Defining Marketing for the 21 st Century Marketing Management, 13 th ed 1

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-2 Chapter Questions Why is marketing important? What is the scope of marketing? What are some fundamental marketing concepts? How has marketing management changed? What are the tasks necessary for successful marketing management?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-3 Good Marketing is No Accident Starbucks plans to ensure its marketing successes in countries around the world.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-4 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.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-5 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.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-6 Selling is only the tip of the iceberg “There will always be a need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available.” Peter Drucker

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-7 What is Marketed? Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-8 Successful New Product Launches Require Careful Planning

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-9 Marketing Can Promote Ideas

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-10 Figure 1.1 Structure of Flows in a Modern Exchange Economy

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-11 Figure 1.2 A Simple Marketing System

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-12 Demand States Nonexistent Latent Declining Irregular Full UnwholesomeOverfull Negative

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall DEMAND STATES 1.Negative Demand – Negative demand is a type of demand which is created if the product is disliked in general. The product might be beneficial but the customer does not want it. 2. Unwholesome demand – Unwholesome demand is the other side of Negative demand. In negative type of demands, customer does not want the product even though product might be necessary for the customer. But in unwholesome demand, the customer should not desire the product, yet the customer wants the product badly. 1-13

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall DEMAND STATES 3. No demands – Certain products face the challenge of no demand. The best example for the same can be education courses where there is very low demand or no demand at all. Such cases are very hard to counter. 4. Latent Demand – Latent demand is, as the name suggests, 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. 1-14

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall DEMAND STATES 5. Declining demand – Declining demand is when demand for a product is declining. For example, when CD players were introduced and IPOD came in the market, the demand for walkman went down. 6. Irregular demand – Irregular demand can be demand which is not consistent. The best example of irregular demand is seasonal products like umbrellas, air conditioners or resorts. These products sell irregularly and sell more during peak season whereas their demand is very low during non seasons. The best way to counter irregular demand is to introduce incentives for the customer to buy the product. 1-15

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall DEMAND STATES 7. Full demand – In an ideal environment, a company should always have full demand. Full demand means that the demand is meeting the supply potential of the company. It also means that the markets are happy with the products of the company and that people want to buy from the same company. 8. Overfull demands – Overfull demands happen when the companies manufacturing capacity is limited but the demand is more than the supply. This can be observed in the cement industry occasionally. 1-16

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-17 Key Customer Markets Consumer Markets Business Markets Global Markets Nonprofit/ Government Markets

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-18 Edmunds.com: A Metamediary Website

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-19 Functions of CMOs Strengthening the brands Measuring marketing effectiveness Driving new product development based on customer needs Gathering meaningful customer insights Utilizing new marketing technology

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-20 Figure 1.3 Improving CMO Success Make the mission and responsibilities clear Fit the role to the marketing culture and structure Ensure the CMO is compatible with the CEO Remember that show people don’t succeed Match the personality with the CMO type Make line managers marketing heroes Infiltrate the line organization Require right-brain and left-brain skills

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-21 Core Marketing Concepts Needs, wants, and demands Target markets, positioning, segmentation Offerings and brands Exchange and Transaction Value and satisfaction Marketing channels Supply chain Competition Marketing environment

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall FOR LEVELS OF COMPETITION 1.BRAND COMPETITION- a company sees its competitors as the other companies offering similar products and services to the same customers at similar prices. 2.INDUSTRY COMPETITION- A company sees its competitors as all companies making the same product or class of products. 1-22

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall FOR LEVELS OF COMPETITION 3. FORM COMPETITION- A company sees its competitors as all companies manufacturing products that supply the same service 4. GENERIC COMPETITION- A company sees its competitors as all companies that compete for the same dollars/money. 1-23

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-24 I want it, I need it… Five Types of Needs Stated needs Real needs Unstated needs Delight needs Secret needs

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-25 The marketplace isn’t what it used to be… Information technology Globalization Deregulation Privatization Competition Convergence Consumer resistance Retail transformation

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-26 New Consumer Capabilities A substantial increase in buying power A greater variety of available goods and services A great amount of information about practically anything Greater ease in interacting and placing and receiving orders An ability to compare notes on products and services An amplified voice to influence public opinion

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-27 Company Orientations Production SellingMarketing Product

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-28 Figure 1.4 Holistic Marketing Dimensions

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-29 RBC emphasizes a relationship marketing approach

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-30 Figure 1.5 The Four P’s

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-31 Carnival uses online marketing activities

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-32 Internal Marketing Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-33 Performance Marketing Financial Accountability Social Responsibility Marketing Social Initiatives Corporate social marketing Cause marketing Corporate philanthropy Corporate community involvement Socially responsible business practices

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-34 Marketing Management Tasks Develop market strategies and plans Capture marketing insights Connect with customers Build strong brands Shape market offerings Deliver value Communicate value Create long-term growth

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-35 Marketing Debate: Take a Position! Does marketing shape consumer needs? or Does marketing merely reflect the needs and wants of consumers?

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1-36 Marketing Discussion Consider the societal forces noted in the chapter (e.g., information technology, globalization, deregulation, consumer resistance, retail transformation). How have marketing practices shifted to accommodate and even leverage these forces?