Ch.1.

Defining Marketing for the New Realities

Defining Marketing for the New Realities

Formally or informally, people and organizations engage in a vast number of activities,
under a function called marketing. Marketing is about identifying and meeting human and
social needs. One of the shortest good definitions of marketing is “meeting needs of
persons in the market (potential customers) profitably.”

Kotler's Marketing Concept - Explanation for the 21

Century
The Marketing Concept - Kotler - Based on 9th Edition

The Value of Marketing

Marketing’s broader importance extends to society as a whole. Marketing has helped in
introduction appropriate new products that gained acceptance as they have eased or
enriched people’s lives. Marketing was able to interact with people and find out their
unmet needs and convey that information to new product developers and designers. In a
similar manner, it facilitates enhancements
in existing products as firms (marketers) innovate to improve their position in the
marketplace.

Successful marketing builds demand for products and services by helping to build
products for which people are waiting after they come to know of the needs and the
demand for products in turn, creates jobs. By contributing to the bottom line, by finding
out the price at which a specific quantity of demand is available and then participating
successfully in the exchange process, successful marketing also allows firms to more fully
engage in socially responsible activities.

Marketing Decision Making

Winning Marketing

The Scope of Marketing

What marketing is, how it works, who does it, and what is marketed.

What Is Marketing?
Marketing is about identifying and meeting human and social needs. One of the shortest
good definitions of marketing is “meeting needs profitably.”

The American Marketing Association offers the following formal definition: Marketing
is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients,
partners, and society at large.
Marketing management as the art and science of choosing target markets and getting,
keeping, and growing customers through creating, delivering, and communicating
superior customer value. (managerial definition of marketing).

Social definition of marketing: 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.

Selling is part of marketing. But selling is only the tip of the marketing iceberg. Marketing
is creating, offering, and freely exchanging products and services of value with others.
Selling may include offering and exchange activities.

Peter Drucker, a leading management theorist, puts it this way: There will always, one can
assume, be need for some selling. But the aim of marketing is to make selling superfluous.
The aim of marketing is to know and understand the customer so well that the product or
service fits him and sells itself. Ideally, marketing should result in a customer who is ready
to buy. All that should be needed then is to make the product or service available.

What Is Marketed?
Marketers market 10 main types of entities: goods, services, events, experiences,
persons, places, properties, organizations, information, and ideas.

Who Markets?
A marketer is someone who seeks a response—attention, a purchase, a vote, a donation—
from another party, called the prospect.

Core Marketing Concepts

Needs, Wants, and Demands

Needs are the basic human requirements such as for air, food, water, clothing, and shelter.
Humans also have strong needs for recreation, education, and entertainment. These needs
become wants when they are directed to specific objects that might satisfy the need.

Demands are wants for specific products backed by an ability to pay. The potential
person is willing to specify a price at which he is going to buy and able to show money
resources to do the transaction (generally it means he has an income).

Target Markets, Positioning, and Segmentation

Marketers start by dividing the market into segments. They identify and categorise distinct
groups of buyers who might prefer or require varying product or service benefits and
features by examining demographic, psychographic, and behavioral differences among
buyers.

After creating market segments for a product or service, the marketer decides which
present the greatest opportunities and select some of them as its target markets. For each,
the firm develops a benefit statement to position in the minds of the target buyers a central
benefit or two as the specialty of the offering by the particular company.

Offerings and Brands

Companies address customer needs by putting forth a value proposition, a set of benefits
that satisfy those needs. The intangible value proposition is made physical by an offering
with features, which can be a combination of products, services, information, and
experiences.

A brand is an offering from a known source. A brand name identifies the source and
carries many
associations in people’s minds that make up its image.

Marketing Channels
Marketers use three kinds of marketing channels. Communication, Distribution and
Service.

Communication channels help in communicating with target buyers. They include

newspapers, magazines, radio, television, mail, telephone, billboards, posters, fliers, CDs,
audiotapes, and the Internet. The firms also communicate through the look of their retail
stores and Web sites and other media. Marketers are increasingly adding interactive
channels such as e-mail, blogs, and toll-free numbers to engage in conversation with
potential buyers.

Distribution channels display, sell, and deliver the physical product or service(s) to the
buyer or user. The distribution may be direct via owned retail outlet, salesmen, the
Internet, mail, or mobile phone
or telephone, or indirect with distributors, wholesalers, retailers, and agents as
intermediaries.

Services used by marketers include warehouses, transportation companies, banks, and

insurance companies.

Paid, Owned, and Earned Media

Media used in marketing for communications is divided into three categories. Paid, owned
and earned media. For paid media, the companies pay fee and insert
their advertisement or communication message. When the communication medium is
totally owned by a company say, a brochure, an in-house magazine, or an advertisement
on the packaging, it is termed owned media. Earned media is the messages circulated by
consumers and public in social media or in traditional media. The rise of digital media has
increased the coverage of the earned media and also increased its role in the media mix.

Impressions and Engagement

Impressions is number of times consumers view the message in the digital

media. Engagement is the active involvement of the audience with the message. Are they
accessing the detail given in the message by clicking and opening the underlying message.
Value and Satisfaction
The buyer chooses from the competing offerings the one he or she perceives to deliver the
most value.Value is primarily a combination of product quality (specification and actual
product), service, and price (qsp or QSP) and it is called the customer value triad. Value
perceptions increase with quality and service but decrease with price.

Marketing can be thought of as an activitity that does identification, creation,

communication, delivery, and monitoring of customer value.

Satisfaction reflects a person’s judgment of a product’s perceived performance in

relationship to expectations. If the performance falls short of expectations, the customer
is dissatisfied. If it matches expectations, the customer is satisfied. If it exceeds them, the
customer is delighted.

Supply Chain
Each company has a value chain and captures only a certain percentage of the total value
generated by the supply chain’s value delivery system. When a company acquires or enters
upstream or downstream activities, it will capture a higher percentage of supply chain
value.

Competition
Competition includes all the actual and potential rival offerings and substitutes a buyer
might consider.

Marketing Environment
The marketing environment has task environment and broad environment. The task
environment includes the economic entities engaged in producing, distributing, and
promoting the offering. These are the company, suppliers, distributors, dealers, and target
customers. Suppliers include marketing services companies also.

The broad has six components: demographic environment, economic environment,

social-cultural environment, natural environment, technological environment, and
political-legal environment.

The New Marketing Realities

Major Societal Forces: Network information technology, Globalization, Deregulation,

Privatization, Heightened competition, Industry convergence, Retail
transformation, Disintermediation, Consumer buying power, Consumer information,
Consumer participation, Consumer resistance.

To be written further

Technology
Globalization
Social Responsibility

Marketing 3.0
A Dramatically Changed Marketplace

New Consumer Capabilities

New Company Capabilities

Changing Channels

Heightened Competition

Marketing in Practice
Marketing Balance
Reinventing Marketing at Coca-Cola

Marketing Accountability

Marketing in the Organization

Every employee has an impact on the customer and must see the customer as the source
of the company’s prosperity. Then only every customer encounter with the company
anywhere will be a pleasant experience.

Company Orientation toward the Marketplace

The Production Concept

It holds that consumers prefer products that are widely available and inexpensive.

The Product Concept

The product concept proposes that consumers favor products offering the most quality,
performance, or innovative features. What is missing is customer needs.

The Selling Concept

The selling concept holds that consumers and businesses, if left alone, won’t buy enough
of
the organization’s products. So you have to put in selling effort and make them buy.

The Marketing Concept

The marketing concept holds that to succeed, a firm has to be more effective than
competitors in creating, delivering, and communicating superior customer value to your
target markets.
Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is
preoccupied with the seller’s need to convert his product into cash; marketing with the
idea of satisfying the needs of the customer by means of the product by creating and
delivering it to the customer.

The Holistic Marketing Concept

Four broad components characterize holistic marketing: relationship marketing,
integrated marketing, internal marketing, and performance marketing.

Updating the Four Ps

Understanding the 4 As of Marketing
Marketing Management Tasks
Developing Marketing Strategies and Plans
Capturing Marketing Insights
Connecting with Customers
Building Strong Brands
Marketers' Frequently Asked Questions
Creating Value
Delivering Value
Communicating Value
Conducting Marketing Responsibly for Long-Term Success