1_Easy_Defining Marketing for the New Realities

• Marketing identifies and meets human and social needs, aligning with organizational goals
• Marketing involves creating, communicating, delivering, and exchanging offerings valuable to customers, clients, partners, and society
• Marketing can apply to goods, services, events, experiences, persons, places, properties, organizations, information, and ideas
• Marketing revolves around exchange processes seeking responses like purchases or support
• Exchanges take place in five basic markets
  • Resource markets (raw materials, labor, capital)
  • Manufacturer markets (products and services)
  • Consumer markets (individual buyers)
  • Intermediary markets (wholesalers, retailers)
  • Government markets (public sector purchasing)
• Marketing manages the level, timing, and composition of demand to align with company objectives
• Marketing collaborates with finance, operations, R&D, and HR for a customer-focused organization

New Marketing Realities

• The marketing landscape has transformed due to external forces
• New realities consist of four major forces, three key market outcomes, and four fundamental pillars of holistic marketing

Four Major Market Forces

• Technology's quick evolution in areas like e-commerce, AI, big data, and mobile tech gives marketers tools to understand and interact with consumers
  • Companies like Amazon, Netflix, and Airbnb use data analytics to personalize customer experiences
  • AI and machine learning help predict customer behavior and automate tasks
• The world is more interconnected, diminishing geographic and political barriers
  • Companies compete globally, extending markets beyond national borders
  • Brands like Coca-Cola, Apple, and McDonald's tailor strategies to different cultures
• Climate change, sustainability, and environmental concerns impact consumer behavior and business strategies
  • Companies adopt eco-friendly practices (e.g., Toyota Prius and Patagonia) to appeal to environmentally conscious consumers
  • Global health crises, like COVID-19, shift business marketing and delivery
• Consumers expect ethical, transparent, and socially responsible practices
  • Companies like Ben & Jerry's and The Body Shop use corporate social responsibility (CSR)
  • Diversity, inclusion, fair trade, and ethical sourcing are now essential to marketing

Key Market Outcomes

• Consumers have more control and access to information
  • They use online reviews, price comparison tools, and mobile apps for informed decisions
  • Social media platforms allow consumers to share opinions, engage with brands, and influence others
  • Consumers can reject traditional marketing through ad blockers, spam filters, and subscription-based models (e.g., Netflix, Spotify)
• Companies adapted by leveraging digital tools and innovative marketing strategies
  • Brands can collect and analyze real-time customer data
  • AI-driven chatbots, recommendation engines, and automated marketing improve efficiency
  • Businesses engage in personalization, omnichannel marketing, and influencer partnerships
• The competitive landscape has changed dramatically
  • Deregulation has opened many industries, increasing competition
  • Rise of e-commerce, direct-to-consumer (DTC) brands, and online marketplaces
  • Disintermediation: Brands (Tesla, Warby Parker) bypass traditional retailers to sell directly to consumers

Holistic Marketing

• Focuses on building long-term relationships with customers, employees, and partners
  • It uses loyalty programs (Marriott Rewards), customer communities (Harley-Davidson HOG), and personalized experiences (Spotify, Netflix)
• Ensures consistent brand messaging across multiple channels in all marketing activities
  • Coca-Cola's "Open Happiness" campaign aligned across TV, digital, and social media
• It emphasizes that employees are brand ambassadors and must be engaged and motivated
  • Zappos and Southwest Airlines prioritize employee satisfaction to enhance customer experience
• Companies must demonstrate financial and non-financial returns on marketing investments
  • Crucial metrics: customer lifetime value (CLV), return on marketing investment (ROMI), and brand equity
  • Social and environmental impact are also measured (e.g., Patagonia’s sustainability commitment)

Role of Marketing in the Organization

• Choosing a guiding philosophy affects everything from product design and production to pricing, promotion, and distribution

Production Concept

• Focuses on making products widely available at low cost
  • Assumption: Consumers prefer products that are easy to find and inexpensive
  • Companies invest in increasing production and improving distribution to keep prices low
  • Smartphone manufacturers in developing countries produce basic, affordable phones cheaply and distribute them widely

Product Concept

• Focuses on making products with the best quality or most innovative features
  • Assumption: Consumers will automatically want a product if it’s better
  • Risk: The "better mousetrap” fallacy— a better product needs the right price, advertising, and distribution
  • A tech startup focuses on a cutting-edge gadget but doesn't plan how to market or distribute it

Selling Concept

• Focuses on convincing consumers to buy through aggressive promotion and selling efforts
  • Assumption: People won't purchase enough if left alone leading to push sales to hit targets
  • Often used for "unsought goods" (life insurance or funeral plots)
  • Risk: It assumes buyers will be happy after being heavily "sold," but aggressive tactics harm long-term relationships
  • Door-to-door salespeople use high-pressure tactics to sell an unwanted product

Marketing Concept

• Focuses on understanding and responding to the needs and wants of the target market
  • Assumption: Achieving business goals involves creating, delivering, better value than competitors
  • Instead of finding the right customers for a product, you develop the right product for your customers.
  • A computer company (like Dell) allows customers to customize their PCs, instead of selling one standard model

Market-Value (Holistic Marketing) Concept

• Recognizes "everything matters" in marketing where every department and process creates value for customers, the company, and its partners
  • Assumption: Instead of the marketing department understanding customer needs, the organization works together to deliver value
  • Defining the business in terms of customer benefits rather than just products
  • Pepsi defines its market beyond soda drinkers to anyone seeking to quench their thirst

Organizing a Modern Marketing Department

• Marketers are grouped by specialized functions like advertising, market research, digital marketing managed by a CMO or VP of Marketing
  • Simple to understand and manage and encourages expertise
  • Hard to coordinate across functional groups, which leads to competition for budget and status
• Marketing (especially sales) is split by regions or territories, where a national sales manager oversees regional managers
  • Allows focus on local customer needs and quick adjustments to market trends
  • Can duplicate effort if each region has separate marketing activities and leads to inconsistent brand messaging
• Marketing teams are organized by specific products or brands managed by a group product manager overseeing product category managers
  • Each brand or product has a "champion" and encourages specialized knowledge and often have limited authority
  • Short-term planning can overshadow long-term brand-building and can be tricky when many brands require coordination
• Marketing teams organized by distinct target markets (business, consumer, government), where a market manager oversees market or industry specialists dedicated to understanding and serving one market group
  • has a deep understanding of unique customer segments and allows tailored strategies for different buyer preferences or industries
  • May duplicate effort if each market group creates its own marketing materials.Coordination across different segments can be complex
• Uses a combination of two or more structures (product and market) where people report to multiple managers. Teams may include both product and market managers who share responsibility
  • Flexible and can adapt to complex market demands while allowing collaboration
  • Can be expensive and administratively complex. Employees may face confusion

Managing

• The CEO must emphasize a customer-focused culture, hires strong marketing talent and supports resources for marketing
• The CMO manages all marketing functions and collaborates to ensure marketing strategies align with overall business goals

How to build a customer-centric organization

• Embeds "the customer is king”
• CEOs and executives must innovate
• Ensures departments collaborate
• Monitors market trends

This quiz covers the core concepts of marketing, including what can be marketed, the goal of exchange processes, and the five basic markets. It also explores demand management, interdepartmental collaboration, and the impact of major market forces. Furthermore, organizational structures in marketing and their advantages and disadvantages are discussed.