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Defining Marketing for 21 st Century

Chapter# 12/34

Contents

1) The Importance of Marketing2) The Scope of Marketing3) Core Marketing Concepts4) The New Marketing Realities5) Company Orientations Toward the

Marketplace6) Marketing Management Tasks

1) Importance of Mark eting 1/2 3/44

1) The Importance of Marketi ng

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TATA Ace

TATA Magic

As of May 2010 TATA M OTORSsold over 500,000 ACE in just 5Years

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1) Importance of Mark eting 2/2 5/34

Financial success often depends on marketing ability.Finance, operations, accounting, and other business functions

will not really matter if there is not sufficient demand for

produc ts and services so the company can make a profit.

Many companies have created a Chief Marketin g Officer (CMO),

posit ion to put marketing on a more equal footing with other

C -level executives s uch asChief Executive Officer (CEO) & Chief Financial Officer (CFO).

2) The Scope of Ma rketing 1/ 12 6/34

2) The Scope of Marketing

2) The Scope of Ma rketing 2/ 12 7/34

What is Marketing?

Marketing isan organizational function & a set of processes for

creating,communicating,

& de livering

value to cu stomers &for man aging customer relationships in wa ys that

benefit the organization & its stakeholders .

Or

Meeting needs profitably

Management

Management i s the act of getti ng people together toaccompli sh d esired go als using avail able resourcesefficient ly and effectively .

Management comprises planning, organizing, staff ing, leading or dire cting, & controlling

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2) The Scope of Ma rketing 3/ 12 9/34

What is Marketing Management?

Marketing management is theart and science

of choosing target marketsand getting, keeping, and growing

customers throughcreating, delivering, and communicating

superior customer value.

2) The Scope of Ma rketing 4/ 12 10/34

Selling is only the tip of the iceberg

There will always be need forsome selling. But the aim of marketing is

to make selling superfluous. The aim ofmarketing is to know and understand the

customer so well that the product orserv ice fits him and sells itself . Ideally,marketing should result in a customerwho is ready to buy. All that should be

needed is to make the product or serviceavailable.

Peter Drucker

Peter Ferdinand Druck er (Nov ember 19, 1909 November 11, 2005) wasan Austrian writer,management cons ultant,and self-descr ibed socialecologist. His books andscholarly and populararticles explored howhumans are organized

across the business,gover nment and thenonprofit sec tors of society.

2) The Scope of Ma rketing 5/ 12 11/34

What is exch ange?

Exchange is the p rocess ofobtaining a desired p roduct

from someone by offeringsomething in return.

2) The Scope of Ma rketing 6/ 12 12/34

For an exchange to occur.

There are at least two parties. Each party has something that might be of value

to the othe r party. Each pa rty is capable of communication a nd

delivery. Each pa rty is free to reject the exchange o ffer. Each p arty believes it is appropriate or desirable

to de al with the othe r party.

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2) The Scope of Ma rketing 7/ 12 13/34

What is Marke ted?

GoodsGoods

ServicesServices

Events & ExperiencesEvents & Experiences

PersonsPersons

Places & PropertiesPlaces & Properties

OrganizationsOrganizations

InformationInformation

IdeasIdeas

Trade show, Disney world

T-pain, Michael Jordan

Sundarban

Public image creation

Health Care/

EncyclopediaCosmetics& Hope

Hair cut saloon/Hospital

PC/NetBook

2) The Scope of Ma rketing 8/ 12 14/34

IDEAS

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Over 12 million copies of Angry B ird have b een purchased from

Apple's App Store

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2) The Scope of Ma rketing 9/ 12 17/34

Who Markets?

Marketers and Pros pects

A MARKETER is someone who seeks a r espons e fr omanother p arty, called PROSPEC T .

Marketer possesses the skill to stimulate demand :

Demand M anagement: to influence the level, tim ingand composition of d emand

Eight Demand States

1) Negative Demand: all or most of the important segments ofthe potential market dislike the products and in fact mightpay a price to avoid it.

Vegetarians feel negative demand for meat;

people in general have a negative demand for vaccinations,dental work, or surgery.

A lar ge number of frequent flyers have a negative demandfor air travel.

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2) Nonexistent Demand: Consumer may be unaware oruninterested in the product.

1st, t here are t hose familiar products that are perceivedas having no value. Ex: w ould be last weeks newspaper,small pieces of used barbed wire, & broken pens.

2nd, there are those familiar products that have valuebut not in a particular market. Ex: would be snowmobilesin areas that do not have snow & residence alarmswhere there is no crime.

3rd, there are those new, unfamiliar products or serviceswhich are innovative & face a situation of no demandbecause the relevant market segment has no knowledgeof its benefits. Ex: include certain consulting services &new software.

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3) Latent Demand: Share a strong need that can not besatis fied with current product. A st ate of latent demandexists when a substantial number of people share a strongneed for something which does not exist in the form of anactual product and service.

Ex: How much a driver of anylarge metropolitan area would be willingto pay for a fast city road? Or

What is the optimal price for an HIV vaccine?

4) Declining Demand: B&W Television

5) Irregular Demand: Seasonal, Monthly or Weekly

6) Full Demand: Consumers are adequately buying all productsput into the marketplace. Rice, etc

7) Overfull Demand: Would like to buy more than can besatisfied. Power/ Water

8) Unwholesome Demand: Attracted to products that haveundesirable social consequences.

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2) The Scope of Ma rketing 10 /12 21/34

Mark ets ?????Structure of Flows in a Mo dern Exchange Economy

(Market in terms Mode rn Economics)

2) The Scope of Ma rketing 11 /12 22/34

A Simple Ma rketing System

KEY MARKETS:CONSUMER MARKET: Selling consumer goods and services; softdrinks, cosmetics, air travel etc.BUSINESS MARKET: Business buyers buy goods in order tomake or resell a product to others.Caterpillar (CAT)GLOBAL MARKET: Selling goods in global market placeNPO and GOVT. MARKET: Usual ly s ell t hrough bid and lowest bitget offer.

2) The Scope of Ma rketing 12 /12 23/34

Marketplace s, Marketspaces and Metamarkets

Marketplace: It is physical..When w e shop in thestore.

Marketspace: It is digitalWhen w e shop on theinternet.

Metamarket: A cluster of complementary products

and services that are closely related in the minds ofconsumers but are spread across a diverse set ofindustries.

Like; automobile manufacturers, new car and usedcar dealers, financing companies, insurancecompanies, mechanics, spare pa rts dealers, serviceshops, auto magazines etc.

3) Core Ma rketing Concepts 1/4 24/34

3) Core Marketing Concepts

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3) Core Ma rketing Concepts 2/4 25/34

Core Ma rketing Concepts:

Needs, wants, &demands (Slide#26)

Segmentation, Targetmarkets, Positioning,

Offerings & brandsOfferings can be acombination of product,services, information &experiences.Brand is an offering fromknown s ource.

Value and satisfactionValue reflects theperceived tangible orintangible benefit and

associated cost.

Marketing channelsCommunication Channel;televisionDistribution Channel;distributor Service Channel;transportation companies

Supply chainChannel from raw materialuntil final buyers.

Competition Marketing environment (Slide#27)

Task Environment: immediateactors involved in producing,distr ibuting, promotingBroad Environment:Demographic, economic,physical, technological,political & legal.

Marketing planning

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Needs - states of felt deprivation including physical needs forfood, social needs for belonging and indiv idual needs for self-expression . i.e. I am thirsty.

Wants when these human needs are shaped by culture andindiv idual pers onality. i.e. I want a Coca-Cola.

Demands - human wants backed by buying power. i.e. I havemoney to buy a Coca-Cola.

Types of needs:1. Stated needs (the customer wants an inexpensive car).2. Real needs (the customer wants a car whose operating cost,

not its initial price, is low).3. Unstated needs (the customer expects good service from the

dealer).4. Delight needs (the customer would like the dealer to include

an onboard navigation system).5. Secret needs (the customer wants to be seen by friends as a

savvy consumer).

Need s, wan ts, & deman ds

3) Core Ma rketing Concepts 4/4 27/34

Grand Summary of the ma rketing p roce ss & the fo rcesshaping the companys Marketing Strategy

4) The New Ma rketing Realities 1/5 28/34

4) The New Marketing Realities

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4) The New Ma rketing Realities 2/5 29/34

Major Societal Fo rces

Network Information technology Globalization Deregulation Privatization Heightened competition Industry convergence Consumer Resistance Retail transformation Disintermediation

4) The New Ma rketing Realities 3/5 30/34

New Consumer Capabilities

A substantial increase in buying power A greater variety of available goo ds and services A great amoun t of info about practically anything Greater ease in interacting & placing & receiving

orders An ability to compa re notes on products An amplified voice to influence peer & public

opinion

4) The New Ma rketing Realities 4/5 31/34

New Company Capabilities

Internet as powerful info an d sales channel Laser sharp info about consumer Strong In ternal Communication Speedy External Communication Cell Phone Laser Sharp Customization Searching and selecting Execu tives is more easy

4) The New Ma rketing Realities 5/5 32/34

Shifts in Marketing Management:

From marketing does the marketing to ev eryone does th emarketing

From organizing by product units to organiz ing bycustomer se gments

From making everything to b uying more goods andservices fro m outsi de

From using many suppliers to working with fewersuppliers i n a " partnership"

From relying on old market positions to uncovering newones

From emphasizing tangible assets to emphasizingintangible ass ets

From building brands through advertising to buildingbrands throu gh p erformance & integrat edcommunications

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5) Co mpany Orientati ons 1/7 33/34

5) Company OrientationsToward the Marketplace

5) Co mpany Orientati ons 2/7 34/44

Company Orientations

Producti on

Selling Marketing

Product

Inexpensivelabor i n China

and HAIER

BetterMousetrap

Fallacy

Insurance orEncyclopedia

Be more effective thancompetitors in creating, deliveri ng

and communicating superior customer value to its chosen

target markets

Reactive orProactive market

orientation

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37/34 5) Co mpany Orientati ons 3/7 38/44

Holistic Marketing Dimensions

5) Co mpany Orientati ons 4/7 39/44

Holistic Marketing:

Holistic marketing recognizes that ev erything matters withmarketing. There are four components:

Relationship Marketing: Aim of building mutually satisfying long-term relationships with key parties-customers, suppliers,distributors etc. Create marketing network.among thestakeholders.

Integrated Marketing: Fully integrated marketing programs to

creat e, communicate and deliv er v alue for co nsumers. Like 4Ps Internal Marketing: Internal marketing is the task of hiring,

training, and motivating able employees who want to servecustomers well. The sales force thinks product managers setprices or sales quo tas too high.

Performance Marketing: Ethical, environmental, legal and socialcontex t of marketing activ ities and programs. McDonals addhealthy items.paper wraps..environmental friendly papers.

5) Co mpany Orientati ons 5/7 40/44

Integrated Marketing

Four Ps Four CsProduct Custom er SolutionPri ce Customer C ostPl ace Convenie nce

Promotion C ommuni cati on

Marketing Mix:Accordi ng to McC arthy,A Marketing Mix the controll abl e variableswhich the company p utstogether to satisfy t argetgroup

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5) Co mpany Orientati ons 6/7 41/44 5) Co mpany Orientati ons 7/7 42/44

T

Grameen Danone Foods Ltd,a Social Business in

Bangladesh

This is aunique opportunity to c reate a business total ly dedic ated to social objectiv es, a companywhose ambition isnot to generate prof its for its investors, but commi tted to serve the interestsofpeople without incurring losses .Professor Muhammad Yunus, Presiden t of the Grameen Group

I am utterly convinced that our future depends on our ability to expl ore andinvent new businessesand new t ypes of enterprise a great opportunityto make progress in that di rection and takeanother huge step towards fulfill ing our missi on: to bri ng health through food to as manypeople aspossi ble.Franck Ribo ud, CEO of Groupe Danone

Reduci ng poverty by meansof a new busi ness model t hat will pr ovide the least well off with ahealthy di et, every day.With this ini tiative, the need to maximize profi ts for the investors i s re[placed by social i mpact onlocalcommunity. Profits go to the l ocal communi ties i n terms of ben efits brought to them.Emmanuel Faber, Groupe Danone,Executi ve Vice-President

6) Ma rketing Manag ement Task s 1 /2 43/44

6) Marketi ng Management Tasks

6) Ma rketing Management Tas ks 2 /2 44/44

Marketing Management Tasks :

Developing marketing strategies and plans

Capturing marketing insights

Connecting with customers

Building strong brands

Shaping market offerings Delivering value

Communicating value

Creating long-term growth

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innate & learned qualities most importantfor marketer

Innate Qualities Risk taker Willingness to make decisions Problem-solving ab ility Change agent Results-oriented Learned Qualities Global experience Multichannel expertise Cross-industry exp erience Digital fo cus Operational knowledge

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