Chapter

1
Defining
Marketing
for the
New Realities

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Learning Objectives
1. Why is marketing important?
2. What is the scope of marketing?
3. What are some core marketing concepts?
4. What forces are defining the new marketing
realities?
5. What new capabilities have these forces given
consumers and companies?
6. What does a holistic marketing philosophy include?
7. What tasks are necessary for successful marketing
management?

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 The Value of Marketing
Financial success often depends on marketing
ability
Successful marketing builds demand for
products and services, which, in turn, creates
jobs
Marketing builds strong brands and a loyal
customer base, intangible assets that contribute
heavily to the value of a firm

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 The Scope of Marketing
Marketing is about identifying and meeting
human and social needs

AMAs formal definition: Marketing is the activity,

set of institutions, and processes for creating,
communicating, delivering, and exchanging
offerings that have value for customers, clients,
partners, and society at large

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 Marketing Management
The art and science of choosing target
markets and getting, keeping, and growing
customers through creating, delivering,
and communicating superior customer
value

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 What is Marketed?
Goods

Services

Events

Experiences

Persons

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 What is Marketed?
Places

Properties

Organizations

Information

Ideas

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 Who Markets?

A marketer is someone who seeks a

responseattention, a purchase, a vote, a
donationfrom another party, called the
prospect

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 8 Demand States
Negative
Nonexistent
Latent
Declining
Irregular
Unwholesome
Full
Overfull
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 Fig. 1.1
Structure Of Flows In A Modern
Exchange Economy

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 Fig. 1.2
A Simple Marketing System

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 Key Customer Markets
Consumer markets
Business markets
Global markets
Nonprofit & governmental markets

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 Core Marketing Concepts
Needs: the basic human requirements
such as for air, food, water, clothing, and
shelter

Wants: specific objects that might satisfy

the need

Demands: wants for specific products

backed by an ability to pay
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 Types of Needs
STATED

REAL

UNSTATED

DELIGHT

SECRET

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 Core Marketing Concepts

Target markets

Positioning

Segmentation

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 Core Marketing Concepts
Value proposition: a set of benefits that
satisfy those needs

Offerings: a combination of products,

services, information, and experiences

Brands: an offering from a known source

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 Core Marketing Concepts
Marketing channels

COMMUNICATION

DISTRIBUTION

SERVICE

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 Core Marketing Concepts
Paid media: TV, magazine and display
ads, paid search, and sponsorships

Owned media: a company or brand

brochure, web site, blog, Facebook page,
or twitter account

Earned media: word of mouth, buzz, or

viral marketing
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 Core Marketing Concepts
Impressions: occur when consumers
view a communication

Engagement: the extent of a customers

attention and active involvement with a
communication

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 Core Marketing Concepts
Value: a combination of quality, service,
and price (qsp: the customer value triad)

Satisfaction: a persons judgment of a

products perceived performance in
relationship to expectations

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 Core Marketing Concepts
Supply chain: a channel stretching from raw materials
to components to finished products carried to final
buyers (Fig 1.3: The Supply Chain for Coffee)

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 Core Marketing Concepts
Competition: all the actual and potential
rival offerings and substitutes a buyer
might consider

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 Core Marketing Concepts

Marketing
environment

Task environment

Broad environment

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 The New Marketing Realities

Technology

Globalization

Social
responsibility

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 A dramatically changed
marketplace
New consumer capabilities

Can use the internet as a powerful information

and purchasing aid

Can search, communicate, and purchase on

the move

Can tap into social media to share opinions

and express loyalty
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 A dramatically changed
marketplace
New consumer
capabilities

Can actively interact

with companies

Can reject marketing

they find inappropriate

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 A dramatically changed
marketplace
New company capabilities
Can use the internet as a powerful information and
sales channel, including for individually differentiated
goods

Can collect fuller and richer information about

markets, customers, prospects, and competitors

Can reach customers quickly and efficiently via social

media and mobile marketing, sending targeted ads,
coupons, and information
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 A dramatically changed
marketplace
New company capabilities

Can improve purchasing, recruiting, training, and

internal and external communications

Can improve cost efficiency

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 A dramatically changed
marketplace

Changing channels

Retail
transformation

Disintermediation

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 A dramatically changed
marketplace
Heightened competition

Private brands

Mega-brands

Deregulation

Privatization

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 Marketing in practice
Marketing balance

Marketing accountability

Marketing in the organization

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 Company Orientation toward
the Marketplace

PRODUCTION

PRODUCT

SELLING

MARKETING

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 Fig. 1.4
Holistic Marketing Dimensions

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Relationship marketing

CUSTOMERS

EMPLOYEES

MARKETING PARTNERS

FINANCIAL
COMMUNITY

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 Integrated marketing
Devise marketing activities and programs that
create, communicate, and deliver value such that
the whole is greater than the sum of its parts.

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 Internal marketing
The task of hiring, training, and motivating
able employees who want to serve
customers well

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Performance marketing

FINANCIAL ENVIRONMENTAL
ACCOUNTABILITY IMPACT

SOCIAL IMPACT

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 Fig. 1.5
Marketing Mix Components (4 Ps)

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MODERN MARKETING
MANAGEMENT

PEOPLE

PROCESSES

PROGRAMS

PERFORMANCE

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 MARKETING
MANAGEMENT TASKS
Developing market strategies and plans

Capturing marketing insights

Connecting with customers

Building strong brands

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 MARKETING
MANAGEMENT TASKS
Creating value

Delivering value

Communicating value

Creating successful long-term growth

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