This document provides an overview of key marketing concepts for the 21st century. It discusses how the digital revolution has benefited both consumers and firms. The tasks of marketing are explained, including entrepreneurial and formulated approaches. The document defines what can be marketed and provides definitions of marketing from Kotler and the AMA. Core marketing concepts are outlined like segmentation, products/brands, exchange/transactions, and channels. Company orientations like production, product, selling, marketing, and societal concepts are contrasted. Objectives of the chapter are to understand new economic challenges and learn major marketing tools and concepts.

1. Chapter 1Chapter 1
Defining MarketingDefining Marketing
for the Twenty-Firstfor the Twenty-First
CenturyCentury

2. ObjectivesObjectives
 Understand the new economy.
 Learn the tasks of marketing.
 Become familiar with the major
concepts and tools of marketing.
 Understand the orientations
exhibited by companies.

3. ObjectivesObjectives
 Learn how companies and
marketers are responding to
new challenges.

4. The New EconomyThe New Economy
 Consumer benefits from the digital
revolution include:
– Increased buying power.
– Greater variety of goods and services.
– Increased information.
– Enhanced shopping convenience.
– Greater opportunities to compare product
information with others.

5. The New EconomyThe New Economy
 Firm benefits from the digital
revolution include:
–New promotional medium.
–Access to richer research data.
–Enhanced employee and customer
communication.
–Ability to customize promotions.

6. Marketing TasksMarketing Tasks
 Marketing practices may pass
through two stages:
–Entrepreneurial marketing
–Formulated marketing
 As marketing becomes more
formulated, creativity is inhibited.

7. What Can Be Marketed?What Can Be Marketed?
 Goods
 Services
 Experiences
 Events
 Persons
 Places
 Properties
 Organizations
 Information
 Ideas

8. Marketing DefinedMarketing Defined
 Kotler’s social definition:
“Marketing is a societal process by
which individuals and groups
obtain what they need and want
through creating, offering, and
freely exchanging products and
services of value with others.”

9. Marketing DefinedMarketing Defined
 The AMA managerial definition:
“Marketing 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 objectives.”

10. Core Marketing ConceptsCore Marketing Concepts
 Target markets and
market segmentation
 Marketplace, market-
space, metamarkets
 Marketers & prospects
 Needs, wants, demands
 Product offering and
brand
 Value and satisfaction
 Exchange and
transactions
 Relationship and
networks
 Marketing channels
 Supply chain
 Competition
 Marketing environment
 Marketing program

11. Core Marketing ConceptsCore Marketing Concepts
 Target markets & segmentation
–Differences in needs, behavior,
demographics or psychographics
are used to identify segments.
–The segment served by the firm is
called the target market.
–The market offering is customized
to the needs of the target market.

12. Core Marketing ConceptsCore Marketing Concepts
 Shopping can take place in a:
– Marketplace (physical entity, Lowe’s)
– Marketspace (virtual entity, Amazon)
 Metamarkets refer to complementary
goods and services that are related
in the minds of consumers.
 Marketers seek responses from
prospects.

13. Core Marketing ConceptsCore Marketing Concepts
 Needs describe basic human
requirements such as food, air, water,
clothing, shelter, recreation, education,
and entertainment.
 Needs become wants when they are
directed to specific objects that might
satisfy the need. (Fast food)
 Demands are wants for specific
products backed by an ability to pay.

14. Core Marketing ConceptsCore Marketing Concepts
 A Product is any offering that can
satisfy a need or want, while a brand
is a specific offering from a known
source.
 When offerings deliver value and
satisfaction to the buyer, they are
successful.

15. Enhancing ValueEnhancing Value
 Marketers can enhance the value of
an offering to the customer by:
– Raising benefits.
– Reducing costs.
– Raising benefits while lowering costs.
– Raising benefits by more than the
increase in costs.
– Lowering benefits by less than the
reduction in costs.

16. Core Marketing ConceptsCore Marketing Concepts
 Exchange involves obtaining a desired
product from someone by offering
something in return. Five conditions
must be satisfied for exchange to occur.
 Transaction involves at least two things
of value, agreed-upon conditions, a time
of agreement, and a place of agreement.

17. Core Marketing ConceptsCore Marketing Concepts
 Relationship marketing aims to
build long-term mutually satisfying
relations with key parties, which
ultimately results in marketing
network between the company and
its supporting stakeholders.

18. Core Marketing ConceptsCore Marketing Concepts
Marketing
Channels
 Communication
channels
 Distribution
channels
 Service channels
 Deliver messages to
and receive
messages from
target buyers.
 Includes traditional
media, non-verbal
communication, and
store atmospherics.

19. Core Marketing ConceptsCore Marketing Concepts
Marketing
Channels
 Communication
channels
 Distribution
channels
 Service channels
 Display or deliver
the physical
products or
services to the
buyer / user.

20. Core Marketing ConceptsCore Marketing Concepts
Marketing
Channels
 Communication
channels
 Distribution
channels
 Service channels
 Carry out
transactions with
potential buyers
by facilitating the
transaction.

21. Core Marketing ConceptsCore Marketing Concepts
 A supply chain stretches from raw
materials to components to final
products that are carried to final
buyers.
 Each company captures only a
certain percentage of the total value
generated by the supply chain.

22. Core Marketing ConceptsCore Marketing Concepts
 The following forces in the broad
environment have a major impact on
the task environment:
– Demographics
– Economics
– Natural environment
– Technological environment
– Political-legal environment
– Social-cultural environment

23. Core Marketing ConceptsCore Marketing Concepts
 The marketing program is developed
to achieve the company’s objectives.
Marketing mix decisions include:
– Product: provides customer solution.
– Price: represents the customer’s cost.
– Place: customer convenience is key.
– Promotion: communicates with customer.

24. Company OrientationsCompany Orientations
 The orientation or philosophy of the
firm typically guides marketing efforts.
Several competing orientations exist:
–Production concept-consumers favor
products that are widely available and
inexpensive.
–Product concept-consumers favor
those products that offer the most quality,
performance and innovative features.

25. –Selling concept-holds that consumers will not
buy enough of products unless the firm undertakes
a large scale selling and promotion effort. (for
unsought goods.)
–Marketing concept-instead of product
centered “make and-sell” shift to a customer
centered, “sense and-respond” philosophy.
Instead of “hunting” marketing is “gardening”.
organisational goals depends on knowing the
needs and wants of target markets. Customer
value and focus are the paths to sale and profits.

26. –Societal marketing concept-
understanding broader concerns and
the ethical, environmental, legal and
social context of marketing activities
and programs clearly extending beyond
the company and the consumers to
society as a whole.

27. To accompany A Framework for Slide 27 in
©2003 Prentice Hall, Inc.
Marketing and sales concepts contrastedMarketing and sales concepts contrasted
Factory
Existing
Products
Selling
and
Promoting
Profits
through
Volume
Market
Customer
Needs
Integrated
Marketing
Profits
through
Satisfaction
The Selling ConceptThe Selling Concept
The Marketing ConceptThe Marketing Concept
Starting Point Focus Means Ends

28. To accompany A Framework for Slide 28 in
©2003 Prentice Hall, Inc.
Modern Marketing SystemModern Marketing SystemModern Marketing SystemModern Marketing System
SuppliersSuppliers
End User
Market
End User
Market
Marketing
Intermediaries
Marketing
Intermediaries
CompetitorsCompetitors Company
(Marketer)
Company
(Marketer)
Environment
Environment