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Defining Marketing st for the 21 Century

Chapter One

At this course YOU will be the Star

Understanding Marketing Management


Chapter One

In this Chapter, we will address the following questions:

1. Why is marketing important? 2. What is the scope of marketing? 3. What are some core marketing concepts? 4. How has marketing management changed in recent years? 5. What are the tasks necessary for successful marketing management?

MC Moon

Defining Marketing for the 21st Century Chapter One


Companies now a days are at Great Risk if : They fail to carefully monitor their customer, competitors and to continuously improve their value offerings. They take a short salesdriven view of their business and ultimately. They fail to satisfy their stakeholders (their employees, their suppliers, and their channel partners).

Skillful Marketing is a never ending pursuit

Defining Marketing for the 21st Century Chapter One

The Scope of Marketing:


What is Marketing? Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is Meeting Needs Profitably.

Marketing is an Organizational function and a set of processes for creating, communicating, and delivering value to customers & for managing customer relationships in ways that benefit the organization and its stake holders.

Understanding Marketing Management


Chapter One

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.

For a Managerial definition, marketing has often been described as the art of selling products. But actually the most important part of marketing is not selling! Selling is only the tip of the marketing iceberg.

Defining Marketing for the 21st Century Chapter One


When Sony designed its Play Station, when Gillette launched its Fusion ProGlide razor, and when Toyota introduced its Lexus automobile.
These manufacturers were swamped with orders because they had designed the "right" product based on careful marketing homework.

Defining Marketing for the 21st Century Chapter One


What Is Marketed?
Marketing people are involved in marketing 10 types of entities: Places Properties Organizations Information Ideas.

Goods
Services Experiences Events Persons

Understanding Marketing Management Chapter One


Demand States Marketers always seek to influence the level, timing, and composition of demand to meet the organizations objectives. Eight demand states are possible: Nonexistent demand Consumers may be unaware or uninterested in the product. Latent demand Consumers may share a strong need that cannot be satisfied by an existing product.

Negative demand Situation where consumers avoid a product or firm with negative image or connotations, such as those associated with unfair labor policies or the practices that harm the environment. Declining demand Consumers begin to buy the product less frequently or not at all. Irregular demand Consumer purchases vary on a seasonal. monthly, weekly, daily, or even hourly basis. Full demand Consumers are adequately buying all products put into the marketplace.

Defining Marketing for the 21st Century Chapter One


Overfull demand Desire or preference which a consumer is unable to satisfy due to lack of information about the products availability, or lack of money.
Unwholesome demand Consumers may be attracted to products that have undesirable social consequences.

In each case, marketers must identify the underlying causers of the demand state and then determine a plan for action to shift the demand to a more desired state.

Defining Marketing for the 21st Century Chapter One

Markets:
Economists describe a market as a collection of buyers and sellers who transact over a particular product or product class.

Structure of Flows in a Modern Exchange Economy


Resources Money Taxes, goods Resource Markets Resources Money Services, money Taxes Government Markets Consumer Markets

Services, money Manufacture Markets

Taxes, goods
Services, money Money Taxes, goods Intermediary Markets

Services

Money Goods and services

Goods and services

Defining Marketing for the 21st Century Chapter One

Consumer Markets Companies selling mass consumer goods and services. Business Markets Business buyers buy goods in order to make or resell a product to others at a profit. Global Markets Companies selling goods and services in the global marketplace.

Key Customer Markets Consider the following key customer markets: consumer, business, global, and nonprofit.

Non Profit & Governmental Markets Companies selling their goods for to nonprofit organizations

Defining Marketing for the 21st Century Chapter One


Core Marketing Concepts To understand the marketing function, we need to understand certain fundamental concepts and tasks, along with current trends.

Needs, Wants, and Demands Needs are the basic human requirements. People need food, air, water, clothing, and shelter to survive, recreation, education, and entertainment. Needs become Wants when they are directed to specific objects that might satisfy the need. Wants are Demands for specific products backed by an ability to pay.

Defining Marketing for the 21st Century Chapter One


We can distinguish among five types of needs:
1. Stated Needs (the customer wants an inexpensive car). 2. Real Needs (the customer wants a car whose operating cost, not its 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 to be seen by friends as a clever consumer).

Defining Marketing for the 21st Century Chapter One


Target Markets, Positioning, and Segmentation:
We can rarely satisfy everyone in a market, marketers should start by dividing up the market into SEGMENTS, as follows: Identifying and profiling distinct groups of buyers mixes by examining demographic, psychographic, and behavioral differences among buyers.

Then deciding which segments present the greatest opportunity-which are its target markets.

For each chosen target market, the firm develops a market offering.
The offering is positioned in the minds of the target buyers as delivering some central benefits. Companies do best when they choose their target markets carefully and prepare tailored marketing programs.

Defining Marketing for the 21st Century Chapter One


Offerings & Brands
Companies address needs by offering a set of benefits to customers satisfying their needs. The intangible value proposition consists of products, services, information, and experiences. A brand is an offering from a known source.

A brand name such as McDonald's carries many associations in the minds of people: hamburgers, fun, children, fast food, convenience, and golden arches. These associations make up the brand image.

Defining Marketing for the 21st Century Chapter One


Value & Satisfaction
The offering will be successful if it delivers value and satisfaction to the target buyer. intangible benefits and costs to customers. Value can be seen as primarily a combination of quality, service, and price (qsp), called the "customer value triangle." Value increases with quality and service and decreases with price, although other factors can also play an important role.

Marketing Channels
To reach a target market, the marketer uses three kinds of marketing channels.
Communication channels, include newspapers, magazines, radio, television, mail, telephone, billboards, posters, fliers, CDs, audiotapes, and the Internet. Distribution channels, include distributors, wholesalers, retailers, and agents. Service channels, include warehouses, transportation companies, banks, and insurance companies that facilitate transactions.

Defining Marketing for the 21st Century Chapter One

Defining Marketing for the 21st Century Chapter One


Supply Chain
The supply chain describes a longer channel stretching from raw materials to components.
When a company acquires competitors or moves upstream or downstream, its aim is to capture a higher percentage of supply chain value.

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

Defining Marketing for the 21st Century Chapter One


Marketing Environment The marketing environment consists of the Task Environment and the Broad Environment.
The Task environment includes the immediate actors involved in producing, distributing, and promoting the offering. Those main actors are as follows: The company. The suppliers. The distributors. The dealers. The target customers.
The broad environment consists of six components:
Demographic environment Economic environment Physical environment Technological environment Political-legal environment Social-cultural environment

Defining Marketing for the 21st Century Chapter One


The new Marketing Realities Today, Societal forces have created new marketing behaviors, opportunities and challenges.
Major Societal Forces Network Information Technology

Deregulation It is deregulating industries to create greater competition with opportunities. Privatization It is converting public companies to private ownership and management to increase their efficiency.

Globalization Technological advances in transportation, shipping, and communication made it easier for companies to market their products.

Understanding Marketing Management


Chapter One

Customer empowerment Customers increasingly expect higher quality and service and some customization. They are more time-starved and want more convenience. They perceive fewer real product differences and show less brand loyalty. They are showing greater price sensitivity in their search for value.

Customization The ability of producing individually differentiated goods whether ordered in person, on the phone, or online. The capacity of interacting with each customer personally, to personalize messages, services, and the relationship. Almost no inventory involved. Heightened Competition

Defining Marketing for the 21st Century Chapter One

Brand manufacturers are facing intense competition from domestic and foreign brands which is resulting in rising promotion costs and shrinking profit margins.

Defining Marketing for the 21st Century Chapter One

Industry convergence
Pharmaceutical companies are now adding biogenetic research capacities in order to formulate new drugs, new cosmetics and new foods. Dell, Gateway, HewlettPackard released a stream of entertainment devicesfrom MP3 players to Plazma and LCD TVs LED TVs and camcorders.

Defining Marketing for the 21st Century Chapter One


Retail transformation
Store-based retailers are facing growing competition from : Catalog houses; direct-mail firms; newspaper, magazine, and TV direct-to-customer ads, home shopping TV; and e-commerce on the Internet. In response, big retailers are now building entertainment into stores with coffee bars, lectures, demonstrations, and performances. They are marketing an "experience" rather than a product assortment.

Defining Marketing for the 21st Century Chapter One


Di-sinter-mediation
The amazing success of early online dot-coms such as AOL, Amazon, Yahoo, eBay, E'TRADE, has created disintermediation in delivery of products and services, struck terror in the hearts of many established manufacturers and retailers.

In response, many traditional companies engaged in Reintermediation, adding online services to their existing offerings.

Company Orientations Toward the Marketplace


What philosophy should guide a company's marketing efforts? What relative weights should be given to the interests of the organization, the customers, and society?

Very often these interests conflict.


The competing concepts under which organizations have conducted marketing activities include The following:

Defining Marketing for the 21st Century Chapter One


The Holistic Marketing Concept
The holistic marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities.

At this concept "everything matters" with marketing that abroad, integrated perspective is often necessary.

Defining Marketing for the 21st Century Chapter One

Updating The Four Ps One of the traditional marketing activities is in terms of the Marketing Mix, which has been defined as the set of marketing tools the firm uses to pursue its marketing objectives.

Defining Marketing for the 21st Century Chapter One


Marketing Management Tasks Core concepts and others provide the input for a set of tasks that make up successful marketing management. Developing marketing strategies and plans. Capturing marketing insights. Connecting with customers. Building strong brands. Shaping the market offerings Delivering value. Communicating value. Creating long term growth.

Defining Marketing for the 21st Century Chapter One

* Always Remember
* Since there are Four Ps, there are Four Cs

Customer solution Customer cost Convenience Communication

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