DEFINING MARKETING

FOR THE TWENTY-

SECOND CENTURY
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.
 Learn how companies and marketers are responding to
new challenges.
BASIS OF MARKETING
 Needs describe basic human requirements such as
food, air, water, clothing, shelter, recreation,
education, and entertainment .i.e. I am thirsty.
 Needs become wants when they are directed to
specific objects that might satisfy the need. (Fast
food) i.e. I want a Coca-Cola
 Desires are wants for specific products – affordable
to aspirational
 Demand are wants for specific products backed by
an ability & willingness to pay i.e. Do I have money
to buy a Mercedes..
EMERGING MARKETING
ENVIRONMENT

 Increased competition

 Proliferation of Brands & Product categories

 Increased choice to Consumers
 Transformation from a Seller’s Market to a Buyer’s
Market
Product Focus –Consumer Focus

Markets move from selling products to selling

solutions that fit consumers need patterns
Marketers are bridge-builders

 On one side there is the

company or
organization
 Marketers are bridge-builders

 On the other there are

consumers
Marketers are bridge-builders

 The company or
organization has
resources
– Capital resources
– Human resources
– Technical resources
– Physical resources
– Consumer franchise
 Marketers are bridge-builders

 The consumers have

needs
– Physical
– Safety
– Affiliation
– Prestige
– Fulfillment
Marketers are bridge-builders

 Marketers build a bridge between the company’s

resources and consumers’ needs
Marketers are bridge-builders

 That bridge stands on four pillars

Marketers are bridge-builders

 Name the pillars on which the bridge stands

Promotion
Product

Place
Price
Marketers’ two major decisions

 How to construct the pillars?

– Product
– Place
– Pricing
– Promotion
 Orchestration of the Marketing Mix
THE MARKETING MIX

 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.

THE MARKETING MIX
 Elements of the Marketing Mix
PRODUCT PRICE

Variety, Quality List price

Design, Features Discount
Sizes, Services Credit & payment
Packaging period

PLACE PROMOTION
Distribution
channels Advertising
Dealer management Sales Promotion
Transportation &
Sales Force
Logistics
Retailing &
Public Relations
Franchising Direct Marketing
Market coverage
Marketers’ two major decisions

1. To where should the bridge be built?

• Demographic
• Geographic
• Psychographic
2. Market Segmentation
• Target Marketing
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.”
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.”
THE NEW ECONOMY
 Consumer benefits from the digital revolution include:
 Increased buying power.
 Greater variety of goods and services.
 Increased information.
 Enhanced shopping convenience.
 Greater opportunities to compare product information with
others.
THE NEW ECONOMY
 Firm benefits from the digital revolution include:
 New promotional medium.
 Access to richer research data.
 Enhanced employee and customer communication.
 Ability to customize promotions.
WHAT CAN BE MARKETED?

 Goods  Places
 Services  Properties

 Experiences  Organizations

 Events  Information

 Persons  Ideas
 Simple Marketing System

Communication

Goods/services
Industry Market
(a collection (a collection
of sellers) Money of Buyers)

Information
Difference between Selling & Marketing
EVOLUTION OF MARKETING

Era of the Production driven What is made will

1950’s be sold
1970’s to mid Sales driven Somehow sell
1980’s

Mid 1980’s to Customer Make what will

late 1990’s Orientation satisfy customer
needs & wants
Currently Customization Focus on the
Individual as a
customer
COMPANY ORIENTATIONS
 The orientation or philosophy of the firm typically
guides marketing efforts.

 Several competing orientations exist:

1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Customer concept
6. Societal marketing concept
THE PRODUCTION CONCEPT
 The Production Concept holds that consumers will prefer
products that are widely available and inexpensive

 Usually applicable in situations where demand outstrips

supply

 Focus on high production and low costs – factories and

their production was important.
THE PRODUCT CONCEPT

 Consumers will choose those products that offer the best

in terms of quality, performance and /or innovative
features.

 Indicates an obsession with the product

 Believed that a good product will sell automatically

 Focus on product innovation, research

THE SELLING CONCEPT

 Consumers & businesses, if left alone, will ordinarily not

buy enough of the organization's products.

 The organization, must therefore, undertake aggressive

selling and promotion.

 Companies aim to sell what they make rather than make

what they sell. Usually adopted by companies having
excess capacity.

 Focus on sales and distribution & channel management

THE MARKETING
CONCEPT
 The key to achieving organizational goals depends on
determining the needs & wants of target markets

 Delivering the desired satisfactions more effectively and

efficiently than competitors do.

 Focus of marketers shifts to the customer –

 begins with the customer -determining needs & wants

 ends with the customer -ensuring continued customer
satisfaction
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
COMPANY ORIENTATIONS TOWARDS
THE MARKETPLACE

Consumers prefer products that are

Production Concept widely available and inexpensive

Consumers favor products that

Product Concept offer the most quality, performance,
or innovative features

Consumers will buy products only if

Selling Concept the company aggressively
promotes/sells these products

Focuses on needs/ wants of target

Marketing Concept markets & delivering value
better than competitors
MARKETING IN THE CURRENT
SCENARIO

Production

Marketing

Customer
re Hum e
so a c
ur n an
ce
s Fin

•Customer as the controlling function

•Marketing as the integrative function
THE CUSTOMER CONCEPT
 Relationship marketing - building long term profitable
relationships with customers.

 Customer lifetime value- making profits by owning the

customer for a lifetime.

 Data Mining & Analytics - developing databases of

customers, their buying preferences, & using it to design
products for specific segments.

 Channel as partners- from intermediaries or a bridge to

partners in the quest of delivering superior value to
customers.
GOOD MARKETING IS NO ACCIDENT

The roaring success

of four-wheeler Tata
Ace, in a market
earlier dominated by
three-wheeler load
carriers, was due to a
deep understanding
of the market needs
and customer
requirements.
CORE MARKETING CONCEPTS
 Target markets and market
segmentation
 Marketplace, market-space,
meta-markets
 Marketers & prospects
 Needs, wants, demands
 Product offering and brand
 Value and satisfaction
 Exchange and transactions
 Relationship and networks
 Marketing channels
 Supply chain
 Competition
 Marketing environment
 Marketing program
CORE MARKETING CONCEPTS
 Target markets & segmentation

 Differencesin 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.
CORE MARKETING CONCEPTS

 Shopping can take place in a:

 Marketplace -physical entity – Big Bazar
 Market-space - virtual entity – Amazon

 Marketers seek responses from prospects.

 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.
CORE MARKETING CONCEPTS
 Relationshipmarketing aims to build long-
term mutually satisfying relations with key
parties, which ultimately results in marketing
network between the company and its
supporting stakeholders.
WHAT IS VALUE?
COMPONENTS OF CUSTOMER VALUE
Functional Value: Physical / Tangible
 Ability of product to meet a given need -reliability,
durability, usefulness etc.

 Economic Value: Price Advantage, Superior profit

feasibility

 Convenience Value: Availability

 Aesthetic Value: Taste, look, feel, sound, smell.

 Service Value: Promptness, quality of service, good

Customer relations. “Best solutions to customer
problems”
COMPONENTS OF CUSTOMER VALUE
Psychological

 Social Value: Social acceptance, social desirability

 Prestige or status Value: Possession contributes to user

status/esteem.

 Sentiment Value: Product capacity to stimulate some

sentiment/memories/past occasions.
COMPONENTS OF CUSTOMER COST

 Components of Customer Cost: Cost of acquiring,

running and maintenance costs

 Other Costs: Time, energy, efforts, after sales, location,

availability of spares etc.
CORE MARKETING CONCEPTS

Marketing Channels  Deliver messages to and

receive messages from
 Communication channels target buyers.
 Distribution channels  Includes traditional media,

 Service channels non-verbal

communication, and store
atmospherics.
CORE MARKETING CONCEPTS

Marketing Channels  Display or deliver the

physical products or
 Communication channels services to the buyer /
 Distribution channels user.
 Service channels
CORE MARKETING CONCEPTS

Marketing Channels  Carry out transactions with

potential buyers by
 Communication channels facilitating the transaction.
 Distribution channels

 Service channels
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.
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
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.