Chapter

1
Defining
Marketing
for the
New Realities

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Learning Objectives
1. Why is marketing important?
2. What is the scope of marketing?
3. What are some core marketing concepts?
4. What forces are defining the new marketing
realities?
5. What new capabilities have these forces given
consumers and companies?
6. What does a holistic marketing philosophy include?
7. What tasks are necessary for successful marketing
management?

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 The Value of Marketing
Financial success often depends on
marketing ability
Successful marketing builds demand for
products and services, which, in turn,
creates jobs
Marketing builds strong brands and a loyal
customer base, intangible assets that
contribute heavily to the value of a firm

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 The Scope of Marketing
Marketing is about identifying and
meeting human and social needs

AMAs formal definition: Marketing is the

activity, set of institutions, and processes
for creating, communicating, delivering,
and exchanging offerings that have value
for customers, clients, partners, and
society at large

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 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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 What is Marketed?
Goods/ commodity

Services/ car wash

Events/ world cup

Experiences/ 50 ys in

business.

Persons/ presidential campaign &

celebrity.
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 What is Marketed?
Places/ Vegas, commercial banks, business
associations.
Properties/ Intangible rights
of ownership (stocks, bonds), and
real estate.
Organizations/ Museums,
theaters, human rights org.
Information/ how to stop smoking.
Ideas/ Democracy, how to make a thing,
How to be successful, how to be a
millionaire.
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 Who Markets?

A marketer is someone who seeks a

responseattention, a purchase, a
vote, a donationfrom another
party, called the prospect.

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 8 Demand States
Negative/ not liked product.
Nonexistent/ not recognized
Latent/ static, need cant be satisfied
by the existing product.
Declining/ going down demand.
Irregular/ seasonal
Unwholesome/ anti-demand (antismoking),
when consumers are attracted to a product
that has undesirable social consequences.
Full/ demand equals supply.
Overfull/ demand is more than supply.
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 Fig. 1.1
Structure Of Flows In A Modern
Exchange Economy

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 Fig. 1.2
A Simple Marketing System

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 Key Customer Markets
Consumer markets
Business markets
Global markets
Nonprofit & governmental markets
Local markets
Regional markets
International markets
Profit markets
Reseller markets

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 Core Marketing Concepts
Needs: the basic human requirements such
as for air, food, water, clothing, and shelter

Wants: specific objects that might satisfy

the need

Demands: wants for specific products

backed by an ability to pay/ the totality or
sum of the individual wants of specific
product.
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 Types of Needs
STATED/ inexpensive car

REAL/ good on gas consumption

UNSTATED/expected good
maintenance service
DELIGHT/ accessories for free,
GPS
SECRET/ to be seen smart

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 Core Marketing Concepts
Target markets/ the specific category of
customers to focus on.

Positioning/ when buyers want varying product

to reflect differences between them. Inserting
the product image in the customers mind.

Segmentation/ the bases on which to

communicate with customers. Geographic,
demographic, psychographic, behavior.
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 Core Marketing Concepts
Value proposition: a set of benefits
that satisfy those needs

Offering: a combination of products,

services, information, and experiences

Brand: an offering from a known

source. Associated to peoples minds to create
image.
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 Core Marketing Concepts
Marketing channels

COMMUNICATION/ TV, mail, Tell,

phone, posters, internet. Social media

DISTRIBUTION/ transportations,
delivery, stores.

SERVICE/ warehouses,
transportation cost., banks, insurance
cost.
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 Core Marketing Concepts
Paid media: TV, magazine and display ads,
paid search, and sponsorships

Owned media: a company or brand

brochure, web site, blog, Facebook page,
or twitter account

Earned media: word of mouth, buzz

(positive rumor), or viral marketing, the
press, any voluntary communciation tools.
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 Core Marketing Concepts
Impressions: occur when
consumers view a communication.
The mental and emotional view
carried on a product.

Engagement: the extent of a

customers attention and active
involvement with a communication

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 Core Marketing Concepts
Value: a combination of Quality, Service,
and Price (QSP: the customer value triad
(the 3 dimensions of value).
Satisfaction: a persons judgment of a
products perceived performance in
relationship to expectations. Tangible and
intangible benefits and costs.
Dissatisfied, satisfied, delighted. If
performance = Expectation>>> Satisfied. If
Performance > Expectation >>> Delighted. If
performance
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< Expectation
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 Core Marketing Concepts
Supply chain: a channel stretching from raw
materials to components to finished products
carried to final buyers (Fig 1.3: The Supply Chain for
Coffee)

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 Core Marketing Concepts
Competition: all the actual and
potential rivals offerings and
substitutes a buyer might consider

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 Core Marketing Concepts
Marketing environment

Task environment/ all actors related to

business, producers, distributors, promoters,
suppliers, dealers, customers,
advertisers, insurance costs, transporters,
telecommunicators.

Broad environment/ demographic, economic,

social and cultural, political and legal,
technological, and natural forces.
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 The New Marketing Realities
Technology/ in all areas.

Globalization/ global marketing

and competition.

Social responsibility/ consumer

affairs, urban affairs, and
environmental affaires.

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 A dramatically changed
marketplace
((New consumer capabilities))

Can use the internet 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

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 A dramatically changed
marketplace
((New company capabilities))
Can use the internet as a powerful information and
sales channel, including for individually differentiated
goods

Can collect fuller and richer information about

markets, customers, prospects, and competitors

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/ by lowering the cost

of distribution and promotion.

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 A dramatically changed
marketplace
((Changing channels)) changed
through the following:

Retail transformation/ building entertainments as

coffee spots, bars, product demonstration and
performance in the store (marketing experience
rather than the product assortment).
Reintermediation and become (Brick and click)
retailers. Add online services to their offerings.
Disintermediation/ to bring something back from
termination.

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 A dramatically changed
marketplace
((Heightened competition)) what
strengthen competition:

Private brands/ by retailers.

Mega-brands/ overall.

Deregulation/ reforming regulations to match

privatization and new legal settings.

Privatization/ sell or rent publicly owned assets.

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 Marketing in practice
Marketing balance/ business to move forward to
meet needs, use the internet and digital marketing
in marketing plans,

Marketing accountability/ to justify investment

in financial and profitable terms, using metric-brand
equity, customer lifetime value, return on marketing
investment, using suitable financial measures.

Marketing in the organization/ everyone in the

org. is a marketer.
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 Company Orientation toward
the Marketplace
PRODUCTION/ 1850-1920, consumers prefer available and
inexpensive products. Concentration on efficiency, low cost,
mass distribution.
PRODUCT/ 1920-1950, consumers prefer product of
quality , performance, and innovative feature

SELLING/ 1950-1970, sell what you make not make what

the market wants . To find the right customer for the product..

MARKETING/ 1970-now, emphasis on social and

psychological needs, social responsibility, and environment
consideration. Involve customers in strategic thinking. make
the right product for the right customer
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 HOLISTIC MARKETING:
IS THE DEVELOPMENT, DESIGN, AND
IMPLEMENTATION OF MARKETING
PROGRAMS, PROCESSES, AND
ACTIVITIES THAT RECOGNIZE THEIR
BREADTH AND INTERDEPENDENCY.
 Fig. 1.4
Holistic Marketing Dimensions

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 RELATIONSHIP MARKETING WITH
THE STAKEHOLDERS:
TO BUILD A MUTUAL SATISFYING LONG-
TERM RELATIONSHIP WITH KEY
CONSTITUENTS IN ORDER TO EARN
AND RETAIN THEIR BUSINESS
Relationship marketing

CUSTOMERS

EMPLOYEES

MARKETING PARTNERS

FINANCIAL COMMUNITY

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 Integrated marketing
Devise marketing activities and programs
that create, communicate, and deliver value
such that the 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/ managers
or owners are buyers of labor and
employees are sellers.

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 PERFORMANCE MARKETING:
FINANCIAL AND NONFINANCIAL RETURNS
TO BUSINESS AND SOCIETY. MARKETERS
USUALLY GO BEYOND SALES REVENUE TO
MEASURE MARKETING SCORECARD OF
MARKET SHARE, CUSTOMER LOOSE RATE,
SATISFACTION, QUALITY. ALSO TO
CONSIDER LEGAL, ETHICAL, AND
ENVIRONMENTAL EFFECT OF MARKETING
ACTIVITIES AND PROGRAMS.
Performance marketing

FINANCIAL ENVIRONMENTAL
ACCOUNTABILITY IMPACT

SOCIAL IMPACT

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 Fig. 1.5
Marketing Mix Components (4
Ps)

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MODERN MARKETING
MANAGEMENT

PEOPLE

PROCESSES

PROGRAMS

PERFORMANCE

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 MARKETING
MANAGEMENT TASKS
Developing market strategies and
plans

Capturing marketing insights

Connecting with customers

Building strong brands

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 MARKETING
MANAGEMENT TASKS
Creating value

Delivering value

Communicating value

Creating successful long-term growth

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