The Value of Marketing

 financial success often depends on marketing ability.

 Marketing helps introduce new or enhanced products that ease or enrich people’s lives.

What Is Marketing?

 Marketing is about identifying and meeting human and social needs

 shortest definitions of marketing is “meeting needs profitably.”
 Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large
 Marketing management as 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?

Marketers market 10 main types of entities:

- goods, services, events, experiences, persons, places, properties, organizations, information, and ideas.

What Is a Market?
 “market” was a physical place where buyers and sellers gathered to buy and sell goods
 Four key customer markets are
o consumer
o business
o global
o nonprofit.
 how sellers and buyers are connected by four flows.
o Sellers send goods and services and communications such as ads and direct mail to the market
o in return they receive money and information such as customer attitudes and sales data.

Core Marketing Concept

 Needs, Wants, and Demands

o Needs are the basic human requirements
o These needs become Wants when directed to specific objects that might satisfy the need
o Demands are wants for specific products backed by an ability to pay.
 Marketers do not create needs: Needs pre-exist marketers.
 We can distinguish five types of needs:
o 1. Stated needs (The customer wants an inexpensive car.)
o 2. Real needs (The customer wants a car whose operating cost, not initial price, is low.)
o 3. Unstated needs (The customer expects good service from the dealer.)
o 4. Delight needs (The customer would like the dealer to include an onboard GPS system.)
o 5. Secret needs (The customer wants friends to see him or her as a savvy consumer.
 Value proposition: a set of benefits that satisfy those needs
 Offerings: a combination of products, services, information, and experiences
 Brands: an offering from a known source
 Value: a combination of quality, service, and price
 Satisfaction: a person’s judgment of a product’s perceived performance in relationship to expectations
The New Marketing Realities

 Three transformative forces:

o technology,
o globalization,
o social responsibility
 These three forces have dramatically changed the marketplace and provided both consumers and companies with
new capabilities
 New Consumer Capabilities:
o Can use the Internet as a powerful information and purchasing aid
o Can search, communicate, and purchase on the move
o Can tap into social media to share opinions and express loyalty
o Can actively interact with companies
o Can reject marketing they find inappropriate
 New Company Capabilities:
o Can use the Internet as a powerful information and sales channel, including for individually differentiated
goods
o Can collect fuller and richer information about markets, customers, prospects, and competitors
o Can reach customers quickly and efficiently via social media and mobile marketing, sending targeted ads,
coupons, and information
o Can improve purchasing, recruiting, training, and internal and external communications
o Can improve cost efficiency

The Holistic Marketing Concept

 The holistic marketing concept is based on the development, design, and implementation of marketing programs,
processes, and activities that recognize their breadth and interdependencies.
 four broad components characterizing holistic marketing:
o Relationship marketing
o Integrated marketing
o Internal marketing
o Performance marketing.
 Relationship Marketing
o Relationship marketing aims to build mutually satisfying long term relationships with key constituents to
earn and retain their business.
o Four key constituents for relationship marketing are
 Customers
 Employees
 Marketing partners (channels, suppliers, distributors, dealers, agencies)
 Members of the financial community (shareholders, investors, analysts).
o The ultimate outcome of relationship marketing is a unique company asset called a marketing network,
consisting of the company and its supporting stakeholders—customers, employees, suppliers, distributors,
retailers, and others—with whom it has built mutually profitable business relationships
 Integrated Marketing
o Integrated marketing occurs when the marketer devises activities and programs to create, communicate, and
deliver value for consumer such that “the whole is greater than the sum of its parts.”
o Two key themes are that
 Many different marketing activities can create, communicate, and deliver value
 Marketers should design and implement each marketing activity with all other activities in mind.
  Internal Marketing
o Internal marketing, an element of holistic marketing, is the task of hiring, training, and motivating able
employees who want to serve customers well.
 Performance Marketing
o Performance marketing requires understanding the financial and nonfinancial returns to business and society
from marketing activities and programs.
o They are also considering the legal, ethical, social, and environmental effects of marketing activities and
programs

Updating The Four Ps

 McCarthy classified various marketing activities into marketing-mix tools of four broad kinds, which he called the
four Ps of marketing:
o Product
o Price
o Place
o Promotion
 Modern Marketing Management Four Ps
o People
o Processes
o Programs
o Performance
 People:
o reflects internal marketing and the fact that employees are critical to marketing success
o Marketing will only be as good as the people inside the organization.
o Marketers must view consumers as people to understand their lives more broadly and not just as shoppers
who consume products and services
 Processes
o All the creativity, discipline, and structure brought to marketing management.
 Programs
o all the firm’s consumer-directed activities, encompassing the old four Ps as well as a range of other
marketing activities that might not fit as neatly into the old view of marketing.
o Regardless of whether they are online or offline, traditional, or nontraditional, these activities must be
integrated such that their whole is greater than the sum of their parts and they accomplish multiple
objectives for the firm.
 Performance
o reflects, as in holistic marketing, the range of possible outcome measures that have financial and
nonfinancial implications (profitability as well as brand and customer equity) and implications beyond the
company itself (social responsibility, legal, ethical, and community related).

MARKETING MANAGEMENT TASKS

 Developing and implementing marketing strategies and plans.

o The first task is to identify and plan for the organization’s potential long-run opportunities, given its market
experience and core competencies.
 Capturing marketing insights.
o Each organization should closely monitor its marketing environment, continually assess market potential, and
forecast demand.
 Connecting with customers.
o Management must decide how to best create value for the firm’s chosen target markets and how to develop
strong, profitable, long-term relationships with customer
  Building strong brands.
o The organization must divide the market into major market segments, evaluate each one, and target those it
can best serve
o it needs to craft a brand positioning and plan to compete effectively
o it should understand how customers perceive its brands and plan for growth
 Creating value.
o At the heart of the marketing program is the product which includes the product quality, design, features,
and packaging,
o how firms can design and market services,
o examines critical marketing decisions related to pricing.
 Delivering value.
o Based on its products and services, how can the firm deliver value to its target market
 Communicating value.
o Each marketer needs to communicate to the target market the value embodied by its offerings. This requires
an integrated marketing program that maximizes the individual and collective contribution of all
communication activities
 Managing the marketing organization for long term success.
o The marketing strategy should consider changing global opportunities and challenges as well as social
responsibility and ethics.

External Environment (Opportunity and Threat) Analysis

A marketing opportunity

 is an area of buyer need and interest that a company has a high probability of profitably satisfying.
 There are three main sources of market opportunities.
o The first is to offer something that is in short supply.
o The second is to supply an existing product or service in a new or superior way
 The problem detection method asks consumers for their suggestions,
 the ideal method has them imagine an ideal version of the product or service
 the consumption chain method asks them to chart their steps in acquiring, using, and disposing of a
product
o This last can often lead to a totally new product or service, which is the third main source of market
opportunities.
 Marketers need to be good at spotting opportunities created from:
o Converging industry trends.
o Making a buying process more convenient or efficient.
o Meeting the need for information and advice.
o Customizing an offering.
o Introducing a new capability
o Delivering products or services faster.
o Offering a much lower price.

An environmental threat

 is a challenge posed by an unfavorable trend or development that, in the absence of defensive marketing action,
would lead to lower sales or profit.
 The company needs contingency plans to deal with major threats that have a high probability of occurrence and can
seriously hurt the company.
Target Marketing
Customer Segmentation Process:

 Understand Customer Needs

 Group Customers by need Groups
 Identify most attractive Segments
 Develop value proposition
 Develop Go-To-Market Strategies

Bases for Segmenting Consumer Markets

 A market segment consists of a group of customers who share a similar set of needs and wants.
 The marketer’s task is to identify the appropriate number and nature of market segments and decide which ones to
target
 The major segmentation variable:
o Geographic
o Demographic
o Psychographic
o Behavioral
 Geographic Segmentation:
o divides the market into geographical units such as nations, states, regions, counties, cities, or neighborhoods
o In a growing trend called grassroots marketing, marketers concentrate on making such activities as
personally relevant to individual customers as possible.
 Demographic Segmentation
o demographic variables such as age, family size, family life cycle, gender, income, occupation, education,
religion, race, generation, nationality, and social class
o Popular Because
 They’re often associated with consumer needs and wants
 easy to measure
o Life stage defines a person’s major concern, such as going through a divorce, going into a second marriage,
o The four main U.S. generation cohorts, from youngest to oldest,
 Millennials (Gen Y) -. Born from 1977 through 1994,
 Gen X - Born from 1964 through 1978,
 Baby Boomers - Born from 1946 through 1964,
 the Silent Generation - Born from 1925 through 1945
o Multicultural marketing is an approach recognizing that different ethnic and cultural segments have
sufficiently different needs and wants to require targeted marketing activities and that a mass market
approach is not refined enough for the diversity of the marketplace.
 Psychographic Segmentation
o the science of using psychology and demographics to better understand consumers.
o buyers are divided into groups based on psychological/ personality traits, lifestyle, or values
o One of the most popular commercially available classification systems based on psychographic
measurements is Strategic Business Insight’s (SBI) VALS™ framework
o The main dimensions of the VALS segmentation framework are consumer motivation (the horizontal
dimension) and consumer resources (the vertical dimension).
o Consumers are inspired by one of three primary motivations: ideals, achievement, and self-expression
 Behavioral Segmentation
o marketers divide buyers into groups based on their knowledge of, attitude toward, use of, or response to a
product.
o Behavior variables can include needs or benefits, decision roles, and user and usage.
 o Not everyone who buys a product has the same needs or wants the same benefits from it. Needs-based or
benefit-based segmentation identifies distinct market segments with clear marketing implications
o People can play five roles in a buying decision: Initiator, Influencer, Decider, Buyer, and User.
o variables related to users or their usage—occasions, user status, usage rate, buyer-readiness stage, and
loyalty status

Effective Segmentation Criteria

 Measurable. The size, purchasing power, and characteristics of the segments can be measured. •
 Substantial. The segments are large and profitable enough to serve. A segment should be the largest possible
homogeneous group worth going after with a tailored marketing program
 Accessible. The segments can be effectively reached and served.
 Differentiable. The segments are conceptually distinguishable and respond differently to different marketing-mix
elements and programs. If married and single women respond similarly to a sale on perfume, they do not constitute
separate segments.
 Actionable. Effective programs can be formulated for attracting and serving the segments

Extra Pointers

 Why is Analytics used: To pinpoint and reach out to the maximum number of customers at the least cost

 What is strategy (Marketing Strategy): Reaching the goal supreme. What could be the goal for a marketing firm?
More sales, more revenue, value creation, brand value. How best can we deliver and capture the value as compared
to the competitor at a given cost. End goal would be how best you can reach out to your customers in terms of
customer satisfaction & the value delivery preposition and achieve a reasonable return as a result.

 Marketing Strategy is about aligning your internal marketing capabilities to address the external opportunities.
Strategy boils down to how well I can deliver value as compared to my competitor, so that I can achieve a unique
position in the market as in each cost. Syncing the internal capacity with the external opportunities.

 Organizations cannot survive in market if they do not CREATE a reason/s for consumers to buy their product/s.

 Why do you have budgets: It is a representation of the resources you have and can master. It is a statement of your
internal capabilities.

 All marketing strategies are geared to points of parity and points of differences. You cannot create points of
difference without achieving points of parity.