7/1/2023

1. Defining Marketing for the New Realities

Learning Objectives
1.1 Define the scope of marketing.

1.2 Describe the new marketing realities.

1.3 Explain the role of marketing in the organization.

1.4 Illustrate how to organize and manage a modern marketing

department.

1.5 Explain how to build a customer-centric organization.

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The Scope of Marketing

A M A’s formal definition: Marketing

is the activity, set of institutions, and
processes for creating,
Marketing is about identifying and
communicating, delivering, and
meeting human and social needs
exchanging offerings that have value
for customers, clients, partners, and
society at large

Marketing
Management
• The art and science of
choosing target markets
and getting, keeping, and
growing customers
through creating,
delivering, and
communicating superior
customer value

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• Goods
What is • Services
Marketed? • Events
(1 of 2) • Experiences
• Persons

What is Marketed?

• Places
• Properties
• Organizations
• Information
• Ideas

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Who Markets?

• A marketer is someone
who seeks a response—
attention, a purchase, a
vote, a donation—from
another party

Five Basic Markets

• Resource markets
• Manufacturer markets
• Consumer markets
• Intermediary goods markets
• Government markets

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Structure of Goods, Services, and Money Flows in a

Modern Exchange Economy

The Market Exchange

Marketers view industry as a group of sellers and use
the term market to describe customer groups

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A Simple Marketing System

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The New Marketing Realities

• The market forces that shape the relationships among the
different market entities
• The market outcomes that stem from the interplay of these
forces
• The emergence of holistic marketing as an essential
approach to succeeding in the rapidly evolving market

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The New Marketing Realities

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Major Market Forces

• Technology
• Globalization
• Physical environment
• Social responsibility

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A Dramatically Changed Marketplace

• New consumer capabilities

• Can use online resources
as a powerful information
and purchasing aid
• Can search, communicate,
and purchase on the move
• Can tap into social media
to share opinions and
express loyalty

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A Dramatically Changed
Marketplace

• New consumer capabilities

• Can actively interact with
companies
• Can reject marketing they find
inappropriate or annoying
• Can extract more value from what
they already own

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• New company capabilities

• Can use the internet as a powerful information and
sales channel, including for individually
A Dramatically differentiated goods
Changed • Can collect fuller and richer information about
markets, customers, prospects, and competitors
Marketplace • Can reach customers quickly and efficiently via social
media and mobile marketing, sending targeted ads,
coupons, and information

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A Dramatically Changed Marketplace

• New company capabilities

• Can improve purchasing, recruiting, training, and internal
and external communications
• Can improve cost efficiency

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A Dramatically Changed Marketplace

• New competitive environment

• Deregulation
• Privatization
• Retail transformation
• Disintermediation
• Private labels
• Mega-brands

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What is Holistic Marketing?

• An integrated approach to managing strategy and tactics
• Relationship marketing
• Integrated marketing
• Internal marketing
• Performance marketing

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The Concept
of Holistic
Marketing

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Relationship Marketing

• Relationship marketing
aims to build mutually
satisfying long-term
relationships with key
constituents in order to
earn and retain their
business

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Relationship Marketing
• Customers
• Employees
• Marketing partners
• Financial community

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Relationship Marketing

• The ultimate outcome of

relationship marketing is a unique
company asset called a marketing
network, which consists of the
company and its supporting
stakeholders with whom it has
built mutually profitable business
relationships

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• Devise marketing activities and

programs that create, communicate,
Integrated
and deliver value such that “the
Marketing whole is greater than the sum of its
parts.”

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Internal Marketing
The task of hiring, training, and
motivating able employees who
want to serve customers well

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Performance Marketing
• Financial accountability
• Environmental impact
• Social impact

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Defining the Role of Marketing in the Organization

• Production concept
• Product concept
• Selling concept
• Marketing concept
• Market-value concept

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Product-Oriented versus Market-Value-Oriented

Definitions of a Business

Company Product Definition Market-Value Definition

Union Pacific Railroad We run a railroad. We move people and goods.

Xerox We make copying We help improve office

equipment. productivity.

Hess Corporation We sell gasoline. We supply energy.

Paramount Pictures We make movies. We market entertainment.

Encyclopaedia Britannica We sell encyclopaedias We distribute information.

online.

Carrier We make air conditioners We provide climate control

and furnaces. in the home.

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Organizing the Marketing Department

• Functional organization
• Geographic organization
• Product or brand organization
• Market organization
• Matrix organization

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Functional Organization

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Figure 1.6 The Product Manager’s Interactions

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Managing the Marketing Department

• The role of the CEO and the CMO
• Relationships with other departments

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The Role of the CEO

• Convince senior management of the importance of being
customer focused
• Hire strong marketing talent
• Facilitate the creation of strong in-house marketing training
programs
• Appoint a chief marketing officer

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The Role of the CMO

• Act as the visionary for the future of the company
• Build adaptive marketing capabilities
• Win the war for marketing talent
• Tighten the alignment with sales
• Take accountability for returns on marketing spending
• Infuse a customer perspective in business decisions affecting
any customer touch point

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Relationships with Other Departments

• Marketers must work closely with:
• customer insights and data analytics teams
• different communication agencies
• channel partners

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Building a Customer-Oriented
Organization
• Create long-term customer value
• Requires managers at every level
to be personally engaged in
understanding, meeting, and
serving customers
• Customers expect companies to
listen and respond to them

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Traditional Organization versus Modern Customer-Oriented Company

Organization

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Becoming a Market-Driven
Company
• Develop a company-wide passion for customers
• Organize around customer segments instead of products
• Understand customers through qualitative and quantitative
research

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TCharacteristics of Customer-Centric Organizations

Low Customer-Centricity High Customer-Centricity

Product driven Market driven
Mass market focused Customer focused
Process oriented Outcome oriented
Reacting to competitors Making competitors irrelevant
Price driven Value driven
Hierarchical organization Teamwork

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Discussion Questions

• For many Starbucks’ customers, buying a favorite drink now

involves a few clicks on the Starbucks app and a pick-up at
the counter.
• How is technology changing the way Starbucks interacts
with its customers?
• What benefits does this offer?
• What challenges does it present?

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Discussion Questions

• Amazon’s success at anticipating customer needs and

fulfilling them is evidenced by its record-breaking profits.
• How does Amazon create value for its customers?
• What are the tradeoffs between the convenience Amazon
offers and the sustainability issues its business model
creates?

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