1

Defining Marketing for

the
21st Century
 Chapter Questions

 Why is marketing important?

 What is the scope of marketing?
 What are some fundamental marketing
concepts?
 How has marketing management changed?
 What are the tasks necessary for successful
marketing management?
 What Is Marketing?

 Marketing deals with identifying and meeting human

and social needs

 One of the shortest definition of marketing is –

“meeting needs profitably”

 Ex: Tata Sky - Installation free if you are shifting at

new home.
 What Is Marketing?
 The American Marketing Association
defines-
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.

 Value reflects the perceived tangible and intangible

benefits and costs to customers.
 Value can be seen primarily a combination of qsp
 What Is Marketing Management?
 The American Marketing Association
defines-

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.
 Social Definition of Marketing
 The American Marketing Association
defines-

Marketing is a social 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.
 Exchange
 It is the process of obtaining a desired
product from someone by offering
something in return.
 For exchange to exist, five conditions must be satisfied:
1. There are at least two parties.
2. Each party has something that might be of value to the other
party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it is appropriate or desirable to deal with
other party.
 Marketing
 For a managerial definition, marketing has often been
described as “the art of Selling”, but people are
surprised when they hear that the most important
part of marketing is not selling!

 Peter Drucker says – The aim of marketing is to

know and understand the customer so well that the
product or service fits him or her and sell itself.

 Ex: Gillette Mach III razor

What Is Marketed?

 Goods  Persons

 Services  Properties

 Events  Organizations

 Experiences  Information

 Places  Ideas
Figure 1.1 Structure of Flows in
Modern Exchange Economy
Figure 1.2
A Simple Marketing System
 Key Customer Markets
 Consumer markets
 Business markets
 Global markets
 Nonprofit/Government markets
 Market place, market space and meta
markets
Rural Markets in South Asia
 Rural markets offer immense
potential for market expansion and
growth:
 Consumption in rural markets predicted
to grow at in the next two decades.
 Size and growth rate for many products
and product categories are very
attractive.
 48 percent of the rural population is
below 20 years of age.
Core Concepts
 Needs, wants,  Value and
and demands satisfaction
 Target markets,  Marketing
positioning, channels
segmentation  Supply chain
 Offerings and  Competition
brands  Marketing
environment
 Core Concepts
Needs:
 Needs are the basic requirements.
 People need food, air, water, clothing, shelter
to survive.
 People also have strong needs for recreation,
education, and entertainment.
Wants:
 These needs become wants when they are
directed to some specific objects that might
satisfy the need.
 Core Concepts
Ex:
 To make presentations and prepare project reports I
need laptop (Need).
 To make presentations and prepare project reports I
need laptop of Apple (want).
 Understanding consumer needs and wants is not
always simple.
 Some consumers have needs of which they are not
fully conscious, or they cannot articulate these needs,
or they use word require interpretations.
 Core Concepts
Ex: Consider the consumer who says he wants an “inexpensive
car”. The marketer must probe further. We can distinguish
among five types of needs:
1. Stated Needs: The consumer wants an inexpensive car
2. Real Needs: The consumer wants a car whose operating cost is
low, not initial price.
3. Unstated Needs: The consumer expects good service from dealer.
4. Delight Needs: The consumer would like the dealer to include an
additional accessories of car.
5. Secret Needs: The consumer wants to be by friend as a savvy
consumer.
 “Make and Sell” is replaced by “Sense and Respond”
 Core Concepts
Segmentation:
 Segmentation is the process of dividing market into
various homogeneous groups which are having similar
needs and wants.
Targeting:
 The marketer then decides which segments present
the greatest opportunity-which are its target markets.
Positioning:
 Positioning is the act of designing company’s offering
and image to occupy a distinctive place in the minds
the target market.
 Core Concepts
Offerings
 Companies addresses needs by putting a value
propositions, set of benefits they offer to satisfy their
needs in form of products or services or
combinations of both.
Brand:
 A brand is an offering from known source.
 A brand name carries many associations in the minds
of people. Those associations make up the brand
image. All companies strives to build brand strength –
that is strong, favorable, and unique brand image.
 Core Concepts
Value
 Value reflects perceived tangible and intangible
benefits and costs to customers.
 Value can be seen primarily as a combination of
quality, service, and price (qsp)
Satisfaction
 Satisfaction reflects a person’s comparative judgments
resulting from a product’s perceived performance in
relation to his or her expectations.
 Core Concepts
Marketing Channels
 Marketing channels deliver and receive message from
target buyers, and include newspapers, magazines, radio,
televisions, mail, telephones, billboards, posters, and the
Internet.
Distribution Channels
 The marketer uses this channel to display, sell or deliver
the physical product or service to the buyer or user.
Service Channel
 It is used to carry out transaction with potential buyers. It
includes warehouses, transportation companies, bank and
insurance firms that facilitate the transactions.
 Core Concepts
Supply Chain
 Supply chain describes a longer channel stretching from
raw materials to components to final products that are
carried to final buyers.

Competition
 It includes all actual and potential rival offerings and
substitutes that a buyer might consider.
Marketing Environment

Demographic Economic

Socio-
Political-
cultural
legal

Technological Natural
 COMPANY ORIENTATIONS
TOWARD THE MARKETPLACE
 Production concept – products that are
available and inexpensive
 Product concept – quality, performance,
or innovative features
 Selling concept
 Marketing concept – “Sense & Respond”
 Societal marketing concept
 Holistic marketing concept
 COMPANY ORIENTATIONS
TOWARD THE MARKETPLACE
 Societal marketing concept

The Societal marketing the organization’s task is to determine

concept holds that the needs, wants, and interests

of target markets

and to deliver desired satisfactions more

effectively and efficiently than competitors

in a way that preserves or enhances the

consumer’s and the society’s well being.
The holistic marketing concept

 It recognizes “Everything matters” with

marketing – and that a broad, integrated
perspective is often necessary.
Figure 1.3 Holistic Marketing
1. Relationship Marketing

Customers

Employees

Marketing Partners

Financial Community

The ultimate outcome of relationship marketing is a unique

company asset called a marketing network
 2. Integrated Marketing

Integrated marketing occurs when the

marketer devises marketing activities and
assembles marketing programs to create,
communicate, and deliver value for consumers
such that –

“The whole is greater than the sum of its

parts.”
2. Integrated Marketing

Key themes:
1. Many different marketing activities can
create, communicate, and deliver
value, and
2. Marketers should design and
implement any one marketing activity
with all other activities in mind.
 3. Internal Marketing
 Marketing is no longer the responsibility of a
single department.

 when engineering designs the right products,

finance furnishes the right amount of funding,
purchasing buys the right materials,
production makes the right products in the
right time horizon, and accounting measures
profitability in the right ways.
 3. Internal Marketing
 Such interdepartmental harmony can only truly
combine, however, when management clearly
communicates a vision of how the company’s
marketing orientation and philosophy serve
customers.

 Internal marketing is the task of hiring,

training, and motivating able employees who
want to serve customers well.
4. Performance Marketing

Financial Social Responsibility

Accountability Marketing
 4. Performance Marketing
 Top marketers are increasingly going beyond sales
revenue to examine the marketing scorecard and
interpret what is happening to market share,
customer loss rate, customer satisfaction, product
quality, and other measures.

 They are also considering the legal, ethical, social,

and environmental effects of marketing activities
and programs.
Figure 1.4 The Marketing Mix
The New Four Ps

People

Processes

Programs

Performance
Marketing Management Tasks
 Develop market strategies and plans
 Assess market opportunities and
customer value
 Choose value
 Design value
 Deliver value
 Communicate value
 Sustain growth and value
For Review
 Why is marketing important?
 What is the scope of marketing?
 What are some fundamental
marketing concepts?
 How has marketing management
changed?
 What are the tasks necessary for
successful marketing management?