Chapter 1: Defining Marketing for the 21st Century

What Is Marketing?

Marketing is about identifying and meeting human and social needs. The American Marketing
Association (AMA) defines marketing as:

"The activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large."

Marketing Management

"The art and science of choosing target markets and getting, keeping, and growing customers
through creating, delivering, and communicating superior customer value."

What Is Marketed?

Marketers promote 10 main types of entities:

1. Goods

2. Services

3. Events

4. Experiences

5. Persons

6. Places

7. Properties

8. Organizations

9. Information

10. Ideas
Eight Demand States with Examples are explained below:

 Negative Demand – Consumers dislike the product and may even pay to avoid it.
Example: Life insurance, medical procedures.
What Should a Marketer Do? Educate consumers about the product’s benefits, rebrand
to improve perception, and offer incentives or guarantees to reduce resistance.

 Nonexistent Demand – Consumers may be unaware of or uninterested in the product.

Example: Electric cars in developing countries.
What Should a Marketer Do? Increase awareness through educational campaigns,
highlight benefits, and offer trial experiences to generate interest.

 Latent Demand – Consumers have a strong need that existing products cannot satisfy.
Example: Affordable and fast public transport in growing cities.
What Should a Marketer Do? Develop innovative solutions to meet unmet needs,
conduct market research to refine offerings, and advocate for infrastructure development.

 Declining Demand – Consumers begin to buy the product less frequently or not at all.
Example: Feature phones (button phones).
What Should a Marketer Do? Revamp the product, introduce new features, find
alternative uses, or reposition it for niche markets.

 Irregular Demand – Consumer purchases vary based on season, time, or occasion.

Example: Hotel bookings during peak vacation seasons.
What Should a Marketer Do? Use pricing strategies (discounts in off-seasons), bundle
services, and create special promotions to stabilize demand year-round.

 Full Demand – Consumers are buying all available products at a satisfactory rate.
Example: Mobile financial services like bKash.
What Should a Marketer Do? Maintain service quality, enhance customer loyalty, and
explore expansion opportunities.

 Overfull Demand – More consumers want the product than can be supplied.
Example: Train tickets for Eid travel.
 What Should a Marketer Do? Increase supply, implement fair distribution strategies, or
adjust pricing to balance demand.

 Unwholesome Demand – Consumers are attracted to products that have undesirable

social consequences.
Example: Tobacco products (cigarettes, smokeless tobacco).
What Should a Marketer Do? Promote awareness of risks, offer alternatives (e.g.,
nicotine patches), and support responsible consumption campaigns.

Key Customer Markets

1. Consumer Markets – Goods/services sold directly to individuals for personal use.

2. Business Markets – Goods/services sold to businesses for operational use or resale.

3. Global Markets – International trade requiring adaptation to local conditions.

4. Nonprofit & Governmental Markets – Goods/services sold to government agencies,

nonprofits, and institutions.

Core Marketing Concepts

Core marketing concepts are fundamental ideas that guide marketing strategies, including
needs, wants, demands, value, exchange, markets, and relationships.

1. Needs, Wants, and Demands

 Needs: These are basic human requirements essential for survival, such as food, water,
clothing, and shelter. For example, in Bangladesh, access to clean water and affordable
housing is a fundamental need for many people.
 Wants: These are desires shaped by an individual's culture, social environment, and
personality. For instance, while food is a need, Bangladeshi consumers may want biryani
or pithas due to cultural preferences.
  Demands: These are wants backed by the ability and willingness to pay. For example,
many people in Bangladesh want to buy IPhone which requires to have affordability.

2. Target Markets, Positioning, and Segmentation

 Target Market: This refers to the specific group of consumers that a company focuses
on serving. For example, Bata in Bangladesh targets both middle-income families and
professionals with its diverse range of footwear.
 Positioning: This involves creating a unique identity in the minds of consumers. A good
example is Lux, which positions itself as a premium beauty soap for elegance and charm,
resonating with Bangladeshi women.
 Segmentation: This is the process of dividing a broad market into smaller segments
based on shared characteristics, such as age, income, or lifestyle. For example, telecom
companies like Robi segment their market into youth, professionals, and rural consumers
to tailor services and packages accordingly.

3. Offerings and Brands

 Offerings: These include the combination of products, services, and experiences that a
business provides to fulfill customer needs. For example, Pathao in Bangladesh offers
ride-sharing, food delivery, and courier services, creating a holistic experience for users.
 Brands: A brand represents a recognizable name, symbol, or design that builds trust and
creates an emotional connection with consumers. Aarong, for instance, is a trusted
Bangladeshi brand that stands out for its high-quality, ethically sourced handmade
products, appealing to both local and international customers.

4. Value and Satisfaction

o Value: The benefits a consumer gets relative to cost.

o Satisfaction: The consumer’s evaluation of a product’s performance versus

expectations.

5. Marketing Channels
 o Communication Channels (e.g., social media, TV).

o Distribution Channels (e.g., retail stores, e-commerce).

o Service Channels (e.g., banks, insurance providers).

6. Supply Chain – The system involved in producing and delivering a product.

7. Competition – Rivalry between companies offering similar products.

8. Marketing Environment

o Task Environment: Suppliers, distributors, competitors, customers.

o Broad Environment: Economic, social, political, technological factors.

Marketing Orientation

1. Production Concept
The Production Concept focuses on mass production and operational efficiency. The
belief is that consumers prefer products that are readily available and affordable. As such,
businesses concentrate on improving production techniques, reducing costs, and ensuring
product availability.

2. Product Concept
The Product Concept emphasizes the importance of producing high-quality, innovative
products. The idea is that consumers will prefer products that offer superior features,
performance, or quality, and businesses should focus on enhancing product attributes.
Example: Apple is an excellent example of the product concept.

3. Selling Concept
The Selling Concept takes an aggressive approach to sales. It assumes that consumers
won’t buy enough of the product unless substantial effort is put into convincing them
through promotional activities and sales techniques. The focus is on persuasion, not
necessarily on the product itself.
 4. Marketing Concept
The Marketing Concept shifts the focus from the product or sales to the customer. This
philosophy emphasizes understanding customer needs and wants, then creating products
or services that provide value and satisfaction. The goal is to build long-term
relationships with customers by focusing on their preferences.

5. Holistic Marketing Concept

The Holistic Marketing Concept integrates all aspects of marketing, including customer
relationships, branding, and social responsibility. It goes beyond traditional marketing
and includes a broader view, encompassing every part of the business and its impact on
society.
The Holistic Marketing Concept encompasses four key types:

o Integrated Marketing

o Internal Marketing

o Performance Marketing

o Relationship Marketing

Components:

Integrated Marketing:
This involves creating a consistent and seamless marketing experience across all channels and
customer touchpoints. For example, Banglalink ensures integrated marketing by running
synchronized TV ads, social media campaigns, and outdoor billboards with a consistent message
to promote their internet packages.

Internal Marketing:
Internal marketing focuses on aligning employees and internal processes with the company’s
marketing objectives to deliver a strong brand message. For example, BRAC Bank trains its
employees extensively to ensure they provide excellent customer service, aligning with the
bank’s brand promise of "delighting customers."
Performance Marketing:
This approach emphasizes measuring and tracking outcomes to improve marketing strategies.
For instance, Daraz Bangladesh uses data-driven analytics to measure the success of its online
advertisements and optimize campaigns during sales events like "11.11."

Relationship Marketing:
This involves building long-term relationships with customers to ensure loyalty and retention. A
good example is Shohoz, which engages with customers through personalized offers and loyalty
programs to encourage repeat use of its ride-sharing and ticket-booking services.

Major Societal Forces

Today, major, and sometimes interlinking, societal forces have created new marketing behaviors,
opportunities, and challenges. These forces require companies to be adaptive, socially
responsible, and technologically forward-thinking to remain competitive. Here are three key
forces reshaping marketing:

1. Globalization – Businesses now operate in a worldwide market, expanding their reach

beyond domestic borders. This creates opportunities to tap into diverse customer bases
but also brings challenges like cultural differences and increased competition.
Example: McDonald's adapts its menu to local tastes, offering the McAloo Tikki in India
and Teriyaki Burgers in Japan while maintaining its global brand identity.

2. Social Responsibility – Consumers today expect companies to act ethically and

contribute positively to society.
Example: Companies like Tesla are pushing sustainability with electric vehicles, while
brands like The Body Shop focus on cruelty-free products and ethical labor practices.

3. Technology – Rapid technological advancements, such as artificial intelligence, big data,

and e-commerce, have transformed marketing.
Example: Amazon uses AI-driven recommendations based on past purchases and
browsing behavior to enhance user experience and boost sales.
New Company Capabilities

These major societal forces create complex challenges for marketers, but they have also
generated a new set of capabilities to help companies cope and respond:

1. Internet as a Sales Channel – Companies can expand their reach and promote products
globally through websites and online ads.

2. Richer Market Information – Businesses can collect detailed customer data through
online research and loyalty programs.

3. Social Media Marketing – Brands can engage audiences through platforms like Twitter,
Instagram, and blogs.

4. Word-of-Mouth & Community Engagement – Companies can leverage online

communities and brand advocates to create buzz.

5. Mobile Marketing – Location-based advertising allows businesses to send targeted

promotions to consumers near stores.

6. Cost Efficiency – Companies can cut costs by comparing supplier prices online, using
auctions, and optimizing logistics.
 Chapter 2: Developing marketing strategies and Plans

The Value Delivery Process represents a shift from the traditional view of marketing, where
companies simply produce and sell products, to a more strategic approach where marketing is
integrated from the start of business planning. The process focuses on creating customer value by
understanding and addressing market needs, and it can be broken down into three key phases:

1. Choosing the Value

This initial phase involves understanding the market before any product is developed. Marketers
must: Segment the market by identifying distinct groups of consumers, Target the most
appropriate group(s) for the company’s offerings, Position the product to meet the specific needs
and preferences of the target market.

2. Providing the Value

Once the target market and positioning are defined, the next phase is about developing the actual
product and making it available to consumers.

3. Communicating the Value

The final phase is communicating the product’s value to the target market. This involves: Using
sales teams, advertising, and digital channels (e.g., social media, websites, etc.) to convey the
product’s benefits and features.

The success of a company is not solely dependent on the performance of individual departments
but on how well the company coordinates its core business processes. These processes ensure
that all departments work together efficiently to deliver value to customers and achieve company
goals. Here are the five key core business processes:

1. Market-Sensing Process

This process involves gathering and acting on information about the market. It is about staying
aware of customer needs, market trends, competitor actions, and other external factors that
influence business decisions. Market sensing allows a company to adapt and adjust its offerings
to meet changing market demands.

2. New-Offering Realization Process

This process focuses on researching, developing, and launching new products or services. The
goal is to quickly and efficiently introduce high-quality offerings that meet customer needs and
are within budget. This process ensures that new products or services align with market demand
and company capabilities.

3. Customer Acquisition Process

This process involves identifying target markets and acquiring new customers. It includes all
activities aimed at attracting prospects, converting them into customers, and expanding the
customer base. Effective customer acquisition is crucial for business growth and market
penetration.

4. Customer Relationship Management (CRM) Process

This process focuses on building and maintaining long-term relationships with customers. It
involves understanding individual customer needs, providing personalized offerings, and
engaging with customers over time. CRM aims to increase customer satisfaction, loyalty, and
lifetime value.

5. Fulfillment Management Process

This process ensures that customer orders are processed, products are delivered on time, and
payments are collected efficiently. It includes all activities related to receiving and fulfilling
customer orders, managing inventory, and ensuring timely delivery.

All corporate headquarters undertake four planning activities. Such as-

1. Defining the Corporate Mission

The corporate mission defines the company’s overall purpose and long-term vision. It guides
the entire organization in terms of its values, goals, and priorities. The mission statement
typically reflects the company’s core purpose in the market and the impact it wants to have on its
stakeholders, including customers, employees, and shareholders.
Example: Pran, a leading food and beverage company based in Bangladesh, has a clear mission
of "providing nutritious, high-quality, and affordable products for families around the world."
This mission drives Pran’s product innovation, customer focus, and market expansion.

2. Establishing Strategic Business Units (SBUs)

A Strategic Business Unit (SBU) is a distinct, autonomous unit within a corporation that has its
own mission, objectives, and resources. SBUs are often created based on product lines,
geographic markets, or customer segments. Each SBU operates like a smaller company, but its
goals and strategies must align with the corporate mission.

Example: Unilever, a multinational consumer goods company, operates through several SBUs,
such as Home Care, Personal Care, Foods & Refreshments, and Health & Wellness.

3. Assigning Resources to Each Strategic Business Unit

The corporate headquarters is responsible for allocating resources (financial, human,

technological, etc.) to each SBU based on its strategic priorities and growth potential. Proper
resource allocation ensures that each business unit has the necessary support to achieve its goals
and compete effectively.

Example: The BCG Matrix (Boston Consulting Group Matrix) is often used by companies like
Unilever and Coca-Cola to help determine how to allocate resources among different business
units. The matrix classifies products or SBUs into four categories: Stars (high growth, high
market share), Cash Cows (low growth, high market share), Question Marks (high growth, low
market share), and Dogs (low growth, low market share). A company might allocate more
resources to "Stars" and "Question Marks" to stimulate growth, while reducing investments in
"Dogs" or low-performing units. This helps the company prioritize where to invest for future
growth.

4. Assessing Growth Opportunities

Corporate planners evaluate potential growth opportunities for the company as a whole and for
individual SBUs. Growth opportunities can be explored through intensive growth, integrative
growth, and diversification growth strategies.
1. Intensive Growth

Intensive growth focuses on increasing a company’s sales and market share within its existing
product lines and markets. The Product-Market Expansion Grid is a tool used to identify four
main strategies:

 Market Penetration: Increase market share with existing products in existing markets.

 Market Development: Enter new markets with existing products.

 Product Development: Develop new products for existing markets.

 Diversification: Develop new products for new markets.

Examples:

Market Penetration

1. PRAN: Offering affordable packaged foods to attract a broader customer base.

2. Banglalink: Providing competitive call rates and data bundles to grow its subscriber
count.
3. Aarong: Running seasonal sales and promotions to attract more customers.

Market Development

1. Yellow: Expanding to smaller cities in Bangladesh to reach new customer segments.

2. bKash: Introducing mobile financial services in rural areas where banking access was
limited.
3. BRAC: Launching low-cost education programs in underserved regions.

Product Development

1. Walton: Introducing advanced smart TVs and air conditioners to cater to tech-savvy
consumers.
2. Grameenphone: Launching new internet packages and digital services like GP Music.
3. Olympic: Expanding its product line with new biscuit flavors and snack items.
Diversification

1. bKash: Offering additional financial products like savings schemes and insurance.
2. Square Group: Expanding from pharmaceuticals into the FMCG and textile industries.
3. Pathao: Diversifying into food delivery, courier services, and e-commerce logistics.

2. Integrative Growth

Integrative growth involves expanding a company's reach and capabilities through acquisitions
or mergers with other businesses within the same industry. This can take three forms:

 Backward Integration: Acquiring suppliers or other businesses earlier in the production

process.

 Forward Integration: Acquiring distributors or retailers to control the distribution of

products.

 Horizontal Integration: Acquiring competitors to expand market share.

Example: Facebook’s Acquisition of Instagram & WhatsApp, Pixar’s Acquisition by

Disney (Horizontal Integration)

3. Diversification Growth

Diversification growth occurs when a company expands into new industries or markets with
new products. Diversification is particularly attractive when the current market is saturated or
when growth opportunities within the existing business are limited. There are two main types of
diversification:

Example: Amazon’s Diversification into Various Sectors

 Chapter6: Analyzing Consumer Market

Consumer behavior is the study of how individuals, groups, and organizations select, buy, use,
and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. A
consumer's buying behavior is influenced by cultural, social, and personal factors.

1. Cultural Factors

How Culture Affects Consumer Behavior in Bangladesh

Culture, subculture, and social class shape what people buy and how they choose brands in
Bangladesh. Businesses must understand these factors to market their products effectively.
Bangladeshi culture influences shopping behavior in several ways:

 Festivals: Events like Eid increase demand for clothes, jewelry, and electronics. Brands
such as Aarong and Yellow launch special collections during this time.

 Traditional Foods: Foods like pitha become popular in winter, and brands like Igloo sell
packaged pitha.

Subcultures and Their Influence

 Religion: Muslim consumers prefer halal products, so brands like Meena Sweets and
Kazi Farms emphasize halal certification.

Social Class and Shopping Preferences

 Upper-Class Consumers: Prefer luxury brands like Gucci, Rolex, and BMW and shop at
high-end places like Gulshan DCC Market.

 Middle-Class Consumers: Choose affordable brands like Cats Eye, Apex, and Walton,
shopping at malls like Bashundhara City.

 Lower-Class Consumers: Buy budget-friendly brands like RFL and Gazi and prefer TV
for entertainment.
2. Social Factors

Influences of Reference Groups, Family, and Social Roles on Consumer Behavior

Social factors, including reference groups, family, and social roles, significantly shape consumer
decisions in Bangladesh.

Reference Groups

 Membership Groups: Groups people belong to and interact with regularly. For example,
university students in Dhaka may follow trends set by their classmates when choosing
fashion or gadgets.

 Primary Groups: Family and close friends directly influence daily buying decisions. For
instance, a student might buy a specific smartphone because their friends recommend it.

 Secondary Groups: Formal groups like professional networks matter. For example, a
banker might buy a luxury watch to fit in with colleagues.

 Aspirational Groups: People buy products to associate with a group they admire, like
purchasing branded clothes to feel part of a higher social class.

 Dissociative Groups: Consumers avoid products associated with groups they do not
want to be identified with.

Family Influence Family plays a significant role in shaping consumer behavior, with values
learned from parents influencing buying habits. For example, a family that prioritizes education
may invest in quality study materials. In the case of a family of procreation, joint decisions are
often made on larger purchases, such as refrigerators or cars.

Roles and Status

 Role in Family: A mother may buy household groceries, while a father may handle
investments.

 Role in Society: A business executive may prefer high-end gadgets to showcase status.
3. Personal Factors

Personal Factors Influencing Buyer Decisions

Personal characteristics play a crucial role in shaping a buyer’s decision-making process. These
include age, stage in the life cycle, occupation, economic circumstances, personality, self-
concept, and lifestyle.

A. Age and Stage in the Life Cycle

Consumer preferences in food, clothing, furniture, and recreation are influenced by age and life
stage. Significant life events create new needs for marketers to target:

 Wedding Collections: Brands like Aarong target different life stages with wedding
collections.

 Hair Care: Brands like Parachute Naturale cater to young adults with hair care solutions.

 New Parents: Supermom and Fresh Baby Diapers cater to new parents.

 Retirement Plans: Financial institutions like BRAC Bank and IDLC offer retirement
savings plans.

B. Occupation and Economic Circumstances

A consumer's occupation directly affects their buying patterns. Economic circumstances such as
income, savings, and spending habits also impact purchasing decisions. For Example-Walmart
and Costco appeal to budget shoppers, High-end brands like Rolex and Tesla cater to affluent
individuals.

C. Personality and Self-Concept

Personality traits influence consumer choices, and brands align themselves with consumers' self-
concept.

 Brand Personality: Research by Jennifer Aaker identifies five brand personality traits:

1. Sincerity (honest, wholesome, cheerful): e.g., Disney, Hallmark.

2. Excitement (daring, imaginative, up-to-date): e.g., PS5, Tesla.

 3. Competence (reliable, intelligent, successful): e.g., IBM, Microsoft.

4. Sophistication (upper-class, charming): e.g., Chanel, Mercedes-Benz.

5. Ruggedness (outdoorsy, tough): e.g., Jeep, The north face

D. Lifestyle and Values

Lifestyle and Values in Consumer Buying Behavior

Lifestyle and values significantly influence consumer purchasing decisions, as they shape
preferences and priorities. For example, health-conscious consumers are drawn to brands like
ZeroCal, which offer sugar-free and low-calorie food and beverages that align with their focus
on health and wellness. Similarly, religious people prefer products like Halal Soap, perfume.

Key Psychological Processes in Consumer Behavior

Psychological processes, combined with consumer characteristics, lead to decision-making and

purchase behavior. These processes include:

1. Motivation Consumer needs can be classified into biogenic (physiological, such as hunger
and thirst) and psychogenic (psychological, such as the need for recognition and belonging).
Motivational theories explain why people make choices.

2. Perception

 Selective Attention: Consumers filter information based on needs and expectations.

 Selective Distortion: Consumers interpret information based on prior beliefs.

 Selective Retention: Consumers remember information that aligns with their values.

 Subliminal Perception: Suggests consumers may be influenced by hidden messages,

though there’s limited evidence of major decisions being altered by subliminal messages.

Examples:
  Selective Attention: Consumers pay attention to information that aligns with their needs
and expectations. For instance, a health-conscious individual in Bangladesh might focus
on ads for organic products like ZeroCal while ignoring others that don't fit their lifestyle.
 Selective Distortion: Consumers interpret information based on their prior beliefs. A
loyal customer of Sultans Dine might exaggerate their positive experience with the
restaurant, dismissing any minor complaints they’ve heard from others.
 Selective Retention: Consumers remember information that aligns with their values. For
example, people who value convenience and digital payments in Bangladesh are more
likely to remember and choose bKash ads, as it aligns with their preference for easy
mobile transactions.
 Subliminal Perception: Some ads may subtly influence consumers through hidden
messages or symbols. For instance, Amazon uses certain design elements or background
imagery that encourage feelings of trust and convenience, subtly nudging consumers
towards making a purchase. However, there's limited evidence that these subliminal
messages have a significant impact on major purchasing decisions.

3. Learning The learning process influences consumer decisions through four key elements:

o Drives: Internal needs motivate actions (e.g., hunger or desire for status).

o Cues: External factors (e.g., ads, packaging) prompt responses.

o Responses: Actions such as purchasing are driven by internal needs and cues.

o Reinforcement: Positive outcomes strengthen future behavior (e.g., loyalty

programs).

4. Memory
Short-term memory (STM) temporarily processes marketing messages, aiding immediate
decisions, while long-term memory (LTM) stores brand associations and experiences,
influencing future purchase behavior and brand loyalty.

.
The Five Stages of Consumer Decision-Making Process

Understanding the decision-making process helps marketers tailor their strategies. The five
stages include:

1. Problem Recognition
The buying process begins when a consumer identifies a need, triggered by internal or external
stimuli (e.g., hunger, advertising).
Example: After a long day at work, a consumer feels thirsty (internal stimulus) and recognizes
the need for a cold, refreshing drink.

2. Information Search
Consumers search for information through personal, commercial, public, or experiential sources.
Example: The consumer searches online for beverage options, checking out ads, reading reviews,
and asking friends for recommendations. They come across ads for Fresh Juice and Pran.

3. Evaluation of Alternatives
Consumers evaluate competing brands based on attributes such as price, quality, and brand
reputation.
Example: The consumer compares Fresh Juice, Pran, and Slice, considering factors like price,
taste, brand reputation, and health benefits. They find Fresh Juice has the best reviews and fits
their budget.

4. Purchase Decision
Involves several sub-decisions (e.g., brand, retailer, quantity, timing, and payment method).
Factors affecting purchase decisions include the attitudes of others, unanticipated situational
factors, and perceived risks.
Example: The consumer decides to purchase a 1-liter bottle of Fresh Juice from the nearest
supermarket, opting for payment with a credit card. They also decide to buy it because a friend
recommended it.
5. Post purchase Behavior
Post purchase behavior influences future purchases. Satisfaction is based on how the product’s
performance aligns with expectations, leading to either repurchase or negative feedback if
dissatisfaction occurs.
Example: After drinking the juice, the consumer feels satisfied with the taste and quality, leading
to a positive review on social media and deciding to repurchase the same brand next time. If the
product had been disappointing, they might have given negative feedback and switched to a
different brand.