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Reference: Marketing, An Introduction by Gary Armstrong & Philip Kotler, Prentice Hall

CHAPTER ONE:
Marketing in a Changing World
QUESTION:
To you, what do you think Marketing is?
Why do you need to study this?

PART ONE: INTRODUCING MARKETING

MARKETING
A social and managerial process by which individuals and groups obtain what they need and
want through creating and exchanging products and values with others.

To explain the definition we will examine the different terms of the CORE MARKETING
CONCEPTS:

Needs A state of self deprivation (physical, social and individual needs). They are not
invented by the marketers and a basic part of being human.
1. Stated needs (The customer wants an inexpensive car.)
2. Real needs (The customer wants a car whose operating cost, not 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 GPS
navigation system.)
5. Secret needs (The customer wants friends to see him or her as a savvy
consumer.)
Wants form of human need take as they shaped by culture and individual personality.
It is shaped by society and described in objects that will satisfy us).
Give examples that will differentiate the two terms
Demands Human wants that are backed up by buying power.



Reference: Marketing, An Introduction by Gary Armstrong & Philip Kotler, Prentice Hall

Consumers today do not see products as an object they needed but a bundle of benefits provide
the most value and satisfaction of their money. E.g. Honda Civic (basic transportation,
affordable and fuel efficient) and Lexus (comfort, luxury and status)

Products Anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want/need. (Physical objects, services, persons, places,
organizations, ideas, information, experiences, etc.)
This includes the brands meaning of the product. Some marketers call it a satisfier,
resource, market offering.
Services Any activity or benefit that one party to another that is intangible and does
not result in ownership of anything.

Some sellers are focused on the product that they lose sight of the need. They suffer from
Marketing Myopia. One of the marketings goals is to satisfy the need of the
customers/consumers.

Customer Value the difference between the value the customer gains from owning
and using the product and the costs of obtaining the product. (Customer act on
perceived value)
Customer Satisfaction is when the products perceived performance in delivering
value matches a buyers expectation or beyond.
Its best to make a balance between customer value and satisfaction but not give away
the house.
Customer Expectations are based on
Past buying experiences
Opinions from others
Marketing and competitor information
Quality has direct impact on product/service performance. Mostly it is known as
freedom from defects but most companies go beyond this narrow definition.
In marketing, quality often means customer satisfaction.

Exchange the act of obtaining a desired object from someone by offering something in
return.
Transaction a trade between two parties that involves at least two things of value,
agreed upon conditions, a time of agreement and a place of agreement. Its the
marketings unit of measure.
Relationship Marketing the process of creating, maintaining and enhancing strong,
value-laden relationships with customers and other stakeholders.
Marketing Network consists of the company and all its supporting
stakeholders with whom the company built with mutual profitable business
relationships.


Reference: Marketing, An Introduction by Gary Armstrong & Philip Kotler, Prentice Hall

RM is all about long term.
The goal is to deliver long term value to customers and the measures of success
are long-term customer satisfaction and retention.
Focus on managing the customers as well as their products.
Marketing is an art of attracting, keeping and growing profitable customers.

3 approaches by building relationships marketing
Financial Benefits e.g. airlines, hotels and supermarkets
Social Benefits e.g. treating customers as individuals
Structural Ties e.g. supplying customers with linkages that help them in their
use of the products.

Market the set of all actual and potential buyers of a product or services
To the marketer, market means buyers/potential buyers. They are very interested on
markets because their goal is to understand the needs and wants of specific market and
select markets that they can serve best.

Marketing managing markets to bring about exchanges and relationships for the purpose of
creating value and satisfying needs and wants.



MARKETING MANAGEMENT the analysis, planning, implementation and control of programs
designed to create, build, and maintain beneficial exchanges with target buyers for the purpose
of achieving organizational objectives.

DEMAND MANAGEMENT (It is simply just Marketing Management)
1. Negative demandConsumers dislike the product and may even pay to avoid it.
2. Nonexistent demandConsumers may be unaware of or uninterested in the product.
3. Latent demandConsumers may share a strong need that cannot be satisfied by an
existing product.
4. Declining demandConsumers begin to buy the product less frequently or not at all.


Reference: Marketing, An Introduction by Gary Armstrong & Philip Kotler, Prentice Hall

5. Irregular demandConsumer purchases vary on a seasonal, monthly, weekly, daily, or
even hourly basis.
6. Full demandConsumers are adequately buying all products put into the marketplace.
7. Overfull demandmore consumers would like to buy the product than can be satisfied.
8. Unwholesome demandConsumers may be attracted to products that have
undesirable social consequences.
Marketing Management must find ways to deal with this different demand states. It is
concerned not only with finding and increasing demand but also with changing and reducing
demand.
Demarketing marketing to reduce demand temporarily or permanently the aim is
not to destroy demand but to reduce or shift it.

MARKETING MANAGEMENT CONCEPTS

A review of the evolution of marketing ideas and philosophy:

THE PRODUCTION CONCEPT

This is one of the oldest concepts in business. It holds that consumers prefer products that are
widely available and inexpensive. Managers of production-oriented businesses concentrate on
achieving high production efficiency, low costs, and mass distribution.

THE PRODUCT CONCEPT

This concept proposes that consumers favor products offering the most quality, performance or
innovative features. However, this concept can often create a love affair between the managers
and their product. They might commit the better-mousetrap fallacy, believing a better
product will by itself lead people to path to their door. (However, a new or improved product
will not be necessarily be successful unless its priced, distributed, advertised and sold properly.

THE SELLING CONCEPT

This concept holds that consumers and businesses, if left alone, wont buy enough of the
organizations products. If is practiced most aggressively with unsought goods goods buyers
dont normally thing of buying like insurance and cemetery plots and when firms with
overcapacity aim to sell what they make, rather than make what the market wants. Marketing
based on hard selling is risky. It assumes customers are coaxed into buying a product not only
wont return or bad-mouth it or complain to consumer organizations but also will never buy it
again.

THE MARKETING CONCEPT



Reference: Marketing, An Introduction by Gary Armstrong & Philip Kotler, Prentice Hall

This concept emerged in the mid1950s as customer-centered, sense-and-respond philosophy.
The job is to find not the right customers for your products, but the right products for your
customers.
e.g. Dell doesnt prepare a perfect computer for its target market. Rather, it provides product
platforms on which each person can customize the features they desire in the computer.

This concept holds that the key to achieving organizational goals is being more effective than
competitors in creating, delivering, and communicating superior customer value to your target
markets.

Whats the difference between the selling concept and the marketing concept? According to
Harvards Theodore Levitt said that :
SELLING CONCEPT MARKETING CONCEPT
Focuses on the need of the seller Focuses on the need of the buyer
Preoccupied with the sellers need to convert
cash
Focuses with the idea of satisfying the needs
of the customer by means of the product and
the whole cluster of things associated with
creating, delivering and finally consuming it.
A lot of companies embrace the marketing concept because of its superior performance.

THE HOLISTIC MARKETING CONCEPT

The trends and forces that have defined the first decade of the 21
st
century are leading business
firms to a new set of beliefs and practices.

This concept is based on the development, design and implementation of marketing programs,
processes and activities that recognize their breadth and interdependencies. It acknowledges
that everything matters in marketing - and that a broad, integrated perspective is often
necessary. This concept recognizes and reconciles the scope and complexities of marketing
activities.



Reference: Marketing, An Introduction by Gary Armstrong & Philip Kotler, Prentice Hall



Integrated Marketing
It 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.

Internal Marketing
It is the task of hiring, training and motivating able employees who want to serve customers
well. It ensures that everyone in the organization embraces appropriate marketing principles.
They recognize that marketing activities within the company can be as important-or even more
important-than those directed outside the company. It makes sense that the customers
received excellent service because the staff is eager to provide it.

Performance Marketing
This requires understanding the financial and nonfinancial returns to business and society from
marketing activities and programs. Top marketers are increasingly going beyond sales revenue
to examine the marketing scorecard and interpret what is happening to the market share,
customer loss rate, customer satisfaction, product quality and other measures. They also
consider the legal, ethical, social and environmental effects of marketing activities and
programs.

PART TWO: THE MILLENIUM GENERATION

Ever since the start of the 21
st
century, a new global and competitive economy emerged. This is
because of how quickly information is being exchanged and the world has gone smaller.
Technology is evolving and faster than ever before and this fast; ever changing, information
awareness, growth and evolution to the environment has given massive changes in
Marketing.





Reference: Marketing, An Introduction by Gary Armstrong & Philip Kotler, Prentice Hall

WHAT IS GOING ON IN THIS NEW ECONOMY?
A greater variety of goods and services
A greater amount of information about almost anything
Ease in interaction, placing orders and delivering them
Increase ability in comparing almost everything
Websites and Social Media provides new information and sales channels
Fast communication
Ease in sending ads, coupons and samples to target market
Improve logistics and operations while enhancing accurate and service quality
The internet and technology is the major force in this new Millennium.

NEW MARKETING REALITIES

Major Societal Forces
1. Network Information Technology
2. Globalization
3. Deregulation
4. Privatization
5. Intense Competition
6. Industry convergence
7. Retail Transformation
8. Disintermediation
9. Buying Power
10. Consumer Information
11. Consumer Participation
12. Consumer Resistance

New Company Capabilities
1. Can now use the internet as a tool for information and sales channel
2. Can now collect fuller and richer information about markets, customers, suppliers,
competitors and prospects
3. Can now tap into media to amplify their brand message
4. Facilitate and fast external communication to customers
5. Can send ads, coupons, samples, and information to customers who have requested
them or given the company permission to send them.
6. Move on to mobile marketing
7. Can now sell differentiated goods individually
8. Can improve purchasing, recruiting, training, and internal and external communications
9. Can facilitate and speed up internal communication among their employees by using the
Internet as a private intranet
10. Can improve their cost efficiency by skillful use of the Internet.