Chapter # 1

Defining Marketing for new

Realities
Mukhtar Ahmed
Chapter Questions
• Why is marketing important?
• What is the scope of marketing?
• What are some of the fundamental
marketing concepts?
• How has marketing management changed?
• What are the tasks necessary for successful
marketing management?

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What is Marketing?
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 Management?

Marketing management is the art and science of

choosing target markets and getting, keeping, and
growing customers through creating, delivering, and
communicating superior customer value.

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For an exchange to occur…..

• 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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What is Marketed?
• Goods (Cars, TV, machines etc.) • Properties (intangible rights of ownership to
either real property (real state) of financial
• Services (hotels, airlines, car rental firms, property (stocks and bonds). They are bought
barbers, beauticians, maintenance & and sold, and these exchanges require
repair people) marketing)
• Events (marketers promote time based • Organizations (Museums, corporations, and
events, such as trade shows) nonprofits all use marketing to boost their public
images and compete for audience and funds)
• Experiences (e.g. climb-up Mount • Information (what books, education institute
Everest) produce, market & distribute at a price to
• Persons (high profiles CEOs, Physicians, parents, students, communities)
musicians, sportsman). • Ideas (every market offering include a basic
idea).
• Places (to attract tourists)

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 Demand States
Marketers are skilled at stimulating demand for their products. They also seek to
influence the level, timing, and composition of demand to meet objectives.
• Negative demand: a type of demand which is crated if the product is disliked in general.
a) Dental work where people don’t want problems with their teeth and use preventive
measures to avoid the same.
b) Insurance, which people should have but they delay buying an insurance policy.
• Nonexistent demand: e.g. education courses where there is very low demand or no demand at
all. Such cases are very hard to counter.
• Latent demand: a demand which the customer realizes later. Thus, while buying the product, he
might not desire some features. But later on, he might think about those features and buy the
product. E.g. normal phones vs smart phones. Petrol cars vs Hybrid cars.

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 Demand States
• Declining demand: E.g. CD and Walkman

• Irregular demand:  E.g. umbrellas, air conditioners or resorts. The best way to counter irregular
demand is to introduce incentives for the customer to buy the product.

• Unwholesome demand: customer should not desire the product, yet the customer wants the
product badly. Best example of unwholesome demand are cigarettes, alcohol, pirated movies, guns
etc.

• Full demand: Full demand means that the demand is meeting the supply potential of the company. .
The marketing challenge is to maintain the same level of interest in the product and the company.

• Overfull demand: Overfull demands happen when the companies manufacturing capacity is limited
but the demand is more than the supply. E.g. demand in the cement industry occasionally.

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 End
End User
User
Market
Market
Marketing
Marketing
Intermediaries
Intermediaries

Environment
Environment
Company
Company Competitors
Competitors
(Marketer)
(Marketer)
Suppliers
Suppliers
Modern Marketing System
Key Customer Markets
Consumer markets
• Companies selling consumer goods & services such as cosmetics, shoes & air travels establish a strong
brand image, ensuring its availability, and backing it with engaging communications, and reliable
performance.
Business markets
• Companies selling business goods and services often face well-informed professional buyers skilled at
competitive offerings.
Global markets
• Companies navigate cultural, language, legal, and political differences while deciding which countries to
enter, how to reach each (exporter, licenser, JV, contract manufacturer, solo manufacturer) , how to set price &
communicate in different cultures)
Nonprofit/Government markets
• Companies selling to nonprofit organizations with limited purchasing power such as, universities,
charitable organizations etc.
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Core Marketing Concepts
• Needs - state of felt deprivation for basic items such as food and
clothing and complex needs such as for belonging. E.g. I am thirsty

• Wants - form that a human need takes as shaped by culture and

individual personality. i.e. I want a Coca-Cola.

• Demands - human wants backed by buying power. i.e. I have money

to buy a Coca-Cola.
Targets Markets, Positioning and
segmentation)
• Not every one likes the same cereal, movie, university or movie.

• Marketers identify distinct segments of buyers by identifying demographic,

psychographic and behavioral differences b/w them.

• For each of these target markets, the firm develops market offering that it
positions in target buyers’ mind as delivering some key benefits.
• Volvo develops its cars for the buyer to whom safety is a major concern, positioning them
as the safest a customer can buy.

• Porsche targets buyers who seek pleasure and excitement in driving.

Targets Markets, Positioning & segmentation

1. Offerings and brands

• Firms address customer needs through Value Proposition, a set of benefits
that satisfy those needs.

• The intangible value proposition, is made physical by an offering, which can be

a combination of products, services, information and experiences.

• A brand is an offering from a known source. A brand name such as Apple

carries many different kinds of associations in people’s minds that make up its
image (e.g. creative, innovative, easy to use, fun, cool, IPod, IPad)
Targets Markets, Positioning & segmentation
2. Market channels
• To reach a target market, the marketer uses three kinds marketing channels.
• Communication channels deliver and receive messages from target
buyers. (Radio, TV, magazines, newspapers, mail, phone, bill boards,
posters, and internet)

• Distribution channels help displays, sell or deliver the physical product to

the buyers or users.

• Service channels that includes warehouse, transportation, banks and

insurance companies, carry out transactions with potential buyers.
Targets Markets, Positioning & segmentation
3. Value and satisfaction
• The buyer chooses the offerings he or she perceives to deliver the most value,
(the sum of tangible and intangible benefit and cost).

• Value, a central marketing concept, is primarily a combination of quality, service

and price (qsp), called the customer value triad.

• Satisfaction reflects a person’s judgement of a product’s perceived performance

in relationship to expectations.
Targets Markets, Positioning & segmentation
4. Supply Chain:
• Supply chain is a funnel stretching from raw materials to components to finished products carried
to final buyers. Problems with supply chain can be damaging.

5. Competition
6. Marketing Environment
• It consists of the task environment and the brand environment.

• The task environment includes the actors engaged in producing, distributing, and promoting the offering.

• Brand environment consists of six components: demographic environment, economic environment,

social-cultural environment, natural environment, technological environment, and political-legal
environment
The New marketing Realities

• Technology:

• Globalization

• Deregulation

• Privatization

• Social responsibility

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The New marketing Realities
• Changing technology • Empowerment
• Globalization • Customization

• Deregulation • Convergence (IT, mkt, design integration)

• Disintermediation
• Privatization

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Company Orientation towards the
Marketplace
• Consumers favor products that are available and
Production
Production Concept
Concept highly affordable. Company focuses on low cost,
high production efficiency and mass distribution.
Product
Product Concept
Concept •Consumers favor products that offer the most
quality, performance, and innovative features.

Selling
Selling Concept
Concept •Consumers will buy products only if the company
promotes/sells these product

•Focuses on needs/ wants of target markets &

Marketing
Marketing Concept
Concept delivering satisfaction better than competitors.
The holistic marketing concept
• This concept is based on the development, design, &
implementation of marketing programs, processes,
& activities that recognizes their breadth &
interdependencies.
• Relationship marketing aims to build mutually
satisfying long-term relationship with key
constituents in order to earn & retain their business.
• Integrated marketing occurs when the marketer
devices marketing activities and assemble marketing
programs to create, communicate, and deliver value
for the customers.
• Internal marketing is the task of hiring, training, and
motivating employees to serve customers well.
• Performance marketing requires understanding the
financial & non financial returns to business.
Marketing Mix and the Customer

Four Ps Four Cs
• Product • Customer solution
• Price • Customer cost
• Place • Convenience
• Promotion • Communication

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 Updating the four Ps

Marketing Mix-Four Ps Modern marketing Management - Four Ps

• Product • People:
• Marketing will only be as good as the people inside the organization. Marketers
• Price must view consumers as people to understand their lives more broadly.

• Place • Processes:
• It reflects all the creativity, discipline, and structure brought to marketing
• Promotion management. Marketers must avoid ad hoc planning and decision.
• Programs:
• Reflects all the firm’s consumer-directed activities.
• Performance:
• We define performance as in holistic marketing, to capture the range of possible
outcome measures that have financial and non financial implications (profit,
customer equality) and implications beyond the company itself (social responsibility,
legal, ethical the environment.
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 MARKETING MANAGEMENT
Marketing12
Management
th
edition Tasks
2
Developing Marketing
Strategies and Plans

Kotler Keller
Marketing Management Tasks

• Capturing marketing insights

• Connecting with customers
• Building strong brands
• Creating value
• Communicating value
• Delivering value

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