Chapter 1

Defining
Marketing for
the Twenty-First
Century
PowerPoint by Karen E. James

Louisiana State University - Shreveport

2003 Prentice Hall, Inc.

To accompany A Framework for Slide 1 in

Objectives
Understand the new economy.
Learn the tasks of marketing.
Become familiar with the major
concepts and tools of marketing.
Understand the orientations
exhibited by companies.
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Objectives
Learn how companies and
marketers are responding to
new challenges.

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The New Economy

Consumer benefits from the digital
revolution include:
Increased buying power.
Greater variety of goods and services.
Increased information.
Enhanced shopping convenience.
Greater opportunities to compare product
information with others.
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The New Economy

CNET is one
of many sites
that provides
shopping
comparison
tools

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The New Economy

Firm benefits from the digital
revolution include:
New promotional medium.
Access to richer research data.
Enhanced employee and customer
communication.
Ability to customize promotions.
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The New Economy

Amazon is
known for
customizing
consumer
promotions

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Marketing Tasks

Entrepreneurial
Stages of
Marketing
Formulated
Intrepreneurial
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What Can Be Marketed?

Goods

Places

Services

Properties

Experiences

Organizations

Events

Information

Persons

Ideas

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Marketing Defined
Kotlers social definition:
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.
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Marketing Defined
The AMA managerial definition:
Marketing is the process of
planning and executing the
conception, pricing, promotion,
and distribution of ideas, goods,
and services to create exchanges
that satisfy individual and
organizational objectives.
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Core Marketing Concepts

Target markets and
market segmentation

Exchange and
transactions

Marketplace, marketspace, metamarkets

Relationship and
networks

Marketers & prospects

Marketing channels

Needs, wants, demands

Supply chain

Product offering and

brand

Competition

Value and satisfaction

Marketing program

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Marketing environment

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Core Marketing Concepts

Target markets & segmentation
Differences in needs, behavior,
demographics or psychographics
are used to identify segments.
The segment served by the firm is
called the target market.
The market offering is customized
to the needs of the target market.
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Core Marketing Concepts

Figure 1-1: A Simple Marketing System

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Core Marketing Concepts

Shopping can take place in a:
Marketplace (physical entity, Lowes)
Marketspace (virtual entity, Amazon)

Metamarkets refer to complementary

goods and services that are related
in the minds of consumers.
Marketers seek responses from
prospects.
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Discussion Scenario
Think about your most recent visit to a
specific marketspace.
Why did you visit this marketspace
instead of going to a marketplace? If
this site was a metamarket, how did it
make you aware of complimentary
items? How could your shopping
experience have been improved?
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Core Marketing Concepts

Needs describe basic human
requirements such as food, air, water,
clothing, shelter, recreation, education,
and entertainment.
Needs become wants when they are
directed to specific objects that might
satisfy the need. (Fast food)
Demands are wants for specific
products backed by an ability to pay.
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Core Marketing Concepts

A product is any offering that can
satisfy a need or want, while a brand
is a specific offering from a known
source.
When offerings deliver value and
satisfaction to the buyer, they are
successful.
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Core Marketing Concepts

Marketers can enhance the value of
an offering to the customer by:
Raising benefits.
Reducing costs.
Raising benefits while lowering costs.
Raising benefits by more than the
increase in costs.
Lowering benefits by less than the
reduction in costs.
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Core Marketing Concepts

Exchange involves obtaining a desired
product from someone by offering
something in return. Five conditions
must be satisfied for exchange to occur.
Transactions involve at least two things
of value, agreed-upon conditions, a time
of agreement, and a place of agreement.
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Core Marketing Concepts

Figure 1-2:
Two-Party
Exchange Map

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Discussion Scenario
When running for office, politicians
engage in advertising, debates, and
personal appearances.
Identify the prospect(s) typically
targeted by politicians. Map the
exchange process between the
politician and prospect(s). What types
of transactions may take place?
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Core Marketing Concepts

Relationship marketing aims to
build long-term mutually satisfying
relations with key parties, which
ultimately results in marketing
network between the company and
its supporting stakeholders.

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Discussion Scenario
Consider the marketing network
that supports your University.
How would you characterize the
relationship between the University
and its supporting stakeholders?
What relationship-oriented
activities might the University take
to strengthen these relationships?
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Core Marketing Concepts

Marketing
Channels
Communication
channels
Distribution
channels

Deliver messages to
and receive
messages from
target buyers.
Includes traditional
media, non-verbal
communication, and
store atmospherics.

Service channels
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Core Marketing Concepts

Marketing
Channels
Communication
channels

Display or deliver
the physical
products or
services to the
buyer / user.

Distribution
channels
Service channels
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Core Marketing Concepts

Marketing
Channels
Communication
channels

Carry out
transactions with
potential buyers
by facilitating the
transaction.

Distribution
channels
Service channels
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Core Marketing Concepts

A supply chain stretches from raw
materials to components to final
products that are carried to final
buyers.
Each company captures only a
certain percentage of the total value
generated by the supply chain.
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Core Marketing
Concepts
Four Levels of Competition
Generic competition
Form competition
Industry competition
Brand competition

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Discussion Scenario
Suppose that you are a member of
the ad agency team assigned to
the Red Bull energy drink account.
Identify key competitors at each
level of competition.
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Core Marketing Tools

Forces Impacting the Task Environment
Economics
Demographics
Natural Environment
Legal-Political Environment
Technological Environment
Socio-cultural Environment
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Core Marketing Concepts

Figure 1-3:
The Four P Components
of the Marketing Mix

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Company Orientations
The orientation of the firm typically guides
marketing efforts
Production Concept
Product Concept

Selling Concept

Marketing Concept Customer Concept

Societal Marketing Concept
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Discussion Scenario
Is the societal marketing concept
destined to be the prevailing
philosophy of the future, or will tough
economic times spell its demise?
Discuss the factors arguing in favor of
each of these viewpoints. How do you
think the marketing concept will
evolve?
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The Marketing Concept

Achieving organizational goals requires
that company be more effective than
competitors in creating, delivering, and
communicating customer value.
Four pillars of the marketing concept:
Target market
Customer needs
Integrated marketing
Profitability
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Core Marketing Concepts

Figure 1-4: The Customer Concept

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Changes in the
Marketplace
Globalization, technological
advances, and deregulation have
created many challenges:
Customers
Brand manufacturers
Store-based retailers

Both companies and marketers have

been forced to respond and adjust.
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