Marketing Management

Global Edition
Kotler & Keller

Chapter 1
Defining Marketing
for the New Realities
 Chapter Questions

What are some

Why is marketing What is the scope
core marketing
important? of marketing?
concepts?

What new
What forces are
capabilities have What does a
defining the new
these forces given holistic marketing
marketing
consumers and philosophy include?
realities?
companies?

What are the tasks

necessary for
successful
marketing
management?

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 Chapter Question 1:
The Importance of Marketing Why is marketing
important?

Marketing is essential for a company to define itself.

Marketing aims to:

Explain what makes the company/product different Understand what customers are looking for

Define and deliver the company’s value proposition.

Financial success often depends on marketing ability.

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 Chapter Question 2:

The Scope of Marketing What is the scope of

marketing?

To prepare to be a marketer, you need to understand:

what marketing is

how it works

what is marketed, and

who does the marketing.

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 Chapter Question 2:

What is Marketing? What is the scope of

marketing?

Marketing is an organizational function and a set of

processes for creating, communicating, and delivering value to
customers and for managing customer relationships in ways
that benefit the organization and its stakeholders.

Marketing is about identifying and meeting human and social

needs.

A short definition: “meeting needs profitably.”

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 Chapter Question 2:

What is Marketing Management? What is the scope of

marketing?

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.

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 Chapter Question 2:

What is Marketed? What is the scope of

marketing?

Goods Places

Services Properties

Events Organizations

Experiences Information

Persons Ideas

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 Chapter Question 2:
Who Markets? What is the scope of
marketing?

Marketers and prospects

Marketers are responsible for demand management

Eight demand states are possible

• Negative demand.
• Nonexistent demand.
• Latent demand.
• Declining demand.
• Irregular demand.
• Full demand.
• Overfull demand.
• Unwholesome demand.

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 Chapter Question 2:
Fig. 1.1: Structure of Flows in a What is the scope of
Modern Exchange Economy marketing?

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 Chapter Question 2:

Fig. 1.2: What is the scope of

marketing?
A Simple Marketing System

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 Chapter Question 2:

Key Customer Markets What is the scope of

marketing?

Global Consumer
Markets Market

Business Government
Markets Market

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 Chapter Question 2:

Key Customer Markets What is the scope of

marketing?

Marketplaces

Market
Metamarkets
spaces

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 The Marketing Process

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 Chapter Question 3:

Core Marketing Concepts What are some

fundamental marketing
concepts?

Needs, Wants Needs

and Demands States of deprivation
basic human requirements
• Physical—food, clothing, warmth,
safety
• Social—belonging and affection
• Individual—knowledge and self-
expression

Wants
Form that needs take as they are shaped
by culture and individual personality

Demands
Wants for specific products backed by the
ability to pay

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 Chapter Question 3:
What are some
fundamental marketing
concepts?
Core Marketing Concepts

Types of Needs
Stated

Real

Unstated

Delight

Secret

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 Chapter Question 3:

Core Marketing Concepts What are some

fundamental marketing
concepts?

Target Markets,
Positioning, and Divide the
market into

Segmentation
segments

Marketers:

Position their
Target the
products in
segments
the minds of
presenting the
target buyers
greatest
as delivering
opportunity
key benefits

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 Chapter Question 3:

Core Marketing Concepts What are some

fundamental marketing
concepts?

Value and Satisfaction

Quality

Customer
Value
Triad

Service Price

Performance versus Expectations

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 Chapter Question 3:
What are some
Core Marketing fundamental marketing
Concepts concepts?

Marketing Economic
Environment

Demographic Socio-cultural

Political/
Natural
Legal

Technological
Broad versus Task

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 Chapter Question 4:

The New Marketing Realities How has marketing

management changed?

Social
Responsibility

Globalizatio
n

Technology

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 Chapter Question 4:

The New Marketing Realities How has marketing

management changed?

Can use the Internet as a powerful

New Consumer information and purchasing aid
Capabilities
Can search, communicate and purchase
on the move

Can tap into social media to share

opinions and express loyalty

Can actively interact with companies

Can reject marketing they find

inappropriate

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 Chapter Question 4:

The New Marketing Realities How has marketing

management changed?

Can use the Internet as a powerful information and

sales channel, including for individually
New Company differentiated goods
Capabilities
Can collect fuller and richer information about
markets, customers, prospects and competitors

Can reach customers quickly and efficiently via

social media and mobile marketing, sending
targeted ads, coupons and information

Can improve purchasing, recruiting, training and

internal and external communications

Can improve cost efficiency

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 Chapter Question 4:

Company Orientations How has marketing

management changed?

Holistic
Production Product Selling Marketing
Marketing
concept concept concept concept
concept

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 Chapter Question 4:

Company Orientations How has marketing

management changed?

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 Chapter Question 4:

The Holistic Marketing Concept How has marketing

management changed?

Recognizes that
‘everything
matters’ in
marketing,
and that
a broad,
integrated
perspective is
often necessary

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 Chapter Question 4:

Internal Marketing How has marketing

management changed?

Ensuring that
everyone in the
organization
embraces appropriate
marketing principles,
especially senior
management

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 Chapter Question 4:

Relationship Marketing How has marketing

management changed?

building mutually
satisfying long-term
relationships with key
Customers Employees
parties, in order to
earn and retain their
business.
Marketing Financial
Partners Community

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 Chapter Question 4:

Performance Marketing How has marketing

management changed?

Social
Responsibility

Financial
Accountability

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 Chapter Question 4:

Integrated Marketing How has marketing

management changed?

Four Ps SIVA

Promotion Access

Place Value

Price Information

Product Solution

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 Chapter Question 4:
How has marketing
Types of management changed?

Corporate Social Initiatives

CORPORATE SOCIAL CAUSE MARKETING CAUSE-RELATED CORPORATE

MARKETING MARKETING PHILANTHROPY

CORPORATE SOCIALLY
COMMUNITY RESPONSIBLE
INVOLVEMENT BUSINESS PRACTICES

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 Chapter Question 4:

The Four Ps of the Marketing Mix How has marketing

management changed?

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 Chapter Question 4:

The Modern How has marketing

management changed?
Marketing Management Four Ps

People

Processes

Programs

Performance

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 Chapter Question 5:

Marketing Management Tasks What are the tasks

necessary for successful
marketing management?

Developing market strategies and plans

Capturing marketing insights

Connecting with customers

Building strong brands

Shaping market offerings

Delivering value

Communicating value

Creating long-term growth

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 Chapter Question 5:

Marketing Management Tasks What are the tasks

necessary for successful
marketing management?

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 So, What Is Marketing?
Pulling It All Together

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 Pulling It All Together

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 The Case of Diwan
A Tale of Heart Over Matter

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 Entrepreneurs’ Background

• Annual meeting on
December 1, 2009
• A steep increase in costs
which were not covered by
the revenues generated.
• Hind and Nadia Wassef
graduated from the
American University in
Cairo (AUC), 1991 and
1994 respectively.
• Master’s degrees, 1994 and
1996.
• Nadia: Master’s degree
anthropology in 2000.

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 Entrepreneurs’ Background cont.

• Twenty –first century shift in the

sisters’ interests, to an
entrepreneurial pursuit that would
not only re-shape their personal lives
but also contribute to cultural reform
in Egyptian society.
• The introduction of Diwan to the
Egyptian market bridged the gap
between book-starved customers
and book retailers.
• Book-hungry individual were forced
to purchase them in other countries,
or wait for the annual international
book fair, had to pay a lot of money
in order to satisfy their yearlong
book needs.

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 The Start-up

Fortunate Coincidences
• Availability of a retail space in
Zamalek.
• Alaa El Aswany, just published
Omaret Yacoubian, provided
Diwan with an opportunity to
capitalize on.
• The devaluation of the
Egyptian Pound
DIWAN’S Start-Up
• Create a recreational cultural
experience for families with a
disposable income.

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 The Offering

•Extensive selection of books

•A multimedia section
Services Offered •A stationery section
•Variety of other services

Diwan has transformed

the ordinary purchase
of a book into a cultural
retail experience.

•customer service and satisfaction, that’s why

delivery service and loyalty cards were established.
Priorities of Diwan: •Exceptional management team.
•Strategic partners.

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 DIWAN’S Organizational Culture

Management culture is based on:

Passion, transparency and sensitive to the needs of the

community.

Team work, trust, recognition, social responsibility and

innovation.

Welcoming, warm and comforting atmosphere.

Creation and implementation of new ideas. Transform the

traditional bookstore into a cultural center. Developed its own
website.

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 The challenges

Over-expenditure problem in 2009

• The success of encouraged partners to expand
• Citadel Capital, supplied 40 percent of the investment
• Opening in huge shopping malls, Alexandria city center.
• 2007 Diwan Heliopolis/ 12 branches
• Many costs: rent, refurbishment, cashier unit, décor, the
merchandise and books inventory, direct costs.
Direct costs
• The opening of its branches demonstrated a 60 percent deficit
in the budget.
• Revenues generated covering only 40 percent of the costs.
• Immediate decision avoid further losses and ..break even.

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 The Future of DIWAN

To sustain its market share, innovativeness is impeccable.

Using the experiences in other countries.

Next step for Diwan introduce e-books.

Expand the range of social-related events.

Diwan is more than just a book retailer; Serving the book-hungry

population, Meets cultural and intellectual needs of Egyptian society.
But cost threatens company’s profits and operations.

Time has come to reshape its business model.

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 Questions
for discussion

Give examples of needs, wants, and demands that Diwan’s customers

demonstrate, differentiating each of these three concepts.

In detail, describe all facets of Diwan’s product offering.

Which of the five marketing management concepts best describes

Diwan?

Discuss in detail the value that Diwan creates for its customers.

Is Diwan likely to be successful in continuing to build customer

relationships? Why or why not?

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