Defining Marketing for the New Realities - Kotler MM15e

Chapter 1 Defining Marketing for the New Realities Copyright © 2016 Pearson Education, Inc. 1-1 Learning Objectives 1. Why is marketing important? 2. What is...

Chapter 1 Defining Marketing for the New Realities Copyright © 2016 Pearson Education, Inc. 1-1 Learning Objectives 1. Why is marketing important? 2. What is the scope of marketing? 3. What are some core marketing concepts? 4. What forces are defining the new marketing realities? 5. What new capabilities have these forces given consumers and companies? 6. What does a holistic marketing philosophy include? 7. What tasks are necessary for successful marketing management? Copyright © 2016 Pearson Education, Inc. 1-2  The Value of Marketing Financial success often depends on marketing ability Successful marketing builds demand for products and services, which, in turn, creates jobs Marketing builds strong brands and a loyal customer base, intangible assets that contribute heavily to the value of a firm Copyright © 2016 Pearson Education, Inc. 1-3  The Scope of Marketing Marketing is about identifying and meeting human and social needs AMA’s formal definition: Marketing 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 Copyright © 2016 Pearson Education, Inc. 1-4  Marketing Management The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value COPYRIGHT © 2016Copyright PEARSON © EDUCATION, 2016 Pearson INC. Education, Inc. 1-5 1-5  What is Marketed? Goods/ commodity Services/ car wash Events/ world cup Experiences/ 50 ys in business. Persons/ presidential campaign & celebrity. COPYRIGHT © 2016Copyright PEARSON © EDUCATION, 2016 Pearson INC. Education, Inc. 1-6 1-6  What is Marketed? Places/ Vegas, commercial banks, business associations. Properties/ Intangible rights of ownership (stocks, bonds), and real estate. Organizations/ Museums, theaters, human rights org. Information/ how to stop smoking. Ideas/ Democracy, how to make a thing, How to be successful, how to be a millionaire. 1-7 COPYRIGHT © 2016 PEARSON EDUCATION, INC. 1-7 Copyright © 2016 Pearson Education, Inc.  Who Markets? A marketer is someone who seeks a response—attention, a purchase, a vote, a donation—from another party, called the prospect. COPYRIGHT © 2016Copyright PEARSON © EDUCATION, 2016 Pearson INC. Education, Inc. 1-8 1-8  8 Demand States Negative/ not liked product. Nonexistent/ not recognized Latent/ static, need can’t be satisfied by the existing product. Declining/ going down demand. Irregular/ seasonal Unwholesome/ anti-demand (antismoking), when consumers are attracted to a product that has undesirable social consequences. Full/ demand equals supply. Overfull/ demand is more than supply. 1-9.  Fig. 1.1 Structure of Flows in A Modern Exchange Economy COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-10 1-10  Fig. 1.2 A Simple Marketing System Copyright © 2016 Pearson Education, Inc. 1-11  Key Customer Markets Consumer markets Business markets Global markets Nonprofit & governmental markets Local markets Regional markets International markets Profit markets Reseller markets COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-12 1-12  Core Marketing Concepts Needs: the basic human requirements such as for air, food, water, clothing, and shelter Wants: specific objects that might satisfy the need Demands: wants for specific products backed by an ability to pay/ the totality or sum of the individual wants of specific product. COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-13 1-13  Types of Needs STATED/ inexpensive car REAL/ good on gas consumption UNSTATED/expected good maintenance service DELIGHT/ accessories for free, GPS SECRET/ to be seen smart COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-14 1-14  Core Marketing Concepts Target markets/ the specific category of customers to focus on. Positioning/ when buyers want varying product to reflect differences between them. Inserting the product image in the customer’s mind. Segmentation/ the bases on which to communicate with customers. Geographic, demographic, psychographic, behavior. 1-15  Core Marketing Concepts Value proposition: a set of benefits that satisfy those needs Offering: a combination of products, services, information, and experiences Brand: an offering from a known source. Associated to people’s minds to create image. COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-16 1-16  Core Marketing Concepts Marketing channels COMMUNICATION/ TV, mail, Tell, phone, posters, internet. Social media DISTRIBUTION/ transportations, delivery, stores. SERVICE/ warehouses, transportation cost., banks, insurance cost. COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-17 1-17  Core Marketing Concepts Paid media: TV, magazine and display ads, paid search, and sponsorships Owned media: a company or brand brochure, web site, blog, Facebook page, or twitter account Earned media: word of mouth, buzz (positive rumor), or viral marketing, the press, any voluntary communciation tools. COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-18 1-18  Core Marketing Concepts Impressions: occur when consumers view a communication. The mental and emotional view carried on a product. Engagement: the extent of a customer’s attention and active involvement with a communication COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-19 1-19  Core Marketing Concepts Value: a combination of Quality, Service, and Price (QSP: the customer value triad (the 3 dimensions of value). Satisfaction: a person’s judgment of a product’s perceived performance in relationship to expectations. Tangible and intangible benefits and costs. Dissatisfied, satisfied, delighted. If performance = Expectation>>> Satisfied. If Performance > Expectation >>> Delighted. If performance < Expectation COPYRIGHT © 2016 = INC. PEARSON EDUCATION, Dissatisfied. 1-20 1-20  Core Marketing Concepts Supply chain: a channel stretching from raw materials to components to finished products carried to final buyers (Fig 1.3: The Supply Chain for Coffee) COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-21 1-21  Core Marketing Concepts Competition: all the actual and potential rivals’ offerings and substitutes a buyer might consider COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-22 1-22  Core Marketing Concepts Marketing environment – Task environment/ all actors related to business, producers, distributors, promoters, suppliers, dealers, customers, advertisers, insurance costs, transporters, telecommunicators. – Broad environment/ demographic, economic, social and cultural, political and legal, technological, and natural forces. COPYRIGHT © 2016 PEARSON EDUCATION, INC. 1-23 1-23 Copyright © 2016 Pearson Education, Inc.  The New Marketing Realities Technology/ in all areas. Globalization/ global marketing and competition. (Act locally and think globally) Social responsibility/ consumer affairs, urban affairs, and environmental affaires. COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-24 1-24  A dramatically changed marketplace ((New consumer capabilities)) – Can use the internet as a powerful information and purchasing aid – Can search, communicate, and purchase on the move – Can tap into social media to share opinions and express loyalty COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-25 1-25  A dramatically changed marketplace New consumer capabilities – Can actively interact with companies – Can reject marketing they find inappropriate Boycott. COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-26 1-26  A dramatically changed marketplace ((New company capabilities)) – Can use the internet as a powerful information and sales channel, including for individually differentiated goods – Can collect fuller and richer information about markets, customers, prospects, and competitors – Can reach customers quickly and efficiently via social media and mobile marketing, sending targeted ads, coupons, and information COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-27 1-27  A dramatically changed marketplace New company capabilities – Can improve purchasing, recruiting, training, and internal and external communications – Can improve cost efficiency/ by lowering the cost of distribution and promotion. COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-28 1-28  A dramatically changed marketplace ((Changing channels)) changed through the following: – Retail transformation/ building entertainments as coffee spots, bars, product demonstration and performance in the store (marketing experience rather than the product assortment). Reintermediation and become (Brick and click) retailers. Add online services to their offerings. – Disintermediation/ to bring something back from termination. COPYRIGHT © 2016Copyright PEARSON © 2016 Pearson Education, EDUCATION, INC. Inc. 1-29 1-29  A dramatically changed marketplace ((Heightened competition)) what strengthen competition: – Private brands/ by retailers. – Mega-brands/ overall branding – Deregulation/ reforming regulations to match privatization and new legal settings. – Privatization/ sell or rent publicly-owned assets. 1-30 COPYRIGHT © 2016 PEARSON EDUCATION, INC. 1-30  Marketing in practice Marketing balance/ business to move forward to meet needs, use the internet and digital marketing in marketing plans. Go to wherever the consumer is. Marketing accountability/ to justify investment in financial and profitable terms, using metric-brand equity, customer lifetime value, return on marketing investment, using suitable financial measures. Marketing in the organization/ everyone in the org. is a marketer. Holistic concept. 1-31 2016 PEARSON EDUCATION, INC. 1-31  Company Orientation toward the Marketplace PRODUCTION/ 1850-1920, consumers prefer available and inexpensive products. Concentration on efficiency, low cost, mass distribution. PRODUCT/ 1920-1950, consumers prefer product of quality , performance, and innovative feature SELLING/ 1950-1970, sell what you make, not make what the market wants. To find the right customer for the product.. MARKETING/ 1970-now, emphasis on social and psychological needs, social responsibility, and environment consideration. Involve customers in strategic thinking. make the right product for the right customer 1-32 Copyright © 2016 Pearson Education, Inc. 1-32. COPYRIGHT © 2016 PEARSON EDUCATION, INC.  HOLISTIC MARKETING: IS THE DEVELOPMENT, DESIGN, AND IMPLEMENTATION OF MARKETING PROGRAMS, PROCESSES, AND ACTIVITIES THAT RECOGNIZE THEIR BREADTH AND INTERDEPENDENCY.  Fig. 1.4 Holistic Marketing Dimensions Copyright © 2016 Pearson Education, Inc. 1-34  RELATIONSHIP MARKETING WITH THE STAKEHOLDERS: TO BUILD A MUTUAL SATISFYING LONG- TERM RELATIONSHIP WITH KEY CONSTITUENTS IN ORDER TO EARN AND RETAIN THEIR BUSINESS Relationship marketing CUSTOMERS EMPLOYEES MARKETING PARTNERS FINANCIAL COMMUNITY Copyright © 2016 Pearson Education, Inc. 1-36  Integrated marketing Devise marketing activities and programs that create, communicate, and deliver value such that “the whole is greater than the sum of its parts.” Copyright © 2016 Pearson Education, Inc. 1-37  Internal marketing The task of hiring, training, and motivating able employees who want to serve customers well/ managers or owners are buyers of labor and employees are sellers. Copyright © 2016 Pearson Education, Inc. 1-38  PERFORMANCE MARKETING : FINANCIAL AND NONFINANCIAL RETURNS TO BUSINESS AND SOCIETY. MARKETERS USUALLY GO BEYOND SALES REVENUE TO MEASURE MARKETING SCORECARD OF MARKET SHARE, CUSTOMER LOOSE RATE, SATISFACTION, QUALITY. ALSO TO CONSIDER LEGAL, ETHICAL, AND ENVIRONMENTAL EFFECT OF MARKETING ACTIVITIES AND PROGRAMS. Performance marketing FINANCIAL ENVIRONMENTAL ACCOUNTABILITY IMPACT SOCIAL IMPACT Copyright © 2016 Pearson Education, Inc. 1-40  Fig. 1.5 Marketing Mix Components (4 Ps) Copyright © 2016 Pearson Education, Inc. 1-41 MODERN MARKETING MANAGEMENT PEOPLE PROCESSES PROGRAMS PERFORMANCE Copyright © 2016 Pearson Education, Inc. 1-42  MARKETING MANAGEMENT TASKS Developing market strategies and plans Capturing marketing insights Connecting with customers Building strong brands Copyright © 2016 Pearson Education, Inc. 1-43  MARKETING MANAGEMENT TASKS Creating value Delivering value Communicating value Creating successful long-term growth Copyright © 2016 Pearson Education, Inc. 1-44 Copyright © 2016 Pearson Education, Inc. 1-45