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Ch-1
Marketing Management • 14e

Marketing is the activity, set of
institutions, and processes for
creating, communicating, delivering,
and exchanging offers that have
value for customers, clients, partners,
and society at large.
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 2 of 25

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.

Differences between Marketing and Marketing Mgt
1. Marketing is a branch within management

concerned specifically with meeting consumer
demands.
2. Marketing relates directly to consumers, while
management does not involve customer interaction.
3. Marketing activities are planned by management,
and their execution is monitored through managerial
functions.
Needs
• What is Needs?
State of felt deprivation.

or
Feelings of deprivation about
something.

Wants
• What is Wants?
Solution of a problem.
or
The forms human needs take as
shaped by culture and individual
personality.
Demands
• What is Demands?
Wants backed by purchasing power.

or
Demands= Wants + $

Conditions of Demands
• Willingness to Purchase
• Ability to purchase
• Willingness to spend the money

Types of Demands
• Negative Demands
• Nonexistent Demands/ No Demands
• Latent Demands
• Declining Demands
• Irregular Demands
• Full Demands
• Overfull Demands
• Unwholesome Demands

Types of Demands
Negative Demands
Consumers dislike the product and may even pay
a price to avoid it
Nonexistent Demands
Consumers may be unaware or uninterested
about the product
Latent Demands
Consumers may share a strong needs that
cannot be satisfied by an existing product
Types of Demands
Declining Demands
Consumers begin to buy the product less
frequently or not at all
Irregular Demands
Consumer purchases vary on a seasonal,
monthly, weekly, daily or even hourly basis
Full Demands
Consumers are adequately buying all products
put into the marketplace
Types of Demands
Overfull Demands
More consumers would like to buy the product that can
be satisfied
(Demarketing is marketing to reduce demand

temporarily or permanently; the aim is not to destroy
demand but to reduce or shift it)
Unwholesome Demands
Consumers may be attracted to product that have
undesirable social sequences

What is marketed?
• Goods,
• services,
• Events
• experiences
• Persons
• Places
• Properties
• Organizations
• information, or
• Ideas
Markets
• Markets are the set of actual and potential buyers of
a product
• Markets are the set of actual and potential buyers
• Set of actual and potential buyers

Marketing Concepts
Quality Create, deliver, and

Innovation communicate value
Production Product Selling Marketing Holistic

Mass production
Unsought goods
Mass distribution
Overcapacity

Production Concept
• Supply creates its own demand
• If a product is made, somebody will want to buy it

• Customer wants to buy product which is
• Highly available
• Low price
• Manager task is to improve
• Production efficiency so that cost is reduced

• Distribution efficiency so that products are
available
Production Concept
• Production concept is effective….
• Wartime
• Natural disaster
• When demand is higher than supply
• When price needs to be reduced

Product Concept
Product concept is the idea that consumers
will favor products that offer
o Most quality
o Performance, and
o Features
• Organization should therefore devote its

energy to making continuous product
improvements

Product Concept
• Sellers pay more attention to the specific
products they offer than to the benefits and
experiences produced by the products.
• Marketing myopia is focusing only on existing

wants and losing sight of underlying consumer
needs

Selling Concept
Selling concept is the idea that consumers will
not buy enough of the firm’s products unless it
undertakes
o a large scale selling and
o promotion effort
• Selling concept is suitable in case of buying
unsought goods such as insurance policy,
encyclopedia, blood donations and so on.

Marketing Concept
Marketing concept is the idea that achieving
organizational goals depends on knowing
the needs and wants of the target markets
and delivering the desired satisfactions
better than competitors do

ORGANISATIONAL ORIENTATIONS
Orientation Focus Aims Thoughts
Production Manufacturing Increase production ‘Buy anything as long as

Cut costs it is what I make’
Make profits
Product Goods Only quality matters ‘Just look at the quality –

Make profits buy it just for that’
Sales Selling Aggressive sales ‘Not buying? – Can I give

Make profits you a freebie?’
Marketing Customer needs Defining customer needs ‘Let me find out what
Make profits you need’
Societal Marketing Concept
Societal marketing concept is the idea that a
company should make good marketing decisions
by considering consumers’ wants, the company’s
requirements, consumers’ long-term interests,
and society’s long-run interests

Green marketing
• Green marketing is the marketing of products
that are presumed to be environmentally safe.
• "Integrating business practices and products

that are friendly to the environment while also
meeting the needs of the consumers"

Examples of Green marketing
• ITC has been 'Carbon Positive' three years in a
row (sequestering/storing twice the amount
of CO2 than the Company emits).
• ITC's Watershed Development Initiative

brings precious water to nearly 35,000
hectares of drylands and moisture-stressed
areas.
Examples of Green marketing
• McDonald's restaurant's napkins, bags are
made of recycled paper.
• Coca-Cola pumped syrup directly from tank

instead of plastic which saved 68 million
pound/year.
• Philips energy Bulb
• Mortein natureguard
Corporate Social Initiatives
• Corporate social marketing
• Cause marketing
• Cause-related marketing
• Corporate philanthropy
• Corporate community involvement
• Socially responsible business practices

Type Description Example
Corporate social marketing uses business Cogito
Corporate social
resources to develop and/or implement a
marketing behavior change campaign intended to
improve public health, safety, the
environment, or community well-being
that directly relate to one or more of the
company's products or services.
Cause Marketing Promoting social issues through efforts ?

such as sponsorships, licensing
agreements, and advertising
Cause related marketing Donating a percentage of revenues to a ?

specific cause based on the revenue
occurring the announced period of support

Type Description Example
Corporate philanthropy Making gifts of money, goods, or ?
time to help nonprofit
organizations, groups, or
individuals
Corporate community Providing in-kind or volunteer ?

services in the community
involvement
Socially responsible Adapting and conducting business ?

practices that protect the
business practices environment and human and
animal rights

Holistic Marketing Concept
• The holistic marketing concept is based on the
development, design and implementation of
marketing programs, processes and activities
that recognizes their breadth and inter-
dependencies.
• Holistic marketing recognizes that

“everything matters” with marketing and
that a broad, integrated perspective is often
necessary.
Holistic Marketing Dimensions

Marketing 3.0
Differences among Marketing 1.0, 2.0, and 3.0
Marketing 1.0 Marketing 2.0 Marketing 3.0
Product - Centric Customer – Centric Value - Centric or Human
- Centric
Objectives Sell products Satisfy and retain the Make the world a better
consumers place
Enabling Forces Industrial Revolution Information Technology New wave Technology
How companies see the Mass buyer with physical Smarter consumer with Whole mind with mind,
market needs mind and heart heart and spirit
Key marketing Concepts Product Development Differentiation Values
Company Marketing Product Specifications Corporate and Product Corporate missions,

Guidelines positioning visions and values
Value Propositions Functional Functional and Functional Emotional

Emotional and spiritual
Interactions with One to many Functional and Many to Many

consumers Transactions Emotional Collaboration
Marketing 1.0
• Marketing 1.0 is Marketing which is product centric,
• talks about the features of the products being

offered,
• does not care much about what specifically the

customer needs, the kinds of tweaks and
customizations that he may want.

Marketing 2.0
• Marketing 2.0, is about being customer

centric,
• and involves understanding customer needs,

and
• satisfying them with the product/service

offering..
Marketing 3.0
• Marketing 3.0 is an evolution beyond
customer needs.
• Marketing 3.0 is about working with the
customer, pulling on the emotion/feeling
chords, pulling more on the heart than the
mind.
• It does not mean that rationality goes for a
toss.
• It merely implies that while rational benefits
are always there, the attachment is built upon
emotional parameters
Main Theme of Marketing 3.0
• Connection & Co creation

• participation and collaborative marketing
• Examples
• Bing’s ‘Decode Jay-Z’
• AT&T’s ‘Shout Your Love From the Mountaintop’
• Domino’s ‘Pizza Turnaround’

Maruti
• Taking the example again from the automobile sector, when a
company like Maruti realizes that there are players like
Hyundai attacking them with Santro and the Fords of the
world with their Icon, it understands that now the different
customer needs can be well satisfied by the competitors as
well.
• So, what does it come up with?
• It comes out with a campaign such as the one embedded
below, on the concept of ’India comes home in a Maruti‘
• Observe that now the pull is not based on how fast the car
can go, or whether customer needs of comfortable transport
is satisfied. It is now about the emotional connect that Maruti
enjoys with the Indian people.

Marketing 3.0 Indian examples
• Now, the marketers of different offerings try to build

an emotional connect with their customers. Some of
the recent examples of this kind of connect:
• 1. Maggi – Campaign about Meri wali Maggi

• 2. Bajaj – Hamara Bajaj (both old and new versions
of the commercial)

Blue Ocean Strategy

Examples of Blue Ocean Strategy
• Apple ,
• google.com,
• amazon.com.
• icici bank,
• shaadi.com,
• Air deccan,
• Flipcart
• Cellbazar
• Polliphone
Blue Ocean vs. Red Ocean Strategy
Blue Ocean Strategy Red Ocean Strategy
• Create uncontested • Compete in existing

market space market space
• Make the competition • Beat the competition
irrelevant
• Create and capture new • Exploit existing demand
demand

Blue Ocean vs. Red Ocean Strategy
Blue Ocean Strategy Red Ocean Strategy
• Break the value- cost • Make the value-cost trade

trade off off
• Align the whole system of • Align the whole system of
a firm’s activities with its a firm’s activities with its
strategic choice of strategic choice of
differentiation and low differentiation or low cost
cost

Blue Ocean Strategy Tools
• A diagnostic tool for building a compelling

Strategy blue ocean strategy
Canvas • It captures the current state of play in the
known market space
• Allow you to understand :
• where the competition is currently investing
• the factors the industry currently competes
on in product, service and delivery
• what customers receive from existing
competitive offerings on the market

Four Action Framework
Eliminate Raise
Reduce Create

Which of the factors that the industry takes
Eliminate for granted should be eliminated?
Which factors should be reduced well below

Reduce
the industry’s standard?
Which factors should be raised well above

Raise the industry’s standard?
Which factors should be created that the

Create industry has never offered?

The Case of Cirque du Soleil (A Circus Company)
Eliminate Reduce
• Star performers • Fun and humor

• Animal shows • Thrill and danger
• Aisle concession sales
• Multiple show arenas
Create Raise
• Theme • Unique venue

• Refined environment
• Multiple productions
• Artistic music and dance
1. Reconstruct Market Boundaries
Head-to-Head Strategy Blue Ocean Strategy
• Focus on rivals within • Looks across alternative

industry industries
• Focuses on competitive • Looks across strategic group
position within strategic within industry
group • Redefines the industry
• Focuses on better serving buyer group
the buyer group

1. Reconstruct Market Boundaries
Head-to-Head Strategy Blue Ocean Strategy
• Focuses on maximizing the • Looks across to

value of product or service complementary product and
offerings within the service offerings
bounds of its industry • Participates in shaping
• Focuses on adapting to external trends over time
external trends as they
occur

Value
• What is value?
• Value means newness
• Customer value is the difference between

total customer value and total customer cost

Key Customer Markets
Consumer Market
Business Markets
Global Markets
Government Market

Markets
Marketplaces Marketspaces
Metamarkets
Who is Responsible for Marketing?
Entire Organization
Marketing Department
Chief Marketing Officer

(CMO)

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

Strengthening the brands
–A brand is the visual, emotional,

rational, and cultural image that you
associate with a company or a product.

Strengthening the brands
• When you think Volvo, you might think safety.
When you think Nike, you might think of Tiger
Woods or "Just Do It.“
• When you think IBM, you might think "Big

Blue."

Strengthening Brand Strategies
• Customer service
• Customer acquisition process
• Messaging (including your voice and tone)
• Customer touch-points
• Marketing and communications

Toyota Campaign
• Toyota is at it again! This
is the second consecutive
year for Toyota’s 100 Cars
for Good program, a
high-impact, national
program in which Toyota
gives away 100 cars to
100 deserving nonprofits
in the course of 100 days.

Strengthening Brand Example
• Toyota is asking the general public to help them determine
who should receive the cars. For this purpose, they’ve set up a
Toyota USA Facebook page where you can go and vote for
your favorite non-profit.
• Voting begins on May 14th– start spreading the word!
• In addition, Toyota will provide every finalist with a digital
camera, training toolkit and free online advertising credits to
help them create or expand their presence in social media
and other digital platforms.
• More than a PR stunt or transactional philanthropy, 100 Cars
for Good is a great example of a CSR initiative that actually
impacts the community while strengthening the brand at the
same time—a true win-win.

• Align With the Brand– While Toyota also donates significant amounts of
money to various causes, this program is directly aligned with one of the
company’s strongest assets—great cars, which evokes a more powerful
public impression. While we would like to hear that a company made 100
donations, there is something tangible and story-worthy about a best-in-
class car manufacturer letting a 100 deserving nonprofits pick whatever
car best suits their needs, and helping that nonprofit to tell its story. You
can’t help but hear the message through this initiative: we make great cars
and we use them to make a better world.
• Collaborate. While online voting is not necessarily original for today’s
consumer, it is somewhat original in the CSR space where companies
typically control who gets their help. Opening up voting to the general
public in this fun and interactive way yields greater awareness and
participation from potential customers.

• If you’re interested to find out more, you can go to the 100
Cars for Good Facebook page. You’ll find an online profile that
includes a video showcasing a winner from last year, The
Community Soup Kitchen of Morristown, NJ, which can now
pick up donations of food that used to be turned away due to
a lack of transportation.
• Keep in mind that voting is scheduled to begin on May 14th.
Each day for 100 days, five organizations will be eligible for
voting. At the end of the day, a car will be awarded. But, don’t
worry, no one is left out in this contest: each of the four
runners-up will receive a $1,000 grant from Toyota.

Functions of CMOs
• Measuring marketing effectiveness
• Driving new product development based on
customer needs
• Gathering meaningful customer insights
• Utilizing new marketing technology

The New Marketing Realities
Network Information technology
Globalization
Deregulation
Privatization
Heightened Competition
Industry Convergence
Consumer resistance
Retail transformation

The New Marketing Realities
Globalization Communicate
Information w/Customer
Collect
Technology Information
Major Societal New Company

Forces Capabilities
Consumer Differentiate
Information Increased Goods
Competition

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 in interacting and placing and
receiving orders
• An ability to compare notes on products and
services
• An amplified voice to influence public opinion
The Four P’s of the Marketing Mix

Marketing Management Tasks
• 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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Ch-1

Marketing Management • 14e

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 2 of 25

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 3 of 25

1. Marketing is a branch within management

State of felt deprivation.

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 5 of 25

Wants backed by purchasing power.

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 7 of 25

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 8 of 25

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 9 of 25

(Demarketing is marketing to reduce demand

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 12 of 25

• Markets are the set of actual and potential buyers

• Set of actual and potential buyers

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 14 of 25

Quality Create, deliver, and

Production Product Selling Marketing Holistic

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 15 of 25

• If a product is made, somebody will want to buy it

• Manager task is to improve

• Production efficiency so that cost is reduced

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 17 of 25

• Organization should therefore devote its

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 18 of 25

• Marketing myopia is focusing only on existing

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 19 of 25

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 20 of 25

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 21 of 25

Production Manufacturing Increase production ‘Buy anything as long as

Product Goods Only quality matters ‘Just look at the quality –

Sales Selling Aggressive sales ‘Not buying? – Can I give

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 23 of 25

• "Integrating business practices and products

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 24 of 25

• ITC's Watershed Development Initiative

• Coca-Cola pumped syrup directly from tank

• Philips energy Bulb

• Corporate community involvement

• Socially responsible business practices

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 27 of 25

Cause Marketing Promoting social issues through efforts ?

Cause related marketing Donating a percentage of revenues to a ?

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 28 of 25

Corporate community Providing in-kind or volunteer ?

Socially responsible Adapting and conducting business ?

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 29 of 25

• Holistic marketing recognizes that

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 31 of 25

Key marketing Concepts Product Development Differentiation Values

Company Marketing Product Specifications Corporate and Product Corporate missions,

Value Propositions Functional Functional and Functional Emotional

Interactions with One to many Functional and Many to Many

• Marketing 1.0 is Marketing which is product centric,

• talks about the features of the products being

• does not care much about what specifically the

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 34 of 25

• Marketing 2.0, is about being customer

• and involves understanding customer needs,

• satisfying them with the product/service

• Connection & Co creation

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 38 of 25

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 39 of 25