CHAPTER 1: MARKETING IN THE MILLENNIUM AGE

●​ Importance of Marketing
●​ Marketing Scope
●​ What Is Marketed
●​ Core Concepts in Marketing
●​ Marketing Management Tasks
●​ Major Marketing Decisions
●​ New Realities and Trends in Marketing in the Millennium Age

IMPORTANCE OF MARKETING
●​ Marketing - is a process through which a product or service is launched
and promoted to possible customers. The success of all businesses
centers in its marketing. A successful marketing is mainly what most
businesses aim for. A business may have the best product or service, but
without marketing no potential customers would be aware of it. Without
marketing, sales may collapse and may end the operation of companies.

Functions that show the significance of marketing in any business.

1.​ Customer - The primary recipient of a product or service, providing essential
feedback, driving sales through purchases, influencing market research by
sharing insights about their needs and wants, and ultimately contributing to brand
loyalty by choosing a company repeatedly based on their positive experiences.
The success of any marketing activity could influence the number of customers
who would willingly spend their money buying the companies' products and
services.
2.​ Finance - Financing may not be the most glamorous function of marketing, but
it's a crucial aspect. The marketing function of financing means having the
required financial means to run your business and how to spend it to get the
most ROI, or return on investment. A business becomes more financially
successful and stable when it is able to market its product and services.
3.​ Human Resources - No business could survive without human resources to
work for them. Human resources are the ones who produce the products or
render services to customers. Human resources in a business must have
marketing knowledge to attract customers in buying the goods or else the
business would not grow.
4.​ Production - More products being manufactured by the company means there
would be quantity of goods to trade and more earning opportunity as well.
5.​ Competition - Competition always starts when certain goods and services grow
to be more well-liked and then other companies will begin selling the same.
6.​ Decision - To analyze customer needs, market conditions, and competitive
landscape to make informed choices about the marketing mix (product, price,
place, promotion) to achieve specific marketing goals, such as increasing sales,
brand awareness, or customer loyalty.
7.​ Idea - The foundation for creating new products, services, campaigns, or
strategies.
 8.​ Economy - influencing consumer behavior and the strategies businesses use to
market their products.

MARKETING SCOPE
1.​ A consumer wants and needs - goods are created to suit consumer wants.
2.​ Consumer behavior - marketers do study consumer behavior. It is the buyer
behavior analysis that assist marketer in market segmenting, targeting and
positioning.
3.​ Product planning and development - it includes the activity of product
research, market research, market segmentation, product development, finding
out the attributes, quantity and quality of product.
4.​ Branding - Many well-known companies espoused to the branding of their
products for their reputation, appeal to more investment opportunities, build trust
among customers and for many other reason.
5.​ Packaging - used by marketer as a way to draw the attention of customer.
6.​ Channels of distribution - the functio of marketing manage and sales manager
to make an important decision concerning the best fitting channel of distribution
such as wholesaling, distribution and retailing of the product.
7.​ Pricing policies - planned and decided by the marketing marketing manager. It
depend on the nature of the products.
8.​ Sales management - includes identifying customers, determining the customer
needs, convincing customer to purchase products, customer service and other
similar activities.
9.​ Promotion - consist of personal selling, sales promotion and advertising.
10.​Finance - without finance, no marketing activity could be executed. Every
marketing activity such as packaging, advertising, personal selling and even
distribution require an appropriate budget to br accomplished.
11.​After-sales services - includes maintenance or repair of equipment by its
manufacturer or supplier, during and after a warranty period and attending to
customer's queries and solve the problems.

WHAT IS MARKETED?
1.​ Goods - are physical products that customers purchase from companies.
Example: food products, cars, televisions, and machines.
2.​ Services - an intangible activity, benefit, or item offered for economic value.
Example: Airlines, hotel and car rentals
3.​ Events - are promoted by the marketers. It can be in the form of trade shows,
company anniversaries, entertainment award show, local festivals, health camps
concert and so on.
Example: the fight of Manny Pacquiao, it is promoted aggressively both
companies and fans.
4.​ Experience - a product is promoted by communicating features and by
furnishing exceptional and exciting experiences to customers.
Example: Enchanted Kingdom represents experiential marketing. Customers
visit the fairy kingdom and experience various rides.
 5.​ Persons: who are involved in a company's marketing activities, either directly or
indirectly. This includes everyone who works for the company, such as customer
service representatives, salespeople, and marketing managers.
Example: Vice Ganda. It is recommended that each person not just celebrities
develops himself as a brand.
6.​ Places - cities, states, region and countries compete to draw tourist to their
places.
Example: Department of Tourism. It is persistently promoting tourist spots locally
and globally as embodied in its latest infomercial entitled " It's More Fun in the
Philippines"
7.​ Properties - the promotion of potential buyers, tenants, and investors. Bought
and sold through marketing.
Example: Real Property is the ownership of real estates, while Financial
Property relates to stocks and bonds.
8.​ Organization - dynamically make effort to build an image in the mind of their
target public.
Example: the organization's goodwill support, trust and reliability.
9.​ Information - can be created and promote a product.
Example: Educational institution, encyclopedias, non-fiction books, specialized
magazines and newspaper sells information.
10.​The idea - a new concept for a product or service, a creative way to engage
customers, or a strong message to communicate a brand.
Example: MMDA (Metro Manila Development Authority) always promotes safe
driving habits, need to wear seatbelts, need to prohibit childre from seating near
the driver seat and so on.

CORE CONCEPT IN MARKETING

According to Philip Kotler and Keller (2012) "Marketing is the process by which
companies create value for customers and build strong customer relationships in order
to capture value from customers in return".
To simply the definition, it says that:
1.​ Marketing produces value for the customer.
2.​ Marketing pleases customer as profits are generated
3.​ Marketing makes good relationship with customers
4.​ All activities of marketing are towards customer satisfaction.

NEEDS, WANTS AND DEMAND

Needs - the desires of consumers that motivate them to buy a product or service.
Three types of needs:
1.​ Existing Need - any need of the customer which is short term and is obtainable.
Example: if a person needs to throw away left overs, he must have a garbage
bin.
2.​ A Latent Need - it is a need of a customer which is there but has not manifested
itself because such a product has not been launched.
Example: Sony Walkman vs. Apple iPod
 3.​ Incipient Need - a type of need which people want but there is no product to
satisfy that need.
Example: a consumer noticing their favorite product is running low, triggering a
need to replenish.

Wants - form of human needs influenced by culture and individual personality.

Demand - is the wants for particular products that are suppoted by the ability and
willingness or readiness to buy them.
Three condition of Demand:
1.​ The desire of getting the product or service
2.​ Ability to pay for the product or service
3.​ Intention to pay for the product or service
Demand could be in these natures:
1.​ Negative demand - refers to a situation where a product or service is perceived
as undesirable or unappealing to customers resulting in a lack of interest.
Example: negative word of mouth and reviews.
2.​ No demand - refers to a situation where there is little to no interest or desire for a
product or service among potential customers.
Example : Low or zero sales
3.​ Latent Demand - a demand which the customer realizes later.
Example: features on cellphones.
4.​ Declining demand - refers to a situation where the demand for a product or
services is decreasing over time
Example: decreasing sales revenue
5.​ Irregular demand - refers to a situation where the demand for a product or
service is unpredictable, uneven, or intermittent.
Example: Christmas toys or decorations.
6.​ Full demand - satisfying the supply potential of teh company
Example: customer satisfaction ratings are high
7.​ Overfull demand - occur when the companies manufacturing capacity is
inadequate but the demand is above the supply.
Example: customer may experience delays or inability to purchase.
8.​ Unwholesome demand - other face of negative demand. The custoner should
be using the product yet desires the product badly.
Example: cigarettes, alcohols, guns and others.

MARKETING OFFERS
Marketing offers are some mixture of products, services, information, or experiences
presented to a market to gratify a need or want. Marketing offers include both product
and service or experience.

1. A product is everything that can be offered to a market for attention, acquisition, use
or consumption that may satisfy a want or need. It can also be referred to as a bundle of
satisfaction, physical and psychological. A product consists of core product (basic
contents or utility), product-related features (color, branding. packaging, labeling,
varieties, others) and product-related services (after-sales services, guarantee and
warranty, free home delivery, free repairing, and so on).

2. Service is any activity or benefit that one party can present to another that is
basically intangible and does not result in the ownership of anything.

Example: A taxi service is a service that is tangible. Taxi drivers provide both the good
(a car), which provides the means of travel, as well as the act of driving to a place,
which is measurable and essentially a service. Therefore a taxi cab driver provides both
a good and a service, so he is providing a product.

3. Experiences are knowledge or skill which is gained from doing, seeing or feeling
things.

UTILITY, COST, VALUE, AND SATISFACTION

1. Utility means an overall ability of a product to gratify need and want. It is a guiding
concept to select the product. Every product has a varying degree of utility. Buyer
purchases such a product, which has more utility. A utility is, therefore, the power of
product to satisfy a particular need.

2. Cost means the price of a product. It is the monetary value of a product. The charges
a customer has to pay to avail certain services can be said as cost. The utility of a
product is parallel with the cost that he has to give.

3. Customer value is the difference between the customer gains from owning and
using a product and the cost of obtaining the product. The definition suggests that there
are two aspects to customer value namely, desired value and perceived value.

Desired value refers to what a customer wants in a product or service.

Perceived value is the benefit that a customer believes he received from a product
after it was purchased.

4 Satisfaction is a person's feeling of delight or displeasure as a result of comparing a

product's perceived performance in relation to his or her expectations. Satisfaction
depends on the perceived performance of the product or service. Satisfaction means
fulfillment of needs.

EXCHANGES, TRANSACTION, RELATIONSHIPS AND NETWORK

An exchange is at the heart of marketing. Marketing management tries to arrive at the

desired exchange. Marketing materializes only when people would like to satisfy their
needs and wants using an exchange. An exchange is an act of acquiring a preferred
product from someone through offering something in return.
Example: Taking chocolates by paying money is a good example of an exchange. An
exchange is a process, not an event. It means that people are bargaining and going into
a consensus on an agreement.

A transaction is a decision entered into or commitment done. Transactions can be very

simple, like buying a newspaper, or extremely complex, taking a long time and involving
many companies or agencies. Some transactions are simple exchanges.
Example: Paying ten pesos for a cup of coffee is a transaction. Getting a haircut, eating
at a restaurant, even buying something expensive like a washer or dryer can be a
transaction.

Relationship marketing is the practice of building long-term profitable or satisfying

dealings with significant parties such as customers, suppliers, distributors, and others to
preserve their long-term preference in business. It needs trust, commitment,
cooperation, and a high degree of understanding economic, technical, social, and
cultural bind among the parties.

A marketing network includes the company and its supporting stakeholders such as
customers, employees, suppliers, distributors, advertising agencies, and others whose
role is regarded as necessary for the success of a business. It an enduring system of
relations with stakeholders. Eventually. relationships with important stakeholders would
result in performance and a good network of excelling the marketing.

MARKET, MARKETING, MARKETER, AND PROSPECT

A market comprises all possible customers sharing a particular need or want who might
be eager to and able to engage in exchange to gratify this need or want.

Marketing is a social and managerial process by which individuals and groups get what
they want and want by creating an exchanging product and value with others.

A marketer is one who seeks one or more buyers to engage in an exchange.

Prospect is someone to whom the marketers spots as possibly agreeable, unable to

engage in the exchange.

MARKETING MANAGEMENT TASKS

Marketing management is the study, planning , implementation and control of programs
intended to form, make and preserve equally beneficial exchanges and relationships
with target markets for the reason of reaching organizational objectives. The following
are its task on the whole:

1.​ Conversional Marketing develops from the situation of negative demand in

which all or most of the vital segments of the potential market hate the product or
service and in reality, may possibly pay the price to avoid it. It is the duty of the
 conversional marketing to create a plan to cause demand to rise from negative to
positive and eventually equal to positive supply level.
2.​ No demand state of the product exists when people are indifferent to such
product. The task of performing such a state into positive demand is called
Stimulational Marketing.
3.​ When a substantial number of people share a strong need for something that
does not exist in the form of an actual product or service, it is called latent
demand. The process of effectively transforming latent demand into a actual
demand is known as Developmental Marketing. A marketing manager must
discover the features which people might be seeking later and promote them to
the customer in such a way that he instantaneously wants them.
4.​ When the demand for product declines and shows a possibility of further fall the
marketing task involved in such a case is Remarketing. A marketers job and test
set version is to think of ways to revitalize the products so that the demand would
no longer be declining.
5.​ When a products current timing pattern of demand is marked by seasonal or
volatile fluctuation the marketing task of Synchro Marketing is necessary to
bring the movement of demand and supply into better synchronization.
6.​ Full demand exist when current level and timing of the month is equal to the
desired level and timing of demand. The task of the marketer in such a state is
Maintenance Marketing through preservation of efficiency in the carrying out of
day-to-day marketing activities and internal vigilance in spotting new forces that
may threaten to erode demand.
7.​ Overall demand exists when demand for a product or service begins to outpace
the supply substantially. The task of reducing such the one is known as
Demarketing. This is for the reason that even if the company keeps marketing,
but if it is not able to supply the material still the company may be badly injured in
terms of brand equity.
8.​ In a state of unwholesome demand, the demand is felt excessive because of
undesirable qualities associated with the offer. The task of trying to destroy such
demand is called Counter-Marketing. It involves advertising techniques which
try to reduce the demand for product being used.

MAJOR MARKETING DECISIONS

Regardless of whether a new organization is developing a brand new marketing plan or
if an established organization is tweaking or recreating a plan that already exists, any
effective marketing plan is built on the core fundamentals. Most marketing management
decisions fall into one of these main categories namely:

●​ Strategic Planning
A strategy is an outline of the company's roadmap for the successful attainment
of its goals and objectives At the different hierarchy of the organization, there
must be strategic planning for an effective marketing. Macro issues like corporate
mission and vision, management of the different strategic business units (SBU)
resource acquisition acquisition and deployment and evaporate policy decisions
are strategically planned in the top level hierarchy. As the middle level of
 management each SBU focuses on those issues pertaining to their product or
market. At the lower level of management, the concern is more tactical in nature.
●​ Social Responsibility and Ethics
Ethics is likely to center on the individual or marketing group decision, while
social responsibility takes into concern the entire consequence of marketing
practices in society. Marketers need to foster an ethical and socially responsible
behavior pattern while at the same time achieving company objectives. They
should cautiously keep an eye on trends and shifts in society's values and
beliefs. There are six ethical values that marketers are expected to advocate,
and these are:
1.​ Honesty - Be straightforward in dealings and present value and integrity.
2.​ Responsibility - Accept results of marketing practices and provide the
needs of customers of all types, at the same time becoming good
guardians of the environment.
3.​ Fairness - Balance buyer needs and seller interest reasonably, and stay
away from manipulation in all forms while shielding the information of the
consumers.
4.​ Respect - Recognize basic human dignity of all the people concerned
through Resorts to communicate, understand and meet needs and be
grateful for contributions from others.
5.​ Transparency -Form a character of openness in the practice of marketing
through communication, helpful criticism, action, and discovery.
6.​ Citizenship - Accomplish all legal, economic, philanthropic and societal
responsibilities to all stakeholders and give back to the community and
care for the ecological environment.
●​ Research Analysis
Market research is the process of gathering data to find out whether a particular
product/service will fulfill the needs of customers.
●​ Developing Competitive Advantage And Strategic Focus
The competitive advantage is the essence of a company's strategy. It determines
what it will do differently or better than the competition to achieve its objective.
Competitive advantages may come from any external or internal sources and are
the actual differences between competing firms. The key strength most expected
to be transformed into capabilities will be those that are well-matched with vital
and substantial opportunities. In their book, The Discipline of Market Leaders
(1995), Michael Treacy and Fred Wiersma describe the three basic strategies for
competitive advantage, namely:
➢​ Operational Excellence - An operational excellence strategy intends to achieve
cost leadership. Market leaders in the area of operational excellence are strongly
centralized, with strong organizational discipline and standardized, rule-based
operation. A strategy of operational excellence is best for markets where
customers value cost over the choice.
Example: Jollibee
➢​ Product Leadership - Product leadership as a competitive strategy intends to
make a culture that continuously brings better-quality products to market. Product
 leaders know that excellence in creativity, problem solving and teamwork is vital
to their success.
Example: Max's Fried Chicken
➢​ Customer Intimacy - The customer intimacy strategy centers on offering a
distinctive range of customer services that consents to a personalized service
and customized products to meet varying customer needs.
Example: Cebu Pacific

MARKETING STRATEGIES DECISIONS

A strategy is the means of the process that objectives are realized. Marketing strategy
decisions are regarded as an essential decision-making for marketing managers.

●​ Segmentation and Targeting – Segmentation is the process of dividing a whole

market into various customer groups. Targeting entails making a decision which
possible customer segments the company will concentrate on.The process of
segmentation and targeting are indispensable to spot and placed intention to
certain demographic groups. Customer demographics can consist of gender,
age, income, household size, geographic area and even various ethnic groups.
●​ Product Decisions - are probably the most crucial as the product is the very
epitome of marketing planning. As a physical product, marketers need to
consider packaging, labeling, and branding involved in marketing the overall
product. The product/market manager is going to have to make decisions about
things such as quality, design, sizes, warranties, returns, brand name, features,
functionality, color, safety, repairs, support, styling, accessories and much more.
●​ Pricing Decisions - Based on an approach that compliments the other elements
of the marketing. The marketer should make price decisions based on an
approach that compliments the other elements of the marketing mix. It is a key
element in the marketing mix and one that generally is the only variable that can
be quickly changed to react to market changes such as competitor actions or
demand variations.
●​ Distribution And Supply Chain Decisions
-​ Distribution Channel - A distribution channel is a way through which
goods or services move from the manufacturing company to the customer
or the transfer of payment happens from the customer to the company.
There are four major decision areas in supply chain management which
are location, production, inventory, and transportation (distribution), and
there are both strategic and operational elements in each of these
decision areas.
●​ Location - in terms of location, the geographic placement of
production facilities, stocking points, and sourcing points is the
normal first step in creating a supply chain.
●​ Production - when it comes to production, the strategic decisions
include what products to produce, and which plants to produce
them in, allocation of suppliers to plants, plants to depots, and
depots to customer markets. Operational decisions center on
comprehensive production scheduling. These decisions include the
 construction of the master production schedules, scheduling
production on machines, equipment maintenance, workload
balancing, and quality control measures at a production facility.
●​ Inventory Decisions - Inventory decisions refer to means by which
inventories are managed. Inventories exist at every stage of the
supply chain as either raw material, semi- finished or finished
goods.
●​ Transportation Decisions - Transportation decisions are directly
connected to the inventory decisions since the best option of a
mode is often found by trading-off the cost of using the particular
mode of transport with the indirect cost of inventory associated with
that mode.

PROMOTION DECISIONS
Promotion decisions are made to help in informing the target marketing of the product.
The source is the information which is introduced for the promotion while the feedback
is provided by the consumer. It refers to any type of marketing communication used to
inform or remind the target customers about the product and it also helps to
communicate the brand's message and build awareness.

5 MAJOR FEATURES OF PROMOTION DECISIONS

1.​ Understanding of target consumers and their inclination of media. - This is
determining who you want to be informed about your message and what their
demographics are. their interest, lifestyle, and buying behaviors.
2.​ Familiarity with consumers' beliefs that can be associated with the product to
obtain the anticipated response. - It is the understanding and leveraging the
existing beliefs, perception or attitudes that consumers have about a product or
brand.
3.​ Planning different promotional tools, each tool for particular target but all related
to gain a common target. - Identify which tools can be used to promote the
product and services.
4.​ Synchronizing of advertising, sales, promotion and public relation as a
promotional strategy. - Indicates combining different promotional strategies that
help customers and company and the goal is to provide a consistent and
cohesive message over all consumer touchpoints.
5.​ Constant broadcasting of information concerning the product. - It's about
continuous spreading of information about the product to maintain awareness
and interest.

Promotion Mix - Promotion mix is a combination of various marketing techniques,

oriented to acquire a common target. It provides a structure for budget allocation for
different elements of the promotional mix. Its goal is to boost product visibility,attract
consumer attention, and gather positive reactions such as purchases or strengthening
brand loyalty.
Implementing And Control - Marketing controls are used to implement marketing
strategies and check whether the objectives of the marketing function are achieved or
not. Strategic control helps the organization to evaluate its strategies by focusing on the
outcomes of the activities undertaken.

Maintaining Customer Relations - Loyal customers are at the core of every business'
success. Companies have a 60 to 70% chance of selling to an existing customer, while
the probability of selling to a new prospect is only 5 to 20%. Maintaining customer
relationships is no easy task, but if done right, it can help set a company apart from its
competitors.
Example: Starbucks

NEW REALITIES AND TRENDS IN MARKETING IN THE MILLENNIUM AGE

Visibility is one aspect of marketing that won't change regardless of the year. Marketing
before and after a digital transformation revolves around how customers see the
business.
1.​ Increased focus on customer experience - Customer experience is the heart
of marketing for every industry. While it has always been a marketing focus,
today's businesses, at least the successful ones have embraced
customer-centric philosophies to create effective marketing strategies and
positive digital transformations.
2.​ Engaged and effective measuring Analytics 2.0 - Now and in the upcoming
year measurement will be done with purpose. Expect business objectives to tie
back to profit, revenue, customer retention, and satisfaction.
3.​ Marketing technologists and data scientists as the new marketing
lieutenants - To make the first two trends on the list work, executives must be
data-driven. As companies aim to connect email, social media, and paid, owned,
and earned marketing strategies (among others), they must incorporate
technology needed to implement and support it.
4.​ Personalized everything - As companies work to individualize everything from
Coca-Cola cans to shoes, mass customization has transitioned into
personalization.
5.​ Better video content - Content is still king, but the kind of content that rules the
web is changing. Social content, reviews, blogs, papers, and eBooks are all still
crucial aspects of marketing, but the video will be the rage moving forward.
6.​ More social media marketing - Companies need to change the way that they
think about social media. Social media strategies should market less and sell
more.
7.​ Embrace the LoT - The Internet of Things has been in its infancy. In 2017,expect
companies to leverage the power of billions of connected devices.
8.​ Chatbots and AI mainstream - Providing positive customer experience and
service means leveraging the power of technology. Asking locals for advice on
where to eat is good, but they do not know whether they like spicy food or have a
gluten intolerance.
9.​ Right-time marketing instead of real-time marketing - Real-time marketing
with eyes out for opportunities to market and score has been hot the last few
years.
10.​Prepare for marketing to own digital transformation campaigns - What
CMOs should actually own is the digital transformation "campaign". It is the
process of showing the market and teams that a company is transforming.