Chapter 1 Defining Marketing for the Arab World Copyright 2012 Pearson Education 1-1
Chapter Questions 1. Why is marketing important? 2. What is the scope of marketing? 3. What are some fundamental marketing concepts? 4. How has marketing management changed? 5. What are the tasks necessary for successful marketing management? 6. How does marketing in the Arab world differ from marketing in other parts of the world? The Importance of Marketing
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 companys value proposition. Financial success often depends on marketing ability.
Chapter Question 1: Why is marketing important? Copyright 2012 Pearson Education 1-2 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. Chapter Question 2: What is the scope of marketing? Copyright 2012 Pearson Education 1-3 Copyright 2012 Pearson Education 1-4
What is Marketing? Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return 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 goals.
Marketing is about identifying and meeting human and social needs. A short definition: meeting needs profitably.
Chapter Question 2: What is the scope of marketing? Copyright 2012 Pearson Education 1-5
What is Marketing Management? 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. Chapter Question 2: What is the scope of marketing? What Is Marketing? The Marketing Process Understanding the Marketplace and Customer Needs Customer needs, wants, and demands Market offerings Value and satisfaction Exchanges and relationships Markets
What is Marketed? Goods Services Events and experiences Persons Places and properties Organizations Information Ideas
Chapter Question 2: What is the scope of marketing? Copyright 2012 Pearson Education 1-9
Who Markets? Marketers and prospects Marketers are responsible for demand management Eight demand states are possible 1. Negative demand. 2. Nonexistent demand. 3. Latent demand. 4. Declining demand. 5. Irregular demand. 6. Full demand. 7. Overfull demand. 8. Unwholesome demand.
Chapter Question 2: What is the scope of marketing? Demand States 1. Negative demandConsumers dislike the product and may even pay to avoid it. 2. Nonexistent demandConsumers may be unaware of or uninterested in the product. 3. Latent demandConsumers may share a strong need that cannot be satisfied by an existing product. 4. Declining demandConsumers begin to buy the product less frequently or not at all. Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall 1-10 5. Irregular demandConsumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis. 6. Full demandConsumers are adequately buying all products put into the marketplace. 7. Overfull demandMore consumers would like to buy the product than can be satisfied. 8. Unwholesome demandConsumers may be attracted to products that have undesirable social consequences. In each case, marketers must identify the underlying cause(s) of the demand state and determine a plan of action to shift demand to a more desired state.
Demand States Copyright 2012 Pearson Education 1-12
Definition of a market? 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 a particular product or product class (such as the housing market or the grain market). Marketers often use the term market to cover various groupings of customers. They view sellers as constituting the industry, and buyers as constituting the market.
Chapter Question 2: What is the scope of marketing? Copyright 2012 Pearson Education 1-13 Structure of Flows in a Modern Exchange Economy
Chapter Question 2: What is the scope of marketing? Copyright 2012 Pearson Education 1-14 Chapter Question 2: What is the scope of marketing? A Simple Marketing System
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Key Customer Markets Consumer markets Business markets Global markets Nonprofit/Government markets Chapter Question 2: What is the scope of marketing? Core Marketing Concepts Chapter Question 3: What are some fundamental marketing concepts? To understand the marketing function, we need to understand some core concepts
Copyright 2012 Pearson Education 1-16 Core Marketing Concepts Chapter Question 3: What are some fundamental marketing concepts? Needs, Wants and Demands Needs are the basic human requirements. Wants are shaped by our society. Demands are wants for specific products backed by the ability to pay. Five types of need: 1. Stated needs (the customer wants an inexpensive car). 2. Real needs (the customer wants a car, the operating cost of which, not initial price, is low). 3. Unstated needs (the customer expects good service from the dealer). 4. Delight needs (the customer would like the dealer to include an onboard navigation system). 5. Secret needs (the customer wants friends to see him as a savvy consumer).
Copyright 2012 Pearson Education 1-17 Core Marketing Concepts Chapter Question 3: What are some fundamental marketing concepts? Target Markets, Positioning, and Segmentation Marketers: Divide the market into segments Target the segments presenting the greatest opportunity Position their products in the minds of target buyers as delivering key benefits
Copyright 2012 Pearson Education 1-18 Carrefour stores are designed to appeal to shoppers looking for a rich shopping experience at affordable prices. Offerings and Brands Copyright 2012 Pearson Education 1- 19 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, which can be a combination of products, services, information, and experiences. A brand is an offering from a known source. A brand name such as McDonalds carries many associations in peoples minds that make up its image: hamburgers, cleanliness, convenience, courteous service, and golden arches. Value and Satisfaction Copyright 2012 Pearson Education 1- 20 The buyer chooses the offerings he or she perceives to deliver the most value, the sum of the tangible and intangible benefits and costs to her. Value, a central marketing concept, is primarily a combination of quality, service, and price (qsp), called the customer value triad. Satisfaction reflects a persons judgment of a products perceived performance in relationship to expectations. Marketing Channels Copyright 2012 Pearson Education 1- 21 Communication Distribution Service Marketing Environment Copyright 2012 Pearson Education 1- 22 Demographic Economic Socio-cultural Natural Technological Political-legal Major Societal Forces Network information technology Globalization Deregulation Privatization Heightened competition Industry convergence Retail transformation Disintermediation Consumer buying power Consumer participation Consumer resistance Copyright 2012 Pearson Education 1- 23 Company Orientations Copyright 2012 Pearson Education 1- 24 Production Product Selling Marketing Further Core Marketing Concepts Chapter Question 3: What are some fundamental marketing concepts? Offerings and brands Value and satisfaction Marketing channels Supply chain Competition Marketing environment Marketing planning
Copyright 2012 Pearson Education 1-25 The New Marketing Realities Major societal forces Network information technology Globalization Deregulation Privatization Heightened competition Industry convergence Consumer resistance Retail transformation Disintermediation Chapter Question 4: How has marketing management changed? Copyright 2012 Pearson Education 1-26 The New Marketing Realities New Consumer Capabilities A substantial increase in buying power A greater variety of available goods and services A great amount of information about practically anything Greater ease of interacting, placing and receiving orders An ability to compare notes on products and services An amplified voice to influence public opinion
Chapter Question 4: How has marketing management changed? Copyright 2012 Pearson Education 1-27 The New Marketing Realities New Company Capabilities Internet Marketing research Internal communication External communication Personalization of messages Rewards and promotions Mobile marketing Personalization of products Savings from using the internet Online training products Chapter Question 4: How has marketing management changed? Copyright 2012 Pearson Education 1-28 More companies can produce individually differentiated goods Company Orientation Toward the Marketplace The Production Concept The Product Concept The Selling Concept The Marketing Concept
Chapter Question 4: How has marketing management changed? Copyright 2012 Pearson Education 1-29 Company Orientation Toward the Marketplace The Holistic Marketing Concept recognizes that everything matters in marketing, and that a broad, integrated perspective is often necessary. Chapter Question 4: How has marketing management changed? Copyright 2012 Pearson Education 1-30 Company Orientation Toward the Marketplace The Holistic Marketing Concept
Chapter Question 4: How has marketing management changed? Copyright 2012 Pearson Education 1-31 Company Orientation Toward the Marketplace Relationship Marketing building mutually satisfying long-term relationships with key parties, in order to earn and retain their business.
Chapter Question 4: How has marketing management changed? Copyright 2012 Pearson Education 1-32 Company Orientation Toward the Marketplace Integrated Marketing
Chapter Question 4: How has marketing management changed? Four Ps Product Price Place Promotion These represent the sellers view of marketing tools. SIVA Solution: how can I solve my problem? Information: where can I learn more about it? Value: what is my total sacrifice to get this solution? Access: where can I find it? Customer questions, corresponding to the 4Ps
Copyright 2012 Pearson Education 1-33 Company Orientation Toward the Marketplace Integrated Marketing
Chapter Question 4: How has marketing management changed? Copyright 2012 Pearson Education 1-34 Company Orientation Toward the Marketplace Internal Marketing ensuring that everyone in the organization embraces appropriate marketing principles, especially senior management
Chapter Question 4: How has marketing management changed? Copyright 2012 Pearson Education 1-35 Company Orientation Toward the Marketplace Performance Marketing
Chapter Question 4: How has marketing management changed? Financial Accountability Social Responsibility Marketing Social Initiatives Corporate social marketing Cause marketing Corporate philanthropy Corporate community involvement Socially responsible business practices Copyright 2012 Pearson Education 1-36 Marketing Management Tasks Chapter Question 5: 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 Copyright 2012 Pearson Education 1-37 Marketing Management Tasks Chapter Question 5: What are the tasks necessary for successful marketing management? Copyright 2012 Pearson Education 1-38 Marketing Memo: Marketers Frequently Asked Questions
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Functions of CMOs Strengthening the brands Measuring marketing effectiveness Driving new product development based on customer needs Gathering meaningful customer insights Utilizing new marketing technology Chapter Question 5: What are the tasks necessary for successful marketing management? A Word About Marketing in the Arab World Chapter Question 6: How does marketing in the Arab world differ from marketing elsewhere? The Arab world is a huge potential market for international companies.
However, companies have to keep several factors in mind when targeting the Arab audience.
Values, religion, language, reading from right to left, and politics are among a few key issues to take into consideration. Copyright 2012 Pearson Education 1-40