Copyright 2009, Prentice-Hall, Inc.1-1 A Framework for Marketing Management Chapter 1 Defining Marketing for the 21 st Century

Copyright 2009, Prentice-Hall, Inc. 1-2 Chapter Questions Why is marketing important? What is the scope of marketing? What are some fundamental marketing concepts and new marketing realities? What are the tasks necessary for successful marketing management?

Copyright 2009, Prentice-Hall, Inc. 1-3 What Is Marketing? Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Copyright 2009, Prentice-Hall, Inc. 1-4 What Is Marketing Management? Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

Copyright 2009, Prentice-Hall, Inc. 1-5 What is Marketed? Goods Services Events Experiences Persons Places Properties Organizations Information Ideas

Copyright 2009, Prentice-Hall, Inc. 1-6 What is a Market? A market is a grouping of customers:  Need markets  Product markets  Demographic markets  Geographic markets  Other

Copyright 2009, Prentice-Hall, Inc. 1-7 Who Markets? A marketer is someone who seeks a response from another party, called a prospect.

Copyright 2009, Prentice-Hall, Inc. 1-8 Key Functions of the CMO Strengthening the brands Measuring marketing effectiveness Driving new product development based on customer needs Gathering meaningful customer insights Utilizing new marketing technology

Copyright 2009, Prentice-Hall, Inc. 1-9 Marketing Process Analyze marketing opportunities Select target markets Design marketing strategies Develop marketing programs Manage the marketing effort

Copyright 2009, Prentice-Hall, Inc Core Marketing Concepts Needs, wants, and demands Target markets, positioning, and segmentation Offerings and brands Value and satisfaction Marketing channels Supply chain Competition Marketing environment

Copyright 2009, Prentice-Hall, Inc Needs, Wants, and Demand Needs—basic human requirements. Wants—directed to specific objects that might satisfy the need. Demands—wants for specific products backed by an ability to pay.

Copyright 2009, Prentice-Hall, Inc Target Markets, Positioning, and Segmentation Segmentation—identify and profile distinct groups of buyers examining demographic, psychographic, and behavioral differences. Target markets—segments presenting the greatest opportunity. Positioning—what the offering means in the minds of the target buyers as delivering some central benefit(s).

Copyright 2009, Prentice-Hall, Inc Offerings and Brands Value proposition—a set of benefits offered to satisfy customers’ needs. Offering—a combination of products, services, information, and experiences. Brand—an offering from a known source.

Copyright 2009, Prentice-Hall, Inc Value and Satisfaction Value—the sum of the perceived tangible and intangible benefits and costs to customers.  “Customer value triad” = quality, service, and price Satisfaction—a person’s comparative judgment of a product’s perceived performance (or outcome) in relation to expectation.

Copyright 2009, Prentice-Hall, Inc Marketing Channels Communication channels—deliver and receive messages from target buyers. Distribution channels—display, sell, or deliver the physical product or service(s) to the buyer or user. Service channels—carry out transactions with potential buyers.

Copyright 2009, Prentice-Hall, Inc Marketing Environment Task environment includes the immediate actors involved in producing, distributing, and promoting the offering. Broad environment includes six environments:  Demographic  Economic  Physical  Technological  Political-legal  Social-cultural

Copyright 2009, Prentice-Hall, Inc New Marketing Realities Major societal forces New consumer capabilities New company capabilities

Copyright 2009, Prentice-Hall, Inc Company Orientations Production concept Product concept Selling concept Marketing concept Holistic marketing concept

Copyright 2009, Prentice-Hall, Inc Production Concept Premise: consumers prefer products that are widely available and inexpensive. Focus on:  High production efficiency  Low costs  Mass distribution

Copyright 2009, Prentice-Hall, Inc Product Concept Premise: consumers favor products offering the most quality, performance, or innovative features. Focus on:  Making superior products  Improving them over time

Copyright 2009, Prentice-Hall, Inc Selling Concept Premise: customers, if left alone, will not buy enough of the organization’s products. Focus on:  Aggressive selling and promotion efforts

Copyright 2009, Prentice-Hall, Inc Marketing Concept Premise: find the right product for your customers. Focus on:  Needs of the buyer

Copyright 2009, Prentice-Hall, Inc Holistic Marketing Concept Premise: “everything matters” with marketing. Focus on:  Relationship marketing  Integrated marketing  Internal marketing  Performance marketing

Copyright 2009, Prentice-Hall, Inc Relationship Marketing Relationship marketing aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business.

Copyright 2009, Prentice-Hall, Inc Integrated Marketing Integrated marketing requires the marketer to devise marketing activities and assemble fully integrated marketing programs that create, communicate, and deliver value for customers. Marketing activities include the four “Ps.”

Copyright 2009, Prentice-Hall, Inc The Four Ps of the Marketing Mix Product Price Place Promotion

Copyright 2009, Prentice-Hall, Inc Internal Marketing Internal marketing ensures that everyone in the organization embraces appropriate marketing principles, especially senior management. Everyone in the organization must “think customer.”

Copyright 2009, Prentice-Hall, Inc Performance Marketing Financial accountability Social responsibility marketing  Societal marketing concept—following the marketing concept while preserving or enhancing customers’ and society’s long-term well-being.

Copyright 2009, Prentice-Hall, Inc 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

Copyright 2009, Prentice-Hall, Inc All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall