Chapter 1 Defining Marketing for  the Twenty­First  Century

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Objectives
 Understand the new economy.  Learn the tasks of marketing.  Become familiar with the major concepts and tools of marketing.  Understand the orientations exhibited by companies.
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Objectives
 Learn how companies and marketers are responding to new challenges.

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The New Economy
 Consumer benefits from the digital revolution include:
1. 2. 3. 4. 5.
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Increased buying power. Greater variety of goods and services. Increased information. Enhanced shopping convenience. Greater opportunities to compare product information with others.
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The New Economy
 Firm benefits from the digital revolution include:
6.New promotional medium. 7.Access to richer research data. 8.Enhanced employee and customer communication. 9.Ability to customize promotions.
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10 Rules of Radical Marketing
1. CEO must own the Marketing function 2. Make sure Marketing Dpt. starts & stays small and flat (keep closer to market) 3. Get face to face with people who matter most-customers “face 2 face,is mantra” 4. Use market Res. Cautiously 5. Hire passionate missionaries
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10 Rules of Radical Marketing
6.Love & respect your customers 7.Create a community of consumers 8.Rethink the marketing mix 9.Celebrate common sense 10.Be true to the brand
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Marketing Tasks
 Marketing practices may pass through three stages:
1. Entrepreneurial marketing 2. Formulated marketing 3. Intrepreneurial marketing

As marketing becomes more formulated, creativity is inhibited.
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Marketing Defined
 Kotler’s social definition:
“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.”
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Marketing Defined
 The AMA managerial definition:
“Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.”
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What Can Be Marketed?
1. Goods 2. Services 4. Events 5. Persons
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6.Places 7.Properties 9.Information 10.Ideas
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3. Experiences 8.Organizations

Core Marketing Concepts
 Target markets and market segmentation  Marketplace, marketspace, metamarkets  Marketers & prospects  Needs, wants, demands  Product offering and brand  Value and satisfaction
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 Exchange and transactions  Relationship and networks  Marketing channels  Supply chain  Competition  Marketing environment  Marketing program
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Core Marketing Concepts
 Target markets & segmentation
– Differences in needs, behavior, demographics or psychographics are used to identify segments. – The segment served by the firm is called the target market. – The market offering is customized to the needs of the target market.
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Core Marketing Concepts
 Shopping can take place in a:
– Marketplace (physical entity, Lowe’s) – Marketspace (virtual entity, Amazon)

 Metamarkets refer to complementary goods and services that are related in the minds of consumers.  Marketers seek responses from prospects.
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Core Marketing Concepts
 Needs describe basic human requirements such as food, air, water, clothing, shelter, recreation, education, and entertainment.  Needs become wants when they are directed to specific objects that might satisfy the need. (Fast food)  Demands are wants for specific products backed by an ability to pay.
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Core Marketing Concepts
 A Product is any offering that can satisfy a need or want, while a brand is a specific offering from a known source.  When offerings deliver value and satisfaction to the buyer, they are successful.
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Enhancing Value
 Marketers can enhance the value of an offering to the customer by:
– Raising benefits. – Reducing costs. – Raising benefits while lowering costs. – Raising benefits by more than the increase in costs. – Lowering benefits by less than the reduction in costs.
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Core Marketing Concepts
 Exchange involves obtaining a desired product from someone by offering something in return. Five conditions must be satisfied for exchange to occur.  Transaction involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.

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Core Marketing Concepts
 Relationship marketing aims to build long-term mutually satisfying relations with key parties, which ultimately results in marketing network between the company and its supporting stakeholders.

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Core Marketing Concepts
Marketing Channels
 Communication channels  Distribution channels  Service channels
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 Deliver messages to and receive messages from target buyers.  Includes traditional media, non-verbal communication, and store atmospherics.

Core Marketing Concepts
Marketing Channels
 Communication channels  Distribution channels  Service channels
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 Display or deliver the physical products or services to the buyer / user.

Core Marketing Concepts
Marketing Channels
 Communication channels  Distribution channels  Service channels
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 Carry out transactions with potential buyers by facilitating the transaction.

Core Marketing Concepts
 A supply chain stretches from raw materials to components to final products that are carried to final buyers.  Each company captures only a certain percentage of the total value generated by the supply chain.
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Core Marketing Concepts
 Four levels of competition can be distinguished by the level of product substitutability: – Brand competition – Industry competition – Form competition – Generic competition
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Core Marketing Concepts
 The following forces in the broad environment have a major impact on the task environment:
– Demographics – Economics – Natural environment – Technological environment – Political-legal environment – Social-cultural environment
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Core Marketing Concepts
 The marketing program is developed to achieve the company’s objectives. Marketing mix decisions include:
– Product: provides customer solution. – Price: represents the customer’s cost. – Place: customer convenience is key. – Promotion: communicates with customer.

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Company Orientations
 The orientation or philosophy of the firm typically guides marketing efforts. Several competing orientations exist:
– Production concept – Product concept – Selling concept – Marketing concept – Customer concept – Societal marketing concept
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The Marketing Concept
 Achieving organizational goals requires that company be more effective than competitors in creating, delivering, and communicating customer value.  Four pillars of the marketing concept:
– Target market – Customer needs – Integrated marketing – Profitability
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Changes in the Marketplace
 Globalization, technological advances, and deregulation have created many challenges:
– Customers – Brand manufacturers – Store-based retailers

 Both companies and marketers have been forced to respond and adjust.
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