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Chapter 1 (Defining Marketing in the 21st Century).ppt
- 1. Marketing Management Marketing Management -PhilipKotler, Kevin Lane Keller, Abraham Koshy & Mithileshwar Jha, “Marketing Management-A South Asian Perspective”, 13th Edition, Pearson Education. 1
- 2. Course Objectives Course Objectives Marketingis a vital organizational sub-system of an enterprise. It performs its assigned responsibilities through proper interactions with other functional sub- systems. Managing marketing operations effectively is a prerequisite for serving the target customer satisfactorily. This course aims at attaining the following objectives: To impart knowledge on the introductory issues of marketing management. To bring into focus the marketing planning process at various levels of organizational hierarchy. To help the students understand how marketing organization is developed. To disseminate knowledge on how marketing mix strategies are formulated. To study how marketing managers handle market competition effectively. 2
- 3. Defining Marketing forthe 21 Defining Marketing for the 21st st Century Century Chapter 1 3
- 4. Chapter Outline Chapter Outline 1.Importance of marketing 2. What is marketing? 3. Functions of marketing 4. Utilities of marketing 5. What is management? 6. Functions of management 7. What is marketing management? 8. What is marketed? 9. Who markets? 10. Demand states 11. What is market? 12. Five basic markets and their connecting flows 13. Relationship between the industry and the market 14. Key customer markets 15. Marketplaces, Marketspaces and Metamarkets 16. Marketing in practice 17. Key functions of a CMO 18. Ways to improve CMO success 19. Core marketing concepts 20. Types of needs 21. Maslow’s hierarchy of needs theory 22. The new marketing realities 23. Philosophies of marketing 24. Marketing management tasks 4
- 5. What is Marketing? Whatis Marketing? • Marketing means “Meeting needs profitably” • For a managerial definition, marketing has been described as “the art of selling product” • Marketing is a social and managerial 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 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. 5
- 6. Selling is onlythe tip of the iceberg 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 6
- 7. Importance of Marketing Importanceof Marketing • Financial success: Financial success often depends on marketing ability. • Demand creation: All business functions will not really matter if there is no sufficient demand for products and services. • Job opportunity: Many companies have now created a Chief Marketing Officer (CMO) position. • For building brands and a loyal customer base • Survival: Companies at greatest risk are those that fail to carefully monitor their customers and competitors monitor their customers and competitors and to continuously improve their value offerings improve their value offerings. • To satisfy stockholders, employees, suppliers, and channel partners 7
- 8. Functions of Marketing Functionsof Marketing • Buying • Selling • Financing • Storage • Transportation • Processing • Risk-Taking • Market Information • Grading & Standardizing 8
- 9. The Four Utilitiesof Marketing The Four Utilities of Marketing • Form Utility - The process of increasing the attractiveness of a product to a group of consumers by altering its physical appearance. • Place Utility- Transporting products to the location where consumers can buy them. • Possession Utility - Establishes legal ownership of a product. • Time Utility - Utility of a good or service created by its availability at a particular time. 9
- 10. What is Management? Whatis Management? • Management is the act/ art/ manner/ practice/ process of managing. • Management is the skillful or resourceful use of materials, time, etc. • Management is the organization and coordination of the activities of a business in order to achieve defined objectives. • Management is the process of reaching organizational goals by working with and through people and other organizational resources. 10
- 11. Functions of Management Functionsof Management • Planning • Organizing • Staffing • Directing/Motivating/Coordinating • Controlling 11
- 12. What is MarketingManagement? What is Marketing Management? • Marketing management 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 goals. (AMA) • 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. (Philip Kotler) • Marketing Management is the process of planning, organizing, implementing and controlling marketing activities to facilitate exchanges effectively and efficiently. (Pride and Ferrell) 12
- 13. Experiences What is Marketed? Whatis Marketed? Persons Services Goods Events 13
- 14. Information … …What is Marketed? Whatis Marketed? Ideas Organizations Properties Places 14
- 15. … …What is Marketed? Whatis Marketed? 1. Goods: Tangible item that satisfies human wants and provides utility (cars, televisions, cosmetics). 2. Services: A service is an intangible commodity that satisfies a need or fulfill a demand (airlines, hotels, barbers and beauticians). 3. Events: Occurrence happening at a determinable time and place (trade shows, artistic performances). 4. Experiences: Something that happens to you that affects how you feel (an amusement park or a water park). 5. Persons: Creating target market awareness, and a favorable opinion, of a particular person (artists, musicians, players, politicians). 15
- 16. … …What is Marketed? Whatis Marketed? 6. Places: Cities, states, regions and whole nations compete actively to attract tourists, factories, company headquarters and new residents. 7. Properties: Intangible rights of ownership of either real property (real estate) or financial property (stocks and bonds). 8. Organizations: organizations actively work to build a strong, favorable and unique image in the minds of their target publics (universities, museums). 9. Information: information is essentially what books, schools, and universities produce, market and distribute at a price to parents, students and communities. 10. Ideas: Every market offering includes a basic idea. Charles Revson of Revlon once observed: “In the factory, we make cosmetics; in the store we sell hope”. Social marketers are busy promoting ideas by creating awareness about AIDS, encouraging family planning and discouraging smoking. 16
- 17. Who Markets? Who Markets? MarketerProspect Attention Purchase Donation Vote Response 17
- 18. … …Who Markets? Who Markets? Marketersare individuals, groups, associations, companies, etc. that seek a response, such as attention, a purchase, a vote, a donation etc., from another party which is called the prospect. If two parties are seeking to sell something to each other, they can be called marketer. 18
- 19. Demand Management: TheTask of Marketers Demand Management: The Task of Marketers • Production and logistics professionals are responsible for supply management supply management, marketers are responsible for demand demand management management. • Marketing managers seek to influence the level, timing and composition of demand to meet the organization’s objectives. 19
- 20. Eight Demand States EightDemand States Negative • Nonexistent • Latent • Full • Overfull Declining Unwholesome Irregular 20
- 21. Demand States andMarketing Tasks Demand States and Marketing Tasks 1. Negative demand: Consumers dislike the product/service and may even pay a price to avoid it (chicken with bird flu, vaccination, dental work, gallbladder operations) • The marketing task is to analyze why the market dislikes The marketing task is to analyze why the market dislikes the product/service and whether a marketing program the product/service and whether a marketing program consisting of product/service re-design, lower prices, and consisting of product/service re-design, lower prices, and more positive promotion can change beliefs and attitudes more positive promotion can change beliefs and attitudes. 2. Nonexistent Demand: Consumers may be unaware of or uninterested in the product/service (New farming method, foreign-language courses) • The marketing task is to find ways to connect the benefits The marketing task is to find ways to connect the benefits of the product/service with people’s natural needs and of the product/service with people’s natural needs and interests interests. 21
- 22. … …Demand States andMarketing Tasks Demand States and Marketing Tasks 3. Latent demand: Consumers may share a strong need that cannot be satisfied by any existing product/service (harmless cigarette, more fuel efficient car) • The marketing task is to measure the size of the potential The marketing task is to measure the size of the potential market and develop products/services to satisfy the market and develop products/services to satisfy the demand demand. 4. Declining demand: Consumers begin to buy the product/service less frequently or not at all. • The marketer must analyze the causes of the decline and The marketer must analyze the causes of the decline and determine whether demand can be re-stimulated by new determine whether demand can be re-stimulated by new target markets, by changing product/service features, or target markets, by changing product/service features, or by more effective communication. The marketing task is by more effective communication. The marketing task is to reverse declining demand through creative to reverse declining demand through creative remarketing remarketing. 22
- 23. … …Demand States andMarketing Tasks Demand States and Marketing Tasks 5. Irregular demand: Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis (umbrellas, air conditioners, museums are under visited on weekdays and overcrowded on weekends) • The marketing task, called synchromarketing, is to find The marketing task, called synchromarketing, is to find ways to alter the pattern of demand through flexible ways to alter the pattern of demand through flexible pricing, promotion, and other incentives pricing, promotion, and other incentives. 6. Full demand: Consumers are adequately buying all products/services put into the marketplace. • The marketing task is to maintain the current level of The marketing task is to maintain the current level of demand in the face of changing consumer preferences demand in the face of changing consumer preferences and increasing competition. The organization must and increasing competition. The organization must maintain or improve its quality and continually maintain or improve its quality and continually measure consumer satisfaction measure consumer satisfaction. 23
- 24. … …Demand States andMarketing Tasks Demand States and Marketing Tasks 7. Overfull Demand: More consumers would like to buy the product/service than can be satisfied. • The marketing task, called de-marketing, requires findings ways to reduce demand temporarily or permanently (raising prices, reducing promotion and services) 8. Unwholesome Demand: Consumers may be attracted to products/services that have undesirable social consequences (cigarettes, alcohol, x-rated movies) • 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. 24
- 25. Definition of Market Definitionof Market • Traditionally, a “market” was a physical place where buyers and sellers gathered to buy and sell goods. • Economists describe a market as a collection of buyers and sellers who transact over a particular product or product class. • A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want. A market does not essentially have to have a physical place to be defined. 25
- 26. … …Definition of Market Definitionof Market 26 • Marketers often use the term market to cover various grouping of customers. They view sellers as sellers as constituting the constituting the industry industry and buyers as constituting buyers as constituting the the market market. • Marketers talk about: – Need markets (the diet-seeking market) – Product markets (the shoe market) – Demographic markets (the youth market) – Geographic markets (the Indian market) – Voter markets – Labor markets – Donor markets
- 27. Relationship Between Industryand Market Relationship Between Industry and Market 27
- 28. Five Basic Marketsand Their Connecting Flows Five Basic Markets and Their Connecting Flows 28 Manufacturers go to resource markets (raw material markets, labor markets, money markets), buy resources and turn them into goods and services, and then sell finished products to intermediaries, who sell them to consumers. The government collects tax revenues to buy goods from resource, manufacturer, and intermediary markets and uses these goods and services to provide public services.
- 29. … …Five Basic Marketsand Their Connecting Flows Five Basic Markets and Their Connecting Flows 29
- 30. Key Customer Markets KeyCustomer Markets Global Markets Business Markets Government Market Consumer Market 30
- 31. … …Key Customer Markets KeyCustomer Markets • Consumer Market Consumer Market: Companies selling mass consumer goods and services such as toothpaste, refrigerator, air travel, spend a great deal of time trying to establish a superior brand image. • Business Market: Business Market: Companies selling business goods and services face well trained and well informed professional buyers who are skilled in evaluating competitive offering. 31
- 32. … …Key Customer Markets KeyCustomer Markets 32 • Global Markets Global Markets: Companies selling goods and services in the global marketplace face additional decisions and challenges. • Nonprofit and Governmental Markets Nonprofit and Governmental Markets: : Companies selling their goods to non-profit and govt. organizations such as churches, universities or govt. agencies need to price carefully because these organization have limited purchasing power.
- 33. Marketplaces, Marketspaces &Metamarkets Marketplaces, Marketspaces & Metamarkets Marketplaces Marketspaces Metamarkets 33
- 34. … …Marketplaces, Marketspaces &Metamarkets Marketplaces, Marketspaces & Metamarkets • Marketplace is physical, as when one goes shopping in a store. • Market space is digital, as when one goes shopping on the internet. • Meta-market means a cluster of contemporary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries (the automobile meta-market consists of automobile the automobile meta-market consists of automobile manufacturers, new car and used car dealers, financing manufacturers, new car and used car dealers, financing companies, insurance companies, mechanics, spare parts companies, insurance companies, mechanics, spare parts dealers, service shops, auto magazines, classified auto ads dealers, service shops, auto magazines, classified auto ads in newspapers, and auto sites on the internet in newspapers, and auto sites on the internet) 34
- 35.
- 36. Marketing in Practice Marketingin Practice • How is marketing done? – Marketing is not done only by the marketing department. – Marketers must properly manage all possible touch points (store layouts, package designs, product functions, employee training, shipping and logistics methods) – Marketing involved in key general management activities, such as product innovation and new- business development. – To create a strong marketing organization, marketers To create a strong marketing organization, marketers must think like executives in other departments, and must think like executives in other departments, and executives in other department must think more like executives in other department must think more like marketers marketers. 36
- 37. Who is Responsiblefor Marketing? Who is Responsible for Marketing? Chief Marketing Officer (CMO) Entire Organization Marketing Department 37
- 38. Functions of CMOs Functionsof CMOs A chief marketing officer (CMO) is a corporate executive responsible for marketing activities in an organization. Most often the position reports to the chief executive officer (CEO). The followings are five key functions for a CMO The followings are five key functions for a CMO: 1. Strengthening the brands 2. Measuring marketing effectiveness 3. Driving new product development based on customer needs 4. Gathering meaningful customer insights (Customer Insight is the intersection between the interests of the consumer and features of the brand. Its main purpose is to understand why the consumer cares for the brand as well as their underlying mindsets, moods, motivation, desires, aspirations, and motivates that trigger their attitude and actions) 5. Utilizing new marketing technology 38
- 39. Ways to ImproveCMO Success Ways to Improve CMO Success 1. Make the mission and responsibilities clear 2. Fit the role to the marketing culture and structure 3. Choose a CMO who is compatible with the CEO 4. Remember that showpeople don’t succeed (the CMO should work hard to ensure the CEO is successful at being the principal cheerleader for the brand) 5. Match the personality with the CMO type 6. Make line managers marketing heroes 7. Infiltrate the line organization 8. Require right-brain and left-brain skills 39
- 40. Left-brain Vs. Right-brainskills Left-brain Vs. Right-brain skills 40
- 41. Core Marketing Concepts CoreMarketing Concepts Needs, Wants, and Demands Target Markets, Positioning, and Segmentation Offerings and Brands Value and Satisfaction 41
- 42. … …Core Marketing Concepts CoreMarketing Concepts Marketing Channels Competition Marketing Environment Supply Chain 42
- 43. … …Core Marketing Concepts CoreMarketing Concepts To understand the marketing function, To understand the marketing function, everybody need to understand the following everybody need to understand the following core set of concepts core set of concepts: 1. Needs, Wants, and Demands 2. Target Markets, Positioning, and Segmentation 3. Offerings and Brands 4. Value and Satisfaction 5. Marketing Channels 6. Supply Chain 7. Competition 8. Marketing Environment 43
- 44. … …Core Marketing Concepts CoreMarketing Concepts Needs, Wants and Demands • Needs are the basic human requirements. • Wants are desires for specific satisfier of needs. • Demands are wants wants for specific products that are backed by an ability ability and willingness willingness to buy them. 44
- 45. Types of Need Typesof Need 1. Stated needs (the customer wants an inexpensive car) 2. Real needs (the customer wants a car whose operating cost, not its initial price, is low) 3. Unstated needs (the customer expects good service from the dealer) 4. Delight needs (the customer would like the dealer to include an onboard navigation system) 5. Secret needs (the customer wants friends to see him as a savvy consumer) 45
- 46. Maslow’s Hierarchy ofNeed Maslow’s Hierarchy of Need 46
- 47. … …Maslow’s Hierarchy ofNeed Maslow’s Hierarchy of Need Maslow’s hierarchy specifies five need-categories arranged in a sequence from basic lower-level needs to higher-level needs. 1.Physiological needs- Food, Water, Sleep 2.Safety and security needs- Health, Employment, Property 3.Social needs- Love, Friendship, Family 4.Ego needs and- Confidence, Achievement, Respect 5.Self-actualization needs- Morality, Creativity 47
- 48. … …Core Marketing Concepts CoreMarketing Concepts Target Markets, Positioning, and Segmentation • Market segmentation can be identified by examining demographic, psychographics, and behavioral differences among buyers. • Target market is that segment of market which offers the greatest opportunities to the marketer. • Positioning is the act of designing the company’s offering and image to occupy a distinctive place in target market’s mind. 48
- 49. … …Core Marketing Concepts CoreMarketing Concepts Offerings and Brands • Companies address customers’ needs through value proposition value proposition (a set of benefits that they offer to customers to satisfy their needs). The intangible value proposition is made physical by an offering. • Offerings can be a combination of products, services, information, and experiences. • A brand is an offering from a known source (in people’s minds McDonald means-hamburgers, fun, children, fast food, convenience, and golden arches). 49
- 50. … …Core Marketing Concepts CoreMarketing Concepts Value and Satisfaction • Value is the consumers’ estimate of the product’s overall capacity to satisfy his or her needs. – Value reflects the sum of the perceived tangible and intangible benefits and costs to customers. – It is primarily a combination of quality, service, and price (“qsp”), called the “customer value triad”. • Satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance or outcome in relation to his or her expectation. 50
- 51. … …Core Marketing Concepts CoreMarketing Concepts Marketing Channels • Marketing channel are sets of interdependent organizations involved in the process of making of product or service available for use or consumption. • Marketer uses three kinds three kinds of marketing channels to reach a target market: – Communication channels (newspapers, magazines, radio, television, mail, telephone, billboards, posters, fliers, CDs, audiotapes, and the internet) deliver and receive messages from target buyers. – Distribution channels (distributors, wholesalers, retailers, and agents) display, sell, or deliver the physical product or services to the buyer or user. – Service channels (warehouse transportation companies, banks and insurance companies) carry out transactions with potential buyers. 51
- 52. … …Core Marketing Concepts CoreMarketing Concepts Supply Chain • Supply chain is a longer channel stretching from raw materials to components to final products that are carried to final buyers. • A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. • Supply chain activities transform natural resources, raw materials, and components into a finished product that is delivered to the end customer. 52
- 53. … …Core Marketing Concepts CoreMarketing Concepts Competition • Competition includes all the actual and potential rival offerings and substitutes that a buyer might consider. 53
- 54. … …Core Marketing Concepts CoreMarketing Concepts Marketing Environment • The marketing environment consists of the Task Task Environment Environment and Broad Environment Broad Environment. –The Task Environment includes the actors engaged in producing, distributing, and promoting the offering (company, suppliers, distributors, dealers and the target customers) –The Broad Environment consists of six components: demographic environment, economic environment, physical/natural environment, technological environment, political-legal environment and social-cultural environment. 54
- 55. The New MarketingRealities The New Marketing Realities Information Technology Globalization Increased Competition Consumer Information Communicate w/Customer Collect Information Differentiate Goods 55
- 56. The New MarketingRealities The New Marketing Realities The marketplace is not what it used to be. Marketers must attend and respond to a number of significant developments: 1.Major societal forces 2.New consumer capabilities 3.New company capabilities 56
- 57. Major Societal Forces MajorSocietal Forces 1. Network information technology 2. Globalization 3. Deregulation 4. Privatization 5. Heightened competition 6. Industry convergence 7. Consumer resistance 8. Retail transformation 9. Disintermediation 57
- 58. New Consumer Capabilities NewConsumer Capabilities 1. A substantial increase in buying power. 2. A greater variety of available goods and services. 3. A great amount of information about practically anything. 4. Greater ease in interacting and placing and receiving orders. 5. An ability to compare notes on products and services. 6. An amplified voice to influence public opinion. 58
- 59. New Company Capabilities NewCompany Capabilities 1. Marketers can use the internet internet as a powerful information and sales channel. 2. 2. Researchers Researchers can collect fuller and richer information about markets, customers, prospects, and competitors. 3. Managers can facilitate and speed internal internal communication communication among their employees by using the internet as a private intranet. 4. Companies can also facilitate and speed external external communication communication among customers by creating online and off-line “buzz” through brand advocates and user communities. 59
- 60. … …New Company Capabilities NewCompany Capabilities 5. Target marketing and two-way communication two-way communication are easier due to special-interest magazines, TV channels, and internet newsgroups. The company can also interact with each customer interact with each customer individually individually to personalize messages, services, and the relationship. 6. Marketers can send ads, coupons, samples, and information to customers who have requested them or have given the company permission permission to send them. 60
- 61. … …New Company Capabilities NewCompany Capabilities 7. Companies can reach consumers on the move with mobile marketing mobile marketing. 8. Firms can produce individually differentiated differentiated goods goods, whether they are ordered in person, on the phone, or online due to advances in factory customization, computers, the internet, and database marketing software. 9. 9. Managers Managers can improve purchasing, recruiting, training, and internal & external communications. 61
- 62. … …New Company Capabilities NewCompany Capabilities 62 10.Corporate buyers can achieve substantial savings by using the internet to compare sellers prices and to purchase purchase materials at auction or by posting their own terms. 11.Firms can also recruit recruit new employees online, and many are also preparing internet training products for download to employees, dealers, and agents.
- 63. Holistic Marketing Philosophies of Marketing Philosophiesof Marketing Selling Product Production Mass production Mass distribution Quality Innovation Unsought goods Overcapacity Create, deliver, and communicate value 63
- 64. … …Philosophies of Marketing Philosophiesof Marketing The Production Concept: • The production concept holds that consumers will prefer products that are widely available and inexpensive. • Management concentration Management concentration: –Achieving high production efficiency –Low costs –Mass distribution 64
- 65. … …Philosophies of Marketing Philosophiesof Marketing 65 The Product Concept: • The product concept holds that consumer will favor those products that offer the most quality, performance or innovative features. • Management concentration Management concentration: –Making superior products and improving them over time.
- 66. … …Philosophies of Marketing Philosophiesof Marketing 66 The Selling Concept: • The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products. • Management concentration Management concentration: –Aggressive selling and promotion effort.
- 67. … …Philosophies of Marketing Philosophiesof Marketing 67 The Marketing Concept: • The marketing concept holds that the key to achieving organizational goals is being more effective than competitors in creating, delivering, and communicating superior customer value to its chosen target markets. • Management concentration Management concentration: • Well defined market • Focuses on customer needs • Coordinates all the activities of the organization • Customer satisfaction
- 68. … …Philosophies of Marketing Philosophiesof Marketing 68 The Holistic Marketing Concept: • The holistic marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies. • Holistic Marketing recognizes that “everything matters” in marketing- and that a broad, integrated perspective is often necessary. • Holistic Marketing is an approach that attempts to recognize and reconcile the scope and complexities of marketing activities. • Four broad components of holistic marketing: – Relationship marketing – Integrated marketing – Internal marketing – Performance marketing
- 69. Holistic Marketing Dimensions HolisticMarketing Dimensions 69
- 70. Relationship Marketing Relationship Marketing Buildlong-term relationships Develop marketing networks 70
- 71. … …Relationship Marketing Relationship Marketing •A key goal of marketing is to develop deep, enduring relationships with people and organizations that could directly or indirectly affect the success of the firm’s marketing activities. • Relationship marketing Relationship marketing aims to build mutually satisfying long-term relationships with key constituents in order to earn and retain their business. • Four key constituents for relationship marketing are Four key constituents for relationship marketing are: – Customers Customers – Employees Employees – Marketing partners Marketing partners (channels, suppliers, distributors, dealers, agencies) – Members of the financial community Members of the financial community (shareholders, investors, analysts) 71
- 72. … …Relationship Marketing Relationship Marketing 72 •The ultimate outcome of relationship marketing is a unique company asset called a marketing network. • A marketing network A marketing network consists of the company and its supporting stakeholders- customers, employees, suppliers, distributors, retailers, ad agencies, university scientists, and others- with whom it has built mutually profitable business relationships. • Another goal of relationship marketing is to place much more emphasis on customer retention customer retention. Attracting a new customer may cost five times as much as doing a good enough job to retain an existing one.
- 73. Integrated Marketing Integrated Marketing Create,communicate, and deliver customer value 73
- 74. … …Integrated Marketing Integrated Marketing •The marketer’s task is to devise marketing activities marketing activities and assemble fully integrated marketing programs to create, communicate, and deliver value for consumers. • McCarthy classified marketing activities as marketing-mix marketing-mix tools of four broad kinds, which he called the four Ps the four Ps of marketing: product, price, place, and promotion. • The four Ps represent the sellers’ view of the marketing tools available for influencing buyers. • From a buyer’s point of view, each marketing tool is designed to deliver a customer benefit. 74
- 75. … …Integrated Marketing Integrated Marketing •Dev and Schultz (2005) proposed four dimensions (SIVA) and the corresponding customer questions: – S Solution olution: How can I solve my problem? – I Information nformation: Where can I learn more about it? – V Value alue: What is my total sacrifice to get this solution? – A Access ccess: Where can I find it? • Two key themes of integrated marketing are that – Many different marketing activities communicate and deliver value. – When coordinated, marketing activities maximize their joint effects. 75
- 76.
- 77. … …Marketing Mix Marketing Mix 77 •4Ps: Product, Price, Place, and Promotion (McCarthy-1960) • 4Ps for B2B: People, Processes, Programs, and Performance (***-2012) • 4Ps: Products to S Solutions olutions, Place to A Access ccess, Price to V Value alue, and Promotion to E Education ducation—SAVE, for short (Ettenson, Conrado & Knowles-2013) • 4Cs: Commodity, Cost, Channel, and Communication (Shimizu-1973) • 4Cs: Customer value, Customer cost, Customer convenience, Customer communication (Lauterborn-1990) • 4Es: Experience, Exchange, Everyplace, and Evangelism (Rothery-2008)
- 78. 4 A’s ofMarketing 4 A’s of Marketing Acceptability, Affordability, Accessibility and Awareness (Sheth & Sisodia-2012) 78
- 79.
- 80. … …Internal Marketing Internal Marketing Internalmarketing is the task of hiring, training, and motivating able employees who want to serve customers well. Internal marketing refers to identification of employees as market and serving them as final customers. The concept believes that satisfaction of internal customer is the prerequisite for satisfying the external customers. 80
- 81. Performance Marketing Performance Marketing SocialResponsibility Financial Accountability 81
- 82. …Performance Marketing • Holisticmarketing incorporates performance performance marketing marketing and understanding the returns to the business from marketing activities and programs, as well as addressing broader concerns and their legal, ethical, social, and environmental effects. • Performance marketing includes: – Financial accountability Financial accountability: Marketers are increasingly asked to justify their investments to senior management in financial and profitability terms, as well as in terms of building the brand and growing the customer base. – Social responsibility marketing Social responsibility marketing: The effects of marketing clearly extend beyond the company and the customer to society as a whole. Marketer must carefully consider their role in broader terms, and the ethical, environmental, legal, and social context of their activities. 82
- 83. 1. Developing marketingstrategies and plans 2. Capturing marketing insights 3. Connecting with customers 4. Building strong brands 5. Shaping market offerings 6. Delivering value 7. Communicating value 8. Creating long-term growth Marketing Management Tasks Marketing Management Tasks 83
- 84. Marketing Debate: Marketing Debate: Takea Position! Take a Position! “Marketing Shapes Consumer Needs and Wants” or “Marketing Merely Reflects The Needs and Wants of consumers” 84
- 85. A Facebook Collection!!! AFacebook Collection!!! A Professor explained Marketing to MBA students 1. You see gorgeous girl in party, you go to her & say I am rich marry me That's Direct Marketing Direct Marketing. 2. You attend party & your friend goes to a girl & pointing at you tells her. He' is very rich, marry him - That's Advertising Advertising. 3. Girl walks to you & says u are rich, ca...n u marry me? "That's Brand Recognition Brand Recognition" 4. You say I m very rich marry me & she slaps u "That's Customer Feedback Customer Feedback" 5. You say I m very rich marry me & she introduces you to her husband "That's Demand & Supply Gap Demand & Supply Gap" 6. Before you say I m rich, marry me, your wife arrives That's Restriction from Entering New Market Restriction from Entering New Market. 85
Editor's Notes
- #13 Experiences include a trip to Disney World, Fantasy baseball camp, a cruise. Events can include trade shows, the Olympics, Super Bowl, etc. Properties include real estate as well as stocks and bonds. Organizations use marketing to connect with their target market. Information is marketed by universities, textbook publishers, newspapers, etc. Ideas include “Friends don’t let friends drive drunk”
- #14 Experiences include a trip to Disney World, Fantasy baseball camp, a cruise. Events can include trade shows, the Olympics, Super Bowl, etc. Properties include real estate as well as stocks and bonds. Organizations use marketing to connect with their target market. Information is marketed by universities, textbook publishers, newspapers, etc. Ideas include “Friends don’t let friends drive drunk”
- #17 Marketers are individuals, groups, associations, companies, etc. that seek a response, such as attention, a purchase, donation, vote, etc., from another party which is called the prospect.
- #20 Negative – consumer’s dislike a product and may pay to avoid, such as with dental work Nonexistent – consumers are unaware of or uninterested in the product or service Latent – There is no product on the market that can satisfy consumer needs Declining – Consumers purchase a product less and less frequently, or not at all. For example, the sale of albums (vinyl and CD’s) are declining significantly. Irregular – A products demand varies by time, such as on a seasonal basis. Full – Consumers are buying all the products that enter into the market. Overfull – There are more buyers than product available. Unwholesome – Consumers are attracted to products that have undesireable social consequences, such as cigarettes or gambling.
- #33 Marketplace – physical locations (such as retail store) Marketspace – digital location (online retailer) Metamarkets – The cluster of complementary products and services related in consumers mind, but spread across diverse set of industries.
- #37 CMOs must have strong quantitative skills, to accompany their qualitative skills. Must be entrepreneurial as well as a team player. However, the CMO nor the marketing department can be solely responsible for marketing. It must be undertaken by the entire organization. David Packard of Hewlett-Packard is quoted as saying: “Marketing is far to important to be left to the marketing department.”
- #55 Major societal forces, such as information technologies, globalization, increased competition, and a more informed consumer have altered the marketplace has changed significantly. While these have created challenges, organizations have responded with new capabilities
- #63 The five distinct marketing concepts are: Production, Product, Selling, Marketing, and Holistic. These philosophies have evolved over time and began with the production concept. The evolution of a new marketing concept does not mean that all companies are changing. Many companies continue to operate under the production concept. Under a production philosophy the company will seek to mass produce products and to distribute them on a wide scale. The belief is that consumers prefer products that are widely available and inexpensive. The product concept proposes that consumers prefer products that have higher quality, performance, or are more innovative. Often, managers focus too much on the product (a better mousetrap) but this does not always equal success. The selling concept argues that members of a market will not purchase enough product on their own so companies use the “hard-sell” to increase demand. Typically used with unsought goods such as insurance or cemetery plots, or when companies face overcapacity. The marketing concept first emerged in the 1950’s and focuses more on the customer with a “sense-and-respond” attitude. Companies that have embraced the marketing concept have been shown to achieve superior performance than competitors. The holistic concept takes a philosophy that everything matters in marketing. Figure 1.3 (next slide) outlines the Holistic Marketing Concept.
- #70 Relationship marketing seeks to build mutually beneficial, long-term relationship with key constituents in order to earn and retain their business. The four key constituents are: customers, employees, partners, and member of the financial community. Attracting a new customer can cost five times as much as retaining existing customers so building long-term relationships makes financial sense for the company. Marketing networks consist of the company and its supporting stakeholders who have built a mutually profitable business relationship.
- #73 Integrated marketing holds that all activities undertaken by the company should create, communicate, and deliver value. Further, all new activities should take into consideration all other marketing activities.
- #79 Internal marketing is the task of hiring, training, and motivating able employees to serve customers well. You can’t promise excellent service if you can’t deliver excellent service.
- #81 Marketers must understand both the financial and nonfinancial returns to a business and society from marketing programs and activities. Financial accountability involves the justification of marketing expenditures in terms of financial returns. But they must also think about the ethical, environmental, legal, and social aspects of their activities.