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DOCT 708: Advanced Marketing Management Seminar What is Marketing? Diego BONAVENTURA - # 4535 Professor: Boris PORKOVICH November 2008 1 What is marketing? “Let’s start with the beginning – the customer” (Levitt, 1960). Several definitions have been proposed for the term marketing. Each tends to emphasize different issues, however most of them converge to a single truth that business success is based on the ability to build a growing body of satisfied customers. “Marketing must be regarded not merely as a business practice, but as a social institution. Marketing is essentially a means of meeting and satisfying certain needs of people” (Bartles, 1976). “Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is meeting needs profitability”. (Kotler, 2005). Marketing involves satisfying consumers’ needs and wants. The task of many business is to deliver customer value and at a profit”. (Kotler and Keller, 2006). “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” (American Marketing Association Board of Directors, October 2007). To sum up, putting the customer first is probably the most popular approach of marketing. As a matter of fact, modern marketing programs are built around the "marketing concept," which directs managers to focus their efforts on identifying and satisfying customer needs - at a profit. But what seems obvious today was not at the stuttering of marketing. In the first chapter of this essay, we will see how marketing theories changed from the historic “marketer in control” at the beginning of the 1900s when new production facilities were leading the industrial revolution, to retailer in control in the 1950s (how can we sales more?), to the today “customer in control” model. But in an over saturated market, where clients are transferring in informed customers who have the choices, the idea that marketing is identified in terms of satisfying customer’s needs and wants may appear as a basic but deficient concept. As a matter of fact, in a modern economy leaded by global competition, customers’ expectations have changed. Today the winning equation is represented by the function: product = f (value + profit). In marketing, the term “product” is often used as a catch-all word to identify solutions 2 a marketer provides to satisfy a want or a need. Value because for a product or service to be successful it must in some way be of value to the customer. The creation of value requires an understanding of customer needs in the form of benefits. What will the product or service do for them and why will it be better, faster or easier to use than that which is currently available (differentiation concept)? If the product is valuable for the customer it will generate economic benefit for the company. So to succeed in the age of constant change; where the democratization of fulfilling all kinds of needs have impact customers’ expectations, a company must be able to offer a product that differentiate to other products. But what differentiates one company from another is how well they manage marketing, not just what is visibly marketed. Marketing has so to focus on the customer but also has to integrate the customer at each level of the company and reflect in term of process not only in term of concept. As a matter of fact, once the customers’ needs have been identified and a tailored in the form of a differentiated product, the need has to be converted into wants. For wants to become purchases, the purchasers had to be “educated and guided to the product’s uses” (Levitt 1986, p13). This why in the second chapter of this essay, I will focus on a more operational approach, and I will introduce the idea that marketing is not only a concept, but it’s also a process that change over time. “The world of competitive enterprises openly facing each other in open markets is clearly a world of constant change” (Levitt, 1986. P12). The marketing concept alerts us to this fact with the perspective restriction that to keep up requires studying and responding to what people want and value, and promptly adjusting to choices provided by competitors. There is not, and cannot be, any rigid and lasting interpretation of what the marketing notion means in the definite ways a company should operate at any given time (Levitt, 1960). 3 Modern Marketing has to face shifts that lead to new approaches in order to fit market conditions under which they operate. Influenced by external (macro) and internal (controllable) parameters companies need to have a more complete and integrated approach that goes beyond traditional applications of the marketing concept. I will in a third chapter explain why modern marketing now a day is moving to a more holistic and cohesive approach leading to new marketing strategic theories, and some how to many criticisms. As a matter of fact, in his book “Marketing Imagination” (1986), Levitt has argued that the marketing concept has stimulated the professionalized study of people enabling business strategists to become what critics have called “hidden persuaders” and “captain of consciousness”. In this view, the definition of marketing as a science of satisfying needs can be viewed as the art of creating needs and wants that did not exist before. In the third chapter of this essay, I will so focus on the idea that marketing shapes consumer needs and wants versus merely reflects the needs of consumers. This criticism tends to be recently objectified by the fact that the technological revolution has saturated our needs and enabled us to stimulate our imagination, amplifying our expectations. Then, to succeed in the age of constant change, in which everything is possible, companies have to arouse customers’ emotion, by anticipating future trends and needs, one way or another by influencing desires. As stated by Carpenter, “Simply giving customers what they want isn’t enough any more – to gain an edge companies must help customers learn what they want”. By doing so modern marketing goes beyond the concept of selling a product or service to satisfy customers ‘needs. Therefore, to better understand the criticisms that stressed marketing, it is essential to define what needs are and how they are fulfilled. Although, it is helpful to understand that we live in very materialistic times where needs and desires are natural and pre-exist. 4 Table of Content: INTRODUCTION PART 1: The Marketing Concept p.2 1.a: From product to customer oriented The product concept The sales concept The marketing concept p.6 p.6 p.8 p.8 1.b: The customer Value and Product Differentiation Concepts p.10 PART 2: From the Marketing Concept to the Marketing Process 2.a: The Marketing process: Situation Analysis Marketing Strategy and Marketing Planning Marketing Mix Decisions Implementation and Control p.13 p.14 p.15 P.16 p.19 PART 3: The New Marketing Paradigm and its Criticisms. 3.a: The Holistic Concept an Obvious Mutation Relationship Marketing Integrated Marketing Internal Marketing Social responsibility marketing 3.b: Marketing criticisms The eternal marketing debate: satisfying or creating needs The concept of influencing desires vs. the concept of creating needs The concept of leveraging desires vs. the concept of obsessing desires p.22 p.23 p.24 p.25 p.25 p.26 p.27 p.29 CONCLUSION ANNEX 1: Strategic Marketing framework ANNEX 2: The 4P’s ANNEX 3: The Theory of Human Motivation p.32 p.34 p.35 p.36 REFRENCES p.38 TABLES: Table 1. Company orientations toward the market place: marketing evolution. Table 2: From product centric to delivering value to customers Table 3: The four P’s – Marketing Mix Table 4: The Modern Marketing Mix Model p.9 p.10 p.17 p.20 5 1- The marketing concept: It is hard for many to believe, but when compared to economics, production and operations, accounting and other business areas, marketing is a relatively young discipline. The development of marketing thought has emerged in the United States at the beginning of the XXth century with the development of the consumption of mass. In Europe, the techniques of the marketing spread were applied after the Second World War, at first in the big companies then gradually, from the 70s, in all the categories of products and organizations. However, historical accounts of trade lead one to conclude that marketing has always existed. Was the original use of the term marketing merely an application of a new name to an old practice (Bartels, 1976)? 1-a: From product to customer oriented. The production concept: In the eighteenth century, business environment was led by economic theories which emphasized that the market had the capacity to adjust itself automatically to a harmonious equilibrium. Adam Smith conceived man as ‘the economic man’ turned upon a constant effort to better his condition1. Thus there was a natural basis for competition, and according to natural motivations they would effect perfect competition. Actually, early students of marketing were actually educated as economists. This is why, at that time, everything was oriented toward production, and productivity was held by the economists to be the production of a surplus over costs. The “production concept” was the idea that a firm should focus in those products that it could manufacture most efficiently and that the creation of a supply of low-cost products would in and of itself creates the demand for the products. Concepts of production included: diminishing returns, marginal productivity, opportunity costs, and the 6 representative firm.2 There was no clear concept of the rationalization of marketing as a productive activity or as a contribution to economic production. On the contrary, the popular impression was that the middleman added cost instead of value. The sale concept: At the time, the production concept was rational as the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand. But with the Industrial Revolution, the rapid transition from an agricultural economy to an industrial economy leaded to expanded market giving opportunities for production on a scale larger than had ever before been undertaken. The new industrial technologies poured into the market such quantities of products as to warrant the conclusion that a buyers market was replacing a sellers market. The development of marketing was suddenly motivated by the need to analyze in greater detail relationships and behaviors that existed between sellers and buyers. In particular, the study of marketing led sellers to identify that adopting certain strategies and tactics could significantly benefit the seller/buyer relationship versus natural competition. New importance was attached to information, promotion, and the quest for satisfactory products (Bartles, 1976)2. But before the 1950s this often meant identifying strategies and tactics for simply selling more products and services with little regard for what customers really wanted (see table 1: Company orientations toward the market place: marketing evolution). At the time marketing was built around the product: “make-and-sell” (i.e. production efficiency and optimization: Ford & Taylor). Often this meant companies embraced a “sell-as-much-as-we-can” philosophy with little concern for building relationships for the long term (see table 2: From product centric to delivering value to customers). During the age of sales concept, marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing 7 with selling (Lanning and Edward, 1998)5. However, led by marketing scholars from several major universities, marketing theorists realized that the selling concept was not concerned with the values that the exchange is all about. “And it does not, as marketing in-variably does, view the entire business process as consisting of a tightly integrated effort to discover, create, arouse, and satisfy customer needs” (Levitt, 1960). At the time, one common error was that organizations tend to view themselves as making things that have to be sold rather than satisfying customer needs: "Come buy this exceptional product we have developed or this fantastic service we are offering." The giveaway, of course, is the word we. When transposing this notion to defining marketing, Levitt suggested that the difference between marketing and selling is more than semantic. Selling Focuses on the needs of the seller, marketing on the needs of the buyer. Selling is preoccupied with the seller's need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering, and finally consuming it.3 The Marketing Concept: After World War II, the variety of products increase and the theory moved from a commercial perspective: sell what was produced by developing the commercial structures (sales force and distribution network) to a marketing focusing on the market as customer, more complete in its initiative and pre-eminent in the company organization. As competition grew stiffer across most industries, organizations looked to the buyer side of the transaction for ways to improve. What was found is an emerging philosophy suggesting that the key factor in successful marketing is understanding the needs of customers. This now famous “Marketing Concept” suggests that marketing decisions should flow from FIRST knowing the customer and what they want. 8 Table 1. Company orientations toward the market place: marketing evolution. Production & Sales Conception Modern Marketing Process > 1900s Production concept: Can we produce the product? The marketing is secondary with regard to the production. VS. Superiority of the marketing function in the organization of the company (a strategic function which leads the company activity). VS. It becomes a constructed initiative: - Analysis and study of the market, - Segmentation, - Elaboration of the marketing mix (unique selling proposition), - Elaboration of the action plans which aim at promoting the offer (operational marketing). Can we produce enough of it? > 1930s It amounts essentially to the sales force, the distribution and the advertising. Sales concept: Can we sell the product? Can we sell enough of it? Radius of action limited to some big companies and essentially to convenience goods. VS. Radiuses of action widened to all products and services, concepts, organizations. Marketing concept: How can we keep our client satisfied? = Realizing a profit by successfully satisfying customer needs over the longterm Can we develop if while they still want it? = Aligning all functions of the company to focus those needs. What do consumers want? = focusing on customers needs. >1950s TIME FRAME The new idea was not to find the right customers for your products, but the right products for your customers (Kotler and Lane, 2006)4 (see Table 2: From product centric to delivering value to customers). In response to these discerning customers, firms began to adopt the “marketing concept”, which involves: 9 Focusing on customers needs before developing the products; Aligning all functions of the company to focus those needs; Realizing profits by successfully satisfying customer needs over the long-term. Table 2. From product centric to delivering value to customers5 a) Traditional Physical Process Sequence Make the Product Design Product Procure Sell the Product Make Price Sell Advertise Promote Distribute Service Sell b) Value Creation and Delivery Sequence The marketing concept • • • • • choosing and targeting appropriate customers positioning your offering interacting with those customers controlling the marketing effort continuity of performance Source: Lanning and Michaels, 1998. 1-b: The Customer Value and Product Differentiation Concepts: satisfying customers’ needs in a saturated competitive market place. Under the “Marketing Concept”, the mission of any business is to satisfy consumers’ needs and wants by delivering value at profit 6. It is important to understand that the term value of a product within the context of marketing means the relationship between the consumer's expectations of product benefit to the actual amount paid for it. The value the 10 customer attributes to this benefit is in proportion to the perceived ability of the offer to solve whatever customer problem prompted the purchase (Payne 2005)6. This why in a market driven by more demanding customers and global competition, marketers have to emphasize the value of their offering by proposing something more than a generic product. This involves differentiating from competitors ‘products. The concept of product differentiation is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market (Sharpe, 2001)7. This is done in order to demonstrate the unique aspects of product and create a sense of value, which is a pivotal concept in a market where products are much more accessible to many more people than ever before. To fully succeed at this, marketers need to distinguish their offering - focusing on offering unique (USP - unique selling point) or differentiated benefits and value – in order to influence customers’ choices. In this ways, differentiation follows customer’s expectation and allows companies to impact their performances by reducing directness of competition: as the product becomes more different, categorization becomes more difficult and hence draws fewer comparisons with its competition7. On the other hand, as pointed out by Harvard Business School's Theodore Levitt (1986), competition exists not between what companies produce in their factories but between "what they add to their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things that people value"8. A successful product differentiation strategy will so move one product from competing based primarily on price (generic product) to competing on nonprice factors such as product characteristics, distribution strategy, or promotional variables… in its value chain model, Porter (1985) argues that in a hypercompetitive economy with increasingly rational buyers faced with abundant choices, a company can win only by finetuning the value delivery process and choosing, providing, and communicating superior 11 value9. Customer value from this perspective is the result of providing and delivering greater value to the purchaser; deploying enhanced acquisition and retention strategies; and utilizing successful channel management1. So what differentiates one organization from others is how well they manage marketing, not just what is visibly marketed. It is the process, not just the product that is uniquely differentiated (Levitt, 1986). Although in competing over a saturated marketplace, to be successful, a firm needs to look for competitive advantage beyond its own product, but into its operation and into the value chain of suppliers, distributors, and customers9. In this process strategic marketing and marketing planning play a central role. 1 A value chain is a chain of activities. Products pass through all activities of the chain in order (R&D, marketing, logistics, operations, etc) and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values of all activities. Michael Porter has proposed the value chain as a tool for identifying ways to create more customer value and increase its competitive advantage. Competitive advantage is a position a firm occupies against its competitors. The two forms of competitive advantage are cost advantage and differentiation advantage. Cost advantage occurs when a firm delivers the same services as its competitors but at a lower cost. Differentiation advantage occurs when a firm delivers greater services for the same price of its competitors. They are collectively known as positional advantages because they denote the firm's position in its industry as a leader in either superior services or cost. Many forms of competitive advantage cannot be sustained indefinitely because the promise of economic rents invites competitors to duplicate the competitive advantage held by any one firm. A firm possesses a sustainable competitive advantage when its value-creating processes and position have not been able to be duplicated or imitated by other firms. Sustainable competitive advantage results, according to the Resourcebased View theory, in the creation of above-normal (or supranormal) rents in the long run. Analysis of competitive advantage is the subject of numerous theories of strategy, including the five forces model pioneered by Michael Porter of the Harvard Business School. The primary factors of competitive advantage are innovation, reputation and relationships. Source: Competitive Advantage: Creating and Sustaining Superior Performance. 12 2: From the Marketing Concept to the Marketing Process: "Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives" (Boone and Kurtz, 1998)10. 2-a. The marketing Process: Under the marketing concept, firms must find a way to differentiate their offers in order to increase customer values. The process of doing so leans on four constituents: 1. A constituent “research of information” (to know): it is the study and the market analysis that is the descriptive and explanatory research for market mechanisms. 2. A constituent “reflection” (to decide – to plan): it is the strategic marketing which tries hard to think in the long term of the development of the company and to orient its activities to attractive opportunities (choice of products-market and segments), that is adapted to its resources and core competencies, and focuses on growth and profitability. 3. A constituent “action” (to act): it is the operational marketing which by the elaboration of the market plan fixed and coordinates product, price, distribution and communication = marketing mix. 4. A constituent “implementation and monitoring” (to control): marketing evaluation and control processes are essential to value the efficiency and effectiveness of marketing activities and how both could be enhanced. 13 In this frame, we can define marketing as a process which in the company attempts to identify and to measure the needs of the clientele, to choose those (the segments) which the company will serve first and foremost, to decide on concepts of products which will answer its expectations and to elaborate the action plans which aim at promoting them – at profit. Step 1 - Situation Analysis: Before determining customers’ needs, the first step is to analyze, define and interpret the state of the environment of an organization. According to the American Marketing Association (2008), a situation analysis is “the systematic collection and study of past and present data to identify trends, forces, and conditions with the potential to influence the performance of the business and the choice of appropriate strategies. The situation analysis is the foundation of the strategic planning process. The situation analysis includes an examination of both the internal factors (to identify strengths and weaknesses) and external factors (to identify opportunities and threats)”. As matter of fact, to fulfill customer needs in a lucrative manner, a firm must understand its internal and external limitation/situation, including the customer (target market), the market environment (micro: business and macro: industry), and firm’s own capabilities. Hence, the situation analysis should yield a summary of problems and opportunities. From this summary, the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition. Different approaches are possible2: the inside out (Porter model) vs. the outside-in (Post Modern Concept, i.e. RVB model)11. The main notion is that a firm needs to assess the environment to recognize, measure, and target opportunities. This step so describes an 2 If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities to introduce products to better satisfy those consumers. There are several frameworks that can be used to add structure to the situation analysis: 5 C Analysis - company, customers, competitors, collaborators, climate. Company represents the internal situation; the other four cover aspects of the external situation / PEST analysis - for macro-environmental political, economic, societal, and technological factors. A PEST analysis can be used as the "climate" portion of the 5 C framework. Or PESTE analysis: Political, Economic, Social, Technological, Legal and Environmental / SWOT analysis - strengths, weaknesses, opportunities, and threats - for the internal and external situation. A SWOT analysis can be used to condense the situation analysis into a listing of the most relevant problems and opportunities and to assess how well the firm is equipped to deal with them. 14 organization’s competitive position, operating and financial condition and general state of internal and external affairs. By doing so organizations will be able to gather specific market information (market research) that will permit the firm to select the target market segment and optimally position the offering within that segment (marketing strategy). The result is a value proposition to the target market. Step 2 - Marketing Strategy and Strategic Planning: “Marketing management is seen as the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.” (American Marketing Association Board of Directors, October 2007). To make sure that the products and services meet customer needs while developing long-term and profitable relationships with customers a strategy has to be implemented. Such a strategy should also aim the firm to identify whole new markets that it can successfully target. To do this it’s vital to create a flexible strategy that can respond to changes in customers’ perceptions and demand (Baker, 2008)12. The marketing strategy subsequently “involves defining what’s to be done, the allocation of resources for their maximization” 3 (Levitt, 1986. p137). In developing a marketing strategy, the mission and marketing and financial objectives must be defined. Marketing Strategy then involves: Segmentation; Targeting (target market selection); Positioning the product within the target market; Value proposition to the target market. 3 It is essential to understand the slight but important difference between “Marketing strategy” and “Strategic Marketing”. Strategic marketing is more than a matter of resources allocation among possible issues. It’s about choices of preferences, not about appropriateness (Levitt, 1986). Marketing strategy is setting the right objectives at the right times, executed with right means for the right situation in order to catch new customer and keep them. But this approach is viable only if the concept is implemented at each level of the organization. It’s a global concept at corporate level that focuses on attracting customers; create a long-term ship with them in order to hold them (see Annex 1: Strategic Marketing Framework) - while Marketing Strategy is related to the product at the Business Unit level where marketers focus on the product (i.e. price, promotion, distribution, etc.) 15 Discovering what customers want and making sure firms meet their needs takes a lot of work. But once the marketing strategy has been set then specific actions have to be taken to achieve the goals of the marketing strategy. Once the best opportunity to satisfy unfulfilled customer needs is identified (marketing strategy), a strategic plan for pursuing the opportunity can be developed. The marketing plan is the central tool for directing and coordinating the marketing strategy in order to satisfy customer needs in an efficient manner. The marketing plan, then, can be thought of as the practical application of the marketing strategy, including product features, promotion, merchandising, pricing, sales, channels and services. All this is done with the inputs from other managerial areas, such as purchasing, manufacturing, sales, finance, and human resources, to guarantee that the company can make available appropriate support for successful execution. Step 3 - Marketing Mix Decisions: Determine how to satisfy customers’ needs. “The right product, in the right place, at the right time, and at the right price” (Adcock et al). Once the customers’ needs have been identified and tailored in the form of a plan, the need has to be converted into wants. For wants to become purchases, the purchasers had to be “educated and guided to the product’s uses” (Levitt 1986, p13). In this process operational marketing plays a fundamental role. To put the marketing strategy in action, marketing as a science makes decisions about controllable parameters (see table 3: The four P’s – Marketing mix) of the marketing mix (Borden, 1964).13 Product: The term "product" refers to tangible, physical products as well as services. Price: Setting the value – how much the customer is ready to pay/scarify. Place (distribution): Distribution is about getting the products to the customer. 16 Promotion: In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Table 3: The four P’s – Marketing Mix Brand name Functionality Styling Quality Safety Packaging Repairs and Support Warranty Accessories and services Promotional strategy (push, pull, etc.) Advertising Personal selling & sales force Sales promotions Public relations & publicity Marketing communications budget Pricing strategy (skim, penetration, etc.) Suggested retail price Volume discounts and wholesale pricing Cash and early payment discounts Seasonal pricing Bundling Price flexibility Price discrimination Distribution channels Market coverage/ inclusive, selective, or exclusive distribution; Specific channel members Inventory management Warehousing Distribution centers Order processing Transportation Reverse Limitations of the Marketing Mix Framework: from managing the supply side to focusing on the demand side. The traditional four P’s marketing has been developed to improve the way of supplying products and services to customers by: manipulating prices, products, places, and promotion to make better use of the tools and resources available to the marketing manager. This framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy. More modern criticisms of the model 17 tend to highlight the fact that at that time, the model has been designed ignoring the dominance of customers (Checkitan and Schultz, 2002).14 This is why the four P’s model has been at the center of many critics. Some authors have so attempted to extend its usefulness by orienting the model on customer and there have been many attempts to increase the number of P's from 4 to 5P's. The most frequently mentioned one being: people or personnel. In 1981, Booms and Bitner have suggested a 7 P’s approach for services-oriented companies 15 (people, process, physical evidence - see annex 1 for detailed information about the four P’s and seven P’s model). The new idea is to make decisions that center the four P’s on the customer in a specific target market (vs. a global population) in order to create value and benefit that can be perceived and generate a positive response (McCarthy, 1960) 15. This new approach has been objectified by many other theorists. According to Gordon (1999), the marketing mix approach is too limited to provide a usable framework for assessing and developing customer relationships in many industries and should be replaced by the relationship marketing alternative model where the focus is on customers, relationships and interaction over time, rather than markets and products (Kotler et al, 1999). Another formal approach to the 4P’s marketing mix is known as SIVA14 (Solution, Information, Value, Access). The SIVA Model provides a demand/customer centric version alternative to the well-known 4Ps supply side model (product, price, place, promotion) of marketing management . 16 Product → Solution Promotion → Information Price → Value Place → Access 18 The four elements of the SIVA model are: Solution: How appropriate is the solution to the customer's problem/need? Information: Does the customer know about the solution? If so, how and from whom do they know enough to let them make a buying decision? Value: Does the customer know the value of the transaction, what it will cost, what are the benefits, what might they have to sacrifice, what will be their reward? Access: Where can the customer find the solution? How easily/locally/remotely can they buy it and take delivery? This model was proposed by Chekitan Dev and Don Schultz in the Marketing Management Journal of the American Marketing Association, and presented by them in Market Leader the journal of the Marketing Society in the UK 14. This framework focuses heavily on the customer and how they view the transaction. But it remains limited to controllable parameters and so by default subject to the internal constraints. However, modern marketing suggest that in an ever changing environment, the 4P’s model should also take in consideration uncontrollable parameters of the marketing environment such as external forces: competition, economic, political and legal situations, etc (see Table 4: The Modern Marketing Mix model). Given that few environments are static, all parameters having an impact on the environment should be monitored closely. As the market changes, the marketing mix must be adjusted to accommodate the changes based on internal and external limitations. That will allow organizations to take appropriate tactical decisions based on the marketing strategy.15 The function of the marketing mix should be to help develop a package that will not only satisfy the needs of the customers within the target markets, but simultaneously to maximize the performance of the organization. Marketing is so the capacity to take advantage, twist or change these limitations vs. passively suffering/respecting them. As a matter of fact, marketing is not the ability to react to the environment, but the capacity to create opportunities (pro-activity) by controlling and monitoring the environment: internal (controllable parameters) and external forces 19 (competition, economic, socio-cultural, technology, political). Marketing must be able to anticipate future needs, but also future trends, rules and other obtuse laws and regulations that slow down competitiveness and clamp imagination. Today however, the marketing mix most commonly remains based on the 4 P's. Despite its limitations and perhaps because of its simplicity, the use of this framework remains strong and many marketing textbooks have been organized around it. Table 4: The Modern Marketing Mix Model Determinants of competitive rivalry, e.g. • Brand identity • Switching costs • Concentration and balance • Exit barriers Regulations: • Government regulated industries (e.g. telecoms) • Young industries beginning to attract government attention (e.g. Internet, software) • Significant public good/cost (e.g. pharmaceuticals, petroleum) • Minor development or evolution within the current state of the business system • True technological discontinuity that fundamentally changes the game for all players • Changes in – GDP – Employment – Exchange rate • Government policy • International relations • cHanges in social preferences: • Existing demand (can be analyzed by demand curve analysis) • Latent demand (demand for services previously unavailable, e.g. Sony walkman unleashed demand for personal music systems) • Future demand (forecasting existing demand in the future) Step 4: Implementation and Control. 20 One more factors that make the difference is the ability to correctly implement the marketing strategy and the importance of being able to measure the return of the marketing actions/decisions. However, the marketing process does not end with implementation. Continual monitoring and adaptation is needed to fulfill customer needs consistently over the long-term. Marketing evaluation and control processes are necessary to understand the efficiency and effectiveness of marketing activities and how both could be improved (Kotler and Keller, 2006). 21 3. The New Marketing Paradigm and its Criticisms. Marketing can so be defined as a process in perpetual progression that evolves with in an ever changing environment where customers’ behaviors (i.e. Internet) and desires evolve. As a matter of fact, the democratization of fulfilling customers’ needs and the amplification of customer expectation are making radical changes in how companies do business and implement their strategies. This revolution is fueled by millions of customers who are imposing their will, tastes, and desires to force transformation in the way companies produce and sell. In order to win this revolution, companies have to constantly refresh their thinking about marketing in order to surprise and challenge them. In consequence, marketers have to connect with their customers’ imaginations, they have to anticipate future needs, and for that they need to have a more complete and integrated approach that goes beyond traditional applications of the marketing concept. 3-a. The Holistic Marketing an Obvious Mutation Back to the concept that marketing should focus on customer needs, based on Levitt approach “to attract and hold customers”, and referring to the idea that differentiation relies on the ability of managing its value chain, it appears obvious that marketing is most effective when it is an integral component of corporate strategy (Baker, 2008)11. This why marketers in the twenty-first century are increasingly recognizing the need to have a more complete and 22 cohesive approach that will help them to design a strategic marketing plan able to rapidly adjust to changes and that addresses three key management questions: 1. Value exploration – how can a company identify new value opportunities? 2. Value creation – how can a company efficiently create more promising new value offerings? 3. Value delivery – how can a company use its capabilities and infrastructure to deliver the new value offerings more efficiently? This belief derives from the old fragmented model of marketing. As a matter of fact, when firms first began to adopt the marketing concept, they typically set up separate marketing departments whose objectives were to satisfy customer needs. Often these departments were separated sales departments with expanded responsibilities. But it quickly appears that marketers used to focus on and communicate with clients, customers, consumers, and often neglect if not ignore other stakeholders - arguably the organization’s most important stakeholder – employees. By contrast, the new marketing concept is a holistic discipline using the fractal concept of wholeness, where the whole is present in each part, as in DNA, to develop congruent, sustainable and high-value brand experience for all stakeholders (customers, employees, suppliers…). The main concept is to focus on the necessity of integrating a strategic marketing plan with the purpose off building long-term, mutually satisfying relationships with key stakeholders. This new approach, namely “Holistic Marketing”, is concerned with wholes rather than analysis or separation into parts. According to Kotler (2005)17, four components of holistic marketing are relationship marketing, integrated marketing, internal marketing, and social responsibility marketing. Relationship Marketing: 23 As “attracting a new customer may cost five times much as doing a good job to retain existing customers” (Kotler, 2006)4, modern marketing is now placing much more emphasis on customer retention. But this fresh philosophy implies many changes at corporate level and gives new direction to strategic marketing issues. In order to improve the process of capturing customer value, it appears obvious that the next step of marketing is to build deep, durable relationship with all stakeholders that could indirectly (employees & suppliers) or directly (customers) affect the success of the firm’s marketing activities. This why new strategic marketer focus on building a mutual interest between company and customer in order to build strong and long lasting exchanges with customers rather than focusing upon one-off exchanges with customers (transactional marketing)4. The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network in order to emphasize customer retention and long term customer relationships (Kotler, 2005) 17. This new, increasingly efficient ways that companies have of understanding and responding to customers' needs and preferences seemingly allow them to build more meaningful connections with customers than ever before. These connections promise to benefit the bottom line by reducing costs and increasing revenues. Integrated Marketing: By definition, Integrated Marketing is a management concept that is designed to make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together as a unified force, rather than permitting each to work in isolation. The concept of integrated marketing is fully related to the relationship and internal marketing theories and it is a natural progression of the effects of developing concepts of 4 The transactional marketing approach places the emphasis on quantity vs. quality; on the product rather than the customer. This type of marketing still exists mostly in low-priced, low-profit margin businesses. In this case, sales people sell and do not go back to the customer and does not care whether the buyer is happy after the purchase; the on-shot model. The sales person does not have a strong relationship with the buyer. Therefore the buyer has no trust and confidence in sales person / people. Sales people to achieve their objective put pressure on the buyer to make purchase. This kind of sales can be described as hard selling. 24 marketing planning. In the case of Integrated Marketing, the starting point is core identity, and this is then articulated as strategy through the business model, products, brand, vision, cultural values and business evaluation (amongst others) (Kotler, 2005).17 Internal Marketing: Holistic Marketing Strategy is an organic and inter-related process that builds on team oriented approaches to achieving organizational goals. In short, everyone needs to be part of the plan. Such an approach involves all players; a system based on partnerships where everyone has something to gain or lose by a campaign's success or failure. In other words, holistic marketing recognizes that “everything matters”. The concept so focuses on the necessity of overlapping marketing at each level of the company: “the holistic marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies” (Kotler, 2006). 4 The principal role of internal marketing is to ensure everyone within the organization not only understands why the organization exists but also its key outputs and metrics, and most importantly, how every person and department contributes to the delivery of the proposition. Since the entire organization exists to satisfy customer needs, nobody can neglect a customer issue by declaring it a "marketing problem" - everybody must be concerned with customer satisfaction. Social Responsibility Marketing: The holistic marketing concept advocates the philosophy that businesses must develop products and marketing strategies that not only address the needs of the consumers but also safeguard the long-term interests of those consumers as well as those of society at large (Kotler and Keller 2005)18. In this view, holistic marketing incorporate social responsibility in its 25 broader context: ethical, environmental, legal and social. One reason modern marketing is involved in this ethical path is the public growing perception that marketing organizations are not just sellers of product but also have an inherent responsibility to be more socially responsible, including being more responsible for its actions and more responsive in addressing social and environmental concerns. And as marketing deals with the public, companies see this new context as an opportunity Kaliski (2001).18 Marketers who are pursuing a socially responsible agenda should bear in mind that such efforts do not automatically translate into increased revenue or even an improved public image. However, organizations that consistently exhibit socially responsible tendencies may eventually gain a strong reputation that could pay dividends in the form of increased customer loyalty. In summary, holistic marketing recognizes that the organization’s sales and revenues are inextricably tied to the quality of each of its products, services, and modes of delivery and to its image and reputation among its constituencies (Mack, 1999). According to this view, holistic marketers succeed in managing a superior value chain that deliver a higher product quality improving the process of capturing customer value. Holistic marketing also recognizes the need of a more ethical approach that focuses on the needs of the consumers but also safeguard the long-term interests of those consumers as well as those of society at large. Nevertheless this new philanthropic trend is not strong enough to upset public critics which accuse marketing to satisfy their financial needs even before satisfying the real consumers’ needs. 3-b. Criticisms of marketing: “It seems impossible in these days for people in marketing to gather anywhere in the world without the subject’s finally turning to their troubles with the public. 26 Everywhere marketing is maligned for its pushy, noisy, manipulative intrusions into our lives; its corruptive teachings of greed hedonisms; its relentless pursuit of the customer’s cash, regardless of consequence, save the profit of the seller” (Levitt 1986, p.215).8 While marketing is viewed as offering main profit to organizations and to society, the fact that marketing is a business function operating in close relation with the public opens this functional area to wide criticism. Among the issues cited by those who criticize marketing, the criticism most frequently made about marketing is that marketers are only concerned with getting customers to buy whether they want the product or not. The source of this argument stems from the conviction that marketers are only out to gratify their own needs and really do not care about the needs of their customers. But while many marketers are guilty of manipulating customers into making unwanted purchases, the majority realizes that undertaking such tactics will not lead to loyal customers and, subsequently, is improbable to lead to longer term success. The eternal marketing debate: satisfying or creating needs. Under the marketing concept, marketers have to ensure that companies’ core activities are yielded by stakeholder needs and wants. But still one common error is that most companies continue to operate under the classic approach of supply is in control (sell what is produced by developing the commercial structures) vs. demand is in control (find the right products for your customers). They focus on the solutions that they make – the products that they are already selling. In other words, most business activities, including advertising, are still today dedicated to solving the firm's problems. This phenomenon leads organizations to the temptation of manipulating customers into making unwanted purchases. However, by doing so they miss the possibility to create customer value by trying to find matches for the 27 products to which they are already committed or to adapt a product to a need. Success, conversely, is more likely if you dedicate your activities exclusively to solving your customer's problems. People buy products in order to solve problems: “products are problemsolving tools” (Levitt, 1986. p76)8. Modern marketing consequently recognizes that the problem defines the market, not the solution. In this view, a market starts where the product can satisfy a need. When you combine need and product you can create products that are valuable for your customers (Meyer, 2002)19. Under this concept, the firm must find a way to discover unfulfilled customer problems (needs) and bring to market solutions (products) that satisfy those problems (needs). This will help ensure that the provided products offer tangible benefits - and therefore genuine value - to the target audience and by default to the company. But solving problems which are relative: different and several, is not risk free so the main question in a how to identify the right problem? To choose the right problem, there are three fundamental options (Smith, 1998)20: 1. Anticipate future problems. 2. Create problems that you can resolve with your products. 3. Go ask customers directly about their existing problems. The most common decision is to anticipate problems: to look into the future and identify the most likely issues that will block the success of competitors (Salter & Rosenbaum, 1997)21. This strategy is attractive if firms know their customers with whom they deal. This strategy has worked well for several markets. More often however, the strategy fails. Why? Because anticipating the problem is easy, while anticipating the problem that eventually becomes real enough to build a market is much riskier. One example is the third cellular phone generation “3G”. At the time the technology had obtain the approval from influencers: media, consultants, technical analysts and investors who massively invest in the project. However, influences and suppliers were not enough. Customers, as a whole, remained unimpressed. The 3G technology became known as technology that “I still don’t need”, and 3G services 28 never became popular (except for the Japanese market).Too much in advance vs. customer acceptance. Another option is to create problems. Where you know that you can create a serious problem, and then solve it, you have the opportunity to stimulate the value of your product. This is risky, but when you control the problem, controlling the market is easier. Inkjet printer cartridges and razor blades are example of success in creating the problem. They apply the “consumables theory”. Getting the initial service and function is cheap and easy. Everybody can get razor for a few dollars, and inkjet printers are now available for $50. The idea? Hook customers on the service; then, to continue to get the value customers want from it, they have to buy products from the manufacturer that will cost much more than the razor or printer. The risk is to create a competitor and substitutes products that can have a strong impact on the business (Meyer, 2002).18 The real solution to avoid risk is to: CONSIDER FINDING A PROBLEM INSTEAD OF CREATING IT. Creating problem is risky, expensive and not always successful. The issue is creating the right problem. If marketers create a wonderfully important problem, they can name the price. If firms want to know where their best chances of creating valuable products are, the key may be in simply asking about the problem. By definition a market starts where the product can satisfy a need and modern marketing recognizes that the problem defines the market, not the solution. When you combine need and product you can start a new market (Meyer, 2002). This is why, the key success in creating and maximizing customer value proposition is to INDENTIFY THE RIGHT PROBLEMS TO SOLVE. The concept of influencing desires vs. the concept of creating needs: To understand fully the resulting dilemmas, it is useful to examine the concept of needs in terms of man’s material aspiration and in terms of how human fulfill their needs. 29 Human have different levels of needs - both physical and psychological - that they have to fulfill (Maslow, 1943)22 (See ANNEX 3: A Theory of Human Motivation) . By definition, need arises from the presence of a gap between the fulfillment of this need and the situation experienced by a person (customer). This gap is called the situation of need. Thus, the recognition of a situation of need gives rise to the need - to fulfill this gap (Leagans, 1964) 23. But when needs cannot be fulfilled they are then considerate as desires. But needs are limited. On the other hand, the culturally differentiated desires are infinite: “because desire is defined not by that which one has, but by that which one is tempted” (Longinotti-Buitoni, 1999)24. However, the marketing does not create needs, these pre-exist, but it influences the desires. For example, marketing suggests to the consumer that a MERCEDES can serve for satisfying a need of respect. It does not create the need of esteem, but proposes a means to satisfy it. The Maslow’s hierarchy of needs (see annex 3: The theory of human motivation) tends to highlight that individuals have several means to satisfy their demand: the auto production, the strength, the plea and the exchange. Marketing focuses on exchange. And this leads us to the second concept: marketing sees “exchange principles” as an economic reality, which regulated the market: - There are two parties (the most active being the storekeeper, the other one the prospect) - Every party possesses something that can have some value for the other one. - Every party may communicate and deliver what he exchanges. - Every party is free to accept or to reject the offer of the other one. - Every party considers the exchange as a solution adapted to its problem. What makes the marketing in all this system? We already know that it influences the desires and concentrates on the exchange. If we rationalize the concept, with the risk of oversimplifying, we can consider that the marketing is nothing else than an economic and social mechanism by which individuals and groups satisfy their needs and desires by means of the exchange of products and other valuable entities for others. “Marketing is a social and 30 managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others” (Kotler 1991). On the other hand we can highlight that marketing has the power to leverage or increase needs by facilitating economical exchanges and by selling tricks such as credit facilities and discount. Most important, companies can also promote their products through incisive advertising and public relations campaigns that help educate and possibly influence their customers’ perceptions. The business logic behind marketing in satisfying needs is designed to arouse customers’ emotion by influencing their perception of reality. By doing so marketing is able to manipulate customers in purchasing unwanted products. As a matter of fact, the excess of marketing leads to an obsessive desire and here lays the custom between satisfying and creating a need. However, human have needs – such as food and shelter – but once they have fulfill these needs can we objectively say that all their needs have been fulfilled. Is everything else unnecessary or self-indulgent? (Levitt, 1986) 18. As a matter of fact, customers have become so contaminated by advertising campaign and organizations trying to bring differentiation to catch market shares that they now perceive themselves and define their lives with the product they buy. In 1986, Levitt argues that delivering products of extreme quality is no more a sufficient differentiation strategy: “the generic product is the minimal expectation” (Levitt, 1986 p. 79). Today, satisfying psychological necessities is now considered the minimum; this is where “marketing concept”, in the sense of satisfying customers’ needs at value, has reached its limits. But the current obsession to identify oneself according to the thing one buys, drinks, drives, wears, and smokes is an extension of the kind of need to identify which we have always innately felt (loninotti-Buitoni, 1999)24. 31 Conclusion: Marketing focuses on two associated key words: “customer and needs”. In marketing the term customers is synonym of market. The term market refers to the group of customers (individual, companies, associations, governments…) that is interesting in the product/service, has the resources to purchase the good, and is allowed by law and regulations to buy the good. While, the concept of need in marketing is closely related to the concept of a situation of need in its primary psychological definition: people have different needs that they have to fulfill (Maslow, 1943). Thus, the recognition of a situation of need gives rise to the need to fulfill this gap (Leagans,1964). Marketing as a discipline recognizes that this situation of needs exist. Its main objective is to identify these needs and focus on providing (exchanging) solutions (products/services) to satisfy (fulfill) them. In brief, the marketing consists in putting a product in adequacy with the customer’s expectations, and to let him (her) to know it…. It supposes to observe the consumer, to encircle his (her) motivations and his (her) behaviors. Know to act: could not the marketing look like an applied “social science"? But marketing is even more than that. Today marketing is a holistic concept that focuses on the whole – it’s an organic methodology that helps organizations in developing a package that will not only satisfy the needs of the customers within the target markets, but simultaneously will maximize the performance of the organization. Is this not considerate as a technique of management? But let’s go further and let’s focus on the twenty first century marketer’s new challenges. In an ever changing environment, where markets are saturated, where competition is global and fragmented, marketers have to collect, perceive and interpret in a fine way the evolutions of such or such market segment. They must know how to cross the information - figures, observations, analyses - to become familiar with the atmosphere of an environment (Badot et al.,1998) in order to be able to anticipate future needs. The post modern marketer would not be any more riveted to a methodology and a unique theory; he 32 would be, on the whole, an informed observer of a changeable world. Is this not the purpose of the human sciences? However, it’s important to recognize that marketing is a structured process (marketing strategy, marketing plan, segmentation strategy, pricing, etc.) but is also build on creativity. Marketing is both a science and an art. It’s the science of satisfying needs at profit and the art of transforming desires in wants. This is even truer in a society where the democratization of fulfilling customers’ needs and the amplification of customer expectation are making radical changes in how companies do business. In an era where technology makes everything possible customers are much more difficult to please. Today, marketing has to cope with the idea that modern customers prefer spend their money on products and services that improve their emotional well-being, products that are an extension of their own personality. To attract them, companies must sell products and services that can excite their personality. In other words, companies are more likely to attract more customers by arousing customers’ emotion, by anticipating future trends and needs, some how by influencing their perception of reality. Today marketing is about influencing desires; it’s about selling dreams… and some how influencing the concept of need. By doing so modern marketing goes beyond the concept of selling a product or service to satisfy customers ‘needs. As stated by Carpenter, “Simply giving customers what they want isn’t enough any more – to gain an edge companies must help customers learn what they want”. However, let’s reverse the concept. Marketing gives the opportunity to customers to fulfill dreams, and doing so, marketing as an art can be seen, to a certain extend, as an equalizer of social differences. By rending desires affordable, can we consider that marketing covers social differences? 33 ANNEX 1/ Strategic Marketing Framework. 34 Source: The Key to Marketing: The Marketing Plan - Part 1: Marketing Plan Versus Marketing Strategy - By Susan Ward (2007). ANNEX 2: 4 P’s Product: A product can be either a good or service that is sold either to a commercial customer or an end consumer. The product or service must address the needs of customers as identified through market research. A customer buys a product, and a consumer uses it. Price: No matter how good the product is, it is unlikely to succeed unless the price is right. This does not just mean being cheaper than competitors. Even if you decide not to charge for a service, it is useful to realise that this is still a pricing strategy. Identifying the total cost to the user (which is likely to be higher than the charge you make) is a part of the price element. Promotion: is the business of communicating with customers, and providing them with information that will assist them in making a decision to purchase a product or service. The main aims of promotion are to persuade, inform and make people more aware of a brand, as well as improving sales figures. This includes advertising, personal selling (eg attending exhibitions), sales promotions (eg special offers), and public relations. Advertising is the most widely used form of promotion, and can be through the media of TV, radio, journals, cinema or outdoors (billboards, posters). The specific sections of society (market segments) being targeted will affect the types of media chosen, as will the cost. Companies use sponsorship and public relations to improve their image, notably through financing sports, the arts and public information services. Sales promotion is designed to encourage new and repeat sales. Loyalty cards, free gifts, competitions and voucher schemes are the most Place or distribution: Looking at location (eg of a library) and where a service is delivered (eg are search results delivered to the user's desktop, office, pigeonhole - or do they have to collect them). 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers. Booms and Bitner's expanded the marketing mix by adding the following 3 additional P's: The first two additional Ps are explicit (People, Process) and the third one (Physical Evidence) is an implicit factor. Booms and Bitner also suggest that Place in a service-oriented company includes the accessibility of the service, and that Promotion in a service-oriented company includes the input of front-line service personnel. 5. People: All people directly or indirectly involved in the consumption of a service are an important part of the extended marketing mix. Knowledge Workers, Employees, Management and other Consumers often add significant value to the total product or service offering. 6. Process: Procedure, mechanisms and flow of activities by which services are consumed 35 (customer management processes) are an essential element of the marketing strategy. 7. Physical Evidence: The ability and environment in which the service is delivered, both tangible goods that help to communicate and perform the service and intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers. ANNEX 3: A Theory of Human Motivation Maslow's hierarchy of needs is often depicted as a pyramid consisting of five levels: the first lower level is being associated with Physiological needs, while the top levels are termed growth needs associated with psychological needs. Deficiency needs must be met first. Once these are met, seeking to satisfy growth needs drives personal growth. The higher needs in this hierarchy only come into focus when the lower needs in the pyramid are met. Once an individual has moved upwards to the next level, needs in the lower level will no longer be prioritized. If a lower set of needs is no longer being met, the individual will temporarily re-prioritize those needs by focusing attention on the unfulfilled needs, but will not permanently regress to the lower level. Deficiency needs: The lower four layers of the pyramid are what Maslow called "deficiency needs" or "D-needs". With the exception of the lowest needs, physiological ones, if the deficiency needs are not met, the body gives no indication of it physically, but the individual feels anxious and tense. These deficiency needs are: physiological, safety and security, love and belonging, and esteem. Safety needs: With their physical needs relatively satisfied, the individual's safety needs take over and dominate their behavior. These needs have to do with people's yearning for a predictable, orderly world in which injustice and inconsistency are under control, the familiar frequent and the unfamiliar rare. In the world of work, these safety needs manifest themselves in such things as a preference for job security, grievance procedures for protecting the individual from unilateral authority, savings accounts, insurance policies, and the like. For the most part, physiological and safety needs are reasonably well satisfied in the "First World". The obvious exceptions, of course, are people outside the mainstream — the poor 36 and the disadvantaged. If frustration has not led to apathy and weakness, such people still struggle to satisfy the basic physiological and safety needs. They are primarily concerned with survival: obtaining adequate food, clothing, shelter, and seeking justice from the dominant societal groups. Safety and Security needs include: Personal security from crime Financial security Health and well-being Safety net against accidents/illness and the adverse impacts Social needs: After physiological and safety needs are fulfilled, the third layer of human needs is social. This psychological aspect of Maslow's hierarchy involves emotionally-based relationships in general, such as: friendship intimacy having a supportive and communicative family Humans need to feel a sense of belonging and acceptance, whether it comes from a large social group, such as clubs, office culture, religious groups, professional organizations, sports teams, gangs ("Safety in numbers"), or small social connections (family members, intimate partners, mentors, close colleagues, confidants). They need to love and be loved (sexually and non-sexually) by others. In the absence of these elements, many people become susceptible to loneliness, social anxiety, and Clinical depression. This need for belonging can often overcome the physiological and security needs, depending on the strength of the peer pressure; an anorexic, for example, ignores the need to eat and the security of health for a feeling of control and belonging. Esteem: All humans have a need to be respected, to have self-esteem, self-respect, and to respect others. People need to engage themselves to gain recognition and have an activity or activities that give the person a sense of contribution, to feel accepted and self-valued, be it in a profession or hobby. Imbalances at this level can result in low self-esteem or an inferiority complex. People with low self-esteem need respect from others. They may seek fame or glory, which again depends on others. It may be noted, however, that many people with low self-esteem will not be able to improve their view of themselves simply by receiving fame, respect, and glory externally, but must first accept themselves internally. Psychological imbalances such as depression can also prevent one from obtaining self-esteem on both levels. Growth needs: Though the deficiency needs may be seen as "basic", and can be met and neutralized (i.e. they stop being motivators in one's life), self-actualization and transcendence are "being" or "growth" needs (also termed "B-needs"); i.e. they are enduring motivations or drivers of behavior. Aesthetic needs: The motivation to realize own maximum potential and possibilities is considered to be the master motive or the only real motive, all other motives being its various forms. In Maslow's hierarchy of needs, the need for self-actualization is the final need that manifests when lower level needs have been satisfied. Self-transcendence: Near the end of his life Maslow revealed that there was a level on the hierarchy that was above self-actualization: self-transcendence. He stated that the 37 achievements and success of his offspring were more satisfying than the personal fulfillment and growth characterized in self-actualization. Source: A.H. 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