Chapter 1: Defining Marketing for the New Realities PDF

**Chapter 1: Defining Marketing for the New Realities** **1. What is Marketing?** - Marketing is about identifying and meeting human and social needs aligned with organizational goals. **2. Who Markets?** - A marketer seeks a response---like attention or a purchase---from another par...

**Chapter 1: Defining Marketing for the New Realities** **1. What is Marketing?** - Marketing is about identifying and meeting human and social needs aligned with organizational goals. **2. Who Markets?** - A marketer seeks a response---like attention or a purchase---from another party. They aim not just to stimulate demand but also to influence its timing and composition to meet organizational goals. - **Traditional Market**\ Historically, a market was a physical place where buyers and sellers met. Economists view it as a collection of transactions between buyers and sellers, such as in the housing or grain markets. **3. Types of Markets:** 1. **Resource Markets:** Provide raw materials and labor. 2. **Manufacturer Markets:** Convert resources into goods and services. 3. **Consumer Markets:** Buy from intermediaries and use products. 4. **Intermediary Markets:** Sell to consumers. 5. **Government Markets:** Buy goods to provide public services. The economy is a network of these interacting markets, connected by the flow of goods, services, and money. - **Consumer Markets**: Selling to individuals for personal use (e.g., groceries, electronics). - **Business Markets (B2B)**: Selling goods and services to other businesses (e.g., office supplies, raw materials). - **Global Markets**: Companies sell internationally, addressing diverse markets with different needs and behaviors. - **Non-profit and Government Markets**: Organizations focus on promoting public goods and services rather than profit (e.g., health campaigns, education).A diagram of a government market Description automatically generated **4. Transaction and Exchange:** - **Transaction**: A business deal involving the exchange of goods, services, or money between parties. - **Exchange**: The core of marketing where a party gives something (money, goods, service) to receive something of value in return (e.g., a product). Example: You buy a book from a store, the store receives money, and you receive the book---this is an exchange, and the transaction is the actual act of trading.  **5. Orientation Towards the Marketplace:** - **Production Orientation**: - Focus on mass production, efficiency, and wide distribution. - Assumes that consumers prefer products that are widely available and affordable. - Example: Henry Ford's mass production of affordable cars. - **Product Orientation**: - Focus on product innovation and quality. - Assumes customers will favor products with the most quality, performance, and innovative features. - Example: Apple's focus on design and technology for iPhones. - **Selling Orientation**: - Aggressive sales techniques to convince customers to buy. - Assumes customers need persuasion to purchase products. - Example: Door-to-door sales, telemarketing. - **Marketing Orientation**: - Focus on understanding and meeting customer needs. - Assumes that customer satisfaction leads to long-term success. - Example: Companies like Amazon that focus on customer feedback and personalization. - **Societal Marketing Orientation**: - Focuses on balancing company profits, customer desires, and societal well-being. - Emphasizes sustainable and ethical practices. - Example: TOMS Shoes' \"One for One\" model, where a pair of shoes is donated for each pair sold. **6. Holistic Marketing Concept:** - Holistic marketing recognizes that everything matters in marketing---from product development, customer communication, employee engagement, to societal welfare. - An integrated approach to managing strategy and tactics - **Four Key Components**: 1. **Internal Marketing**: Ensuring that all employees understand and support the company's marketing efforts (e.g., staff training, corporate culture). 2. **Integrated Marketing**: Ensuring a consistent message across all marketing channels (e.g., advertising, social media, PR). 3. **Relationship Marketing**: Fostering long-term relationships with customers, suppliers, and other stakeholders (e.g., loyalty programs, partnerships). 4. **Preformance Marketing**: Considering the ethical, environmental, and social impacts of marketing practices (e.g., green marketing, corporate social responsibility). Understanding the financial and nonfinancial returns to business and society from marketing activities and programs. **7. The 4 P's of Marketing (Marketing Mix):** - **Product**: - Goods, services, or ideas that satisfy customer needs. - Decisions include design, features, branding, and warranties. - Example: A smartphone with high-resolution cameras, long battery life, and unique design. - **Price**: - The cost a customer pays for the product. - Pricing strategies include discounts, bundling, and premium pricing. - Example: Subscription-based pricing models (e.g., Netflix). - **Place**: - Distribution strategies for making the product available to customers. - Decisions about channels, locations, and logistics. - Example: E-commerce websites, retail stores, or direct sales. - **Promotion**: - Activities that communicate the product's benefits to target customers. - Includes advertising, sales promotions, public relations, and direct marketing. - Example: A social media campaign or a TV commercial. **8. Core Marketing Concepts:** - **Needs, Wants, and Demands**: - **Needs**: Basic human requirements (e.g., food, clothing, shelter). - **Wants**: Specific ways in which people choose to fulfill their needs, shaped by culture and personality (e.g., wanting a specific type of food). - **Demands**: Wants backed by purchasing power (e.g., customers willing to pay for organic food). - **Target Markets**: - The specific group of customers that a company aims to serve. - Requires market segmentation to identify specific groups (e.g., young professionals, retirees). - **Positioning**: - Creating a distinct place in the minds of target customers about the product compared to competitors. - Example: Volvo's positioning as a safety-focused car brand. - **Value Proposition**: - A promise of the benefits or value that a customer will receive in exchange for purchasing the product. - Example: FedEx's value proposition, \"When it absolutely, positively has to be there overnight.\" - **Satisfaction**: - The customer's perception of the product meeting or exceeding their expectations. - Example: A restaurant delivering excellent food and service. - **Loyalty**: - A customer's commitment to repurchase or continue using the product/service. - Example: Amazon Prime members showing repeat purchase behavior due to fast shipping and exclusive offers. - **Marketing Channels**: - Paths through which products reach customers, such as physical stores, online shops, or mobile apps. - Example: Apple distributing its products through Apple Stores, authorized resellers, and online platforms. - The ***production concept*** is one of the oldest concepts in business. It holds that consumers prefer products that are widely available and inexpensive. - The ***product concept*** proposes that consumers favor products offering the highest quality, the best performance, or innovative features. - The ***selling concept*** holds that consumers and businesses, if left alone, won't buy enough of the organization's products. - The ***marketing concept*** emerged in the mid-1950s as a customer-centered, sense-and-respond philosophy. The job of marketing is not to find the right customers for your products but to develop the right products for your customers. - The ***market-value concept*** is based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies. The value-based view of marketing acknowledges that everything matters in marketing---and that a broad, integrated perspective is often necessary. **9. Marketing Management Tasks:** **ROLE OF CEO** - Convince senior management of the importance of being customer focused - Hire strong marketing talent - Facilitate the creation of strong in-house marketing training programs - Appoint a chief marketing officer **ROLE OF CMO** - Act as the visionary for the future of the company - Build adaptive marketing capabilities - Win the war for marketing talent - Tighten the alignment with sales - Take accountability for returns on marketing spending - Infuse a customer perspective in business decisions affecting any customer touch point **RELATIONSHIPS WITH OTHER DEPARTMENTS\ ** - Marketers must work closely with: - customer insights and data analytics teams - different communication agencies - channel partners - Create long-term customer value **Low Customer-Centricity** **High Customer-Centricity** ----------------------------- ------------------------------- Product driven Market driven Mass market focused Customer focused Process oriented Outcome oriented Reacting to competitors Making competitors irrelevant Price driven Value driven Hierarchical organization Teamwork - Requires managers at every level to be personally engaged in understanding, meeting, and serving customers - Customers expect companies to **listen** and **respond** to them