Chapter-1

Defining marketing for the

new realities

Dr. Md. Kashedul Wahab Tuhin

Professor
Department of marketing

Jahangirnagar university

Savar, Dhaka-1342
 Chapter Questions

 Why is marketing important?

 What is the scope of marketing?
 What are some core marketing concepts?
 What forces are defining the new marketing realities?
 What new capabilities have these forces given consumers and companies?
 What does a holistic marketing philosophy include?
 What task are necessary for successful marketing management?
 The value of marketing

 Finance, operations, accounting and other business

functions won’t really matter without sufficient demand
for products and services so the firm can make a profit
 Thus, financial success often depends on marketing
ability
 Marketing’s value extends to society, it has helped
introduce new or enhanced products that ease or
enrich people’s lives.
 ../Video/The IKEA Group - The Story of How We
Work.mp4
 Importance of Marketing

 Many companies now creating the post of CMO as CFO

 In starting business CEOs acknowledge the importance of marketing
 Among the top 5 challenges of CEOs were both “sustained and steady top line
growth’ and “customer loyalty/retention”
 Making the right decision about change is not easy. Marketing manager must decide
what features to design new product, what prices to offer customers, where to
sell, how much to spend on advertising and sales or so on.
The scope of marketing
 What is marketing ?

Marketing is a societal process by which

individuals and groups obtain what they need
and want through creating, offering, and
freely exchanging products and value with
others
 What is marketing ?
Marketing is a is the activity, set of
institutions, and processes for creating,
communicating, delivering, and exchanging
offerings that have value for customers,
clients, partners and society at large.

creating, communicating, delivering, and

exchanging offerings in return earn value from
customer
 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.

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“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

9
 What is Marketed?

1. Goods
2. Services
3. Events
4. Experiences
The Rolling Stones have done a masterful job of
5. Persons marketing their rebellious form of rock and roll to
audiences of all ages.
 What is Marketed?

6. Places
7. Properties
8. Organizations
9. Information
For a city like Las Vegas that
10.Ideas thrives on tourism, good marketing
is essential.
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Who Markets?

 Marketers and prospects: A marketer is someone who

seeks response-attention, a purchase, a vote, a
donation- from another party, called the prospect.

 Marketers responsible for demand management.

Marketing manager seeks to influence the level, timing
and composition of demand to the organization’s
objectives. Eight demand state are possible.
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1-13

Demand States

 Negative
 Irregular
 Nonexistent
 Unwholesome
 Latent
 Full
 Declining
 Overfull
Key Customer Markets

Consumer markets Global markets

Companies selling mass consumer Companies in the global
goods and services spend a great marketplace decide which
deal of time establishing a strong countries to enter; how to enter
brand image each, how to adapt, how to price
and how to design
Business markets
communications
Companies selling business goods
Nonprofit/Government markets
and services often face well-
informed professional buyers limited purchasing power such as
skilled at evaluating competitive churches, universities, charitable
offerings. organizations, and government
agencies need to price carefully
Core marketing concepts
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Education, Inc.
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Fig. 1.2
A Simple Marketing System
 Needs, wants, and demands  Impressions and Engagement
 Segmentation, Target markets,  Value and Satisfaction
positioning, Offerings and brands
 Supply chain
 Paid, Owned and Earned Media
 Competition
 Marketing environment
 Needs Wants and Demands

 Needs
basic human requirements

 Wants
specific objects that might satisfy the need

 Demands
with purchasing power
Segmentation, Target Markets &
Positioning

identify and profile distinct groups of

buyers (Segmentation)

decides which present the greatest

opportunities (Targeting)

develops a market offering that it positions

in the minds of the target buyers as
delivering some central benefits
(Positioning)
Offerings and Brands

 The intangible value proposition is

made physical by an offering, which
can be a combination of products,
services, information, and experiences
 A brand is an offering from a known
source.

?
 Marketing Channels

Communication channels deliver and receive

Communication messages from target buyers

The marketer uses distribution channels to display,

Distribution sell, or deliver the physical product or service(s) to
the buyer or user.

The marketer also uses service channels that

Service include warehouses, transportation companies,
banks, and insurance companies.
 Paid, owned and earned
media
The rise of digital media gives marketers a host of new
ways to interact with consumers and customers.
• Paid Media: media which allow marketers to show their
ad or brand for a fee., like TV, magazine and display
ads,
• Owned Media: communication channels marketers
actually own, like a company or brand brochure, web
site, blog, Fb page etc.
• Earned Media: streams are which consumers, the press
or other outsiders voluntary communicate something
about the brand via WOM, buzz or viral marketing
methods.
Impressions and engagement
 Impressions, which occurs when consumers
view a communication, are a useful metric for
tracking the scope or breadth of a
communication’s reach that can also be
compared across all communication types.
 Engagements is the extends of a customer’s
attention and active involvement with a
communication.
 Some online measures of engagement are Fb
likes, Twitter tweets, comments on blog,
sharing of video, etc.
Reinventing Marketing at Coca-Cola

https://www.youtube.com/watch?v=A45sjUX7mp0
Value and Satisfaction

 Value: the sum of the tangible and intangible benefits and

costs to consumer.
../Video/Value Creation Through the Marketing Mix.mp4
 Value, a central marketing concept, is primarily a
combination of quality, service, and price (qsp)
 Satisfaction reflects a person’s judgment of a product’s
perceived performance in relationship to expectations
 Supply chain

 The supply chain is a

channel stretching from
raw materials to
components to finished
products carried to final
buyers.
 Problems with a supply
chain can be damaging
or even fatal for a
business
 competition
Competition includes all the actual and potential rival offerings and substitutes a
buyer might consider.
 Marketing Environment

 Task Env ironment/ Micro Env ironment

includes the actors engaged in producing, distributing, and
promoting the offering. These are the company, suppliers,
distributors, dealers, and target customers .
 Broad env ironment/ Macro Env ironment
o Demographic environment
o Economic environment
o Socio-cultural environment
o Natural environment
o Technological environment
o Politic-legal environment
The new marketing
realities
 Technology
 Globalization
 Social Responsibility
 ../Video/Dramatic Shift in Marketing Reality (Scholz &
Friends).mp4
 A Dramatically Changed Marketplace
 New consumer capabilities
 Consumer can use Internet as a powerful information and purchasing aid
 Consumer can search, communicate, and purchase on the move
 Consumer can tap into social media to share opinions and express loyalty
 Consumer can actively interact with companies
 Consumer can reject marketing they find inappropriate
 New company capabilities
 Companies can use the Internet as a powerful information and sales channel,
including for individually differentiated goods.
 Companies can collect fuller and richer information about markets, customers,
prospects, and competitors
 Companies can reach consumers quickly and efficiently via social media and
mobile marketing, sending targeted ads, coupons, and information
 Companies can improve purchasing, recruiting, training, and internal and
external communications
 Companies can improve their cost efficiency.
 A Dramatically Changed Marketplace

 Changing channels
 Retail Transformation
 Disintermediation
 Heightened competition
 Private labels
 Mega-brands
 Deregulation
 Privatization
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Marketing Practice
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 Marketing balance- marketers must balance increases spending on search

advertising, social media, e-mails, and text messages with appropriate spending on
traditional marketing communications.
 Marketing accountability- marketers are increasingly asked to justify their
investments in financial terms of building the brand and growing the customer
base.
 Marketing in organization- Marketing is not done only by marketing department;
every employee has an impact on the customer.
Company Orientations/
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Marketing concepts/Approaches/
Marketing Philosophies
 Production………..low price high volume
 Product… best product/technical superiority
 Selling
 Marketing
 Holistic Marketing Concept
 Company Orientations Copyright © 2009 Pearson Education,
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 The Production Concept: It holds that consumer will prefer the products
that are widely available and in expensive. Managers of production
oriented business concentrated on achieving high production efficiency,
low costs and mass distribution.
 The Product Concept: It holds that consumer will prefer the products that
offer the most quality, performance or innovative features. Managers in
these organizations focuses on making superior products and improving
them over time.
 The selling Concept: It holds that consumer and business will not buy
enough of the organization’s products. The organization must undertake an
aggressive selling and promotional efforts.
 The Marketing Concept: It holds that the key to achieving organizational
goals is being more effective than competitors in creating, delivering and
communicating superior customer value to your chosen target market.
 Company Orientations
 Instead of product-centered philosophy “make-and-sell’ business shifted to
Customer-centered “sense-and-respond” philosophy.
 Companies embrace marketing concepts achieve superior performance
which was demonstrated by:
 Reactive Marketing: understanding and meeting consumers’ express
needs.
 Proactive Marketing: Companies focus on consumers; latent needs
 Total market Orientation: Companies that practice both reactive
and proactive marketing orientation.

 The holistic marketing concept is based on the development, design, and

implementation of marketing programs, processes, and activities that
recognize their breadth and interdependencies.
 Holistic marketing acknowledges that everything matters in marketing—and
that a broad, integrated perspective is often necessary
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Company Orientations
 The Holistic Marketing concept:

Senior Mgt Products & Services

Communication Channel
Marketing Dept Other Dept

Internal Marketing Integrated

Marketing

Holistic
marketing

Relationship
Performance Marketing
Marketing
Sales Revenue Community
Partners
Customers
Brand & customer
Legal
equity
Channel
Ethics Environment
 Company Orientations
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 Relationship Marketing: It aims to build mutually satisfying long-term relationships with key constituents in
order to earn and retain their business.
 Four key constituents of RM are customers, employees, Marketing Partners (channels, suppliers,
distributors, dealers, agencies) and members of financial community (shareholders, investors,
analysts) .
 The ultimate outcome of relationship marketing is an unique assets called Marketing Network.
 Customer Centricity
 Customer Retention
 Not only CRM but PRM
 Integrated Marketing: Marketers’ task is to device marketing activities and assemble fully integrated
marketing programs to create, communicate, and deliver value to consumers. McCarthy classified these
activities as Marketing-Mix tools of four broad kinds, which he called four Ps.
Marketing Mix

Product

Product
Variety Place
Quality Price
Design Promotion Channel
Features List Price Coverage
Brand Name Discounts Sales Promotion Assortment
Packaging Allowances Advertising Locations
Sizes Payment Sales Force Inventory
Services Period Public Relation Transport
Warranties Credit Terms Direct
Return Marketing
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Internal Marketing

Internal marketing is the task of hiring, training, and motivating

able employees who want to serve customers well.
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Performance Marketing

 Social Initiatives
 Financial  Corporate social
Accountability marketing
 Cause marketing
 Social
Corporate philanthropy
Responsibility 

Marketing  Corporate community

involvement
 Socially responsible
business practices
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Updating the 4pS

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Acceptability
Affordability
ACCESSIBILITY
AWARENESS

Four Ps Four Cs
 Product  Customer solution
 Price  Customer cost
 Place  Convenience
 Promotion  Communication

Four As
 Acceptability
 Affordability
 Accessibility
 Awareness
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Updating the 4pS

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Four Ps Modern Marketing

Management Ps
 Product
 People
 Price
 Process
 Place
 Program
 Promotion
 Performance
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