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Chapter 1 Defining Marketing for the 21st Century

What is the first thing (word, picture, thought) that comes to your mind when you listen to the word Marketing? Is Marketing and is Sales Sales a same part or of Different? Marketing

If Different then, or is Marketing a part of a Sales?

“There will always be a need for some selling. But the aim of marketing is to make selling extra. 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 is to make the product or service available.” Selling is a tip of ice-berg. By Peter Drucker

Company Orientations towards the Market Place 1) Production Concept: this is the one of the oldest concept. It holds that customers will prefer products that are widely available & inexpensive. Managers of production orientation are concerned with high production efficiency, low cost, & mass distribution. 2) Product Concept: this concept holds that consumer will favour those products that offer the most quality, performance, or innovative features. Managers in these organization focus on making superior products & improving them over time. 3) Selling Concept: this concept holds that consumers & businesses, if left alone, will ordinarily not buy enough of the organizations products. The organization must, therefore, undertake an aggressive selling promotion effort. The selling concept is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopaedias & funeral pots. 4) Marketing Concept: this concept avails that “to find the right products for the customer” 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 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. What is marketed? 1) Goods 2) Services 3) Events 4) Experiences 5) Persons 6) Places 7) Properties 8) Organization 9) Information 10) Ideas

4) Declining Demand: Consumer begin to buy the product less frequently or not at all. monthly.Marketing & Demand: Just as production and logistic professionals are responsible for supply management. Structure of Flows in a Modern Exchange Economy Explanation of the terms & diagram: Traditionally. 5) Irregular Demand: Consumer purchase vary on seasonal. 8) Unwholesome demand: consumer may be attracted to products that have undesirable social consequences. 2) Non-existent Demand (unaware or uninterested): consumer may be unaware or uninterested to buy the product. weekly. Demand States: 1) Negative Demand (Dislike): Consumer dislikes the product & may even pay a piece to avoid it. a “market” was a physical place where buyer & sellers gathered to buy & sell goods. daily or even hourly basis 6) Full Demand: consumers are adequately buying all products put into the market place. 3) Latent Demand: consumer may share a strong need that cannot be satisfied by an existing product. 7) Overfull demand: more consumers would like to buy the product that can be satisfied. marketers are responsible for demand management. Economist describe a market as a collection of buyers & sellers who transact over a particular product or product class (housing market or grain market) . They have to stimulate demand for their company’s product/service.

Sellers & buyers are connected through four flows. Key Consumer Markets: 1) Consumer Market 2) Business Market 3) Global Market 4) Non Profit & Governmental Market Explanation of Each Term: 1) Consumer Market: in this market companies are selling mass consumer goods & services such as soft drinks. & how to adopt their communication to fit their countries. labour &money. how to enter each country. direct mail) to the market. The sellers send goods & services & communications (ads. who sell them to customer. Then the Govt. sales data). 2) Business Market: Companies sells business goods & services to the well trained & well professional buyers who are skilled in evaluating competitive offering. buy resources & turn them into goods & services. and the outer loops shows an exchange of information. ensuring its availability. cosmetics. Manufacturer goes to the resource market of raw material. Business buyers buy goods in order to make or resell a product to others at a profit. in return they receive money & information (attitudes. 3) Global Market: companies selling goods & services in the global marketplace face additional decision & challenges. & then sell to intermediaries. air travel & athletic shoes & equipment spend a great deal of time trying to establish a superior brand image. They must decide which countries to enter. how to price their products in different countries. backing it with engaging communications & reliable service. collects tax revenues to buy goods from resource.Modern Market explanation: There are 5 basic markets as you can see from the diagram. how to adapt their product & service features to each country. The inner loop shows an exchange of money for goods & services. Then consumer sells their labour & receives money with which they pay for goods & services. A simple marketing system: Explanation of the diagram: The figure shows the relationship between the industry & the market. manufacturer & intermediaries market & uses these goods & services to provide public services. Mostly brand’s strength depends on developing a superior product & packaging. .

” Value increases with quality & service decreases with price. or organization. and stage in the family life cycle) Psychographic segmentation (similar attitudes. Value & Satisfaction: Value reflects the perceived tangible& intangible benefits & cost to customers. air. Wants & Demand: Need is the basic human requirement. Target Market. values. water clothing & shelter to survive. CDs. and lifestyles) Behavioural segmentation (occasions. posters. called the “customer value tried. television. Target markets can be separated by the following aspects: Geographic segmentations. which can be a combination of products. audio . Marketing in Practice: Functions of CMO’s Strengthening the brands Measuring marketing effectiveness Driving new product development based on customer needs Gathering meaningful customer insights Utilizing new marketing technology Core Marketing Concepts: 01. A brand name such as McDonald’s carries many associations in the mind of people: hamburger’s. services. Needs. Segmentation: Segmentation is the process of splitting (segmenting) the entire market (everyone) into smaller groups that share similar traits. 02. household size. & Segmentation: Target markets are groups of individuals that are separated by distinguishable and noticeable aspects. Value can be seen as primarily a combination of quality. service & price. billboards. addresses (their location climate region) Demographic / socioeconomic segmentation (gender. mail. education & entertainment. & include newspapers. magazines. a set of benefits they offer to customers to satisfy their needs. the marketer uses three kinds of marketing channels: Communication channels: which deliver & receives messages from target buyers. brand. age. children’s. fliers. Marketing Channels: To reach a target market. radio.4) Non-profit & Governmental Markets: companies selling their goods to non-profit organizations such as churches. fun. Demands are wants for specific products backed by an ability to buy. 05. universities. convenience & golden arches. 04. Positioning. Satisfaction reflects a person’s comparative judgements resulting from a product’s perceived performance in relation to his or her experience. or government agencies need to price carefully because these organizations have limited purchase power. telephone. education. information & experiences. People need food. income. degree of loyalty) Product-related segmentation (relationship to a product) Positioning: Positioning is the process by which marketers try to create an image or identity in the minds of their target market for its product. charitable organizations. Offerings& Brands: companies addresses needs by putting forth a value proposition. The intangible value proposition is made physical by an offering. occupation. People also have strong needs for recreation. A brand is an offering from a known source. fast food. although other factors can also play an important role. 03. These need become wants when they are directed to specific objects that might satisfy the need.

suppliers. The industry age was characterized by mass production & mass consumption. selecting target markets. It describes a longer channel stretching from raw materials to components to final products that are carried to final buyers. banking & insurance companies. Globalization 3. 09. transportation & telecommunication companies. 07. Marketing Planning: the marketing planning process consists of analysing marketing opportunities. Heightened competition 8. & the target customers. people. & insurance companies that facilitate transactions. and resources involved in moving a product or service from supplier to customer. Task Environment: it includes the immediate actors involved in producing. & the social environment. The main actors are the company. Deregulation 4. bank. . advertising agencies. political-legal environment. Service channels include warehouses. distributors. more targeted communications. How Marketing & Business are changing: 1. & more relevant pricing. distributing. information. While in the supplier group are material suppliers & service suppliers such as marketing research agencies. or deliver the physical product or services to the user. 08. sell. The marketing environment consists of the task environment & the broad environment. Privatisation 5. & managing the marketing effort. ads everywhere. & promoting the offerings. Service Channels: the marketer uses service channels to carry out transactions with potential buyers. Distribution channels: the marketer uses the distribution channel to display. stores stuffed with inventory. the look of retail stores & many other media. They include distributors. designing marketing strategies. technological environment. Retail transformation 10. Information technology: the digital revolution has created an information age. Information technology 2. wholesalers. Marketing Environment: Competition represent only one force in the environment in which the marketer operator. technology. 06. retailers. economic environment. Broad Environment: it consists of six components: demographic environment. Competition: it includes all the actual & potential rival offerings & substitute that a buyer might consider. and agents. developing marketing programs. dealers. & rampant discounting. beyond this the communication are also conveyed by facial expressions & clothing. Customization 7. Disintermediation Explanation of each above points: 1. physical environment. The information Age promises to lead to more accurate levels of production. Customer empowerment 6. transportation companies.traps & the internet. activities. Supply Chain: A supply chain is a system of organizations. Industry convergence 9.

newspapers.: ebay. designed. It is an approach to marketing that attempts to recognize & reconcile the scope & complexities of marketing activities. They are more & more time-starved & want more convenience. 8. which in turn helps you develop an overall or 'holistic marketing' plan. Holistic Marketing is a term used to describe a strategy that enables you to look at your marketing efforts as a 'whole'. 4. 3. & relationship. 7. 6. or online.2. 5. Disintermediation: disintermediation is the removal of intermediaries in a supply chain.S. New Customer 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 in interacting and placing and receiving orders An ability to compare notes on products and services An amplified voice to influence public opinion Holistic Marketing The concept of holistic market is based on the development. The company also has the capacity to interact with each customer personally.: In U. Store based retailers are facing growing competition from catalogue houses. & e-commerce on internet. They perceive fewer real product differences & show less brand loyalty. processes. Retail Transformation: small retailers are succumbing to the growing power of giant killers & category killers.. yahoo. By going online. such as British Airways & British Telecom in the United Kingdom. & TV direct to customer ads. 10. yepme shopping. Customer Empowerment: customer increasingly expects higher quality & service & some customization. shipping.g. amazon. communication have made it easier for companies to market in other countries & easier for consumers to buy products & services from marketers in other countries. E. services. Privatization: Many countries have converted public companies to private ownership & management to increase their efficiency. Heightened Competition: Brand manufacturers are facing intense competition from domestic & foreign brands. E. Industry Convergence: Industry convergence is generally defined as the converging/merging of two or more separate and distinct industries 9. flipkart. .g. home shopping TV. & implementation of marketing programs. direct mail firms. which is resulting in rising promotion costs & shrinking profit margins. the long distance telephone companies can now compete in local markets & local phone companies can now offer long distance. companies essentially enable consumers to design their own goods. Customization: the company is able to produce individually differentiated goods whether ordered in person. Globalization: technology advances in transportation. to personalize messages. on the phone. & activities that recognizes their breadth & interdependencies. Deregulation: Many countries have deregulated industries to create greater competition & growth opportunities.

: Blurring Lines between Advertising And PR The lines between the common marketing communication practices of advertising and PR are becoming increasingly blurred as more companies use a combination of approaches--or integrated marketing--to get their messages across to their target audiences. author of "Marketing with the End in Mind. By combining various tools. what affect does that have on the whole loaf? Do your clients and customers want a loaf or a slice or two? How do you know who your clients are? How do you know what your clients want? Where will you locate your ideal clients and customers? What goodness will your loaf bring to your clients? What else can you make from the same ingredients to benefit your clients and customers? How do you know that your clients and customers would benefit from other products? With many common reasons why start-up businesses fail in their first year . What is holistic marketing? If you are in the business of selling bread do you market the benefits of the whole loaf or the benefits of the slice? If you market a slice. A marketing network consists of the company & its stakeholders with whom it has built mutually profitable business relationships. distributors." And. E. television and radio--have received increasing competition rom other low-cost options for communicating with consumers. Integrated marketing strategies take advantage of a combination of communication tools and media to spread a message.g. It makes sense to leverage all of the communication tools. Its objective is to complement and reinforce the market impact of each method. . and direct marketing. pricing. including media relations and online communication efforts. as traditional media--newspaper. and to employ the market data generated by these efforts in product development. The outcome of relationship marketing is the building of a unique company asset called a marketing network. customer service. It involves cultivating the right kind of relationships with the right constituent groups. omit to undertake or incorporate marketing actions that are less comfortable for them.Most small businesses look at their marketing and select marketing formats to action that they are comfortable with. and therefore.customers. & other marketing partners in order to earn & retain their business. distribution. Integrated marketing draws upon the power of traditional advertising and public relations efforts. says Lin Grensing-Pophal. 2) Integrated Marketing: Strategy aimed at unifying different marketing methods such as mass marketing. one-to-one marketing. online communication tools that include social'll want to make sure you don't repeat those same mistakes! Holistic Market Dimensions: Graph is nor coming 1) Relationship Marketing: it has an aim of building mutually satisfying long-term relationships with key parties. as well as the use of new. marketers are able to ensure that their audience is reached and can leverage the various tools in ways that are most effective. marketers understand a variety of options available to them. etc. suppliers.

namely Product. Product design which leads to the product attributes is the most important factor. Tangible products may be items like consumer goods (Toothpaste. IPods). Product: It is the tangible object or an intangible service that is getting marketed through the program. Many business degree programs such as devry online degrees include this within their curriculum. 4) Social Responsibility Marketing: Socially responsible marketing is a marketing philosophy that states a company should take into consideration what is in the best interest of society in the present and long term. Internal marketing is the task of hiring. Every product is subject to a life-cycle including a growth phase followed by an eventual period of decline as the . and Shampoos) or consumer durables (Watches. Place (distribution) and Promotion. The basic major marketing management decisions can be classified in one of the following four categories.3) Internal Marketing: internal market ensures that everyone in the organization embraces appropriate marketing principle. training. However packaging also needs to be taken into consideration while deciding this factor. The Four P’s The term “marketing mix” was coined in the early 1950s by Neil Borden in his American Marketing Association presidential address. especially senior management. Price. This is one of the preliminary knowledge every marketer must have and is considered to be the basics of every marketing theory. which emerged henceforth. Soaps. Intangible products are service based like the tourism industry and information technology based services or codes-based products like cell phone load and credits. and motivating able employees who want to serve customers well.

g. Place: Place represents the location where a product can be purchased. Price: The price is the simply amount a customer pays for the product. This is crucial as this provides the place utility to the consumer. . If the price outweigh the perceived benefits for an individual. A certain amount of crossover occurs when promotion uses the four principal elements together (e. continuous product extensions though innovation and thus differentiation is required and is one of the strategies to differentiate a product from its competitors. public relations. personal selling and sales promotion. To retain its competitiveness in the market.product approaches market saturation. in film promotion). Promotion has four distinct elements: advertising. Sales staff often plays a major role in promotion of a product. Promotion: This represents all of the communications that a marketer may use in the marketplace to increase awareness about the product and its benefits to the target segment. It is often referred to as the distribution channel. the perceived value of the offering will be low and it will be unlikely to be adopted. This may include any physical store (supermarket. but if the benefits are perceived as greater than their costs. chances of trial and adoption of the product is much greater. departmental stores) as well as virtual stores (e-markets and e-malls) on the Internet. which often becomes a deciding factor for the purchase of many products across multiple product categories.