Chapter 1a
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  • The Marketing Management Process The marketing concept suggests that businesses must actively manage an on-going relationship with customers. Key concepts of this perspective include: Marketing Management . The text defines marketing management as “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.” Discussion Note: You might point out to students the influential role played by Professor Kotler in the development of marketing management, in both business and academic settings. Demand Management . Matching supply and demand can be a difficult balancing act. Traditional views of marketing were simplistic: build demand. Now marketers recognize the need to manage demand so that infrastructure resources are not overburdened. Discussion Note: It might help to compare demand management with Just-in-Time Inventory or Supply management. JIT lowers costs by not requiring extra capacity to hold things -- supplies or inventory -- before they are needed. By matching consumer demand to the systems designed to meet needs and wants, overall costs of marketing, and hence, the price of products, is reduced. Building Customer Relationships . Growing markets traditionally mean a plentiful supply of new customers. But as consumers become more sophisticated and as market growth slows, maintaining existing customers is the key to long term marketing success. As pointed out in the text, a continuing customer relationship means years of revenues for a company, not one time only sales. Further, existing customers are less expensive to promote to as they have already processed a great deal of product-specific information. Marketing Management This CTR corresponds to the material on pp. 11 - 12.
  • Societal Marketing Concept This CTR corresponds to Figure 1-5 on p. 16 and relates to the material on pp. 16-17. The Societal Marketing Concept holds that the organization should determine the needs, wants, and interests of target markets. In delivering the desired satisfactions more effectively and efficiently than the competition, the company should also maintain or improve both the consumer’s and society’s well being. Discussion Note: You may wish to consider extra-textual class discussion identifying the pros and cons of the societal marketing concept. Pros: Reasons for adopting the societal marketing concept include: 1. Public expectations. Social expectations of business have increased. 2. Long-run profits. Socially responsible marketing may lead to more secure long-run profits. 3. Ethical obligation. Business should recognize that responsible actions are right for their own sake. 4. Public image. A good public image helps firms gain more customers, better employees, access to money markets, and other benefits. 5. Better environment. Involvement by business can help solve difficult social problems, creating a better quality of life and a more desirable community in which to attract and hold skilled employees. 7. Balance of responsibility and power. Marketers have a large amount of power in society that requires an equally large amount of responsibility. 8. Stockholder interests. Socially responsible companies are considered less risky and safer investments 9. Possession of resources. Business has the financial resources, technical experts, and managerial talent to provide to support public causes. Cons: Reasons for not adopting the societal marketing concept include: 1. Violation of profit maximization. 2. Dilution of purpose. The pursuit of social goals dilutes business’s primary purpose. 3. Costs. Many socially responsible activities don’t pay their way. 4. Too much power. Business is already one of the most powerful institutions in society. 5. Lack of skills. Marketers may be poorly qualified to deal with social issues. 6. Lack of accountability. There are no direct lines of social accountability from the business sector to the public. 7. Lack of broad public support. Even favorable attitudes are general and lack consensus on specific actions marketers should take on social issues. The Societal Marketing Concept
  • New Marketing Challenges This CTR relates to the material on pp. 17-24. Teaching Tip: Challenge students to see marketing as an exciting and creative field needing new ideas and new solutions to emerging business opportunities. Growth of Nonprofit Marketing. More and more charitable firms and businesses that hold nonprofit status, like colleges and hospitals, are adopting a marketing orientation toward serving their constituencies. Globalization. Technological and economic developments continue to shrink the distances between countries. Computer and communications technology make possible truly global businesses that buy, sell, manufacturer, market, and service customers easily across international borders. Rising affluence creates new markets. Similarly, more European and Asian companies now compete successfully in the US. market. Changing World Economy. Even as new markets open to rising affluence in such countries as the “newly industrialized” pacific rim, poverty in many areas and slowed economies in previously industrial nations has already changed the world economy. Americans increasingly maintain living standards only by having two incomes per household. Value is hunted for by penny-wise consumers. Ethics and Responsibility . The greed of the 1980s and other problems has spurred a new interest in ethical conduct in business. Many consumers feel business in general has more of an obligation to those who generate profits -- the consumer! New Landscape and Information Technology . The new marketing landscape is a dynamic, fast-paced, and evolving function of all these changes and opportunities. More than ever, there is no static formula for success. Only strategies that incorporate and implement constant improvement in product quality and higher delivered customer value stand any chance of long-term success. Information and the internet have created a technology boom.


  • 1. Chapter 1Understanding MarketingThe future is not ahead of us. It has already happened. Philip Kotler
  • 2. The learning objectives:•What is Market?•What is Marketing and marketing management?•Marketing core Concepts•Marketing management philosophies 2
  • 3. 1. Market Market means that customers who have purchased or want to purchase a certain product or service.
  • 4. Market= population+ Purchasing Power+ Purchasing NeedExamples:How to understand the market of purifiedwater what is the market of Nike?how tounderstand the Nike’s market?
  • 5. Market • Consumer Market • Business Market • Global Market • Nonprofit and Government Markets
  • 6. Consumer Market The aim of buying is to consume for their own or somebody who has something to do with in consumer market.
  • 7. Business Market Business buyers buy goods for their utility in enabling them to make or resell a product to others for the purpose of making profits.
  • 8. Global Market Companies selling their goods and services in the global marketplace face additional decisions and challenges.
  • 9. Nonprofit and GovernmentMarkets Companies selling their goods to nonprofit organizations such as churches, universities, charitable organizations, or government agencies.
  • 10. Simple Marketing System Communication Goods/services Industry Market(a collection (a collection of sellers) Money of Buyers) Information
  • 11. 2.Defining MarketingMarketing is a societal process by whichindividuals and groups obtain what theyneed and want through creating, offering,and freely exchanging products and servicesof value with others.- Philip Kotler
  • 12. Marketing Is the process of planning and executing the conception,pricing,promotion,and distribution of ideas,goods,services to create exchanges that satisfy individual and organizational goals.
  • 13. The Scope of Marketing Goods Services Experience Events Persons Places Properties Organizations Information Ideas
  • 14. Target Market and Segmentation• the relationship between the industry and market•Marketplace & Marketspace• five basic markets
  • 15. Marketplace and Marketspace •Marketplace is physical, as when one goes shopping in a store, •Marketspace is digital, as when someone shopping on the internet.
  • 16. Five Basic Market (figure 1.2 P9) •Manufacturer markets •Resource markets •Government markets •Intermediary markets •Consumer markets
  • 17. Structure of Flows Resources Resources Money Resource Money markets Services, money Taxes, goods Services, Taxes moneyManufacturer Government Consumer markets markets markets Taxes, goods Services Services, Taxes, money goods Money Money Intermediary Goods, services markets Goods, services
  • 18. The Four Ps The Four Cs Marketing Mix Place ProductCustomer Conven- Solution Price Promotion ience Customer Communication Cost
  • 19. Customer Delivered ValueStarting point Focus Means Ends Existing Selling and Profits through Factory products promotion sales volume (a) The selling concept Customer Integrated Profits through Market needs marketing customer satisfaction (b) The marketing concept
  • 20. Traditional Organization Chart Top Management Middle Management Front-line people Customers
  • 21. Customer-Oriented Organization Chart Customers Front-line people Middle management sC erus om t Top om t us manage- er C s ment
  • 22. Evolving Views of Marketing’s Role Finance ProductionProduction Finance Human resourcesMarketing Human resources Marketing a. Marketing as an b. Marketing as a more equal function important function
  • 23. Evolving Views of Marketing’s Role Production on cti Fi du n o an Pr ce Marketing CustomerreHu ur ce M so ur an n ar s ma ces na ce ke so m F i t in re Hu n g c. Marketing as the d. The customer as the major function controlling factor
  • 24. Evolving Views of Marketing’s Role Production Marketing CustomerreHu ur so ce ma ces an n Fin e. The customer as the controlling function and marketing as the integrative function
  • 25. Marketing managementThe analysis, planning, implementation, andcontrol of programs designed to create, build,and maintain beneficial exchanges with targetbuyers for the purpose of achieving organizationobjectives
  • 26. 3.Core Concepts of Marketing Target Markets & Segmentation Needs, Wants, and Demands Product or Offering Value and Satisfaction Exchange and Transactions Relationships and Networks Marketing Channels Supply Chain Competition Marketing Environment
  • 27. Products Needs, wants, and and demands Services Core Marketing ConceptsMarkets Value, satisfaction, and quality Exchange, transactions, and relationships
  • 28. Needs, Want, and Demands •Needs describe basic human requirements. •Want are shaped by one’s society. •Demands are wants for specific products backed by ability to pay. •examples
  • 29. Needs - state of felt deprivation for basic items suchas food and clothing and complex needs such as forbelonging. i.e. I am thirstyWants - form that a human need takes as shaped byculture and individual personality. i.e. I want a Coca-Cola.Demands - human wants backed by buying power.i.e. I have money to buy a Coca-Cola.
  • 30. Demand States and Marketing Tasks • No demand • Latent demand • Declining demand • Irregular demand • full demand • Overfull demand • Unwholesome demand
  • 31. How do Consumers Obtain Products and Services? • Exchanges - act of obtaining a desired object from someone by offering something in return. • Transactions - trade of values between parties. Usually involves money and a response. • Relationships - building long-term relationships wit consumers, distributors, dealers, and suppliers.
  • 32. Value and satisfaction Benefits • functional benefits • emotional benefits Costs •Monetary costs •Time costs •Energy costs •Psychic costs
  • 33. Value and satisfaction benefits Value = ----------------- costs
  • 34. Exchange and transaction“Exchange” is the act of obtaining a desiredobject from someone by offering something inreturn.“transaction” is a trade between two parties thatinvolves at least two things of value, agreed-upon conditions a time of agreement, and aplace of agreement.
  • 35. Relationship marketingThe process of creating, maintaining, andenhancing strong, value-laden relationships withcustomers and other stakeholders.
  • 36. Product and serviceProduct---Anything that can be offered to amarket for attention, acquisition, use orconsumption that might satisfying a want orneed. It includes physical objectives, services,persons, places, organizations and ideas.Service--- any activity or benefit that one partycan offer to another that is essentially intangibleand does not result in the ownership of anything.
  • 37. philosophiesThe production conceptThe product conceptThe selling conceptThe marketing conceptThe societal marketing concept
  • 38. Company Orientations Towards the Marketplace Consumers prefer products that areProduction Concept widely available and inexpensive Consumers favor products that Product Concept offer the most quality, performance, or innovative features Consumers will buy products only if Selling Concept the company aggressively promotes/sells these products Focuses on needs/ wants of targetMarketing Concept markets & delivering value better than competitors
  • 39. Traditional Organization Chart Top Management Middle Management Front-line people Customers
  • 40. Customer-Oriented Organization Chart Customers Front-line people Middle management sC erus om t Top om t us manage- er C s ment
  • 41. Marketing Management Marketing Management Implementing programs to create exchanges with target buyers to achieve organizational goals Demand Management Finding and increasing demand, also changing or reducing demand Profitable Customer Relationships Attracting new customers and retaining current customers
  • 42. Evolving Views of Marketing’s Role Finance ProductionProduction Finance Human resourcesMarketing Human resources Marketing a. Marketing as an b. Marketing as a more equal function important function
  • 43. Evolving Views of Marketing’s Role Production on cti Fi du n o an Pr ce Marketing CustomerreHu ur ce M so ur an n ar s ma ces na ce ke so m F i t in re Hu n g c. Marketing as the d. The customer as the major function controlling factor
  • 44. Evolving Views of Marketing’s Role Production Marketing CustomerreHu ur so ce ma ces an n Fin e. The customer as the controlling function and marketing as the integrative function
  • 45. The production concept the production concept holds that consumers will prefers products that are widely available and inexpensive.
  • 46. The product concept The product concept holds that consumers will favor those products that offer the most quality,performance,or innovative features.
  • 47. The selling conceptThe selling concept holds that consumers andbusinesses, if left alone, will ordinarily not buyenough of the organization’s products. Theorganization must, therefore, undertake anaggressive selling and promotion effort
  • 48. The marketing conceptThe marketing concept holds that the key toachieving its organizational goals consists ofthe company being more effective thancompetitors in creating,delivering,andcommunicating customer value to its chosentarget markets
  • 49. The societal marketing conceptThe societal marketing concept holds thatthe organization’s task is to determine theneeds, wants,and interests of targetmarkets and to deliver the desiredsatisfaction more effectively and efficientlythan competitors in a way that preserves orenhances the consumer’s and the society’swell-being.
  • 50. Society (Human Welfare) Societal Marketing ConceptConsumers Company (Wants) (Profits)
  • 51. New Marketing Challenges New Marketing Landscape & Nonprofit Information Marketing Technology Emerging Ethical Concerns Challenges Globalizatio n Changing World Economy
  • 52. Marketing’s Future“It (marketing) encompasses the entire business.It is the whole business seen from the point ofview of the final result, that is, from thecustomer’s point of view.” • Peter DruckerMarketing has become the job of everyone. 53