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Learning Objectives

Chapter
1
Defining
Marketing
for the
New Realities

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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 Scope of Marketing

The Value of Marketing

Marketing is about identifying and meeting


human and social needs

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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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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What is Marketed?

Marketing Management
Goods

The art and science of choosing target


markets and getting, keeping, and growing
customers through creating, delivering,
and communicating superior customer
value

Services
Events
Experiences
Persons

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What is Marketed?

Who Markets?

Places

A marketer is someone who seeks a


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

Properties
Organizations
Information
Ideas

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Negative
Nonexistent
Latent
Declining
Irregular
Unwholesome
Full
Overfull
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Key Customer Markets

Fig. 1.2
A Simple Marketing System

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Fig. 1.1
Structure Of Flows In A Modern
Exchange Economy

8 Demand States

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Consumer markets
Business markets
Global markets
Nonprofit & governmental markets

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Core Marketing Concepts

Types of Needs

Needs: the basic human requirements


such as for air, food, water, clothing, and
shelter

STATED
REAL
UNSTATED

Wants: specific objects that might satisfy


the need

DELIGHT

Demands: wants for specific products


backed by an ability to pay
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SECRET

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Core Marketing Concepts

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Core Marketing Concepts


Value proposition: a set of benefits that
satisfy those needs

Target markets
Positioning

Offerings: a combination of products,


services, information, and experiences

Segmentation
Brands: an offering from a known source
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Core Marketing Concepts

Core Marketing Concepts


Marketing channels

Paid media: TV, magazine and display


ads, paid search, and sponsorships

COMMUNICATION

Owned media: a company or brand


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

DISTRIBUTION

Earned media: word of mouth, buzz, or


viral marketing

SERVICE

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Core Marketing Concepts

Core Marketing Concepts

Impressions: occur when consumers


view a communication

Value: a combination of quality, service,


and price (qsp: the customer value triad)

Engagement: the extent of a customers


attention and active involvement with a
communication

Satisfaction: a persons judgment of a


products perceived performance in
relationship to expectations

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Core Marketing Concepts

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Competition: all the actual and potential


rival offerings and substitutes a buyer
might consider

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Core Marketing Concepts

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The New Marketing Realities

Marketing
environment

Technology
Globalization

Task environment

Social
responsibility

Broad environment

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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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A dramatically changed
marketplace

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

New consumer
capabilities
Can actively interact
with companies
Can reject marketing
they find inappropriate

Can tap into social media to share opinions


and express loyalty
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A dramatically changed
marketplace

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A dramatically changed
marketplace

New company capabilities

New company capabilities

Can use the internet as a powerful information and


sales channel, including for individually differentiated
goods

Can improve purchasing, recruiting, training, and


internal and external communications

Can collect fuller and richer information about


markets, customers, prospects, and competitors

Can improve cost efficiency

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

A dramatically changed
marketplace

Heightened competition

Changing channels

Private brands
Retail
transformation

Mega-brands
Deregulation

Disintermediation

Privatization
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Company Orientation toward


the Marketplace

Marketing in practice
Marketing balance

PRODUCTION

Marketing accountability

PRODUCT
SELLING

Marketing in the organization

MARKETING

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Relationship marketing

Fig. 1.4
Holistic Marketing Dimensions

CUSTOMERS

EMPLOYEES

MARKETING PARTNERS
FINANCIAL
COMMUNITY

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Internal marketing

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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The task of hiring, training, and motivating


able employees who want to serve
customers well

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Fig. 1.5
Marketing Mix Components (4 Ps)

Performance marketing

FINANCIAL
ACCOUNTABILITY

ENVIRONMENTAL
IMPACT

SOCIAL IMPACT

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MODERN MARKETING
MANAGEMENT

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MARKETING
MANAGEMENT TASKS
Developing market strategies and plans

PEOPLE

Capturing marketing insights

PROCESSES

Connecting with customers

PROGRAMS

Building strong brands

PERFORMANCE

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MARKETING
MANAGEMENT TASKS
Creating value
Delivering value
Communicating value
Creating successful long-term growth

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