A FRAMEWORK for MARKETING MANAGEMENT Kotler KellerCunningham Chapter 1 Defining Marketing for the 21 st Century

Chapter Questions Why is marketing important? What is the scope of marketing? What are some fundamental marketing concepts? What are the tasks necessary for successful marketing management? © Copyright 2008 Pearson Education Canada 1-2

Kraft Canada Inc. continues to operate in a highly complex market Customers have more choice but less time for shopping and preparing meals Retailers are ramping up the use of own-brands Using a newly developed consumer database, Kraft adopted a set of customer relationship management (CRM) initiatives, with the key aim being: “To help Kraft grow into a service provider that helps consumers shop more efficiently, prepare quick meals simply.” Profile: Canadian Marketing Excellence KRAFT CANADA INC. © Copyright 2008 Pearson Education Canada 1-3

Kraft’s Strategy: “Family. Food. Simple.” The Results: Kraft is now on the Marketing Magazine’s annual top ten list of “Marketers that Mattered.” Customer satisfaction is high, with thousands calling its helpline for cooking tips Profile: Canadian Marketing Excellence KRAFT CANADA INC. © Copyright 2008 Pearson Education Canada Kraft’s What’s Cooking magazine is the largest circulating magazine in Canada Kraft also partnered with Food TV and created the number one cooking show in Quebec By combining marketing insight and leading edge technologies, Kraft has developed unmatched consumer relationships 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 2008 Pearson Education Canada 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 2008 Pearson Education Canada 1-6

The Importance of Marketing Financial success often depends on good marketing Many companies have not understood this completely, including Nortel, Bombardier, Sears, Kodak, Xerox Today’s market leaders, including Wal-Mart, Nike, and Research In Motion (RIM), know they can’t afford to relax Short term (transactional marketing) versus long term (relationship marketing) Creation of Chief Marketing Officer (CMO) position © Copyright 2008 Pearson Education Canada 1-7

Big Rock Brewery Big Rock Brewery recognizes that meeting customer needs is an infinite quest In 2005 the company found it necessary to differentiate itself in Alberta’s crowded premium beer market: © Copyright 2008 Pearson Education Canada Using a combination of retro labels (originally used 20 years ago) and the rolling out of the largest-ever multimedia campaign to promote its Grasshopper brand, Big Rock was able to secure a foothold as the beer of choice for many Albertans 1-8

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 2008 Pearson Education Canada 1-9

For an Exchange to Occur….. There must be 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 accept or reject the exchange offer Each party believes it is appropriate or desirable to deal with the other party © Copyright 2008 Pearson Education Canada 1-10

Are Both Forms of Exchange? TransactionsTransfers © Copyright 2008 Pearson Education Canada 1-11

What Is Marketed? Goods Services Events and experiences Persons Places and properties Organizations Information Ideas © Copyright 2008 Pearson Education Canada 87% of Canadian Exports (2005) 69% of Canadian GDP (2005) 1-12

Figure 1.1 A Simple Marketing System © Copyright 2008 Pearson Education Canada 1-13

Company Orientations Production SellingMarketing Product © Copyright 2008 Pearson Education Canada 1-14

Figure 1.2 Holistic Marketing Dimensions © Copyright 2008 Pearson Education Canada 1-15

Figure 1.3 The Four P Components of the Marketing Mix © Copyright 2008 Pearson Education Canada 1-16

Key Themes of Integrated Marketing Many different marketing activities used to communicate and deliver value All marketing activities coordinated to maximize their joint effects © Copyright 2008 Pearson Education Canada 1-17

Marketing Mix and the Customer Four Ps Product Price Place Promotion Four Cs Customer solution Customer cost Convenience Communication © Copyright 2008 Pearson Education Canada 1-18

Figure 1.4 Marketing-Mix Strategy © Copyright 2008 Pearson Education Canada 1-19

Internal Marketing Employees contribute to building long- term relationships with customers Step 1: Select employees with positive attitudes Step 2: Train, motivate, and empower employees Step 3: Establish standards for employee performance Step 4: Monitor actions and reward good performance © Copyright 2008 Pearson Education Canada 1-20

Internal Marketing at Scotiabank Positioned as a “Client Centred” bank Plan put into action to align Scotiabank around customer centricity; © Copyright 2008 Pearson Education Canada Key use was made of internal incentive programs that rewarded staff for spending time with clients Peer to peer awards program and “Team Voice”, which let employees communicate directly with senior management 1-21

Societal Marketing Concept An organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the well-being of both consumer and society. © Copyright 2008 Pearson Education Canada 1-22

Fundamental Marketing Concepts Needs, wants, and demands Target markets, positioning, segmentation Offerings and brands Value and satisfaction Marketing channels Supply chain Competition Marketing environment Marketing planning © Copyright 2008 Pearson Education Canada 1-23

I Want It, I Need It... Five Types of Needs Stated needs Real needs Unstated needs Delight needs Secret needs © Copyright 2008 Pearson Education Canada 1-24

Figure 1.5 Factors Influencing Marketing Strategy © Copyright 2008 Pearson Education Canada 1-25

Marketing Management Tasks Developing marketing strategies Capturing marketing insights Connecting with customers Building strong brands Shaping market offerings Delivering value Communicating value Creating long-term growth © Copyright 2008 Pearson Education Canada 1-26

For Discussion How are demographic changes in the Canadian population affecting marketers? © Copyright 2008 Pearson Education Canada 1-27