Chapter-1
Defining Marketing for the
21st Century
What Is Marketing?
Change or die Eg: Nokia Mobile
Nirma Powder: Dudh si safedi nirma se ayi, rangin
kapde bhi khil khil jaye, sabki pasand Nirma
Marketing is about identifying and meeting human and
social needs profitably.
• Eg. Ebay, Amazon
“Marketing is an organizational function and a set
of processes for creating, communicating, and
delivering value to customers and for managing
customer relationships in ways that benefit the
organization and its stakeholders.”
What Is Marketing management?
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.
Selling is only the tip of the marketing iceberg.
Marketing includes all activities includes knowing customer
well about his need and demand, creating product which
fulfills his demand and make the product available to
customer.
Ideally marketing should result in a customer who is ready
to buy.
Eg: I-Phone, Vivo-V15
What Is Marketed?
Entity Example Entity Example
Goods Cars, TVs Services Airlines,
Hotels
Events IPL, Experiences Water park,
Tradeshow, Agro tourism
Olympic,
Places Incredible Persons Celebrities
India, Vibrant
Gujarat
Properties Real estate Organizations IIM,
Universities,
Tata
Information Books, Ideas Social
software marketing
Demand States
Marketer Prospects
• Eight demand states are possible:
• In each case, marketers must identify the underlying
cause(s) of the demand state and determine a plan of
action to shift demand to a more desired state.
1.Negative demand: Consumers dislike the product and
may even pay to avoid it.
2.Nonexistent demand: Consumers may be unaware of or
uninterested in the product.
3.Latent demand—Consumers may share a strong need
that cannot be satisfied by an existing product.
Demand States (Cont…)
4.Declining demand —Consumers begin to buy the
product less frequently or not at all.
5.Irregular demand—Consumer purchases vary on a
seasonal, monthly, weekly, daily, or even hourly basis.
6.Full demand—Consumers are adequately buying all
products put into the marketplace.
7.Overfull demand—More consumers would like to buy
the product than can be satisfied.
8.Unwholesome demand—Consumers may be attracted to
products that have undesirable social consequences.
Structure of Flows in Modern Exchange
Economy
• Traditionally Market is a physical place where buyers and
sellers gathered to buy and sell goods.
• Economists describe a market as a collection of buyers and
sellers who transact over a particular product or product class
(such as the housing market or the grain market).
A Simple Marketing System
Key Customer Markets
• Consumer Markets: Companies selling mass
consumer goods and services such as soft drinks,
cosmetics, air travel, shoes establishing a strong brand
image by developing a superior product and
packaging, ensuring its availability, and backing it
with engaging communications and reliable service.
• Business Markets: Companies selling business goods
and services often face well-informed professional
buyers skilled at evaluating competitive offerings.
Key Customer Markets
• Global Markets: Companies in the global marketplace must
decide which countries to enter; how to enter each (as an
exporter, licenser, joint venture partner, contract manufacturer,
or solo manufacturer); how to adapt product and service features
to each country; how to price products in different countries;
and how to design communications for different cultures. They
face different requirements for buying and disposing of
property; cultural, language, legal and political differences; and
currency fluctuations.
• Nonprofit and Governmental Markets: Companies selling to
nonprofit organizations with limited purchasing power such as
churches, universities, charitable organizations, and government
agencies need to price carefully.
Marketplace, Market space and Meta
markets
• Marketplace is physical. eg. D-mart
• Market space is digital. e.g. Flipkart
• Meta market: “A cluster of complementary products
and services that are closely related in the minds of
consumers, but spread across a diverse set of
industries.”
• Eg. Automobile dealer, Event organizers, Tour
operators (Make my trip, Yatra.com)
Needs, Wants and Demands
• Needs: Basic human requirements. Eg. Air, water, food, clothing
• Wants: Needs that are directed to specific objects that might
satisfy the need. Eg. Non-veg
• Demands: Wants for specific products backed by an ability to
pay.
• Five types of needs:
1. Stated needs (The customer wants an inexpensive car.)
2. Real needs (The customer wants a car whose operating cost, not
initial price, is low.)
3. Unstated needs (The customer expects good service from the
dealer.)
4. Delight needs (The customer would like the dealer to include an
onboard GPS navigation system.)
5. Secret needs (The customer wants friends to see him or her as a
savvy consumer.)
Offerings, Brands, Value and Satisfaction
Offering: “The intangible value proposition is made physical by
an offering, which can be a combination of products, services,
information and experiences.”
Brand: “It is an offering from a known source.”
• Eg. McDonald’s, Levi’s, TGB, Subway
Value: “The sum of the perceived tangible and intangible
benefits and costs to customers.”
• Value is a combination of quality, service, and price (QSP),
called the customer value triad. Value perceptions increase with
quality and service but decrease with price.
Satisfaction: “It is person’s judgment of a product’s perceived
performance in relation to expectations.”
• If the performance falls short of expectations, the customer is
disappointed. If it matches expectations, the customer is
satisfied. If it exceeds them, the customer is delighted.
Marketing Channels
Communication (To deliver and
receive message)
Distribution (Deliver physical
product or service)
Service (Transaction with potential
buyers)
Marketing Environment
1. Task environment
2. Broad environment.
The task environment includes the actors engaged in
producing, distributing, and promoting the offering.
The broad environment consists of six components:
demographic environment, economic environment,
Social-cultural environnent, Natural environnent,
Technological environnent, and Political- legal
environment.
Company Orientations towards the
marketplace
The production concept is one of the oldest concepts in
business.
• It holds that consumers prefer products that are widely
available and inexpensive.
• Managers concentrate on achieving high production
efficiency, low costs, and mass distribution.
• It can be used when company wants to expand the market.
The product concept proposes that consumers favor
products offering that have the most quality, performance
or innovative features.
• Managers focus on making superior products and improving
them over time.
Company Orientations towards the
marketplace (Cont…)
The selling concept Organization must undertake
aggressive selling and promotion efforts.
• It is practiced most aggressively with unsought goods
buyers don’t normally think of buying such as insurance,
encyclopedia and when firms with overcapacity.
• Aim to sell what they make, rather than make what the
market wants.
The marketing concept emerged in the mid-1950s as a
customer-centered, sense-and-respond philosophy.
• The job is to find not the right customers for your
products, but the right products for your customers.
Holistic Marketing
The holistic marketing concept is based on interdependencies. It
recognizes everything matters.
Relationship Marketing
It aims to build mutually satisfying long term
relationship with key constituents in order to earn and
retain their business.
Customers
Employees
Marketing Partners (Channel,
supplier, distributors, dealers,
agencies)
Financial Community (Shareholders,
investors)
Integrated Marketing
Key themes:
(1) Many different marketing activities can create,
communicate, and deliver value, and
(2) When coordinated, marketing activities maximize
their joint effects. In other words marketers should
design and implement any one marketing activity with
all other activities in mind.
Integrated Marketing (Cont…)
McCarthy classified
various marketing
activities into
marketing-mix tools
of four broad kinds,
which he called the
four Ps of marketing:
product, price, place,
and promotion.
Customer Centric
“SIVA”
1. Solution
2. Information
3. Values
4. Access
Internal Marketing
• It ensures that everyone in the organization follows
marketing principles.
• Internal marketing is the task of hiring, training, and
motivating able employees who want to serve
customers well.
• It requires vertical alignment with senior management
and horizontal alignment with other departments, so
everyone understands, appreciates and supports the
marketing efforts.
Performance Marketing
• Performance marketing requires understanding the
financial and nonfinancial returns to business and
society from marketing activities and programs also
considering the legal, ethical, social, and
environmental effects of marketing activities and
programs.
• Top marketers are increasingly going beyond sales
revenue to examine the marketing scorecard and
interpret what is happening to market share, customer
loss rate, customer satisfaction, product quality, and
other measures.
• Societal marketing concepts: “Meeting needs profitably
in a way that preserves or enhance consumer’s and
society’s long term well being.”
Marketing Management Tasks
• Developing marketing strategies and plans
• Assess market opportunities and customer value
• Choose value
• Design value
• Deliver value
• Communicate value
• Sustain growth and value
