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Chapter 1
Defining Marketing for
the Twenty-First
Century
Objectives
 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.
Objectives
 Learn how companies and
marketers are responding to
new challenges.
The 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.
The 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.
Marketing Tasks
 Marketing practices may pass
through two stages:
– Entrepreneurial marketing
– Formulated marketing
 As marketing becomes more
formulated, creativity is inhibited.
What Can Be Marketed?
 Goods
 Places
 Services
 Properties
 Experiences
 Organizations
 Events
 Information
 Persons
 Ideas
Marketing 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.”
Marketing 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.”
Core Marketing Concepts
 Target markets and
market segmentation
 Exchange and
transactions
 Marketplace, marketspace, metamarkets
 Relationship and
networks
 Marketers & prospects
 Marketing channels
 Needs, wants, demands
 Supply chain
 Product offering and
brand
 Competition
 Value and satisfaction
 Marketing program
 Marketing environment
Core 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.
Core 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.
Core 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.
Core 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.
Enhancing 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.
Core 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.
Core 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.
Core 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.
Core Marketing Concepts
Marketing Channels
 Communication
channels
 Distribution
channels
 Service channels
 Display or deliver
the physical
products or
services to the
buyer / user.
Core Marketing Concepts
Marketing Channels
 Communication
channels
 Distribution
channels
 Service channels
 Carry out
transactions with
potential buyers
by facilitating the
transaction.
Core 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.
Core 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
Core 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.
Company 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.
– 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.
– Societal marketing conceptunderstanding 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.
Marketing and sales concepts contrasted
Starting Point
Factory
Focus
Existing
Products
Mean
s
Ends
Selling
and
Promoting
Profits
through
Volume
The Selling Concept
Market
Customer
Needs
Integrated
Marketing
Profits
through
Satisfaction
The Marketing Concept
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 26 in Chapter 1
Modern Marketing System
Suppliers
Company
(Marketer)
Marketing
Intermediaries
Environment
Environment
Competitors
End User
Market
©2003 Prentice Hall, Inc.
To accompany A Framework for Marketing Management, 2nd Edition
Slide 27 in Chapter 1