003 Prentice Hall, Inc.

Enhancing ValueEnhancing Value

Marketers can enhance the value of an offering to the customer by:

– Raising benefits.– Reducing costs.– Raising benefits while lowering costs.– Raising benefits by more than the

increase in costs.– Lowering benefits by less than the

reduction in costs.

To accompany A Framework for Marketing Management, 2nd Edition Slide 16 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Exchange involves obtaining a desired product from someone by offering something in return. Five conditions must be satisfied for exchange to occur.

Transaction involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.

To accompany A Framework for Marketing Management, 2nd Edition Slide 17 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Relationship marketing aims to build long-term mutually satisfying relations with key parties, which ultimately results in marketing network between the company and its supporting stakeholders.

To accompany A Framework for Marketing Management, 2nd Edition Slide 18 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Marketing Channels

Communication channels

Distribution channels

Service channels

Deliver messages to and receive messages from target buyers.

Includes traditional media, non-verbal communication, and store atmospherics.

To accompany A Framework for Marketing Management, 2nd Edition Slide 19 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Marketing Channels

Communication channels

Distribution channels

Service channels

Display or deliver the physical products or services to the buyer / user.

To accompany A Framework for Marketing Management, 2nd Edition Slide 20 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Marketing Channels

Communication channels

Distribution channels

Service channels

Carry out transactions with potential buyers by facilitating the transaction.

To accompany A Framework for Marketing Management, 2nd Edition Slide 21 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

A supply chain stretches from raw materials to components to final products that are carried to final buyers.

Each company captures only a certain percentage of the total value generated by the supply chain.

To accompany A Framework for Marketing Management, 2nd Edition Slide 22 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

Four levels of competition can be distinguished by the level of product substitutability:

– Brand competition

– Industry competition

– Form competition

– Generic competition

To accompany A Framework for Marketing Management, 2nd Edition Slide 23 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

The following forces in the broad environment have a major impact on the task environment:– Demographics– Economics– Natural environment– Technological environment– Political-legal environment– Social-cultural environment

To accompany A Framework for Marketing Management, 2nd Edition Slide 24 in Chapter 1©2003 Prentice Hall, Inc.

Core Marketing ConceptsCore Marketing Concepts

The marketing program is developed to achieve the company’s objectives. Marketing mix decisions include: – Product: provides customer solution.– Price: represents the customer’s cost.– Place: customer convenience is key.– Promotion: communicates with customer.

To accompany A Framework for Marketing Management, 2nd Edition Slide 25 in Chapter 1©2003 Prentice Hall, Inc.

Company OrientationsCompany Orientations

The orientation or philosophy of the firm typically guides marketing efforts. Several competing orientations exist:– Production concept– Product concept– Selling concept– Marketing concept– Customer concept– Societal marketing concept

To accompany A Framework for Marketing Management, 2nd Edition Slide 26 in Chapter 1©2003 Prentice Hall, Inc.

The Marketing ConceptThe Marketing Concept

Achieving organizational goals requires that company be more effective than competitors in creating, delivering, and communicating customer value.

Four pillars of the marketing concept:– Target market– Customer needs– Integrated marketing– Profitability

To accompany A Framework for Marketing Management, 2nd Edition Slide 27 in Chapter 1©2003 Prentice Hall, Inc.

Changes in the MarketplaceChanges in the Marketplace

Globalization, technological advances, and deregulation have created many challenges:

– Customers– Brand manufacturers– Store-based retailers

Both companies and marketers have been forced to respond and adjust.