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Marketing: An Overview
Marketing
• According to Kotler, Marketing as a social
managerial process by which individuals and
groups obtain what they need and want through
creating and exchanging products and value with
others.
• Marketing deals with identifying and meeting
human and social needs. One of the shortest
definitions of marketing is “meeting needs
profitably.”
Marketing
• The AMA defines marketing as 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.
Selling is only the tip of the
iceberg
‘There will always be need for
some selling. But the aim of marketing
is to make selling superfluous. The aim
of marketing is to know and understand
the customer so well that the product or
service fits him and sells itself. Ideally,
marketing should result in a customer
who is ready to buy. All that should be
needed is to make the product or
service available’.
Peter Drucker
Needs, Wants, and Demands
• Needs are states of felt deprivation, personal
requirements that motivate behavior and things
that people cannot live without, like food,
clothing and shelter. Needs are not invented by
marketers; they are basic parts of the human
makeup. When a certain need is not satisfied, a
person may either find a way to reduce the need
or look for an object that will satisfy it.
Needs, Wants, and Demands
• Wants are the form taken by human needs as
they are shaped by culture and individual
personality. These are needs translated into
specific satisfiers that may differ from person to
person.
Needs, Wants, and Demands
• Demands are wants backed by purchasing power
or the ability to buy.
What is Marketed?
Goods
• Physical goods constitute the bulk of most
countries’ production and marketing effort. Not
only do companies market their goods, but
thanks in part to the Internet, even individuals
can effectively market goods.
Services
• As economies advance, a growing proportion of
their activities is focused on the production of
services. The US economy today consists of a
70:30 services-to-goods mix.
• Many market offering consist of a variable mix of
goods and services.
Events
• Marketers promote time-based events, such as
major trade shows, artistic performances, and
company anniversaries.
Experiences
• By orchestrating several services and goods, a
firm can create, stage, and market experiences.
• The goal of experiential marketing is to establish
the connection in such a way that the consumer
responds to a product offering based on both
emotional and rational response levels.
example
• Samuel Jackson's movie, Snakes on a Plane, had
an interactive feature on their website. A person
could enter the name and phone number of a
friend, and they would receive a pre-recorded
message inviting them to see the movie. It
worked. Opening night for the movie was a huge
success.
Persons
• Marketing activity aimed at creating target
market awareness, and a favorable opinion, of a
particular person
• Celebrity marketing is a major business.
Places
• Cities, states, regions, and whole nations
compete actively to attract tourists, factories,
company headquarters, and new residents.
Properties
• Properties are intangible rights of ownership of
either real property or financial property.
Organizations
• Organizations actively work to build a strong,
favorable, and unique image in the minds of
their target market. Companies spend money on
corporate identity ads.
Information
• Information can be produced and marketed as a
product.
• Example: Information on a particular good /
service / company may actually be marketed and
actually sold.
Ideas
• Every market offering includes a basic idea.
Goods and services are platforms for delivering
some idea or benefit.
• Example: “A mind is a terrible thing to waste”
(an example of idea being promoted by social
marketers )
Structure of Flows in a Modern Exchange Economy
A Simple Marketing System
Value, Satisfaction, and
Quality
• Customer value is the difference between the
value of buying, owning and using the product
and the cost of the product. The customer
compares the cost of the product with the
benefits he gains from using the product. (if the
benefit exceeds the cost, there is positive
customer value and the customer usually decides
to buy the product; if the cost exceeds the
benefit, there is negative customer value and the
customer would most likely avoid the product
and look for something else)
Value, Satisfaction, and
Quality
• Customer satisfaction refers to the difference
between the buyer’s expectation and the
perceived performance of the product. Before
making any purchase, a customer would already
have an expectation in mind and his task is to
look for a product that he thinks would perform
and deliver according to his expectations. (if the
product performs less than expected, the
customer is dissatisfied; if it performs as
expected, the customer is satisfied; if it performs
better than expected, the customer is delighted.
Value, Satisfaction, and
Quality
• Quality is what the customer says it is. The
ultimate evaluator of quality is the customer.
• Quality is the unyielding and continuing effort by
everyone in an organization to understand, meet
and exceed the needs of customers.
Marketing Management
• Marketing guru Philip Kotler defines marketing
management as the analysis, planning,
implementation, and control of programs
designed to create, build, and maintain
beneficial exchanges with target buyers for the
purpose of achieving organizational objectives.
• Art and science of choosing target markets and
getting, keeping, and growing customers through
creating, delivering, and communicating superior
customer value.
Marketing Management
Philosophies
Production Concept
• This concept holds that given a wide array of
products in the market, consumers will prefer to
buy products that are widely available and highly
affordable. This is one of the oldest philosophies
guiding sellers. In this concept, the primary
factors affecting the decision to buy are place of
distribution (availability) and price (affordability).
Management must focus on improving
production and distribution efficiency.
Product Concept
• This concept holds that consumer favor products
that offer the best quality, performance, and
innovative features. From the name itself, the
primary focus is the product. Thus, an
organization must devote energy to making
continuous product improvements, research,
development, and innovations.
Selling Concept
• This concept holds that consumers will not buy
enough of the company’s products unless the
company undertakes an extensive and largescale selling and promotional effort. Consumers
need a lot of coaxing, persuasion and motivation
to buy the company’s products. This concept
may hold particularly true for unsought goods,
goods that people do not normally think of
buying like memorial plans.
Marketing Concept
• This concept holds that achieving the goals of an
organization depends on knowing the needs and
wants of the target market and delivering the
desired satisfaction more effectively and
efficiently than others. The focus would be the
consumer needs and wants and the competition.
This concept shifts the drive from a productfocused marketing effort to a market-focused or
customer-driven marketing effort.
Societal Marketing Concept
• This concept holds that organizations must not
only study and satisfy the customer’s needs and
wants but also deliver superior value in way that
maintains or improves the customer’s as well as
the society’s well-being. This concept is the
newest of the five marketing management
philosophies.
How Business and Marketing
Are Changing
Changing Technology
• The digital revolution has created an Information
Age. It promises to lead to more accurate levels
of production, more targeted communications,
and more relevant pricing.
• Much of today’s business is carried on over
electronic networks: intranet, extranets, and the
internet.
Globalization
• Technological advances in transportation,
shipping, and communication have made it
easier for companies to market in other
countries and easier for consumers to buy
products and services from marketers in other
countries.
Deregulation
• Many countries have deregulated industries to
create greater competition and growth
opportunities.
Privatization
• Many countries have converted public
companies to private ownership and
management to increase their efficiency.
Customer Empowerment
• Customers increasingly expect higher quality and
service and some customization. They are more
and more time-starved and want more
convenience. They perceive fewer real product
differences and show less brand loyalty.
Customization
• The company is able to produce individually
differentiated goods whether ordered in person,
on the phone, or online.
Heightened Competition
• Brand manufacturers are facing intense
competition from domestic and foreign brands,
which is resulting in rising promotion costs and
shrinking profit margins.
Industry Convergence
• Industry boundaries are blurring at an incredible
rate as companies are recognizing that new
opportunities lie at the intersection of two or
more industries.
Retail Transformation
• Small retailers are succumbing to the growing
power of giant retailers and “category killers.”
Disintermediation
• In response to disintermediation, many
traditional companies engaged in
reintermediation.
New Consumer Capabilities
A substantial increase in buying
power
• Credit Cards
• Checks
• Schemes such as “buy now, pay
later”, lay-away or installment
A greater variety of available goods
and services
• The availability of a variety of goods
and services makes companies
strengthen the purchasing power of
buyers.
A great amount of information
about practically anything
• The internet is a very powerful tool
Greater ease in interacting and
placing and receiving orders
• There are many ways of buying products. Aside
from the traditional direct selling strategies, or
the dependence on several channels of
distribution, we also depend much on the
internet.
An ability to compare notes on
products and services
• There are websites and magazines designed to
accommodate the evaluation of people regarding
the products and services that they use. They can
be relied upon especially when making
purchasing decisions.
An amplified voice to influence
public opinion.
• A lot of websites have been designed to publish
what people think about goods and services in the
market.
• Freedom of speech has further amplified that
“voice”
The Holistic Marketing
Concept
• This is based on the development, design, and
implementation of marketing programs,
processes, and activities that recognizes their
breadth and interdependencies. Holistic
marketing recognizes that “everything matters”
with marketing – and that a broad, integrated
perspective is often necessary. Holistic
marketing is thus an approach to marketing that
attempts to recognize and reconcile the scope
and complexities of marketing activities.
Holistic Marketing
Dimensions
Marketing Management
Tasks
• Develop market strategies and plans
• Capture marketing insights
• Connect with customers
• Build strong brands
• Shape market offerings
• Deliver value
• Communicate value
• Create long-term growth