1. Copyright © 2003 Prentice-Hall, Inc. 1-1 Chapter 1 Defining Marketing for the 21 st Century

2. Copyright © 2003 Prentice-Hall, Inc. 1-2 The future is not ahead of us. It has already happened. Unfortunately, it is unequally distributed among companies, industries and nations. The future is not ahead of us. It has already happened. Unfortunately, it is unequally distributed among companies, industries and nations. Kotler on Marketing

3. Copyright © 2003 Prentice-Hall, Inc. 1-3 Topics to Be Covered  In this chapter, the following topics will be Covered:  Importance of Marketing  Scope of Marketing  Marketing Entities  Composition Demand of Marketing  Key Customers Markets  Core Marketing Concepts  Company Orientations toward the Market Place  Marketing Management Tasks

4. Copyright © 2003 Prentice-Hall, Inc. 1-4 Importance of Marketing  Financial success often depends on marketing ability.  Finance, operations, accounting and other business functions will not really matter if there is not sufficient demand for products and services, so the company can make a profit.  Companies need marketing to cope up with the statement- “Change or Die” “Change or Die”

5. Copyright © 2003 Prentice-Hall, Inc. 1-5 The Scope of Marketing  Marketing: Typically seen as the task of creating, promoting, and delivering goods and services to consumers and businesses. It is also about identifying and meeting human and social needs. It is also about identifying and meeting human and social needs. A Brief Definition: A Brief Definition: The process by which, companies create value for customers and build strong customer relationships in order to capture value from customers in return. The process by which, companies create value for customers and build strong customer relationships in order to capture value from customers in return. Marketing management: Marketing management: The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering and communicating superior customer value. The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering and communicating superior customer value.

6. Copyright © 2003 Prentice-Hall, Inc. 1-6 The Scope of Marketing (Cont.)  The Marketing Process: Understand the Marketplace and Customer Needs & Wants Design a Customer- Driven Marketing Strategy Construct an Integrated Marketing Program that Delivers Superior Value Build Profitable Relationship and Create Customer Delight Capture Value from Customers to Create Profits and Customer Equity Create Value for Customers and Build Customer Relationships Capture Value from Customers in Return Figure: Marketing Process

7. Copyright © 2003 Prentice-Hall, Inc. 1-7 What is Marketed (Marketing Entities)  Places Ex: Beautiful Bangladesh, Incredible India, Truly Asia Ex: Beautiful Bangladesh, Incredible India, Truly Asia  Properties Ex: Real Estate or Stock & Bonds Companies Ex: Real Estate or Stock & Bonds Companies  Organizations Ex: Grameen Phone, Square Ex: Grameen Phone, Square  Information Ex: Information Provided by Companies Ex: Information Provided by Companies  Ideas Ex: Smoking is Injurious to Health Ex: Smoking is Injurious to Health  Goods Ex: Lux, Sony  Services Ex: Bangladesh Bank, Persona, Jahangirnagar University  Events Ex: World Cup Cricket, 2011  Experiences Ex: Water Kingdom, VOOT  Persons Ex: Filmstars, Cricketers

8. Copyright © 2003 Prentice-Hall, Inc. 1-8 Who Markets??  Marketers and Prospects : 1. Negative Demand A major part of the market dislikes the product and may even pay a price to avoid it—vaccinations, dental work, vasectomies, and gallbladder operations, for instance. The marketing task is to analyze why the market dislikes the product and whether a marketing program consisting of product redesign, lower prices, and more positive promotion can change beliefs and attitudes. 2. No Demand Target consumers may be unaware of or uninterested in the product. Farmers may not be interested in a new farming method, and college students may not be interested in foreign-language courses. The marketing task is to find ways to connect the benefits of the product with people’s natural needs and interests.

9. Copyright © 2003 Prentice-Hall, Inc. 1-9 Stages of Demand 3. Latent Demand Consumers may share a strong need that cannot be satisfied by any existing product. Ex: Harmless Cigarettes, Safe Neighborhoods and More Fuel Efficient Cars. The marketing task is to measure the size of the potential market and develop goods and services to satisfy the demand. 4. Declining Demand Consumers begin to buy the product less frequently or not at all. Ex: Churches have seen membership decline. The marketing task is to analyze the causes of the decline and determine whether demand can be re- stimulated by new target markets by changing product features, or by effective communications. (Creative Re-marketing)

10. Copyright © 2003 Prentice-Hall, Inc. 1-10 Stages of Demand 5. Irregular Demand Consumers purchase vary on a seasonal, monthly, weekly, daily or even hourly basis. Ex: Museums and libraries are under visited on weekdays and overcrowded on weekends. The marketing task is to find ways to alter the pattern of demand through flexible pricing, promotion and other incentives. (Synchro-marketing) 6. Full Demand Consumers are adequately buying all products put into the marketplace. The marketing task is to maintain the current level of demand in the face of changing consumer references and increasing competition. The organization must maintain or improve its quality and continually measure consumer satisfaction.

11. Copyright © 2003 Prentice-Hall, Inc. 1-11 Stages of Demand 7. Overfull Demand Demand More consumers would like to buy the product that can be satisfied. Ex: Overcrowded Theme Parks on Festivals. The marketing task requires finding ways to reduce demand temporarily or permanent taking steps like- raising prices and reducing promotion and services. (De-marketing) 8. Unwholesome Demand Consumers may be attracted to products that have undesirable social consequences. Ex: cigarettes, alcohol, hard drugs, handguns, X-rated movies and large families. The marketing task is to get people who like something to give it up, using such tools as- fear messages, price hikes and reduced availability. (Social Marketing)

12. Copyright © 2003 Prentice-Hall, Inc. 1-12 Who Markets??  Markets: Traditionally, a market is a physical place where buyers and sellers are gathered to buy and sell goods and services. In Marketing, a market is a set of actual and potential buyers. In Marketing, a market is a set of actual and potential buyers.

13. Copyright © 2003 Prentice-Hall, Inc. 1-13 Figure: Structure of Flows in a Modern Exchange Economy

14. Copyright © 2003 Prentice-Hall, Inc. 1-14 Figure: A Simple Marketing System

15. Copyright © 2003 Prentice-Hall, Inc. 1-15 Key Customer Markets   Consumer Markets, Ex: Unilever, Sony Erricson etc   Business Markets Ex: PHP Group   Global Markets Ex: RMG Companies   Nonprofit and Governmental Markets

16. Copyright © 2003 Prentice-Hall, Inc. 1-16 Core Marketing Concepts  Needs, Wants, and Demands 5 Types of Needs: 5 Types of Needs: - Stated Needs- inexpensive car - Stated Needs- inexpensive car - Real Needs- a car with low operating cost - Real Needs- a car with low operating cost - Unstated Needs-good service - Unstated Needs-good service - Delight Needs-an onboard navigation system - Delight Needs-an onboard navigation system - Secret Needs-savvy customer - Secret Needs-savvy customer  Target Markets, Positioning and Segmentation  Offerings and Brands  Value and Satisfaction  Marketing Channels  Supply Chain

17. Copyright © 2003 Prentice-Hall, Inc. 1-17 Marketing Concepts and Tools  Competition - Brand competition - Brand competition - Industry competition - Form competition - Generic competition  Marketing Environment  Task environment  Broad environment

18. Copyright © 2003 Prentice-Hall, Inc. 1-18 Figure: Marketing-Mix Strategy

19. Copyright © 2003 Prentice-Hall, Inc. 1-19 Company Orientations Toward the Marketplace  The Production Concept  The Product concept  The Selling Concept  The Customer Concept  The Marketing Concept  Societal Marketing Concept  The Holistic Marketing Concept

20. Copyright © 2003 Prentice-Hall, Inc. 1-20 The Production Concept  The Oldest concept in business.  Consumers will prefer products that are widely available and inexpensive.  Managers concentrate on achieving high production efficiency, low costs and mass distribution.  This application makes sense in developing countries, where consumers are more interested in obtaining the product than in its features.

21. Copyright © 2003 Prentice-Hall, Inc. 1-21 The Product Concept  Consumers will prefer products that offer the most quality, performance and innovative features.  Managers focus on making superior products and improving them over time.  Not that much valid, as, quality is subjective in nature.

22. Copyright © 2003 Prentice-Hall, Inc. 1-22 The Selling Concept  Consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products.  Consumers typically show buying inertia or resistance and must be coaxed into buying it.  Usually, applicable for the unsought goods.

23. Copyright © 2003 Prentice-Hall, Inc. 1-23 The Marketing Concept  The marketing concept emerged in the mid-1950s.  It replaced the product-centered “make-and-sell” philosophy with the customer centered “sense-and- respond” philosophy.  The key to achieving its organizational goals consists of the company being more effective than competitors in creating, delivering and communicating superior customer value to its chosen target markets.

24. Copyright © 2003 Prentice-Hall, Inc. 1-24 Figure: Contrasts Between the Selling Concept and the Marketing Concept

25. Copyright © 2003 Prentice-Hall, Inc. 1-25 Figure: Traditional Organizational Chart versus Modern Customer-Oriented Company Organization Chart

26. Copyright © 2003 Prentice-Hall, Inc. 1-26 The Customer Concept

27. Copyright © 2003 Prentice-Hall, Inc. 1-27 The Societal Marketing Concept  Is an appropriate philosophy in an age of environmental deterioration, resource shortages, explosive population, world hunger and poverty and neglected social services.  The organization’s task is to determine the needs, wants and interests of target markets and to deliver the desired satisfactions more efficiently and effectively than competitors in a way that preserves or enhances the consumer’s and the society’s well being.

28. Copyright © 2003 Prentice-Hall, Inc. 1-28 The Holistic Marketing Concept RelationshipMarketing CustomersChannelsPartners IntegratedMarketing Holistic Marketing InternalMarketing MarketingDepartmentSeniorManagementOtherDepartments Communications Products & Services Channels PerformanceMarketing Environments Ethics Brand & CustomerEquity SalesRevenue Legal Community

29. Copyright © 2003 Prentice-Hall, Inc. 1-29 Company Orientations Toward the Marketplace  Integrated Marketing  External marketing  Internal marketing

30. Copyright © 2003 Prentice-Hall, Inc. 1-30 Company Responses and Adjustments  Reengineering  Outsourcing  E-commerce  Benchmarking  Alliances  Partner-suppliers  Market-centered  Global and local  Decentralized

31. Copyright © 2003 Prentice-Hall, Inc. 1-31 Managing Marketing Task  Developing Marketing Strategies and Plans  Capturing Marketing Insights  Connecting with Customers  Building Strong Brands  Shaping the Marketing Offerings  Delivering Value  Communicating Value  Creating Long-Term Growth

32. Copyright © 2003 Prentice-Hall, Inc. 1-32 Thank You Thank You