Chapter 1

Defining Marketing for

the Twenty-First
Century
 Objectives

Understand the new economy.

Learn the tasks of marketing.
Become familiar with the major
concepts and tools of marketing.
Understand the orientations
exhibited by companies.
 Objectives

Learn how companies and

marketers are responding to
new challenges.
 The New Economy

Consumer benefits from the digital

revolution include:
Increased buying power.
Greater variety of goods and services.
Increased information.
Enhanced shopping convenience.
Greater opportunities to compare product
information with others.
 The New Economy

Firm benefits from the digital

revolution include:
New promotional medium.
Access to richer research data.
Enhanced employee and customer
communication.
Ability to customize promotions.
 Marketing Tasks

Marketing practices may pass

through two stages:
Entrepreneurial marketing
Formulated marketing
As marketing becomes more
formulated, creativity is inhibited.
What Can Be Marketed?

Goods Places
Services Properties
Experiences Organizations
Events Information
Persons Ideas
 Marketing Defined

Kotlers social definition:

Marketing is a societal process by
which individuals and groups
obtain what they need and want
through creating, offering, and
freely exchanging products and
services of value with others.
 Marketing Defined

The AMA managerial definition:

Marketing is the process of
planning and executing the
conception, pricing, promotion,
and distribution of ideas, goods,
and services to create exchanges
that satisfy individual and
organizational objectives.
Core Marketing Concepts

Target markets and Exchange and

market segmentation transactions
Marketplace, market- Relationship and
space, metamarkets networks
Marketers & prospects Marketing channels
Needs, wants, demands Supply chain
Product offering and Competition
brand Marketing environment
Value and satisfaction Marketing program
Core Marketing Concepts

Target markets & segmentation

Differences in needs, behavior,
demographics or psychographics
are used to identify segments.
The segment served by the firm is
called the target market.
The market offering is customized
to the needs of the target market.
Core Marketing Concepts

Shopping can take place in a:

Marketplace (physical entity, Lowes)
Marketspace (virtual entity, Amazon)
Metamarkets refer to complementary
goods and services that are related
in the minds of consumers.
Marketers seek responses from
prospects.
Core Marketing Concepts

Needs describe basic human

requirements such as food, air, water,
clothing, shelter, recreation, education,
and entertainment.
Needs become wants when they are
directed to specific objects that might
satisfy the need. (Fast food)
Demands are wants for specific
products backed by an ability to pay.
Core Marketing Concepts

A Product is any offering that can

satisfy a need or want, while a brand
is a specific offering from a known
source.
When offerings deliver value and
satisfaction to the buyer, they are
successful.
 Enhancing Value

Marketers can enhance the value of

an offering to the customer by:
Raising benefits.
Reducing costs.
Raising benefits while lowering costs.
Raising benefits by more than the
increase in costs.
Lowering benefits by less than the
reduction in costs.
Core Marketing Concepts

Exchange involves obtaining a desired

product from someone by offering
something in return. Five conditions
must be satisfied for exchange to occur.
Transaction involves at least two things
of value, agreed-upon conditions, a time
of agreement, and a place of agreement.
Core Marketing Concepts

Relationship marketing aims to

build long-term mutually satisfying
relations with key parties, which
ultimately results in marketing
network between the company and
its supporting stakeholders.
Core Marketing Concepts

Marketing Deliver messages to

Channels and receive
messages from
target buyers.
Communication
channels Includes traditional
media, non-verbal
Distribution
communication, and
channels store atmospherics.
Service channels
Core Marketing Concepts

Marketing Display or deliver

Channels the physical
products or
Communication services to the
channels buyer / user.
Distribution
channels
Service channels
Core Marketing Concepts

Marketing Carry out

Channels transactions with
potential buyers
Communication by facilitating the
channels transaction.
Distribution
channels
Service channels
Core Marketing Concepts

A supply chain stretches from raw

materials to components to final
products that are carried to final
buyers.
Each company captures only a
certain percentage of the total value
generated by the supply chain.
Core Marketing Concepts

The following forces in the broad

environment have a major impact on
the task environment:
Demographics
Economics
Natural environment
Technological environment
Political-legal environment
Social-cultural environment
Core Marketing Concepts

The marketing program is developed

to achieve the companys objectives.
Marketing mix decisions include:
Product: provides customer solution.
Price: represents the customers cost.
Place: customer convenience is key.
Promotion: communicates with customer.
 Company Orientations
The orientation or philosophy of the
firm typically guides marketing efforts.
Several competing orientations exist:
Production concept-consumers favor
products that are widely available and
inexpensive.
Product concept-consumers favor
those products that offer the most quality,
performance and innovative features.
 Selling concept-holds that consumers will not
buy enough of products unless the firm undertakes
a large scale selling and promotion effort. (for
unsought goods.)
Marketing concept-instead of product
centered make and-sell shift to a customer
centered, sense and-respond philosophy. Instead
of hunting marketing is gardening.
organisational goals depends on knowing the
needs and wants of target markets. Customer
value and focus are the paths to sale and profits.
 Societal marketing concept-
understanding broader concerns and
the ethical, environmental, legal and
social context of marketing activities
and programs clearly extending beyond
the company and the consumers to
society as a whole.
 Marketing and sales concepts contrasted

Starting Point Focus Means Ends

Selling Profits
Existing
Factory and through
Products
Promoting Volume

The
The Selling
Selling Concept
Concept

Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction

The
The Marketing
Marketing Concept
Concept
2003 Prentice Hall, Inc.
To accompany A Framework for Slide 27 in
Modern
Modern Marketing
Marketing System
System

Suppliers
Suppliers

Company
Company
Competitors
Competitors (Marketer)
(Marketer)
Environment

Environment
Marketing
Marketing
Intermediaries
Intermediaries

End
End User
User
Market
Market

2003 Prentice Hall, Inc.

To accompany A Framework for Slide 28 in