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Chapter 1 Questions

Chapter

1. Why is marketing important?

2. What is the scope of marketing?
3. What are some fundamental
marketing concepts?
4. What are the tasks necessary for
successful marketing management?

Fundamentals of Marketing
Management

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Why Marketing is Important?

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What is Marketing?

Most business are driven by the marketing

function
Identifying needs and ensuring that organizations
are producing goods and services to fulfill those
needs
Chief Marketing Officer (CMO) position
Increasing competitiveness and rapid changing
consumer and business needs

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Marketing is the delivery of customer satisfaction

at a profit.
The goal of marketing is:
To attract new customer by promising superior
value, and to keep current customers by
delivering satisfaction.

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Marketing Defined
Marketing, more than any other business function, deals
with customers.
Creating customer value and satisfaction are at the very
heart of modern marketing thinking and practice.
Some people believe that only large business
organizations operating in highly developed economies
use marketing, but sound marketing is critical to the
success of every organization whether large or small,
for profit or non profit, domestic or global.

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Many people think of marketing only as selling and advertising.

Selling and advertising are only the tip of the marketing ice-berg.
Marketing is one of three key core functions that are central to all
organizations.
Marketers act as the customers voice within the firm and marketers are
responsible for many more decisions than just advertising or sales:
Analyse industries to identify emerging trends.
Determine which national and international markets to enter or exit.
Conduct research to understand consumer behavior.
Design integrated marketing mixes products, prices, channels of
distribution, and promotion programs.
Marketing is a social and managerial process by which individuals and groups
obtain what they need and want through creating and exchanging products
and value with others.

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Needs, Wants, and Demands

Needs:
The most basic concept underlying marketing is that of human needs.
Human needs are states of felt deprivation.
Human have many complex needs:
Physical needs for food, clothing, warmth, and safety
Social needs or belonging and affection
Individual needs for knowledge and self expression
Wants:
Want are the form taken by human needs as they are shaped by culture and individual
personality.
People have almost unlimited wants but limited resources.
They want to choose products that provide the most value and satisfaction for their
money.
Demands:
When backed by buying power, wants become demands.
Consumers view products as bundles of benefits and choose products that give them
the best bundle for their money.

To explain marketing definition, we examine the following

important terms :

Needs, wants, and demands

Products and services
Value, satisfaction and quality
Exchange, transactions, and relationships
Markets

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Values:
Customer value is the difference between the values the customer gains from owning
and using a product and the costs of obtaining the products.
Customers often do not judge product value and costs accurately or objectively. They
act on perceived value.
Satisfaction:
Customer satisfaction depends on a products perceived performance in delivering
value relative to a buyers expectation.
If the products performance falls short of the customers expectations, the buyer is
dissatisfied.
Quality:
Customer satisfaction is closely linked to quality.
Quality has a direct impact on product performance.
Quality can be defined as freedom from defects.
TQM programs designed to constantly improve the quality of products, services, and
marketing processes.

Product:
Anything that can be offered to a market to satisfy a
need or want.
The concept of product is not limited to physical objects
anything capable of satisfying a need can be called a
product.

Services:
In addition to tangible goods, products also include
services, which are activities or benefits offered for sale
that are essentially intangible and do not result in the
ownership of anything.

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Values, Satisfaction, and Quality

Products and Services

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Exchange, Transactions, and

Relationships

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Markets

Exchange :
The act of obtaining a desired object from someone by
offering something in return
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

The set of all actual and potential buyers of a

product or service

Communication

Industry
(a collection
of sellers)

Products / Services

Market (a
collection of
buyers)

Money
Information

A simple marketing system

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What is Marketing?

The Marketing Objective

Satisfy the needs of a group of customers
better than the competition.

Marketing is an organizational function

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

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Distinguish from Selling or Advertising:

merely a subset of marketing actions used to satisfy
consumer needs.
The aim of marketing is to make selling superfluous

Marketing focuses on the use of all the firms

controllable influences to satisfy the customer.

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Focus

Means

Selling
Factory Existing
and
products
promoting

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Identify needs of customers that company can satisfy

Design a Product (bundle of benefits) that satisfies
those needs - better than existing products.
Promote / communicate these benefits in order to
motivate purchase
Price at the right level so that consumers are willing &
able to buy the product and the firms profit goals are met
Make the product available at the right Place so that
exchange is facilitated

Ends
Profits through
sales volume

The selling concept

Market Customer Integrated

needs
marketing

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Activities in the Marketing Process ...

The selling and Marketing Concepts Contrasted

Starting
point

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Profits through
customer
satisfaction

The marketing concept

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What is Marketed?

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Marketers and Markets

A marketer is someone actively seeking one or
more prospects for an exchange of values
A prospect is willing and able to engage in the
exchange
Marketplace physical
Marketspace digital
Metamarket cluster of complementary goods
and services across diverse set of industries and
includes metamediaries

Goods
Services
Events & Experiences
Persons
Places & Properties
Organizations
Information
Ideas
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What is Marketing Management?

The Marketing Philosophy

Company Orientations
The Production-Oriented
The Product-Oriented
The Selling-Oriented
The Marketing-Oriented
The Holistic Marketing-Oriented

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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Holistic Marketing Dimensions

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Performance Marketing
Financial
Accountability
Social Responsibility
Marketing

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Societal Marketing Concept

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Social Initiatives
Corporate social
marketing
Cause marketing
Corporate philanthropy
Corporate community
involvement
Socially responsible
business practices

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Three Considerations Underlying The Societal Marketing

An organizations task is to determine

the needs, wants, and interests
of target markets and to deliver
the desired satisfaction
more effectively and efficiently
than competitors in a way
that preserves or enhances the
well-being of both consumer and society

Society
(Human welfare)

Societal
marketing
concept
Consumers

Company

(Want satisfaction)

(Profits)

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The Four Ps of the Marketing Mix

Key Themes of Integrated Marketing

Many different marketing activities are used
to communicate and deliver value
All marketing activities are coordinated to
maximize their joint effects

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Marketing Mix and the Four Cs

Marketing-Mix Strategy

Customer solution
Customer cost
Convenience
Communication

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Internal Marketing

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Needs, wants, and

demands
Target markets,
positioning, and
segmentation
Offerings and brands
Value and
satisfaction

Step 1: Select employees with positive attitudes

Step 2: Train, motivate, and empower employees
Step 3: Establish standards for employee performance
Step 4: Monitor actions and reward good performance

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Fundamental Marketing Concepts

Employees contribute to building long-term relationships

with customers

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Marketing channels
Supply chain
Competition
Marketing
environment
Marketing planning

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For an Exchange to Occur

I want it, I need it

There must be 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 is free to accept or reject the exchange offer
Each party believes it is appropriate or desirable to deal
with the other party

Five Types of Needs

Stated needs
Real needs
Unstated needs
Delight needs
Secret needs

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The marketplace isnt what it used to be

Dynamic Marketing Management

Information technology

The New Marketing Realities

Globalization
Deregulation

Transformation Marketing

Privatization
Competition

Marketing Management Tasks

Convergence
Consumer resistance
Retail transformation

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New Consumer Capabilities

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New company capabilities

A substantial increase in buying power

A wider variety of available goods and
services
A large amount of information about
practically anything
Greater ease in interacting and in placing
and receiving orders
An ability to compare notes on products and
services
An amplified voice to influence public opinion
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Internet
Research
Speed of internal information
Speed of external information
Better target marketing
Mobile marketing
Differentiated goods
Improved purchasing, recruiting, training, and
communications

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Transformation Marketing

4 Major Marketing Patterns

Transformation marketing can be divided into
4 major marketing patterns:

Transformation marketing emphasizes that

marketing management should conform and

transaction-driven

adapt to changes of environment, so as to

realize gradual upgrades and to achieve more

relationship-driven

effectiveness and more efficiency.

value-driven
value network (cooperation)-driven

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Marketing Management Tasks

Improving the
infrastructure and
strategies of
marketing
management
Assessing market
orientation and
customer value
Choosing value

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Marketing Discussion

Offering value

Marketing shapes
consumer needs
Does Marketing Create
and wants
versus
versus

Marketing
merely
Satisfy Needs?
reflects the needs
and wants of
consumers

Shaping market
offerings

Delivering value
Communicating
value
Creating long-term
growth and value

Building brands
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Cases Discussion
Marketing in China:
Amways
Transformation in
China

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Homework
Prepare for the case discussion for:

Chapter Case:

Does Marketing Create versus Satisfy Needs?

Case 1: Amways Transformation in China
Case 2: Coca-Cola
Every student need to prepare for the discussion. We will
need three volunteers to lead the discussion or we can
randomly choose 3 students to lead the discussion.
Every student need to lead the discussion for at least
once.

Coca-Cola

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