Defining Marketing for the 21st Century

Topic # 1
Marketing Management (MBA)

What is Marketing?
The American Marketing Association offers the following formal definition:

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.
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What is Marketing?
Social Definition that serves our purpose:

Marketing is 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.

Core Marketing Concepts

Needs, Wants & Demands

Markets

Products & Services

Exchange, Transactions & Relationships

Value, Satisfaction & Quality

What are Consumers Needs, Wants and Demands?

Needs - state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am hungry. Wants - form that a human need takes as shaped by culture and individual personality. i.e. I want a burger, French fries, and a soft drink. Demands - human wants backed by buying power. i.e. I have money to buy this meal.

5 Types of Needs
Stated Needs the customer wants an inexpensive car Real Needs the customer wants a car whose operating cost, nor its initial price is low. Unstated Needs the customer expects good service from the dealer. Delight Needs the customer would like the dealer to include an onboard navigation system. Secret Needs the customer wants friends to see him as a savvy customer.

Demand States

Negative Nonexistent Latent Declining

Irregular Full Overfull Unwholesome

Demand States

Negative Demand
A major part of the market dislikes the product and may even pay a price to avoid itvaccinations, dental work, blood donations and operations, for instance. Marketers task is to analyze why is it happening and needs to offer marketing programs like product redesign, lower prices and positive promotions that can change the attitude. Make it into their likings, etc.

Demand States

Nonexistent Demand Target consumers may be unaware of or uninterested in the product. Farmers may not be interested in a new farming method, and college students may not be interested in foreign-language courses. Eg. Windows ME
Marketers task is to find ways to connect the benefits of the product with the persons natural needs and interests.

Demand States
Latent

Demand

Many consumers may share a strong need that cannot be satisfied by any existing product. Eg. Web portal for the Tourism Industry of Bangladesh. Marketers task is to measure the size of the potential market and develop a product / service to fulfill this need.

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Demand States
Declining

Demand

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Consumers begin to buy the products less frequently or not at all. Every organization faces declining demand for one or more of its products or services. E.g. Jet Washing powder compared to Surf Excel. Robin Liquid Blue compared to Ujala. The Marketer must analyze the reason for decline and must find a way (which can be redesigning the product or service or even offering a completely new product or service) to reverse the declining demand.

Demand States
Irregular

Demand

Consumers purchases vary on a seasonal, monthly, weekly, daily or even hourly basis. Many organizations face demand causing problems of idle or overworked capacity. E.g. Cold drinks companies, ice cream manufacturers, Water Kingdom during the Winter Season. Umbrella, Raincoats, etc. Marketing task called as synchromarketing, is to find ways to alter the pattern of demand through flexible pricing, promotion, and other incentives.

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Demand States
Full

Demand

Consumers are adequately buying all products put in the marketplace. Organization faces full demand when they are pleased with their volume of business. E.g. Cell phones Nokia, Computer Accessories Marketing task is to maintain the current level of demand in the face of changing consumer preferences and increasing competition. The organization must maintain or improve quality and continually measure consumer satisfaction.

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Demand States
Overfull

Demand

More consumers would like to buy the product that can be satisfied. Some organization face a demand level that is higher than they can or want to handle. Eg. University Set up tough questions in the admission exam, set up GPA benchmark, etc.
Marketing task called de-marketing (Which includes raising prices or stopping sales promotion) is sometimes required for these organizations. Selective de-marketing can also be done the aim of which is to reduce demand for those parts of the market which are less profitable or less in need of the product or service.

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Demand States
Unwholesome

Demand

Unwholesome products will attract organized efforts to discourage their consumption. Un-selling campaigns have been conducted against cigarettes, alcohol, hard drugs, handguns and large families. The marketing task is to get people who like something to give up, using such tools as fear message, price hikes, and reduced availability.

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What is Marketed?

Goods

Services

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Events

Experiences

What is Marketed?
Mark Zuckerberg Bill Gates

Persons

Organizations

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Places

Information

What is Marketed?

Ideas

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Properties

Customer Value and Satisfaction

Value Gained From Owning a Product and Costs of Obtaining the Product is Customer Value
Products Perceived Performance in Delivering Value Relative to Buyers Expectations is Customer Satisfaction

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Exchange and Transaction

Exchange is the core concept of marketing, it is the process of obtaining a desired product from someone by offering something in return. A Transaction is a trade of values between two or more parties.

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Exchange and Transaction

There are at least two parties. Each party has something that might be of value to the other party. Each party is capable of communication and delivery. Each party is free to reject the exchange offer. Each party believes it is appropriate or desirable to deal with the other party.

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Who Purchases Products and Services?

People Who Exhibit Need

Actual & Potential Buyers

Market Buyers who share

Resources to Exchange

a particular need or want that can be satisfied through exchange or relationships.

Willingness to Exchange

Sellers

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A Simple Marketing System

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Key Customer Markets

Consumer Markets Business markets Global markets Nonprofit/Government markets

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Key Customer Markets

Consumer Markets
Companies selling mass consumer goods and services such as soft drinks, cosmetics, air travel, athletic shoes and equipments spend a great deal of time trying to establish a superior brand image. Much of a brands strength depends on developing a superior product and packaging, ensuring its availability and backing it with engaging communications and reliable service.

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Key Customer Markets

Business Markets
Companies selling business goods and services often face well-trained and well-informed professional buyers who are skilled at evaluating competitive offerings. Business buyers buy goods in order to make or resell a product to others at a profit. Business marketers must demonstrate how their products will help these buyers achieve higher revenue or lower costs. Advertising can play a role, but the sales force, price and the companys reputation for reliability and quality may play a stronger one.

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Key Customer Markets

Global Markets
Marketers must decide first which countries to enter, how to enter each country (Export, Licenser, Joint venture partner, contract manufacturer, or solo manufacturer, etc.); how to price their products in different countries; and how to adapt their communications to fit different cultures. They make decisions in the face of different requirements for buying, negotiating, owning and disposing of property; different culture, language, legal and political systems and currencies that might fluctuate in value.

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Key Customer Markets

Nonprofit & Government Markets

Companies selling their goods to nonprofit organizations such as mosques, churches, temples, charitable organizations, and government agencies need to price carefully, because these buyers have limited purchasing power. Lower selling prices affect the features and the quality the seller can build into the offering. Much government purchasing calls for bids and the buyers often favor the lowest bid in the absence of justifying factors.

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Company (Marketing) Orientations

Production Concept

Product Concept

Selling Concept

Marketing Concept

Societal Marketing Concept

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Company (Marketing) Orientations

Production Concept
The Production Concept holds that the consumers will prefer those products that are widely available and inexpensive. - Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs and mass distribution. - Price of the products remains relatively low

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Company (Marketing) Orientations

Product Concept
The Product Concept holds that consumers will prefer those products that offer the most quality, performance and innovative features. - Managers in these organizations focus on making superior products and improving them over time.

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Company (Marketing) Orientations

Selling Concept
The Selling Concept holds that consumers, if left alone will ordinarily not buy enough of the organizations products. The organization must therefore undertake an aggressive selling and promotion effort.

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Company (Marketing) Orientations

Marketing Concept
The Marketing Concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.

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Company (Marketing) Orientations

Societal Marketing Concept

The Marketing Concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors in way that preserves or enhances the consumers and the societys well being.

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Company (Marketing) Orientations

Society (Human Welfare)

Customers (Want Satisfaction)

Societal Marketing Concept

Company (Profits)

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Company (Marketing) Orientations

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The Holistic Marketing Concept

The Holistic Marketing Concept is based on the development, design and implementation of the marketing programs, processes and activities that recognizes that everything matters in marketing and that a broad, integrated perspective is often necessary.

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The Holistic Marketing Concept

Marketing Department Senior Management Other Departments Products & Services

Communications

Channels

Internal Marketing

Integrated Marketing

Holistic Marketing
Performance Marketing
Brand & customer equity Legal Community Customers Channel Partners

Relationship Marketing

Sales Revenue Ethics

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Environment

The Four P Components of the Marketing Mix

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4 Ps

4Cs

Product Price Place Promotion

Customer Solution Customer Cost Convenience Communication

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END OF TOPIC # 1

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