Marketing in the Twenty-First

Century
Change is occurring at an accelerating rate; today is not like
yesterday, and tomorrow will be different from today.
Continuing todays strategy is risky; so is turning to a new
strategy. Therefore, tomorrows successful companies will
have to heed three certainties:
Global forces will continue to affect everyones business
and personal life.
Technology will continue to advance and amaze us.
There will be a continuing push toward deregulation of the
economic sector.
These three developmentsglobalization, technological
advances, and deregulationspell endless opportunities. But
what is marketing and what does it have to do with these
issues?
Definition of Marketing
What are the tasks of marketing?
What are the major concepts and tools of marketing?
What orientations do companies exhibit in the marketplace?
How are companies and marketers responding to the new
challenges?
Understanding Marketing Management
Marketing deals with identifying and meeting human and
social needs. One of the shortest definitions of marketing
is meeting needs profitably.
Marketing: Managing Profitable Customer Relationships.
The two fold goal of marketing is to attract new customers by
promising superior value and to keep and grow current customers
by delivering satisfaction. Example-Wal-Mart, Sony, IBM and
Procter etc.
What is Marketing
Many people think of marketing only as selling and
advertising. It is only the tip of the marketing
iceberg.
Sense: Old sense making a sale- telling and
selling-but in the new sense of satisfying
customer needs.
Selling and advertising are only part of a longer
marketing mix- a set of marketing tools that
work together to satisfy customer needs and
build customer relationships.
What is Marketing
Marketing is NOT synonymous with Sales or
Advertising
Kotlers social definition : Marketing is a social and
managerial process by which individuals and groups
obtain what they need and want through creating and
exchanging value with others.
As a managerial definition, marketing has often been
described as the art of selling products.
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
Scope of Marketing
Marketing people are involved in marketing 10 types of
entities: goods, services, experiences, events, persons, places,
properties, organizations, information, and ideas.
Many Things can be marketed:
* Goods * Services
* Experiences * Events
* Persons * Places
* Properties * Organizations
* Information * Ideas
Core Marketing Concepts:
1.Needs. Human needs are states of felt deprivation.
(physical needs, social needs, and individual needs)
Needs describe basic human requirements such as
food, air, water, clothing, and shelter. People also have
strong needs for recreation, education, and
entertainment.
Wants: are the form human needs take as they are
shaped by culture and individual personality.
Demands: Human wants that are backed by buying
power. Wants become buying power.
Core Concepts of Marketing
2. Marketing Offers-( Products, Services, and
Experiences): Some combination of products,
services, information or experiences offered to a
market to satisfy a need or want.
. A product is any offering that can satisfy a need or
want.
A brand is an offering from a known source. A brand
name such as McDonalds.
Marketing offers also include other entities, such as
persons, places, organizations, information and ideas.
Core Concepts of Marketing

3. Customer Value and Satisfaction: are key building

blocks for developing and managing customer
relationship. Satisfied customers buy again and tell
others about their good experiences.
Dissatisfied customers often switch to competitors and
disparage/criticize the product to others.
We define value as a ratio between what the
customer gets and what he gives.
Core Concepts of Marketing
4. Exchanges and Relationships:
Exchange: is the act of obtaining a desired object from
someone by offering something in return.
Whether exchange actually takes place depends upon
whether the two parties can agree on terms that will leave
them both better off (or at least not worse off) than before.
Exchange is a value-creating process because it normally
leaves both parties better off.
Relationships: Marketers want to built strong relationships by
consistently delivering superior customer value.
Relationship marketing aims to build long-term mutually satisfying
relations with key partiescustomers, suppliers, distributorsin
order to earn and retain their long-term preference and business.
Core Concepts of Marketing

5. Markets: A market is a set of actual and

potential buyers of a product or services.
Today we can distinguish between a marketplace and a
marketspace.
The marketplace is physical, as when one goes shopping in
a store; marketspace is digital, as when one goes shopping
on the Internet. E-commercebusiness transactions
conducted on-linehas many advantages for both
consumers and businesses, including convenience, savings,
selection, personalization, and information.
Core Concepts of Marketing

Another core concept is the distinction between

marketers and prospects. A marketer is someone who
is seeking a response (attention, a purchase, a vote, a
donation) from another party, called the prospect. If
two parties are seeking to sell something to each other,
both are marketers.
MARKETING MANAGEMENT
Marketing Management is the art and
science of choosing target markets and
building profitable relationships with
them
What customers will we serve (Whats our
target market) and How can we serve these
customers best ( Whats our value
proposition?)
Creating, delivering and communicating
superior customer value is key.
MARKETING MANAGEMENT
Marketing Management is the analysis, planning, implementation and
control of programs designed to create, build and maintain
beneficial exchanges with target buyers for the purpose of
achieving organizational objectives.
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.
Coping with exchange processespart of this definitioncalls for
a considerable amount of work and skill. We see marketing
management as the art and science of applying core marketing
concepts to choose target markets and get, keep, and grow
customers through creating, delivering, and communicating
superior customer value.
a
MARKETING MANAGEMENT
(A Broad view of Marketing Task)
1.Customer Management:
Marketers select customers that can be
served well and profitably.
2.Demand Management:
Marketers must deal with different
demand states ranging from no
demand to too much demand.
Eight different states of demand
Just as production and logistics professionals are
responsible for supply management, marketers are
responsible for demand management. They may have to
manage -
negative demand (avoidance of a product),
no demand (lack of awareness or interest in a product),
latent demand (a strong need that cannot be satisfied by
existing products),
declining demand (lower demand),
irregular demand (demand varying by season, day, or hour),
full demand (a satisfying level of demand),
overfull demand (more demand than can be handled), or
unwholesome demand (demand for unhealthy or dangerous products).
A Broadened View of Marketing Tasks

To meet the organizations objectives, marketing

managers seek to influence the level, timing, and
composition of these various demand states.

1. Negative demand 2. No demand

3. latent demand 4. Declining demand
5. Irregular demand 6. Full demand
7. Overfull demand 8.Unwholesome demand
Marketing Management Orientation
What philosophy should guide marketing
strategies?
What weight should be given to the interests of
customers, the organization and society?
There are six alternative concepts under which
organizations design and carry out their
marketing strategies: the production, product,
selling, marketing and societal marketing and
holistic marketing concepts.
Management Orientation
1. The Production Concept: holds that consumers will favor
products that are available and highly affordable. Therefore,
management should focus on improving production and
distribution efficiency.
The production concept, one of the oldest in business, holds
that consumers prefer products that are widely available and
inexpensive. Managers of production-oriented businesses
concentrate on achieving high production efficiency, low
costs, and mass distribution.
This concept is still a useful philosophy in two types of
situations: (i) When the demand for a product exceeds the
supply and (ii) When the product cost is too high and
improved productivity is needed to bring it down.
Management Orientation
2. The Product Concept: holds that
consumers will favor products that offer
the most in quality, performance, and
innovative features, and that the
organization should devote its energy to
making continuous product improvement
by designs, packages, prices and better
product. For example- users wanted train
rather than transportation.
Management Orientation
3. The Selling concept: holds that
consumers will not buy enough of the
firms products unless it undertakes a
large-scale selling and promotion effort.
The concept is typically practiced with
unsought goods or unwanted goods those
that buyers do not normally think of buying.
Example-insurance and blood donations.
Management Orientation

04.The Marketing Concept: holds that organizational

goals depends on knowing the needs and wants of
target markets and delivering the desired
satisfactions better than competitors do.
Under the concept, customer focus and value are the
paths to sales and profits.
It views marketing not as hunting but as
gardening
The marketing concept rests on four pillars: target
market, customer needs, integrated marketing, and
profitability.
Marketing Concepts

Customer Needs
A company can carefully define its target market yet fail
to correctly understand the customers needs. Clearly,
understanding customer needs and wants is not always
simple.
Some customers have needs of which they are not fully
conscious; some cannot
articulate these needs or use words that require some
interpretation. We can distinguish among five types of
needs: (1) stated needs, (2) real needs, (3) unstated needs,
(4) delight needs, and (5) secret needs.
Management Orientation
The fig contrasts the selling concept and marketing
concept:
Starting point Focus Means Ends
Factory Existing Selling and Profit through
products promotion sales volume
* The Selling Concept
Market Customer Integrated Profit through
needs marketing customer
satisfaction
*The Marketing Concept
Integrated Marketing
When all of the companys departments work together to serve the
customers interests , the result is integrated marketing. Integrated
marketing takes place on two levels.
First, the various marketing functionssales force, advertising,
customer service, product management, marketing researchmust
work together. All of these functions must be coordinated from the
customers point of view.
Second, marketing must be embraced by the other departments.
External marketing is marketing directed at people outside the
company. Internal marketing is the task of hiring, training, and
motivating able employees who want to serve customers well. In
fact, internal marketing must precede external marketing. It makes
no sense to promise excellent service before the companys staff is
ready to provide it.
Practice the marketing concept
How many companies actually practice the marketing
concept? Unfortunately, too few. Only a handful of
companies stand out as master marketers: Procter &
Gamble, Disney, Nordstrom, Wal-Mart, Milliken &
Company, McDonalds, Marriott Hotels, American
Airlines, and several Japanese (Sony, Toyota, Canon)
and European companies (IKEA, Club Med, Nokia,
ABB, Marks & Spencer). These companies focus on
the customer and are organized to respond effectively
to changing customer
Management Orientation
5. The Societal Marketing Concept: holds that
marketing strategy should deliver value to
customers in a way that maintains or improves
both the consumers and societys well-being.
Companies should balance three considerations
in setting their marketing strategies: company
profits, customer wants/satisfaction, and
societys interests (Human welfare).
Management Orientation
6. The Holistic Marketing concept: is based on
the development, design, and
implementation of marketing programs,
processes and activities that recognizes
their breadth and interdependencies.
Four broad components charactering holistic
marketing:
a. Relationship marketing
b. Integrated marketing
c. Internal marketing and
d. Performance marketing
The Holistic Marketing Concept
1. Relationship Marketing: is the aim to build
mutually satisfying long-term relationships
with key constituents/necessary in order to
earn and retain their business. Four key
constituents marketing are customers,
employees, marketing partners (channels,
suppliers, distributors, dealers, agencies)
The Holistic Marketing Concept
2. Integrated Marketing: The marketers task
is to devise/to plan marketing activities
and assemble/to gather fully integrated
marketing programs to create,
communicate, and deliver value for
consumers. Mc Carthy classified these
activities as marketing mix, which he
called four Ps of marketing: product, price,
place and promotion
Marketing Mix
Marketing mix is the set of marketing tools
that the firm uses to pursue its marketing
objectives in the target market.
McCarthy classified these tools into four broad
groups that he called the four Ps of marketing:
product, price, place, and promotion
The four P components of the marketing mix are:
1. Product: Product variety, quality, design,
features, brand name, packaging, sizes, service,
warranties and returns.
2. Price: list price, discounts, allowances, payment
period and credit terms.
Marketing Mix
3. Place: Channels, coverage, assortments,
locations inventory and transportation.
4. Promotion: Sales promotion, Advertising,
Public relations and Direct marketing
The four Ps represent the sellers view of the
marketing tools available for influencing
buyers. Its four dimensions (SIVA) and the
corresponding customer questions these
are designed to answer are:
Marketing Mix
I. Solution: How can I solve my
problem?
II. Information: Where can I learn more
about it?
III. Value: What is my total sacrifice to get
their solution?
IV. Access: Where can I find it?
Holistic Marketing Concept
3. Internal Marketing: is the task of hiring,
training and motivating able employees
who want to serve customers well.
Internal marketing must take place on two
levels: first level- the various marketing
functions- sales forces, advertising,
customer service, product management,
marketing research must work together.
Holistic Marketing Concept
At the second level, other departments
must embrace marketing; they must
also think customer.
Holistic Marketing Concept
4. Performance Marketing: Holistic
marketing incorporates performance
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.
CRM
CRM-Customer Relationships Marketing
is the overall process of building and
maintaining profitable customer relationships
by delivering superior customer value and
satisfaction.
It costs 5 to 10 items MORE to attract a new
customer than it does to keep a current
customer satisfied.
Marketers must be concerned with the lifetime
value of the customer.
CRM
KEY Concepts:
1. Attracting, retaining and growing
customers
a) Customer value/satisfaction: The
difference between total customer value
and total customer cost.
CRM
Customer satisfaction depends on the products
perceived performance relative to a buyers
expectations. Here
*perceptions are key
*Meeting/exceeding
*expectations creates satisfaction
b) Loyalty and retention: Good customer
relationship management creates customer
delight. In turn, delighted customers remain loyal
and talk favorably to others about the company
and its products.
CRM
Studies show big differences in the loyal of customers
who are less satisfied, somewhat satisfied, and
completely satisfied. So loyalty increases satisfaction
level and delights consumers should be the goal.
c. Growing share of customer: The portion of the
customers purchasing that a company gets its
product categories. Super markets and restaurants
want to get more share of stomach. Car
companies want to increase share of garage and
air lines want greater share of travel.
CRM
2. Building customer relationships and customer
equity
a) Customer equity: is the total combined
customer lifetime values of all customers.
Clearly, the more loyal the firms profitable
customers, the higher the firms customer
equity.
b) Customer relationship levels and tools: Target
market typically dictates type of relationship.
*Basic relationships
*Full relationships
CRM
c) Customer loyalty and retention programs:
*Adding financial benefits
*Adding social benefits
*Adding structural ties
Marketing Challenges of the New
Millennium
We examine the major trends and forces that
are changing the marketing landscape
and challenging marketing strategy. The
four major developments are causing
marketplace changes; such as-
1.the new digital age (Internet),
2. rapid globalization,
3. the call for more ethics and social
responsibilities and
4.the growth in not-for-profit marketing
Marketers Responding to
Marketing Challenges
Connecting Millennium:
1.a) Via technology: advances in computers,
telecommunications, video-conferencing,
etc, are major forces.
*Databases allow for customization of products,
messages and analysis of needs.
b) The Internet: (i) Facilities anytime, anywhere
connections. ii) Facilities CRM iii) Creates
market spaces.
Marketers Responding to
Marketing Challenges
Connecting:
2. With Customers:
a) Selective relationship management is key
.Customer profitability analysis separates
winners from losers.
b) Growing share of customer
Cross-selling and up-selling are helpful.
c) Direct sales to buyers are growing
Marketers Responding to
Marketing Challenges
3. With marketing partners:
a) Partner relationship management
involves:
i) Connecting inside the company
ii) Connecting with outside partners
*Supply chain management
*Strategic alliances
Marketers Responding to
Marketing Challenges
4.With the world:
a) Globalization
*Competition
*New opportunities
b) Greater concern for environmental and social
responsibilities
c) Increased marketing by non profit and public
sector entities
* Social marketing campaign.