1. 1 Defining Marketing for the 21 st Century 1

2. Chapter Questions  Why is marketing important?  What is the scope of marketing?  What are some fundamental marketing concepts?  How has marketing management changed?  What are the tasks necessary for successful marketing management? 1-2

3. What is Marketing? 1-3 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.

4. What is Marketing Management? 1-4 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.

5. Marketing 1-5 1.Identifying and meeting human and social needs 2.Meeting needs profitably 3.The art of selling products, selling is not the most important part but the tip of iceberg

6. Know the customer 1-6 Product or service fits him He is ready to buy Just make it available Nintendo wii game Canon ELPH Camera Toyota Prius Hybrid

7. Need, Wants Demand 1-7 Need: a state of felt deprivation: Want: Preference to satisfy a need, depends on culture, personality…etc Demand: Wants + buying power Ability and willingness to buy If a want is always satisfied it becomes a need Marketing influences WANTS Companies help learn what they want Demand can be created……

8. Obama for America campaign 1-8 1.Charismatic Politician 2.Powerful message of Hope 3.Integrated Modern Marketing Plan Online, offline, free and paid Multimedia usage Short and long videos, 50 States 1800 Videos Youtube Main aspect 1 13.5 Million email list 3 million donors $500 million donation (mostly less than $100)

9. Marketing in 21 st Century 1-9 1.Economic environment is different 2.Without sufficient demand other business functions are useless 3.Financial performance depends on marketing ability 4.Introducing new products, enriching people life 5.Enhancing existing products 6.Creates demand for products and services, Jobs created 7.CSR 8.Strong Brand, Loyal customers, ….Great Value 9.Product: Features? Price Where to sell how to promote.

10. What is Marketed? 1-10 Goods Services Events Experiences Persons

11. What is Marketed? 1-11 Places Properties Organizations Information Ideas

12. 1-12 Demand States  Negative  Nonexistent  Latent  Declining  Irregular  Unwholesome  Full  Overfull

13. 1-13 Eight demand states are possible: 1. Negative demand—Consumers dislike the product and may even pay to avoid it. 2. Nonexistent demand—Consumers may be unaware of or uninterested in the product. 3. Latent demand—Consumers may share a strong need that cannot be satisfied by an existing product. 4. Declining demand—Consumers begin to buy the product less frequently or not at all. 5. Irregular demand—Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis. 6. Full demand—Consumers are adequately buying all products put into the marketplace. 7. Overfull demand—More consumers would like to buy the product than can be satisfied. 8. Unwholesome demand—Consumers may be attracted to products that have undesirable social consequences.

14. 1-14 Traditionally, a “market” was a physical place where buyers and sellers gathered to buy and sell goods. Economists describe a market as a collection of buyers and sellers who transact over a particular product or product class (such as the housing market or the grain market). Five basic markets and their connecting flows are shown in Figure 1.1. Manufacturers go to resource markets (raw material markets, labor markets, money markets), buy resources and turn them into goods and services, and sell finished products to intermediaries, who sell them to consumers. Consumers sell their labor and receive money with which they pay for goods and services. The government collects tax revenues to buy goods from resource, manufacturer, and intermediary markets and uses these goods and services to provide public services. Each nation’s economy, and the global economy, consists of interacting sets of markets linked through exchange processes. Marketers use the term market to cover various groupings of customers. They view sellers as constituting the industry and buyers as constituting the market.

15. Figure 1.1 Structure of Flows in Modern Exchange Economy 1-15

16. Figure 1.2 A Simple Marketing System 1-16

17. 1-17 Key Customer Markets  Consumer markets  Business markets  Global markets  Nonprofit/Government markets

18. Core Concepts  Needs, wants, and demands  Target markets, positioning, segmentation  Offerings and brands  Value and satisfaction  Marketing channels  Supply chain  Competition  Marketing environment  Marketing planning 1-18

19. Types of Needs 1-19 Stated Real Unstated Delight Secret

20. Target Markets, Positioning & Segmentation 1-20

21. Target Market  A target market is a group of customers a business has decided to aim its marketing efforts and ultimately its merchandise towards. A well-defined target market is the first element of a marketing trategy. Product, price,promotion, and place are the four elements of a marketing mix strategy that determine the success of a product or service in the marketplace.businessmarketing merchandisemarketing trategyProductpricepromotionplacemarketing mixmarketplace 1-21

22.  Target markets are groups of individuals that are separated by distinguishable and noticeable market segmentation including the following:market segmentation  Geographic - addresses (their location climate region) Geographic  Demographic/socioeconomic segmentation - (gender, age, income, occupation, education, household size, and stage in the family life cycle) Demographicsocioeconomic  Psychographic segmentation - (similar attitudes, values, and lifestyles) Psychographic  Behavioral segmentation - (occasions, degree of loyalty) Behavioral  Product-related segmentation - (relationship to a product 1-22

23. Positioning  Positioning is a marketing strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer. Companies apply this strategy either by emphasizing the distinguishing features of their brand (what it is, what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian or luxurious, entry-level or high-end, etc.) through advertising. Once a brand is positioned, it is very difficult to reposition it without destroying its credibility. It is also called product positioning.marketing strategybrandadvertisingproduct positioning 1-23

24.  Market segmentation is a marketing strategy which involves dividing a broad target market into subsets of consumers, businesses, or countries who have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them. Market segmentation strategies are generally used to identify and further define the target customers, and provide supporting data for marketing plan elements such as positioning to achieve certain marketing plan objectives. marketing strategytarget marketconsumersbusinessescountriespositioning 1-24

25. Offerings and Brands 1-25

26.  Companies address customer needs by putting forth a value proposition, a set of benefits that satisfy those needs. The intangible value proposition is made physical by an offering, which can be a combination of products, services, information, and experiences.  A brand is an offering from a known source. A brand name such as McDonald’s carries many associations in people’s minds that make up its image: hamburgers, cleanliness, convenience, courteous service, and golden arches. All companies strive to build a brand image with as many strong, favorable, and unique brand associations as possible. 1-26

27. Value and Satisfaction 1-27

28.  The buyer chooses the offerings he or she perceives to deliver the most value, the sum of the tangible and intangible benefits and costs to her. Value, a central marketing concept, is primarily a combination of quality, service, and price (qsp), called the customer value triad. Value perceptions increase with quality and service but decrease with price. We can think of marketing as the identification, creation, communication, delivery, and monitoring of customer value. Satisfaction reflects a person’s judgment of a product’s perceived performance in relationship to expectations. If the performance falls short of expectations, the customer is disappointed. If it matches expectations, the customer is satisfied. If it exceeds them, the customer is delighted. LL Bean consistently has high satisfaction ratings. 1-28

29. Marketing Channels 1-29 Communication Distribution Service

30.  Communication channels deliver and receive messages from target buyers and include newspapers, magazines, radio, television, mail, telephone, billboards, posters, fliers, CDs, audiotapes, and the Internet. Beyond these, firms communicate through the look of their retail stores and Web sites and other media. Marketers are increasingly adding dialogue channels such as e-mail, blogs, and toll-free numbers to familiar monologue channels such as ads. 1-30

31.  The marketer uses distribution channels to display, sell, or deliver the physical product or service(s) to the buyer or user. These channels may be direct via the Internet, mail, or mobile phone or telephone, or indirect with distributors, wholesalers, retailers, and agents as intermediaries. 1-31

32.  To carry out transactions with potential buyers, the marketer also uses service channels that include warehouses, transportation companies, banks, and insurance companies. Marketers clearly face a design challenge in choosing the best mix of communication, distribution, and service channels for their offerings. 1-32

33. Marketing Environment 1-33 DemographicEconomic Socio-cultural Natural Technological Political-legal

34. Major Societal Forces  Network information technology  Globalization  Deregulation  Privatization  Heightened competition  Industry convergence  Retail transformation  Disintermediation  Consumer buying power  Consumer participation  Consumer resistance 1-34

35. Company Orientations 1-35 Production Product Selling Marketing

36. Holistic Marketing 1-36

37. Relationship Marketing 1-37 Customers Employees Marketing Partners Financial Community

38. Integrated Marketing 1-38

39. 1-39 Integrated marketing occurs when the marketer devises marketing activities and assembles marketing programs to create, communicate, and deliver value for consumers such that “the whole is greater than the sum of its parts.” Two key themes are that (1) many different marketing activities can create, communicate, and deliver value and (2) marketers should design and implement any one marketing activity with all other activities in mind.

40. Internal Marketing Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well. 1-40

41. Performance Marketing 1-41 Financial Accountability Social Responsibility Marketing

42. Types of Corporate Social Initiatives  Corporate social marketing  Cause marketing  Cause-related marketing  Corporate philanthropy  Corporate community involvement  Socially responsible business practices 1-42

43. The Marketing Mix 1-43

44. The New Four Ps 1-44 Processes People Programs Performance

45. 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 1-45

46. For Review  Why is marketing important?  What is the scope of marketing?  What are some fundamental marketing concepts?  How has marketing management changed?  What are the tasks necessary for successful marketing management? 1-46