What is Marketing?

Simple Definition: Marketing is managing

profitable customer relationships.
Goals:
Attract new customers by promising superior value.
Keep and grow current customers by delivering
satisfaction.
Marketing Defined
A social and managerial process by which
individuals and groups obtain what they need
and want through creating, offering and
exchanging products and value with others.
• Needs, Wants, & Demands
• Need: State of felt deprivation including
physical, social, and individual needs.
• Physical:
• Food, clothing, shelter, safety
• Social:
• Belonging, affection
• Individual:
• Learning, knowledge, self-expression
Maslow’s
Hierarchy
of Needs
Needs, Wants, & Demands
• Wants: Form that a human need takes, as
shaped by culture and individual personality.
• Needs/Wants + Buying Power + willingness to buy = Demand
•
• Demand
• Need / Want Fulfillment
• Needs and Wants Fulfilled through a
• Marketing Offer :
• Some combination of products, services,
information, or experiences offered to a market
to satisfy a need or want.
 Five types of need
• Stated need: the customer wants an expensive car
• Real need: the customer wants a car whose operating cost not its
initial price is low.
• Unstated need: the customer expects good service from the
dealer
• Delight need: the customer buys the car and receives a
complementary road rule guide and atlas.
• Secret needs: the customer wants to be seen by friends as a
value-oriented savvy customer.
• Need / Want Satisfiers
• Products:
• Persons
• Places
• Organizations
• Information
• Ideas
• Experience
• Event
• Property
• Services
• Activity or benefit offered for sale that is
essentially intangible and does not result in the
ownership of anything.
What is Marketed?
Goods
Goods
Services
Services
Events
Events &
& Experiences
Experiences
Persons
Persons
Places
Places &
& Properties
Properties
Organizations
Organizations
Information
Information
Ideas
Ideas
 Ten entities of marketing:
Marketing people are involved in marketing ten types of entities: goods, services, events,
experiences, persons, places, properties, organizations, information, and ideas.
A) Goods
Physical goods constitute the bulk of production and marketing efforts.
B) Services
A growing portion of business activities are focused on the production of services. The
U.S. economy today consists of a 70–30 services to goods mix.
C) Events
Marketers promote time-based events such as trade shows, artistic performances, and
the Olympics.
D) Experiences
By orchestrating several services and goods, a firm can create and market experiences
such as Walt Disney World’s Magic Kingdom.
E) Persons
Celebrity marketing is a major business.
 Ten entities (cont’d)
D) Places
Cities, states, regions, and whole nations compete actively to attract tourists, factories,
and new residents.
E) Properties
Are intangible rights of ownership of either real property (real estate) or financial
property (stocks and bonds).
H) Organizations
Actively work to build a strong, favorable, and unique image in the minds of their
target publics.
I) Information
Can be produced and marketed as a product. Schools, universities, and others produce
information and then market it.
J) Ideas
Every market offering includes a basic idea. Products and services are platforms for
delivering some idea or benefit.
 Eight demand states are possible
• NEGATIVE DEMAND – consumer dislike the product
• NONEXISTENT DEMAND – consumer may be uninterested
in the product
• LATENT DEMAND – consumer may share a strong need
that cannot be satisfied by an existing product
• DECLINING DEMAND – consumer buy a product less
frequently
• IRREGULAR DEMAND – consumer purchases vary on
seasonal, monthly, etc.
• FULL DEMAND – consumer are adequately buying all
products
• OVERFULL DEMAND – more consumers would like to buy
the product
• UNWHOLESOME DEMAND – consumer may be attracted
to products that have undesiderable social consequences
• Exchange vs. Transaction
• Exchange:
• Act of obtaining a desired object from someone by
offering something in return.
• Transaction:
• A trade of values between two parties.
• One party gives X to another party and gets Y in
return. Can include cash, credit, or cheque.
• -Exchange is a process and transaction is the end
result of this process
• What is a Market?
• The set of actual and potential buyers of a product.
• These people share a need or want that can be
satisfied through exchange relationships.
 The Concept of Exchange
At
At Least
Least Two
Two
Parties
Parties Something
Something of
of
Value
Value

Ability
Ability to
to
Necessary
NecessaryConditions
Conditions Communicate
Communicate
for
forExchange
Exchange Offer
Offer

Freedom
Freedom toto Accept
Accept
or
or Reject
Reject
Desire
Desire to
to Deal
Deal With
With
Other
Other Party
Party
Types of products
 Types of products
• Business Product: A product used to manufacture other goods or
services, to facilitate an organization’s operations, or to resell to
other consumers.
• Consumer Product: Product bought to satisfy an individual’s
personal wants
1. Convenience Product: A relatively inexpensive item that merits
little shopping effort.
2. Shopping Product : A product that requires comparison shopping,
because it is usually more expensive and found in fewer stores.
3. Specialty Product: A particular item that consumers search
extensively for and are reluctant to accept substitutes.
4. Unsought Product: A product unknown to the potential buyer or a
known product that the buyer does not actively seek.
Marketing Management Philosophies

Societal
SocietalMarketing
MarketingConcept
Concept

Marketing
MarketingConcept
Concept

Selling
SellingConcept
Concept

Product
ProductConcept
Concept

Production
ProductionConcept
Concept
Company Orientations

Production Product

Selling Marketing
• Production concept: The production concept holds that
consumers will favour those products that are widely available
and low in cost. Managers and production oriented
organisations concentrate on achieving high production
efficiency and wide distribution coverage.
• Product Concept: The Product Concept holds that consumers
will favour those products that offer the most quality
performance, or innovative features. Managers in these product
oriented organisations focus on making superior products and
improving them over time.
• Selling Concept: The Selling Concept holds that consumers if
left alone, will ordinarily not buy enough of the organisations
products. The organisations thus must undertake an aggressive
selling and promotion effort.
• Marketing Concept:: The Marketing Concept holds that the key
to achieving organisational goals consists in determining the
needs and wants of target markets and delivering the desired
satisfaction more effectively and efficiently than competitors.
• Holistic Marketing concept
 The holistic marketing concept
• The holistic marketing concept is based on the
development, design, and implementation of marketing
programs, processes, and activities that recognizes their
breadth and interdependancies. Holistic marketing
recognizes that “everything matters” with marketing and
a broad integrated perspective is often necessary.
• Four broad themes characterizing holistic
marketing
– Relationship marketing
– Integrated marketing
– Internal marketing
– Social responsability marketing
Holistic Marketing Dimensions
 Relationship marketing

• Relationship marketing has the aim of building

mutually satisfying long-term relationship with
key parties – customers, suppliers, distributors,
and other marketing partners.
• A marketing network consists of a company and
its supporting stakeholders (customers,
employees, suppliers, distributors, retailers, ad
agencies, university, scientists and others)
Relationship Marketing
– Marketing must not only do customer
relationship management (CRM) but also
partnership relationship management (PRM).
– Four key constituents for marketing are:
» Customers.
» Employees.
» Marketing partners (channel partners).
» Members of the financial community.
» The ultimate outcome of relationship
marketing is the building of a unique
company asset called a marketing network
 Integrated marketing
• The marketer’s task is to devise marketing actvities and
assemble fully integrated marketing programs to create,
communicate and deliver value for consumer.

CompanyOffering mix Communications mix Communication mix

• Products – Advertising to:
• Services – Sales promotion – Distribution
• Prices – Events and experiences channels
– Public relations – Target
consumers
– Direct marketing
– Personal selling
 Internal marketing

• Internal marketing is the task of hiring,

training and motivating able employees
who want to serve customers well.
– Internal mktg To:
• marketing department
• Senior management
• Other departments
 Social responsability marketing
• The cause and effects of marketing clearly extend
beyond the company and the consumer to society as a
whole. Social responsability also requires that marketing
consider the role that they are playing and could play in
terms of social welfare.
• Ethics
• Environment
• Legal
• Community
 Creating utility
• A customer purchases a product because it provides satisfaction. The
want satisfying power of a product is called its utility, and it comes
from many forms. The following types of utility is created in the
process.
• Form utility: Form utility is associated with production-the physical
changes that make a product valuable.
• Place utility: Place utility exists when a product is readily accessible
to potential customers.
• Time utility: Time utility means having a product available when you
want it.
• Information utility: Information utility is created by informing
prospective buyer that a product exists. Unless you know about a
product and where you can get it, the product has no value.
• Possession utility: Possession utility is created when a customer
buys a product-that is ownership is transferred to the buyer.
 Marketing Myopia

• Sellers pay more

attention to the specific
products they offer than
to the benefits and
experiences produced
by the products.
• They focus on the
“wants” and lose sight
of the “needs.”
Marketing and Sales Concepts Contrasted
 Difference between the selling concept and the marketing concept

Selling Marketing
•Starts with seller and •Starts with buyer and focus
preoccupied with needs of on needs of seller
seller •Emphasis on identifying
•Emphasis on salable surplus marketing opportunities
•Seeks to convert product •Seeks to convert Customer
into cash needs into products
•Views Business a Goods •Views Business a Customer
producing process satisfying Process
•Emphasis on existing •Emphasis on innovation &
technology better technology
•Cost determines price •Consumers determine price
 Difference between the selling concept and the marketing concept

Selling Marketing
•Transportation, Storage and •Transportation, Storage and
other distribution functions other distribution functions
viewed as extention of viewed as vital services for
productipon function customer convenience
•No coordination of marketing •Integrated marketing
tasks • customers are the very
•Selling views the customer as purpose of business
last link to business
 How business and marketing are changing
• Changing technology
• Globalization
• Deregulation
• Privatization
• Customer empowerment (i.e. associations, laws,)
• Customization (taylor made product and message)
• HEIGHTENED COMPETITION – domestic and foreign
brands / aweful retailers
• INDUSTRY CONVERGENCE – mergers
• RETAIL TRANSFORMATION – giant retailers and
“category killers”
• DISINTERMEDIATION – Amazon, eBay, E’Trade, etc.
The Four P’s
Marketing Mix Strategy
 Reversing pyramid
• customers
• Front line people

c
•

u
Middle management

cus

s
• Top management

t o
tom

m e rs
ers
• Top management
• Middle
management
• Front line people
• customers
 The concept of a ‘market’

• Economists describe a market as a collection of buyers

and sellers who transact over a particular product or
product class.

• Marketers use the term “market” to cover various groups

of customers. The five basic markets are:
A) Resource Markets
B) Government Markets
C) Manufacturer Markets
D) Intermediary Markets
E) Consumer Markets
A Simple Marketing System
 Key customer markets
A) Consumer Markets
Consumer goods and services such as soft drinks and cosmetics, spend a great deal of
time trying to establish a superior brand image.
B) Business Markets
Companies selling business goods and services often face well-trained and well-
informed professional buyers who are skilled in evaluating competitive offerings.
C) Global Markets
Companies face challenges and decisions regarding which countries to enter, how to
enter the country, how to adapt their products/services to the country, and how to price
their products.
D) Nonprofit and Governmental Markets
Companies selling to these markets have to price carefully because these organizations
have limited purchasing power.
Global markets
 Marketplaces, Marketspaces, and
Metamarkets

• The marketplace is physical,

• The marketspace is digital,
• The metamarket is a cluster of
complementary products and services that
are closely related in the consumer’s mind
but spread across a diverse set of
industries.
Functions of CMOs (chief marketing officers)

• Strengthening the brands

• Measuring marketing effectiveness
• Driving new product development based
on customer needs
• Gathering meaningful customer insights
• Utilizing new marketing technology
Question: Do you think that the responsibility for marketing lie
entirely in the hands of the CMO? What about smaller organizations
that have limited or no marketing specializations? How will marketing
be managed then?
 New Consumer Capabilities
• A substantial increase in buying power
• A greater variety of available goods and services
• A great amount of information about practically
anything
• Greater ease in interacting and placing and
receiving orders
• An ability to compare notes on products and
services
• An amplified voice to influence public opinion
 Marketing Management Tasks

• Develop market strategies and plans

• Capture marketing insights
• Connect with customers
• Build strong brands
• Shape market offerings
• Deliver value
• Communicate value
• Create long-term growth
The International Marketing Task
Foreign environment
(uncontrollable)
Political/legal 1 Economic
forces forces
Domestic environment
(uncontrollable)
2
7 Competitive
Political/
legal (controllable) structure Competitive
Cultural Forces
forces
forces Environmental
Price Product
uncontrollables
7 3 country market A
Channels of
Promotion Environmental
distribution
6 uncontrollables
country
market B
Geography Level of
Economic climate Technology Environmental
and
Infrastructure uncontrollables
4
5 country
Structure of market C
distribution
The ten Commandments for the new paradigm as given by
the Gurus As conclusion are

1.Recognize Growing customer Empowerment

2.Develop a focused offering to the target market.
3. Design the marketing from Customer Back.
4. Focus on delivering outcomes, not products.
5.Draw in the customer to Co-Create value.
6. Use newer ways to reach the customer with a message.
7.Develop metrics and ROI measurements.
8.Develop High-tech marketing.
9.Focus on building long term assets.
10.View marketing holistically to regain influence in the
company.
 Marketing
Marketing Functions
Functions

Information Buying

Risk Taking Selling

Universal
Marketing
Marketing
Functions
Functions
Financing Transporting

Standardizing
Storing
and Grading
–Thank You