instructor: amir ekhlassi (1) defining marketing for the 21 st century

Instructor: Amir Ekhlassi

(1)Defining Marketing for the 21st century

What is marketing?Simply put: Marketing is the delivery of

customer satisfaction at a profit.Marketing is a social and managerial process

whereby individuals and groups obtain what they need and want through creating and exchangingexchanging products and value with others.

2 © Compiled by: Amir Ekhlassi

Marketing importance and role

Production sector Heterogeneous supply capabilities

consumption sector Heterogeneous demand for form, time, place, and possession utility

Marketing Needed

To overcomeDiscrepancies

AndSeparations

Spatial separation

Separation in time

Separation of information

Separation in values

Separation of ownership

Discrepancies of quantity

Discrepancies of assortment


Core concepts of MarketingNeeds, wants, demandsProducts, services, and experiences Value, satisfaction, and quality Exchange, transaction, and relationships Markets


Needs, wants, and Demands Human needs are states of felt deprivation. They are

basic human requirements. These needs were not invented by marketers; they are a basic part of the human makeup.

Wants are the form human needs take as they are shaped by culture and individual personality. Wants are shaped by one’s society.

Demands: human wants that are backed by buying power.


Products, services, and experiences A product is anything that can be offered to a market

to satisfy a need or want. It includes physical objects, services, persons, places, organizations, and ideas.

Thus the term product includes more than just the physical properties of a good or service. It also includes a brand’s meaning to consumers.

The term product also includes more than just goods or services. Consumers decide which events to experience, which entertainers to watch on TV, which places to visit on vacation, which organizations to support through contributions, and which ideas to adopt. To the consumer, these are all products.


Products, services, and experiences (cont’d)

Service: an activity or benefit that one party can offer to another that is essentially intangible, and does not result in the ownership of anything.


Value, satisfaction, and qualityCustomer value: is the difference between the values the

customer gains from owning and using a product and the costs of obtaining the product. Customers often do not judge product values and costs accurately or objectively. They act on perceived value.

Value proposition: a set of benefits to satisfy needsValue = Benefits / Costs = (functional benefits + emotional benefits) / (monetary costs + time costs + energy costs + psychic costs)

Customer satisfaction: depends on a product’s perceived performance in delivering value relative to a buyer’s expectations. If the product’s performance falls short of the customer’s expectations, the buyer is dissatisfied. If performance matches expectations, the buyer is satisfied. If performance exceeds expectations, the buyer is delighted.


Value, satisfaction, and quality (cont’d)

Note: a company can always increase customer satisfaction by lowering its price or increasing its

services, but this may result in lower profits. Thus, the purpose of marketing is to generate customer value profitably. This requires a very delicate balance: the marketer must continue to generate more customer

value and satisfaction but not “give away the house”.


Value, satisfaction, and quality (cont’d)

In the narrowest sense, Quality can be defined as “freedom from defects”.

Marketers have two major responsibilities in a quality-centered company. first, they must participate in forming strategies

that will help the company with through total quality excellence.

Second, marketers must deliver marketing quality as well as production quality.


Exchange, transaction, and relationships

Exchange: the act of obtaining a desired object from someone by offering something in term.

Transaction: a trade between two parties that involves at least two things of value, agreed upon conditions, a time of agreement, and a place of agreement.

Relationship marketing:: the process of creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.


Marketing and exchange

Marketing (Kotler, 1980): human activity directed as satisfying needs and wants through exchangeexchange processes.

Exchange is the core concept of marketing Exchange is a value creating process because it leaves both

parties better off. There are at least two parties. Each party has something that might be of value to the other

party. Each party is capable of communication and delivery.Each party believe it is appropriate or desirable to deal with the

other party. The focal point in an exchange is marketing offer combination

of products, services, information, or experience that satisfy a need or want.


MarketsEconomists describe a market as a collection

of buyers and sellers who transact over a particular product or product class.

Marketers often use the term market to cover various grouping of customers.

Market: the set of all actual and potential buyers of a product or service.


Key customer markets

Consumer markets Global markets

Business markets Nonprofit/governmentMarkets


What is marketed?

goods

services

Events

Experience

persons

Places & properties

Ideas

Organizations 15 © Compiled by: Amir Ekhlassi

Marketing managementMarketing management: is the analysis, planning,

implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.

Marketing management is concerned not only with finding and increasing demand but also with changing or even reducing it. (Demand management)

Demarketing: marketing to reduce demand temporarily or permanently- the aim is not to destroy demand but only to reduce or shift it.


Marketing management: the newest definition

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.


Marketing management practiceIn fact, marketing practice often passes through three

stages:1. Entrepreneurial marketing: most companies are

started by individuals who live by their wits. They visualize an opportunity and knock on every door to gain attention.

2. Formulated marketing: as small companies achieve success, they inevitably move toward more formulated marketing.

3. Intrepreneurial marketing: many large and mature companies need to reestablish within their companies the entrepreneurial spirit and actions that made them successful in the first place. They need to encourage more initiative and “ Intrepreneurial” at the local level.


Marketing management tasksDeveloping marketing

strategiesCapturing marketing

insightsConnecting with

customersBuilding strong

brands

Shaping market offerings

Delivering valueCommunicating

value Creating long-term

growth


Marketing management philosophies

Production

Concept

Product concept

Selling concept

Marketing concept

Societal marketing concept

20© Compiled by: Amir Ekhlassi

Production and product orientationProduction orientation:

It holds that consumers will prefer products that are very cheap and widely available.

High volume, production efficiency, basic features, mass distribution.

Product orientation:It holds that consumers will favor those products

that offer the most quality, performance or innovative features.

Making superior products and improve it.


Selling conceptIt holds that consumers will ordinary not buy

enough of the organization’s product. The company should undertake aggressive

selling and promotion efforts. Sell more stuff to more people more often for

more money in order to make more profit. The aim is to sell what we make rather than

making what market wants.


Marketing orientationInstead of product or selling, it focuses on

customers. Instead of hunting, marketing is gardening The job is not to find the right product for your

customers. Being more effective than competitors in

creating, delivering and communication superior customer value to the target market.


Marketing and sales concepts contrasted

factoryExistingproducts

Selling And

promoting

Profits through Sales volume

marketCustomer

needsIntegratedmarketing

Profits throughCustomer

satisfaction

Startingpoint

focus means ends


The societal marketing conceptSocietal marketing concept: the idea that the

organization should determine the needs, wants, and interests of target markets and deliver the desired satisfaction more effectively and efficiently than do competitors in a way that maintains or improves the consumer’s and society’s well-being

According to the societal marketing concept, the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare.


The societal marketing concept (cont’d)

The societal marketing concept calls on marketers to balance three considerations in setting their marketing policies: company profits, consumer wants, and society’s interests.

Societal MarketingConcept

Society(human welfare)

Consumers(want satisfaction)

Company(profits)


George Day’s Market driven concept

What does it mean to be market drivenmarket driven? = superior skills in understanding, attracting, and

keeping valuable customers.


Misconceptions about Market orientationSelf centered companies:

Advantage comes from controlling assets or achieving functional excellence.

Technology determines benefits offered. Incapability of capturing and sharing market insight.

Customer compelled companies: Try to be all things to all people=no priorities in

segments served or benefits offered. Each function gets different inputs from customers

and reacts separately = lack of functional integration Skepticism

Leading customers or following customers Technology push or market pull


What does it mean to be market driven? (cont’d)

Distinctive capabilities and behaviors:Offering superior solutions and experiences Focusing on superior customer value Converting satisfaction to loyaltyEnergizing and retaining employees Anticipating competitors’ moves Viewing marketing as an investment, not a

cost Nurturing and leveraging brands as assets


Kotler’s holistic marketing concept

Companies need a fresh thinking about how to operate in new environment.

The holistic marketingholistic marketing is based on development, design, and implementation of marketing program, processes and activities that recognizes their breadth and interdependence.


Holistic marketing

HolisticHolisticmarketingmarketing

Integratedmarketing

Relationshipmarketing

Internalmarketing

SociallyResponsiblemarketing

channelsProducts &

servicescommunications

Other departments

Seniormanagement

MarketingDepartment

partners

Channels

customers

communityLegal & ethicsEnvironment 31 © Compiled by: Amir Ekhlassi

Thank You For Your Patience & Attention

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instructor: amir ekhlassi (1) defining marketing for the 21 st century

Documents

amir ekhlassi value

amir ekhlassi products

amir ekhlassi needs

benefits costs

experiences value

products performance

human wants

perceived value