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MARKETING IN 21ST

CENTURY
LEARNING OBJECTIVES
After reading this chapter, students should
know:
- Importance of Marketing
- Scope of Marketing
- Fundamental marketing concepts
- Marketing Environment
- Necessary tasks are for successful marketing
management

Dr. Sandhir Sharma


Marketing for Managers Chapter 1

Opening Case

It is ironic. The Ministry of Tourism‘s TV commercials starring a beaming Aamir Khan are aired
between the very same news bulletins that broadcast the latest updates on the many scams surrounding
the Commonwealth Games. In such a milieu, the Ministry of Tourism‘s pedantic ‗Atithi Devo Bhava‘
message ends up looking moronic, because the viewers are disgusted thinking ‗Ye Babu Kab ...Kab
Sudharenge‘. And at the heart of these divergent views lies the battle that Brand India fights everyday:
the imagery and perceptions of good old Bharat that refuses to be wished away as the country
desperately tries to live up to it‘s newly burnished ‗arrived‘ image.
In a perception driven world, nation brands are a dual edged sword. They can either deliver a
handsome dividend if managed properly or can make an economy a pariah. In that context, the babus
of Bharat are taking baby steps to do away with the land of snake charmers legacy, and similar
perceptions of the past that are difficult to shake away. After 2007, when Incredible !ndia became the
credo for projecting an India version 2.0 to the world, creating symbols of success has become a new
ritual. Recently, the Indian currency, the rupee, got a new symbol, Nandan Nilekani‘s Unique
Identification Authority‘s new logo with the sun over a fingerprint will be unveiled soon, Indian
Railways is looking to rebrand itself and get a new logo. And land at the New Delhi airport and
Commonwealth Game‘s mascot Sheru greets visitors, promising a dekko of a new improved India.

That‘s not all, the rebranding fever has really caught on: different Indian states have got into the act
too, Madhya Pradesh, Sikkim, Assam, among others, are all busy carving out a distinct identity in one
of the world‘s most diverse economies. Union minister of commerce and industry, (MOS) Jyotiraditya
Scindia is talking about creating a global brand out of Indian Tea. Some years back, the young
minister led the rebranding of the eponymous Indian postal services transforming it into the swish
India Post. Even the corporate world underwent a makeover in the last decade or so to put its best foot
forward as it looked westwards for expansion. After the Tata's new logo and rebranding in 1999, a
slew of corporates like Godrej's, Avantha group, L&T and SAIL, got an image makeover. To say
nothing of the public sector banks. Spurred by competition from private and global banking brands
and the very real need to discard a stodgy solid bureaucratic image, many of them have gone in for
extensive makeovers. The State Bank of India in particular is trying to bridge the same yawning gulf,
morphing people from both Bharat and India into its 'Banker For Every Indian' campaign. Bank of
Baroda rebranded itself in 2005. "We wanted to make sure that consumers and employees start
identifying with the bank as a partner in their progress," says MD Mallya, chairman and managing
director, Bank of Baroda. With IT and Technology reshaping India's image overseas it was clear the
symbols of the past had to be cast aside. In all, it was as if India and many of its iconic government
entities and entrepreneurs were eager for a new identity.

But how effective is all of this in leaving people with the impression that the totality of Brand India
has changed and is changing? The answer is disheartening. "In its present form, it's just not generating
the desired effect," observes Suhel Seth, managing partner at Counselage India, who is also the brand
advisor to Indian Railways. "India's branding is by accident and not by design. Different government
departments are branding themselves in isolation. In reality, there has to be a lot of coordination to
ensure consistency, engagement and strategy behind the exercise," he adds. The reasons for failure are
very simple. Often the main agents driving these exercises are politicians and bureaucrats, few of
whom have the business and marketing expertise to perform a brand management role. The sad part is

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that professional marketers and advertisers have the expertise, but lack the mandate and when roped in
by the babudom, the red tape stifles creativity and out of the box thinking.

The crux of the problem is that rebranding and a new logo do not mean anything if the overall brand
experience doesn't change. A new swanky airport does not equal a vastly improved brand India, if the
moment you step outside, the pothole congested roads, the shaky taxis and in case of Mumbai, the
cluster of slums proclaim it all a façade. Take for example the Commonwealth Games: on paper, an
excellent opportunity to showcase India just like South Africa did during the FIFA World Cup. As
the land of possibility, Africa's largest economy presented itself as full of diverse opportunity to attract
reverence and the monies. But for India the Commonwealth Games might just turn into an
international embarrassment rather than a timely opportunity to change the orbit for Brand India.
Again the old ways of life of Bharat are tripping new India. VK Malhotra, vice president - organising
committee, CWG 2010, admits "At the moment, the Commonwealth Games are giving out a bad
image of India." He also smirks at the committee chairman's ambition of hosting the Asiads and later
the Olympics. "We might get to host the Asian Games but Olympics are impossible," he signs off.
The overall architecture of Brand India and what it truly stands for is incoherent with different arms
saying different things. According to experts, nation and departmental branding have a wide range of
stakeholders who use numerous channels to reach a diverse audience. It's thus difficult to encapsulate
a multifaceted entity into a distilled brand. The plethora of uncontrollable factors that can affect
perceptions make the task all the more complex. "When we talk of branding India, we are really
talking about whitewashing certain aspects of the country and promoting some parts of the story,"
feels Santosh Desai, brand guru and MD and CEO, Future Brands. "India needs many sub-brands for
different purposes," Desai says citing the examples of Kerala (God's Own Country) and Rajasthan
(The Incredible State of India) within the tourism piece. Smaller brand stories on the FDI, currency-
branding front, he feels, can be similarly conveyed.

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Case Point: The Great Indian Makeover: Marketing the Nation

The word ―Marketing‖ encompasses such a broad scope of activities and ideas that settling on one
definition is often difficult. If we ask three people to define marketing, different definitions are likely
to follow. In 21st century, over exposure to advertising and personal selling leads most of us to link
marketing with selling or to think that marketing activities start after goods and services have been
produced. In actual, marketing starts the moment an idea is generated to run a business. Marketing
involves customer needs, securing information needed to design and produce goods or services that
match buyer expectations, satisfying preferences of customers, creating and maintaining relationship
with customers and suppliers. Any business around the world is not restricted to one or couple of
activities. Business is generally combinations of various steps to be taken sequentially in order to
raise profits and be sustainable for long term in the market place. Marketing is required at every
step of business.

One must understand it very clearly that Marketing is broader concept no only related to
Organisations, its products and consumers rather it is connected to People, Societies, Values, Global
World. This inter functional & institutional integration has raised several challenges to the thinkers of
the world at present. Thus, Marketing is everywhere. Formally or informally, people and
organizations engage in a vast number of activities that could be called marketing. Good marketing is
no accident, but a result of careful planning, execution and efficient communication. Marketing is
both an ―art‖ and a ―science‖—there is invariable strain between the conceptual side of marketing and
the creative side. Concepts are one side of the coin and creativity is another.

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Importance of Marketing

Marketing is a very important aspect in business since it contributes greatly to the success of the
organization. Production and distribution depend largely on marketing. Many people think that
sales and marketing are basically the same. These two concepts are different in many aspects.
Marketing covers advertising, promotions, public relations, and sales. It is the process of
introducing and promoting the product or service into the market and encourages sales from the
buying public. Sales refer to the act of buying or the actual transaction of customers purchasing
the product or service.

Since the goal of marketing is to make the product or service widely known and recognized to
the market, marketers must be creative in their marketing activities. In this competitive nature of
many businesses, getting the product noticed is not that easy.

Strategically, the business must be centered on the customers more than the products. Although
good and quality products are also essential, the buying public still has their personal
preferences. If you target more of their needs, they will come back again and again and even
bring along recruits. If you push more on the product and disregard their wants and the benefits
they can get, you will lose your customers in no time. The sad thing is that getting them back is
the hardest part.

Marketing Promotes Product Awareness to the Public

It has already been mentioned in the previous paragraph that getting the product or service
recognized by the market is the primary goal of marketing. No business possibly ever thought of
just letting the people find out about the business themselves, unless you have already
established a reputation in the industry. But if you are a start-out company, the only means to be
made known is to advertise and promote. Your business may be spending on the advertising and
promotional programs but the important thing is that product and company information is
disseminated to the buying public.

Various types of marketing approaches can be utilized by an organization. All forms of


marketing promote product awareness to the market at large. Offline and online marketing make
it possible for the people to be educated with the various products and services that they can take
advantage of.

A company must invest in marketing so as not to miss the opportunity of being discovered. If
expense is to be considered, there are cost-effective marketing techniques a company can embark
on such as pay-per-click ads and blogging.

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Marketing Helps Boost Product Sales

Apart from public awareness about a company‘s products and services, marketing helps boost
sales and revenue growth. Whatever your business is selling, it will generate sales once the
public learns about your product through TV advertisements, radio commercials, newspaper ads,
online ads, and other forms of marketing. The more people hear and see more of your
advertisements, the more they will be interested to buy.

If your company aims to increase the sales percentage and double the production, the marketing
department must be able to come up with effective and strategic marketing plans.

Marketing Builds Company Reputation

In order to conquer the general market, marketers aim to create a brand name recognition or
product recall. This is a technique for the consumers to easily associate the brand name with the
images, logo, or caption that they hear and see in the advertisements.

For example, McDonalds is known for its arch design which attracts people and identifies the
image as McDonalds. For some companies, building a reputation to the public may take time but
there are those who easily attract the people. With an established name in the industry, a business
continues to grow and expand because more and more customers will purchase the products or
take advantage of the services from a reputable company.

Origin of Marketing
The actual term ‗marketing‘ may be a creation of recent history, often associated with the dawn
of the 20th century. However the actions of marketing date back thousands of years. We know
from excavations of caves that early civilizations used ‗advertising‘ to inform other members of
the community of events and issues, indeed also to warn them of perils in the area. Equally
customers or consumers, as we know them, are far from being a recent phenomenon. Customers
are as old as the first transaction between two people. The social, economic, political and
technological changes during the 20th century revolutionized the way we lived and worked.
Moreover these ‗revolutions‘ provided the means or the platform for an equally dramatic change
in the marketing of products and services linked to dynamic competitive environments. The 21st
century obviously remains an unknown quantity. Already in its early years 21st Century has
witnessed tremendous growth in certain business sectors, decline in others, increased
competition in both home and international markets, societal change and geopolitical turmoil.
Where the next 20 or so years will lead us is anyone‘s guess. However, marketing, in one form or
another, will play an integral role in reacting to change and even shaping change.

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Scope of Marketing
Marketing is something that affects every one of us every waking moment of our lives – even
though we may not necessarily be conscious of it. From that very moment we stir out of deep
sleep, turn on the radio or television, and walk around the house, we are bombarded by
marketing messages. They are not always in the form of advertisements beaming from the radio
or television. Think of the packaging in your kitchen or bathroom. Even on non-commercial
radio and television stations there are still marketing messages, in the form of publicity and
public relations. Even before we leave the house we have already seen or heard hundreds of
marketing messages. Then it just explodes – newspapers, magazines, billboards and posters.
There are messages everywhere, invading every aspect of our lives.

All this relates to marketing, but how do we define marketing? This is not as easy as one might
think. Indeed as Cooke, Rayburn and Abercrombie (1992) suggested, ‗after about 80 years of
formal marketing education (thought) there is no consensus on the definition of market‘. Has this
perspective changed? No. It is perhaps a scary thought that a subject that is a major course at the
vast majority of universities has no hard and fast definition. However, being able to debate a
definition for marketing allows us to consider the subject as being flexible and dynamic, just like
the world we live in. In the next section we investigate some of the various definitions of
marketing, drawing on a range of subject areas. It may well turn out that there is no one
definition that fits all aspects of marketing. As marketers we may have to be flexible in our
understanding of the subject, and its relationship with us both as individuals and a society,
especially within a turbulent macro environment.

Different approaches to Definition of Marketing

An Economics Approach

With an economics approach the emphasis is on products (usually referred to as goods) and
services, sources of supply, the most commonly used channels of distribution and the functions
performed during the marketing process (Cooke et al. 1992).

Three definitions can be provided on the basis of the economics approach:

Marketing is the performance of business activities directed toward, and incident to, the flow of
goods and services from producer to consumer or user.
(American Marketing Association (AMA) 1948)

Marketing embraces all the business activities involved in getting commodities of all kinds,
including services, from the hands of producers and manufacturers into the hands of the final
consumers. All the business steps through which goods progress on their way to final
consumption is the concern of marketing. This is especially true of the points in those stages at
which change of ownership takes place. (McNair et al. 1975)

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Marketing is the performance of business activities that direct the flow of goods and services
from producer to consumer or user. (AMA 1960)

As Cooke et al. (1992) state, there are several key words that summarize these definitions:
goods/services
transfer of ownership
storage
flow of goods/services
distribution/transport
functions.

A consumer’s (or buyer’s) approach

This perspective arises out of consumers‘ dissatisfaction with products, services and the
organizations that provide them. Linked to this is the subsequent need for governments to protect
individual consumer rights through legislation. The dissatisfaction emanated from the following
views:
The marketing system was unresponsive to consumer wants.
Marketing practitioners were unscrupulous.
Marketers made claims that were not borne out by the actual performance of the
product.
Consumers sought increased product quality.
Increasing concern over hazardous and unsafe products entering the marketplace,
especially electrical goods and children‘s toys.
Concern over misleading advertising, deceptive packaging and labeling.

These definitions provide an insight into the consumer perspective:

Marketing consists of four general activities:


1. Identifying and selecting the type of customer that the business will cultivate, learning his
needs and desires;
2. Designing products or services that the firm can sell at a profit in conformity with customers
desires;
3. Persuading customers to buy at the firm‘s offerings;
4. Storing, moving, and displaying goods after they leave the production site.
(Oxenfeldt 1966)

Note the use of the word ‗his‘. Perhaps the focus remained male dominated?

That process through which a business enterprise, institution, or organization 1. selects target
customers or constituents, 2. assesses the needs or wants of such target customers, and 3.
manages its resources to satisfy those customer needs or wants. (Star et al. 1977)

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As Cooke et al. (1992) state, there are several key words that summarize these definitions:
consumer
meet – fulfill – satisfy
product (goods and services)
wants
determine – assess needs
needs
target customers.

The societal approach

This can be considered as a needs-fulfilling exchange or relationship activity that is present, to a


greater or lesser degree, within all cultures. Cooke et al. (1992) suggest that it is the ‗process of
exchange in society and this process must occur in society so that the consumption of values can
occur‘. They continue: The societal view of marketing as exchange relationships begin with the
basic idea that most human behavior is the planned, purposeful quest and search for want
satisfaction. Individuals act to satisfy their wants and desires. Goods, services, or ideas are the
source of this satisfaction.

Cunningham and Cunningham (1981) suggest that societal marketing performs three essential
functions:

1 As an information network – knowing and understanding the consumer‘s changing


needs and wants.
2 Equalizing the distribution function – efficiently and effectively managing the supply
and demand of products and services.
3 Centralizing the exchange function – efficient provision of distribution and payment
processing systems.

These definitions provide an insight into the societal perspective:

Marketing may be thought of as that phase of business activities which human activities are
satisfied by the exchange of goods and services, on the one hand, for some valuable
consideration using money or its equivalent on the other. (Pyle 1931)

Marketing is the delivery of a standard of living to society. (Mazur 1947)

As Cooke et al. (1992) state, there are several key words that summarise these definitions:
consumption – relationship
matching
society
exchange
social process
standard of living.

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The managerial or systems approach


This is the approach of management within individual companies or organisations (including
not-for-profit and public sector organisations) to marketing. The emphasis is on how the
individual organisation processes marketing and develops the strategic dimensions of marketing
activities.

Hughes (1978) suggests that marketing managers focus on market analysis and the selection of
target market segments, strategy development and the creation of a profit plan. Of course, a
profit plan does not exist within a not-for-profit organisation, such as a charity. Nevertheless
these organizations need to generate revenues to both develop the organisation and to deliver
products/services to its clients: for example, the distribution of food and medical supplies in
famine-stricken areas.

The managerial approach can be described as follows:


Marketing is the combination of activities designed to produce profit through ascertaining,
creating, stimulating, and satisfying the needs and/or wants of a selected segment of the market.
(Eldridge 1970)

As Cooke et al. (1992) state, there are several key words that summarise this approach:
business – corporation – organisation
goods – services
objectives of organisations
product development – design
stimulate (demand)
assess – determine
create (demand)
meet – fulfil
profit
strategy
target (customers).

A broader approach
While some definitions fit relatively neatly into one of the four categories above, not all
definitions do. Perhaps marketing is not as easy to define as we might think?
In the early 1990s Kotler defined marketing as:

A social and managerial process by which individuals and groups get what they need and want
through creating and exchanging products of value with others.
(Kotler 1991)

By 2000 he had slightly modified this to: A societal process by which individuals and groups
obtain what they need and want through creating, offering, and freely exchanging products and
services of value with others.
(Kotler 2000)

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While the differences between the two definitions might appear slight, they are significant.
Consider the following:
a) The second definition has introduced the term ‗societal‘ and removed the managerial
element. However, it could be debated that marketing needs management of the process
in order for it to be both effective and efficient. Also in the second definition the word
‗freely‘ is introduced. Marketing involves an exchange of one form or another. This can
be an exchange of a product for money. Equally it could be an exchange of an emotional
feeling (for instance, a thank you) for a donation to a charity, or a huge hug when we give
a gift to a loved one.

b) In the second definition Kotler has also introduced the word ‗service‘. While an early
focus on marketing was driven by ‗products‘, the last 30 years especially have witnessed
a dramatic rise in service-oriented business, covering everything from travel companies
to supermarkets. Thus ‗service‘ is a key ingredient in marketing operations, even within a
mainly product-based business. This is an element that recurs throughout this text.

Now compare Kotler‘s views with those of the AMA. In many ways they are similar, only
differing in some of the nomenclature and specifics, such as pricing. However, it could be argued
that the AMA‘s definition is more financially focused in terms of transactions.

In the 1960s the AMAdefined marketing as: The process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods and services to create exchanges
that satisfy individual and organisational goals. (AMA 1960)

As Cooke et al. (1992) state, definitions of marketing change as a result of environmental


changes, or because our knowledge of the subject improves, or indeed through a combination of
these two reasons. Marketing as a subject or discipline is therefore evolving. It is important to
comprehend marketing as a dynamic and not a static subject. As we shall see as we journey
through this textbook, the elements that comprise the marketing discipline are often in a state of
flux due to the fluidity of both the micro and macro environments.

It is how the people involved in marketing handle such environments and experiences that often
determines whether a product or service is viable or not, and over what time frame. This is made
clear by a new definition issued by the AMA in 2004 (Keefe 2004): Marketing is an
organizational function and set of processes for creating, communicating and delivering value to
customers and for managing customer relationships in a way that benefits both the organization
and the stakeholder.

While there is still an emphasis on process – that is fundamental to marketing – we now see the
use of the words ‗value‘, ‗managing customer relationships‘ and ‗stakeholders‘ being brought to
centre stage. These are issues that are reflected
throughout this text.

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Equally, as Mercer (1997) contends: Marketing is the one (our italics) fundamental activity
undertaken by all organizations. For most of them it is also the most important contributor to
their success or failure.

Mercer (1997) also suggests that marketing is: Both a relationship with the customer, based upon
a series of transactions which, over time, should result in mutual benefit, and a parallel dialogue
between you and the customer(s), which communicates the information necessary to define the
relationship.

There are several key elements to Mercer‘s description which define the interaction between
customer (buyer) and supplier (seller) as ‗complex‘. This complexity has often been overlooked.

Relationships
These must be seen as two-directional, not just purely seller to buyer, but also buyer to seller.
The seller must understand the needs and wants of the buyer in order to deliver a suitable product
and/or service.

Transactions
Traditionally writers have considered transactions purely in terms of the exchange of money for
a product. This is a tangible transaction: something solid changes hands. Thus there was a view
that definitions containing the word ‗transaction‘ were not applicable to not-for-profit
organisations, such as charities, as the transactions they dealt in were
intangible. However a transaction does not have to include money for a physical product or
service: it can equally take place within a charitable environment. For instance, if a person
donates 100 INR to a children‘s charity, three parties benefit from that donation:
the child who receives the direct benefit of the donation
the charity in terms of raising donations and its profile
the individual who donates the 100 INR,

whose element of the transaction is the psychological good he or she feels, and the belief that he
or she has contributed to helping to provide a child with a better life.

Time
Mercer (1997) refers to ‗a series of transactions which, over time, should result in mutual
benefit‘. The time element could be construed in several ways. Some transactions take place
within a very short time frame. For example, a commuter buying a newspaper from a street
corner vendor on his or her way to work is engaged in a quick transaction. Others do not. For
example, an individual may want to purchase a product or donate to a charity. He or she is short
of funds and unable to do so right away, but intends to do so later, perhaps in a week or a month.
One important issue here is the need for the organisation to maintain a dialogue with the
prospective customer . Mercer‘s statement comes into its own when the
buyer and seller develop a relationship. Continual transactions – for example, regular visits to a
particular restaurant – can deepen the relationship between the staff/owner and the customer. The
mutual benefit derived can be a mixture of:
revenue for the restaurant

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not only from the customer but also from the customer‘s friends (to whom he or she
recommends it)
loyalty from the customer in the form of continuing support
the food and ambience that the customer enjoys, and his or her personal feeling of
‗reward‘ for dining at that restaurant.

Dialogue
There must be a dialogue between the buyer and the supplier. This can take two forms.

Supplier to buyer
This is usually in the form of marketing communications such as advertising and public
relations. This is where the supplier communicates and promotes the features and benefits of the
product or service.

Buyer to supplier
This is where buyers either directly or indirectly state their personal needs and wants. A
customer may communicate directly with a company through marketing research, where the
company seeks feedback on specific marketing issues. Alternatively, the customer may have an
indirect dialogue with the company by switching brands.

This indirect dialogue can be seen as informing the company that ‗something is wrong with the
product‘. This ‗problem‘ could be price, quality, accessibility or a combination of factors.

We have looked at a few definitions of marketing, but there are significantly more. McDonald
(2002), for example, cites some 30 definitions. Virtually everyone who has written on the subject
of marketing has probably put forward his or her own definition in one way or another. So as for
many other disciplines, there is no absolute definition. The definitions given vary to a greater or
lesser extent, depending on circumstances, attitudes and the time at which they were conceived.
At the end we briefly consider the future of this discipline called ‗marketing‘. While it will
continue to affect our lives into the distant future, what we call it and how we define it may be
different from the terms we use now.

Finally, What is Marketing

As per AMA (American Marketing Association) Marketing is an organisationsl functions and a


set of processes for creating, communicating and delivering value ot customers and for anaging
customer relationships in ways that benefit the organization and its stakeholders.

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Marketing in 21st Century


Initially it may seem out of place to comment on future trends towards the end of the first
chapter. However, in attempting to understand what marketing is, we need to consider and
analyse where marketing is positioned today, and where it may be positioned in the future. While
there are numerous industry watchers, in the main the focus of investigation has been the work of
the Marketing Science Institute (MSI). In its research it has outlined the key developments and
research topics over a ten-year period. Many of the issues raised in the MSI research are
discussed in this text. However, it is worth briefly considering what might be the ‗hot‘ marketing
topics over the next years or so.

It is easy to speculate; that is part of the fun. So here is some blue-sky thinking for the
future: There will be stronger links between marketing and strategy. It will be the real
strategic thinkers who will be able to leverage products or services into the marketplace.
Indeed the marketplace may increasingly be looked upon as a battle space where
companies compete for market share.

Competitive sustainability will become increasingly hard to maintain within a global


business environment. More of the developing nations will attain developed status, and
have the products and services to compete with established companies and brands head to
head. The major brands of the future might be not American or European, but Indian,
African and Chinese. China-based companies have already created several major brands.

The marketing mix and relationship marketing will combine to form a new approach
to how companies and organizations relate to their customers.

Information will be the key to success in the competitive world of the future. Thus
competitive intelligence and marketing research will form the platform for the
development of new marketing information systems, incorporating real-time analysis.

Computing power will increase, and lead to more embedded systems within the home
and office that act on behalf of customers. For instance, remote systems will order
products and services automatically. Thus will marketing messages need to be directed to
the home computer system rather than the home owner? Will customers use home
computers to remove the marketing clutter from their lives?

The World Wide Web and the Internet will grow – but what form will they take, how
will we interact with them, and on what scale? Whatever the answers, companies will
need to be both proactive and reactive to meet the needs of customers working and living
in cyberspace.

Measurement will be critical to truly understanding success or failure. Computer


systems will drive the mathematics to interpret real time movements in products and
services.

Customers will seek deliveries at times that suit them. While some companies are already

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providing such services, not all companies have realized that customers will switch
brands based upon delivery slots. This is because people‘s time is increasingly limited.
Companies that cannot adapt their distribution channels to meet customer demands will
not survive.

Customers will seek the best deal for them, so brand switching will increase.
Companies thus need to position themselves in the group of brands that customers
consider. There will no longer be single brands of choice.

Consumers will seek higher ethical standards from companies and organisations. The
scandals of the late 1990s and early 21st century have cost stakeholders significantly, for
instance, in stock values, life savings and product– service quality. Organisations that fail
to meet higher standards will see increasing shareholder power and boycott action.

Clearly these are major issues. However, perhaps the greatest concern facing humankind
is the threat of global warming and global dimming. Individuals, companies and
governments must consider the reality of this environmental threat, and how they tackle
this issue might determine the outcomes of many of the trends suggested above.

These are thoughts based upon current trends. However, as we live in an increasingly turbulent
world it is really difficult to predict developments over the next few years. Whatever happens it
will be a challenge for marketers, no matter what type of organization they work in.

Exchange and Transactions


Exchange is the process of obtaining a desired product from someone by offering something in
return. For exchange potential to exist, the following conditions must be satisfied:
A) There are at least two parties.
B) Each party has something that might be of value to the other party.
C) Each party is capable of communication and delivery.
D) Each party is free to accept or reject the exchange offer.
E) Each party believes it is appropriate or desirable to deal with the other party.
F) Exchange is a value-creating process because it normally leaves both parties better off.
G) A transaction is a trade of values between two or more parties and involves several
dimensions:
1) At least two things of value.
2) Agreed upon conditions.
3) A time of agreement.
4) A place of agreement.

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H) A transaction differs from a transfer. In a transfer, A gives X to B but does not receive
anything tangible in return.

I) Marketers seek to elicit a behavioral response from another party.

What is marketed?

Marketing is not restricted to products produced by manufacturers. Look at the following grid
showing what all can be marketed by marketing people

Goods Persons Places


This includes physical goods Celebrity marketing is catching States, regions and whole nations
constitute the bulk of most up in 21st Century. Think of compete to attract investors,
countries‘ production Yuvraj Singh, Amitabh Bachhan, tourists, companies, for their
Akshay Kumar, Shahrukh Khan growth. Place marketers include
endorsing several products. economic development
specialists, financial and non
financial institutions, business
associations. Delhi is being
marketed as place of CWG-2010
Organizations Properties Ideas
Think of TATA..It gives you Properties are intangible rights of Tata Nano – was an idea to
feeling of ownership of either real property trigger the demand of vehicles
patriotism..RELIANCE – It or financial property. Both can among middle class of India.
gives you feeling of bought and sold. Such exchange Nokia also sells ideas. Who can
abundance..State Bank of India- requires marketing. Think of deny power of idea in WAVES
It gives you confidence. financial securities agencies like or DOLBY Cinemas. METRO is
Organisations actually work to Angel Broking, Karvy, Tata also an idea. Factories make
build a strong, favourable and securities, Moti Lal Oswal products, stores sell idea behind
unique image in the minds of Securities etc. products.
their targeted customers.
Information Networks Values and Beliefs
Why do you read Economic All social networking through Social and Cultural values and
Times…Why do you watch Facebook, Twitter, Blogs, beliefs are marketed. Think of
Bloomberg TV…Why people Linkeldn is good example to Terrorists – they market their
read India Today…Why do learn network or viral marketing. own values. Think of ―Pujari‖ in
ladies read ―Fashion‖ magazine People join facebook to remain Temple he is marketing his
? What is Call Center? Yes connected to several people and religious values and beliefs.
Information is also marketed share their ideas. Think of There are several products
through mentioned products or AMWAY – snowball marketing. associated with such beliefs and
services. One person recruits 5 persons values that are produced and
and then each of them recruits marketed commercially.
five each hence so on..

Who Markets?

Marketers and Prospects are those who markets? A marketer is someone who seeks a response –
attention a purchase from another party called the prospects. If both parties are seeking to sell

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something to each other both are marketers. It is basically described as Seller-Buyer, Seller-
Seller connectivity.

The basic function of marketers is to trigger demand of various products or services. Marketers
are basically responsible for demand management. They seek to affect the level, timing and
composition of demand to meet the organizations‘ objectives. The following demand states are
possible:
1) Negative demand—consumers dislike the product and may even pay a price to avoid it.
2) Non-existent demand—consumers may be unaware or uninterested in the product.
3) Dormant 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) Asymmetrical demand—consumer purchases vary on a seasonal, monthly, daily, or even
an hourly basis.
6) Full demand—consumers are adequately buying all product put into the marketplace.
7) Overfull demand—too many consumers would like to buy the product that can be
satisfied.
8) Objectionable demand—consumers may be attracted to products that have undesirable
social consequences.

Markets
Economists describe a market as a collection of buyers and sellers who transact over a particular
product or product class.
Marketers use the term “market” to cover various groups of customers. They view the sellers as
constituting the industry and the buyers as constituting the market. They talk about need markets,
product markets, demographic markets, and geographic markets.
A) Sellers and buyers are connected by flows:
1) Seller sends goods, services, and communications to the market.
2) In return they receive money and information.
3) There is an exchange of money for goods and services.
4) There is an exchange of information.
Key Customer Markets
A) Consumer Markets (B 2 C)
Consumer goods and services such as soft drinks and cosmetics, spend a great deal of time
trying to establish a superior brand image. Much of a brand‘s strength depends on developing
a superior product and packaging, ensuring its availability and backing it with engaging
communications and reliable services
B) Business Markets (B 2 B)

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Companies selling business goods and services often face well-trained and well-informed
professional buyers who are skilled in evaluating competitive offerings.
C) Global Markets
Companies face challenges and decisions regarding which countries to enter, how to enter the
country, how to adapt their products/services to the country, and how to price their products.
D) Nonprofit and Governmental Markets (B 2 G)
Companies selling to these markets have to price carefully because these organizations have
limited purchasing power.

MARKETPLACES, MARKETSPACES, AND METAMARKETS


The marketplace is physical; the marketspace is digital.
Northwestern University’s Prof. Mohan Sawhney has proposed the concept of metamarkets to
describe a cluster of complementary products and services that are closely related in the minds of
consumers but are spread across a diverse set of industries. An example is the automobile industry
that consists of physical locations (car dealers) and marketspace locations (Internet locations) that
consumers use in deciding what car to purchase.

Changing role of Marketing in 21st century


Function of marketing is not restricted to marketing department of any business organization.
Companies generally establish a Marketing Department to be responsible for creating and delivering
customer value. Companies now know that every employee has an impact on the customer and must
see the customer as source of the company‘s prosperity. So they are beginning to emphasize
interdepartmental teamwork to manage kep processes. In practice Marketing follow logical process.
The marketing planning process consists of analyzing marketing opportunities, selecting target
markets, designing marketing strategies, developing marketing programs, and managing the
marketing effort. The changing new marketing environment is putting considerable demand on
marketing executives. There are five key functions of Chief Marketing Officer of any company:
1. Strengthening the brand
2. Measuring Marketing effectiveness
3. New product development based on customer needs
4. Gathering meaningful customer insights
5. Utlising new marketing technology.

Core Concepts of Marketing


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To understand the marketing function, we should understand the following core set of concepts

Needs, Wants, and Demands


Marketers must try to understand the target market‘s needs, wants, and demands.
A) Needs are basic human desires.
B) Wants are shaped by one‘s society.
C) Demands are wants for specific products backed by an ability to pay.
D) Marketers do not create needs—needs pre-exist marketers.
E) Marketers, along with society influence wants.
1) There are five types of needs that marketers must understand:
a. Stated needs – customer wants an inexpensive car
b. Real needs – customer wants a care whose operating cost is low
c. Unstated needs – customer expects good service from the dealer
d. Delight needs – customer would like the dealer to include an onboard navigation
system
e. Secret needs – customer wants friends to see him as a savvy consumer.

Target Markets, Positioning, and Segmentation

A marketer can rarely satisfy everyone in a market. Not everyone likes the same cereal, hotel room,
restaurant, automobile, college or movie. There fore marketers start by dividing the market into
segments. They identify and profile distinct groups of buyers who might prefer or require varying
product and service mixes by examining demographic, psychographic and behavioral differences
among buyers. Thus, following is must:
A) The marketers must divide the market into segments.
B) The marketer then decides about target markets.
C) For each chosen target market, the firm develops a market offering.
D) The offering is positioned in the minds of the target buyers as delivering some central
benefit(s).

Offerings and Brands


A) Companies address nedds by putting forth a value proposition, a set of benefits that they offer
to customers to satisfy their needs.
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B) The intangible value proposition is made physical by an offering which can be a combination
of products, services, information and experiences.
C) A brand is an offering from a known source. A name such as Mc Donald‘s carries many
associations in peoples‘ minds that make up the brand image: hamburgers, fun, children, fast
food, convenience, and golden arches. Companies strive to build a strong,favourable and
unique brand image.

Value and Satisfaction


A) The offering will be successful if it delivers value and satisfaction to the target buyer.
B) The buyer chooses between different offerings based on which is perceived to deliver the most
value.
C) Value reflects the perceived tangible benefits and costs to customers.
D) Value can be a combination of quality, service, and prices called the customer value triad.
E) Value is a central marketing concept.
F) Marketing can be seen as the identification, creation, communication, delivery, and
monitoring of customer value.
1) Satisfaction reflects a person‘s comparative judgment resulting from a product‘s perceived
performance (or outcome) in relation to his or her expectations.
Marketing Channels
Primarily there are three kind of Marketing channels:
A) Communication channels deliver and receive messages from target buyers.
B) Distribution channels to display, sell, or deliver the physical product or service(s).
C) Service channels to carry out transactions with potential buyers (warehouses, transportation
companies, banks).

Supply Chain
A) Describes a longer channel stretching from raw materials to finished goods.
B) Represents a value delivery system.
e.g. The supply chain for women‘s purses starts with hides and moves through training, cutting,
manufacturing and the marketing channels to bring products to customers. Each company captures
only a certain percentage of the togal value generated by the supply chain‘s value delivery stystem.
When a company acquires competitors or expands upstream or downstream, its aim is to capture a
higher percentage of supply chain.

Competition
A) Includes all the actual and potential rival offering and substitutes that a buyer might consider.
Suppose an automobile company is planning to buy steel for its cars. There are several
possible levels of competitors. The manufacturer can buy steel from Mittal steels in India , it
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can buy from foreign firm POSCO in Korea, it can buy from a minimill AARTI steels at a
cost savings or it can buy aluminum from Alcoa for certain parts to reduce the car‘s eight or
engineered plastics from GE plastic.
The marketing environment consists of the task environment and broad environment. The task
environment includes the actors engaged in producing, distributing an dpromoting the offering. There
are the company, suppliers, distributors, dealers and the target customers.
The broad environment consists of six components : economic environment, social and cultural
environment, technological environment, poliocal-legal environment and demographic environment.
How Business and Marketing Are Changing – The New Marketing realities
A) Shift in technology.
There is a constant shift in technology from last two decades. Take an example of telecommunication
industry. There is considerable shift in consumer demand because of invent and update of mobile,
wireless communication on continous basis. Two decades back people used to have one telephone at
home as requirement and now a days it has become luxury and status symbol as a result in one family
everybody is carrying different technologies of mobile phones despite having one landline. Thus it
indicates business of telecommunication has changed so as Marketing efforts.
B) Globalization.
Sony, LG, Standard Chartered Bank, HSBC, Citibank, Pepsi, Coke, etc. there are many brands and
companies that are known as global organizations. Globalization has led to presence of one product or
brand to several countries and its presence make you feel at home wherever you go across the world.
This is the one aspect. On the other hand think of these companies those market their products at
different geography to different demography. Thus causing change in the dimension and focus of
marketing such products. Therefore Globalisation has brought in several changes into business and
marketing world
C) Deregulation.
Many countries have deregulated industries to create greater competition and growth opportunities.
Deregulation of oil prices in India is the recent example to understand it. It will lead to competition
among oil companies operating in India and their marketing efforts have received new shift and
dimenstion altogether.
D) Privatization.
India is the best example and year 1999 has lot to make it clear to all when Liberalisation,
Privatisation and Globalisation were introduced to Indian Economy. There are many other countries
that have converted public companies to privat eowernship and management to increase their
efficiency. Modern Foods Limited, ITC Hotels, Maruti Suzuki are certain examples in India and
British Airways and British Telecom are another examples at outside world. Privatisation has also
brought change in Marketing world.
E) Customer empowerment.
Customer of 21st century is knowledgable, attentive, price and quality conscious, analytical and aware
of consumer rights. Information, Education and law has give sufficiently empowered customer with
so many rights. Customer of 21st century demands quality, reasonable price, after sale service,
customer care and proper knowledge about the product. Thus it has changed the old marketing
concepts to newer world of innovation and transparency.
F) Customization.
Dell started offering customized computers to its customers. Go to any bakery customized cakes are
offered to the customer. Gradually even in education industry institutions like ISB, Hyderabad and

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IIMs provide customized education to the professionals. In 21st century need of customer is addressed
by the companies by offering customized products.
G) Heightened competition.
Brand manufacturers are facing intense completion from domestic and foreign brands, resulting in
rising promotion costs and shrinking profit markings. They are being further buffeted by powerful
retailers that command limited shelf space and are putting their own store brands in competition with
national brands.
H) Industry convergent.
Industry boundaries are blurring at an incredible rate as companies are recognizing that new
opportunities lie at the intersection of two or more industries. The computing and consumer
electronics industries are converging as the giants of the computer world such as Dell, Gateway, HP
release a stream of entertainment devices – from MP3 players to plasma TVs and camcorders. The
shift to digital technology is fueling this massive convergence.
I) Disintermediation.
The amazing success of early online dot comes such as AOL, Amazon.com, Yahoo. eBay and dozens
of others that created disintermediation in the delivery of products and services by intervening
between the traditional flow of goods through distribution channels. Many brick and click competitors
became stronger contenders than pure-click firms, because they had a larger pool of resources to work
with and well established brand names.

Besides above the consumer in 21st century has added more capabilities, that are as follows:
1. A substantial increase in buying power
2. A greater choice and variety of products
3. A great amount of information
4. An ability to compare notes on products and services
5. An amplified voice to influence peer and public opinion

COMPANY ORIENTATIONS TOWARD THE MARKETPLACE


In the light of these marketing realities, what philosophy should guide a company’s marketing
effotts ? Increasingly, marketers operate consistent with a holistic marketing concept.
The competing concepts under which organizations have conducted marketing activities include;
the production concept, product concept, selling concept, marketing concept, and holistic
marketing concept.
Production Concept
A) It is one of the oldes concepts in business. The production concept holds that consumers will
prefer products that are widely available and inexpensive. Managers of production oriented
businesses concentrate on achieving high production effieciency, low costs and mass
distribution.
Product Concept
A) The product concept holds that consumers will favor those products that offer the most
quality, performance, or innovative features. Managers in these organizations foucs on making
superior products and improving them over time. However, these managers are sometimes
caught up in a love affair with their products. They might commit the ―better mousetrap‖
fallcy, believing that a better mosue trap will lead people to beat a path to their door.

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Selling Concept
A) The selling concept holds that consumers and businesses, will ordinarily not buy enough of
the organization‘s products, therefore, the organization must undertake aggressive selling and
promotion effort. The selling concept is practiced most aggressively with unsought goods,
goods that buyers normally donot think of buying such as insurance, encyclopedias and
cemetery plots. Most firsm also practice the selling conept when they have overcapacity. Their
aim is to sell what they make, rather than make what the market wants.
Marketing Concept
This concept emerged in 1950s Instead of product-centered ―make and sell‖philosophy, business
shifted to a customer-centered ―sense and respond‖ philosophy. The job is to find the right product for
right customers.
A) The marketing concept holds that the key to achieving organizational goals consists of the
company being more effective than competitors in creating, delivering, and communicating
superior customer value to its chosen target markets.
1) Reactive market orientation—understanding and meeting consumers‘ expressed needs.
2) Proactive marketing orientation—researching or imagining latent consumers‘ needs
through a ―probe-and-learn‖ process.
a. Companies that practice both reactive and proactive marketing orientation are
implementing a total market orientation.
Holistic Marketing Concept
Holistic marketing can be seen as the development, design, and implementation of marketing
programs, processes, and activities that recognizes the breath and interdependencies of their efforts.
Holistic marketing recognizes that ―everything matters‖ with marketing—the consumer, employees,
other companies, competition, as well as society as a whole.
Relationship Marketing
A) Relationship marketing has the aim of building mutually satisfying long-term relationships
with key parties—customers, suppliers, distributors, and other marketing partners.
Relationship marketing builds strong economic, technical, and social ties among the parties.
1) Marketing must not only do customer relationship management (CRM) but also
partnership relationship management (PRM).
2) Four key constituents for marketing are:
a. Customers.
b. Employees.
c. Marketing partners (channel partners).
d. Members of the financial community.
3) The ultimate outcome of relationship marketing is the building of a unique company asset
called a marketing network.

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A marketing network consists of the company and its supporting stakeholders (customers,
suppliers, distributors, retailers, ad agencies, university scientists, and others) with whom it has
built mutually profitable business relationships.
Integrated Marketing
A) The marketer‘s task is to devise marketing activities and assemble fully integrated marketing
programs to create, communicate, and deliver value for consumers.
B) The 4Ps of marketing: product, price, place, and promotion.
Marketing—mix decisions must be made for influencing the trade channels as well as the final
consumers.
1) Robert Lauterborn suggests that the sellers 4Ps correspond to the customers‘ 4Cs:
4Ps 4Cs
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication
C) Two key themes of integrated marketing are:
1) Many different marketing activities are employed to communicate and deliver value.
2) All marketing activities are coordinated to maximize their joint efforts.

Internal Marketing
A) Holistic marketing incorporates internal marketing, ensuring that everyone in the
organization embraces appropriate marketing principles.
B) Internal marketing must take place on two levels:
1) At one level, the various marketing functions (sales force, advertising, customer services,
product management, and marketing research) must work together.
2) Secondly, marketing must be embraced by the other departments—they must ―think
customer.‖ Marketing is not a department so much as a company orientation.
Social Responsible Marketing
A) Holistic marketing incorporates social responsibility marketing and understanding broader
concerns, and the ethical, environmental, legal, and social context of marketing activities and
programs.

Ten Marketing Blunders:


1. Company is not market focused and customer driven
2. Company does not target market
3. Company has no knowledge about its competitors
4. No relationship management

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5. Company is not good for finding new opportunities


6. Deficiency in plans
7. Product and Service policies need discipline
8. Brand building and communication is weaker.
9. Absence of efficient and effective marketing
10. No or negligible use of technology

Types of Marketing Organisations

Growth Champions :- such organizations are growth support functions, leading such general
management activities a sproduct innovation and new business development

Marketing masters : such companies oversee company wide marketing efforts and the customer
focused side of new product and service launches, although are typically not involved with strategic
deicisions.

Senior Consuelors : such organizations specialize in marketing strategy, advising the CEO and
invidivdual busineses and may drive major communication programs, although not typically new
products development

Best Practices Advisors: such organizations work with individual business units to improve their
marketing effectiveness and but are less likely to be linked with above avareage growth than botht eh
Growth champions and the Marketing masters.

Brand Builders: support brands by providing marketing services like communications strategy,
creative output and campaign execution but exhibit little strategic leadership

Service Providers – such organizations coordinate marketin communication but ofen work infirms
with lower revenue growth and profitabliity

Marketing Planning
A) Consists of analyzing marketing opportunities.
B) Selecting target markets.
C) Designing marketing strategies.
D) Developing marketing programs.
E) Managing the marketing effort.

Shifts in Marketing Management


A) A number of important trends and forces are eliciting a new set of beliefs and practices on the
part of business firms. These fourteen major shifts are:
1) From marketing does the marketing to everyone does the marketing.
2) From organization by products units to organizing by customer segments.
3) From making everything to buying more goods and services from outside.

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4) From using many suppliers to working with fewer suppliers in a ―partnership.‖


5) From relying on old market positions to uncovering new ones.
6) From emphasizing tangible assets to emphasizing intangible assets.
7) From building brands through advertising to building brands through performance and
integrated communications.
8) From attracting customers through stores and salespeople to making products available
online.
9) From selling to everyone to trying to be the best firm serving a well-defined target market.
10) From focusing on profitable transactions to focusing on customer lifetime value.
11) From a focus on gaining market share to a focus on building customer share.
12) From being local to being ―glocal‖—both global and local.
13) From focusing on the financial scorecard to focusing on the marketing scorecard.
14) From focusing on shareholders to focusing on stakeholders.

Thus to conclude, Marketing in 21 st century has brought in several new concepts and methods to
survive in the world of change. The concept of marketing has extended their reach from products
to customer delight, value delivery, relationship marketing and integration of all business
functions.

Coming chapters will include:


Marketing Management Tasks:
A) Developing marketing strategies and plans
B) Connecting with customers .
C) Building strong brands
D) Shaping the market offerings
E) Delivering value
F) Communicating value
G) Capturing marketing insights and performance
H) Creating successful long-term growth

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