CHAPTER 1 :
DEFINING MARKETING FOR THE 21st CENTURY
ĐỊNH NGHĨA TIẾP THỊ CHO THẾ KỶ 21
Nataraj Pangal | Shreya Rana
Social Definition
Quan điểm xã hội
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
AMA Definition
Quan điểm quản trị
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 goals (2007)
Kotler Definition
Quan điểm “trao đổi”
Marketing Management is the Art and Science of choosing target
markets and getting, keeping and growing customers through
creating, delivering and communicating superior customer value.
Marketing = Khoa học + Nghệ thuật
GOODS PLACES
Hàng hóa
SERVICES
EXPERIENCES
Trải nghiệm EVENTS
PERSONS
PROPERTIES
Tài sản INFORMATION
ORGANIZATIONS
IDEAS
Markets are the set of actual and
potential buyers of a product/service
A simple marketing system
Communication
Products / Services
Market
Industry (a set of
(a set of Buyers)
Sellers)
Money
Information
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Needs, Wants and Demands
• Needs – Basic Human Requirements
• Wants – Directed at specific objects
• Demands – Backed by ability to pay
Target Markets, Positioning & Segmentation
Offerings and Brands
• Offering – Value Proposition made Tangible
• Brand – Offering from a known source
Value & Satisfaction
• Value – Benefits / Cost
• Customer Value Triad – Quality, Service and Price
• Satisfaction – Product’s perceived performance
Marketing Channel
• Communication Channel – Deliver & Receive message
• Distribution Channel – Display, sell & Deliver
• Service Channel – Carry out transactions
Selecting Customers to Serve
Market segmentation refers to dividing the
markets into segments of customers
Target marketing refers to which segments to
go after
Adapted by Mr. TT Khoa, 2013
Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and Demands
• States of deprivation
Needs • Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
• Form human needs take as they are shaped
Wants by culture and individual personality
(Object that satisfy one’s need)
Demands • Wants backed by buying power
Adapted by Mr. TT Khoa, 2013
• Bảo hiểm
Negative Demand • Tiêm chủng
No Demand
• Hút thuốc mà không gây hại cho sức khỏe
Latent Demand • Xe hơi tiêu thụ ít nhiên liệu
• Tôn giáo
Declining Demand
• Du lịch
Irregular Demand • Quần áo theo mùa
• Changing Preference
Full Demand • Increasing Competition
• Sử dụng Demarketing
Overfull Demand
• Rượu bia – thuốc lá
Unwholesome Demand
Who would be the target market for this product?
Phím tắt gọi nhanh: 3 phím tắt
gọi nhanh cho người thân
có kèm biểu tượng & phím gọi
khẩn cấp (SOS)
Phím tắt tiện dụng Các phím
tắt được thiết kế nổi, và in
hình minh họa rõ ràng.
Chức năng nghe đài FM không
cần phải cắm tai nghe, dò
kênh với 1 phím bấm
Đèn led siêu sáng
Adapted by Mr. TT Khoa, 2013
Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
or Philosophy what guides the marketing strategy
It depends on the what weight should be given to
the interests of customers, the organization, and society?
1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Societal marketing concept
Adapted by Mr. TT Khoa, 2013
Marketing Management Orientations
Production Product Selling Marketing Societal
concept concept concept concept concept
Adapted by Mr. TT Khoa, 2013
Production concept
• Production concept The idea that
consumers will favor products that are
available and highly affordable
(inexpensive)
Organization The organization should
therefore focus on improving production
and distribution efficiency
Adapted by Mr. TT Khoa, 2013
Product concept
• Product concept is the idea that consumers
will favor products that offer the most
quality, performance, and features.
Organization should therefore devote its
energy to making continuous product
improvements (technology-driven
organization)
Adapted by Mr. TT Khoa, 2013
Marketing Management Orientations
Selling concept is the idea that consumers
will not buy enough of the firm’s products
unless the firm undertakes a large scale
selling and promotion effort.
“what we make, we sell”
Adapted by Mr. TT Khoa, 2013
Marketing concept
Marketing concept is the
idea that achieving
organizational goals
depends on knowing the
needs and wants of the
target markets and
delivering the desired
satisfactions better than
competitors do (customer-
oriented organization)
Adapted by Mr. TT Khoa, 2013
The Production Concept
• Oldest Concept
• Consumers will prefer products that are widely available &
Inexpensive
• Concentrate on achieving high production efficiency, low
costs and mass distribution
• Eg: - Lenovo and Haier in China
The Product Concept
• Consumers favor products that offer most quality,
performance and innovative features.
• Make superior products and improve them over time.
• Caught in a “love-affair” with their product.
The Selling Concept
• Consumers, if left alone, wont buy enough of the
organization’s products.
• Must undertake an aggressive selling and promotion effort.
• Practiced most aggressively with unsought goods.
• Eg:- Insurance & Encyclopedias.
• Aim is to sell what they make rather than make what the
market wants.
The Marketing Concept
• Customer Centered instead of Product Centered.
• Not to find right customers for your products, but to find
right products for your customers.
• Eg:- Dell
• Reactive Market Orientation – Understanding and meeting
customers’ expressed needs
• Proactive Market Orientation - Understanding and meeting
customers’ latent needs
• Total Market Orientation
Selling and Marketing Concepts Contrasted
Concepts Contrasted
Adapted by Mr. TT Khoa, 2013
Societal marketing concept
Societal marketing concept
is the idea that a company
should make good marketing
decisions by considering
consumers’ wants, the
company’s requirements,
consumers’ long-term
interests, and society’s long-
run interests
Adapted by Mr. TT Khoa, 2013
Three considerations underlying the societal
marketing concept
Senior Mgmt Products & Services
Marketing Other Depts Communications Channels
Dept
Internal Integrated
Marketing Marketing
Holistic
Marketing
Concept
Performance Relationship
Marketing Marketing
Commodity
Legal
Environment
Sales Revenue Ethics Customers Partners
Brand & Customer Channel
Equity
Developing Marketing Strategies & Plan
Capturing Marketing Insights
Connecting with Customers
Building strong brands
Shaping the market offering
Delivering Value
Communicating Value
Creating Long-Term Growth
The Modern Schools of Marketing Thought
• During the mid-twentieth century, there was a paradigm shift
in marketing thinking:
– From describing what, how, who, why, when and where of performing
activities to several developments.
– Influenced by the development mathematic modelling, computation;
the economic growth and the supply surplus in the U.S.
• Six modern schools of marketing thought
– Marketing management
– Marketing system
– Consumer behavior
– Macromarketing
– Exchange
– Marketing history
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3.1 Marketing management
• The largest school of thought
• This school addresses the question “How should organizations
market their products and services?”
• The school focuses on the practice of marketing viewed from
the seller’s perspective. Originally, it limited the sellers’
perspectives to manufacturers. But now it includes retailers,
service providers and others.
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3.1 Marketing management
• Marketing is a set of management techniques:
– Marketing is a managerial process
– Its techniques include segmenting, targeting, differentiating,
positioning, marketing mix or 4Ps (McCarthy, 1960) etc.
– Marketing is applicable for all organizations (for profit, not for profit)
and individuals.
– For example, Kotler (1972) wrote “the marketer is a specialist at
understanding human wants and values and determining what it takes
for someone to act”
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3.1 Marketing management (cont.)
• During the 1980s, Kotler’s Marketing Management surpassed
McCarthy’s Basic Marketing for largest share in the textbook
market. Kotler’s line of books came to dominate all segments
of marketing management
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3.2 Marketing system
• Marketing system school addresses all questions of marketing,
for instances:
– What is marketing system?
– Why does it exist?
– Who engages in marketing?
– Where and when marketing performed?
– How does it work?
– How well is the marketing system performing?
• Marketing system school was started by Wroe Alderson (1957), who is the
first author use system terminology of marketing. Alderson was influenced
by General System Theory (Boulding, 1956)
• Marketing system school declined during the 1970s.
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3.3 Consumer behavior school
• Dealing with human behavior, this school is the most eclectic
(chiết trung) school of thought.
• It address questions of buying (search & selection) and
consuming (use, disposal).
• Buying and consuming can be viewed as different roles
because there are some notable distinctions between them.
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3.3 Consumer behavior school (cont.)
• Consumer behavior school started its growth stage in the
1960s with the integration of concepts
– Cognitive psychology, risk taking, opinion leadership,
information processing, sociology.
– Environmental and marketing stimuli as input; affective
and cognitive mental processing, a hierarchy of behavioral
outputs leading to purchase and learning providing
feedback.
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3.3 Consumer behavior school (cont.)
• Consumer behavior school extended to Freudian
psychology, to Pavlovian psychology, to psychophysics, to
cognitive psychology, to socio psychology, to sociology.
– Economic viewpoint 'consumer as utility maximizer‘.
– Freudian psychology 'consumer manipulated by
subliminal (tiềm thức) messages‘
– Pavlovian psychology 'consumer conditioned by
repetitive advertising',
– Psychophysics 'consumer sensory thresholds
sensitized by just noticeable differences
– Cognitive psychology 'consumer overwhelmed by
information processing and risky decision making'
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3.3 Consumer behavior school (cont.)
• Some examples based on psychology:
– Freud’s Psychodymanic Theory
• Concious thoughts are wishes, desires, or thought that we
are aware of, or can recall, at any given moment.
• Unconcious forces represent wishes, desires, thoughts that,
because of their disturbing or threatening content, we
automatically repress and cannot voluntarily access.
• Freud would say that unconscious thoughts, desires and
feeling influences behavior.
• “Love is in the eyes of beholder”
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3.3 Consumer behavior school (cont.)
• Freud’s Psychodymanic Theory (cont.)
• Three techniques to uncover unconscious: free associations, dream
interpretation, and analysis of slips of the tongue.
– Free association: clients are encouraged to talk about any thoughts or
images that enter their head.; the assumption is that this kind of free-
flowing, uncensored talking will provides clues to unconscious material.
– Dream interpretation: the assumption is that dreams contain underlying,
hidden meanings and symbols that provide clues to unconscious thoughts
and desires.
– Freudian slips: are mistakes or slips of the tongue that we make in
everyday speech.
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3.3 Consumer behavior school (cont.)
• Pavlovian Psychology (Russia, Nobel Prize)
• Classical conditioning (original term: conditional reflex) is
a kind of learning in which a neutral stimulus acquires
the ability to produce a response that was introduced by
a different stimulus.
– When food is placed in a dog’s mouth, the food
triggers the reflex of salivation (sự tiết nước bọt).
– When the lab technician is bringing food to dogs in
the lab, some dogs begin to have their salivation.
These dogs somehow learned.
– Pavlov’s experiment:
• Pavlov rang the bell before putting food into the
dog’s mouth, after sometime, the dog salivated at
the sound of the bell alone.
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3.3 Consumer behavior school (cont.)
• With its extension beyond purchasing and even consumption,
consumer research now vers the spectrum of the social
sciences and has almost become an academic discipline in
itself, rather than a school of marketing thought.
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3.3 Consumer behavior school (cont.)
• Popular topics of this school includes:
• motivation, personality, influence, selective attention,
perception and retention, needs hierarchy, classical and
operant learning, emotions, information processing, opinion
leadership, hierarchy of effects, diffusion and adoption of
innovation, subcultures and cross-cultures, joint decision-
making, household gift-giving, buying and consuming, family
life cycle, social influence, affect, cognition, intentions and
choice, signs, semiotics and symbolism, information search,
involvement, memory, persuasion theory, hedonics, imagery,
prospect theory, judgement, variety seeking, polarization and
deviant behaviour, among others.
'
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3.3 Consumer behavior school (cont.)
• Once upon a time a fledgling was born and given the name Consumer
Research - the bastard child of marketing and an unknown father variously
alleged to be Economics, Psychology, Sociology, Anthropology, Home
Economics or occasionally others as well.
Despite these humble and ignoble beginnings, the infant developed
precociously and was admired, housed, and nurtured by Mother
Marketing.
It found it had occasionally kind uncles named Business and Government,
but the former did not always appreciate the child's talents and the latter
tended to favor more legitimate nephews and nieces with names like Art,
Science and Medicine .... The child grew and learned.
Russell W. Belk (1986), 'What Should ACR Want To Be When It grows Up', in R.J. Lutz
(ed.), Advances in Consumer Research, Vol. 13, Provo, UT: Association for Consumer
Research, pp. 423-424
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3.4 Macromarketing school
• With the overwhelming focus on marketing management and
consumer behavior, interest waned in the general systems
approach in reaction to the growing micro-oriented schools.
• Several scholars sought a return to the larger dimensions of
marketing and focused on the part of Fisk's (1967) systems
schema involving macromarketing
• This school addresses big picture questions, such as:
– How does the marketing system impact society?
– How does society impact the marketing system?
– How productive is the aggregate marketing system?
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3.4 Macromarketing school (cont.)
• The most widely accepted view of what constitutes its subject
matter was Hunt's (I98I) definition of macromarketing as the
study of marketing systems, their impact on society and
society's impact on marketing systems.
• It was thought macro-marketing should include one or more
of: a societal perspective, a high level of aggregation, the
consequences of marketing on society, the consequences of
society on marketing and anything involving marketing
systems (in the aggregate)
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3.4 Macromarketing school (cont.)
• Current topics:
– competition, markets and marketing systems;
– global policy and environment;
– marketing and development;
– marketing history;
– quality of life,
– marketing ethics and distributive justice.
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3.5 Exchange school
• Who are the parties to an exchange?
What is the motivation of the parties to reach agreement?
What is the context of exchange?
• Most marketing theoreticians have argued that
exchange is the heart of marketing (Alderson, 1965; Bagozzi,
1975, 1978; Hunt, 1976; Kotler, 1972; McGarry, 1950;
Mclnnes, 1964; Sheth and Gartett, 1986).
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3.5 Exchange school (cont.)
• The exchange school has also divided into two divergent
groups:
– the traditional one focusing on marketing transactions (i.e.
buying and selling) and
– the broadened path based on generic or social exchange
(i.e. generalized giving and receiving).
• Marketing is not an exchange of commodities - it is a purchase
and sale' (original emphasis). Commons made the point that
marketing is far more than a general exchange of one thing for
another; market exchange involves an institutional process of
great social value (Shaw, 1995)
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3.5 Exchange school (cont.)
• Kotler (1972) stated that 'A transaction is the exchange of
values between two parties. The things-of-value need not be
limited to goods, services and money; they include other
resources such as time, energy, and feelings'
(original emphasis).
• Four necessary, but not sufficient, conditions for exchange
were proposed: (1) at least two parties, (2) each with
something of value to the other, (3) capable of
communicating and (4) accepting or rejecting the exchange
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3.6 Marketing history school
• Marketing history addresses questions of when practices and
techniques, concepts and theories were introduced and
developed over time.
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