Chapter 1: Scope of Marketing for New Realities
Marketing process
1. Understand the marketplace and customer needs and wants
2. Design a customer-driven marketing strategy (STP = Segmenting, Targeting,
Positioning)
3. Construct a programme/marketing mix that delivers superior value (4 P’s = Product,
Price, Place, Promotion / People, Processes, Programs, Performance -> new)
4. Build profitable relationships and create customer delight
5. Capture value from customers to create profits and customer equity
Core Marketing Concepts
Definition: Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for costumers, clients,
partners, and society at large.
Definition: Marketing management is the art and science of choosing target markets and
getting, keeping, and growing customers through creating, delivering, and communicating
superior customer value.
Definition: Needs are the basic human requirements such as air, food, water, clothing, and
shelter. Humans also have strong needs for recreation, education, and entertainment. These
needs become wants when directed to specific objects that might satisfy the need.
Five types of needs:
1. Stated needs (The customer wants an inexpensive car.)
2. Real needs (The customer wants a car whose operating cost, not initial price, is low.)
3. Unstated needs (The customer expects good service from the dealer.)
4. Delight needs (The customer would like the dealer to include a GPS system.)
5. Secret needs (The customer wants friends to see him or her as a smart consumer.)
STP
Marketers identify distinct segments of buyers by identifying demographic, psychographic,
and behavioral differences between them. They then decide which segment(s) present the
greatest opportunities. For each of these target markets, the firm develops a market offering
that it positions in target buyers’ minds as delivering some key benefit(s). VB: Porsche
targets buyers who seek pleasure and excitement in driving and want to make a statement
about their wheels.
Marketing channels:
1. Communication channels: deliver and receive messages from target buyers and
include newspapers, magazines, radio, television, mail, telephone, smart phone,
billboards, posters, and the Internet.
2. Distribution channels: help display, sell, or deliver the physical product or service(s)
to the buyer or user. These channels may be direct via the Internet, mail, or mobile
phone or telephone or indirect with distributors, wholesalers, retailers, and agents as
intermediaries.
3. Service channels: To carry out transactions with potential buyers, that include
warehouses, transportation companies, banks, and insurance companies.
,Marketing management philosophies:
• Production concept: cheap production and efficient distribution
• Product concept: continuous product improvement to stay ahead of competition
• Selling concept: consumers and businesses, if left alone, won’t buy enough of the
organization’s products -> transactions, not relations.
• Marketing concept: customer focus, understanding needs and wants
• Holistic Marketing concept: everything matters in marketing! Requires a broad,
integrated prospective.
Holistic Marketing concept
1. Relationship marketing: aims to build mutually satisfying long-term relationships
with key constituents to earn and retain their business -> customers, employees,
marketing partners (channels, suppliers, distributors, dealers, agencies), and
members of the financial community (shareholders, investors, analysts)
2. Integrated marketing: occurs when the marketer devises activities and programs to
create, communicate, and deliver value for consumer such that “the whole is greater
than the sum of its parts.”
3. Internal marketing: the task of hiring, training, and motivating able employees who
want to serve customers well.
4. Performance marketing: requires understanding the financial and nonfinancial
returns to business and society from marketing activities and programs. They are also
considering the legal, ethical, social, and environmental effects of marketing
activities and programs.
The 4 P’s
Marketing Management Tasks
• Developing and implementing marketing strategies and plans. The first task is to
identify and plan for the organization’s potential long-run opportunities, given its
market experience and core competencies. (Chapter 2)
• Capturing marketing insights. Each organization should closely monitor its marketing
environment, continually assess market potential, and forecast demand. (Chapter 3)
, • Connecting with customers. Management must decide how to best create value for
the firm’s chosen target markets and how to develop strong, profitable, long-term
relationships with customers. (Chapters 4 and 5)
• Building strong brands. The organization must divide the market into major market
segments, evaluate each one, and target those it can best serve. (Chapter 6) Next, it
needs to craft a brand positioning and plan to compete effectively. (Chapter 7) Also,
it should understand how customers perceive its brands and plan for growth.
(Chapter 8)
• Creating value. At the heart of the marketing program is the product—the firm’s
tangible offering to the market—which includes the product quality, design, features,
and packaging. (Chapters 9, 10 and 11)
• Delivering value. Based on its products and services, how can the firm deliver value
to its target market? (Chapters 12 and 13)
• Communicating value. Each marketer needs to communicate to the target market
the value embodied by its offerings. This requires an integrated marketing program
that maximizes the individual and collective contribution of all communication
activities. (Chapters 14, 15, 16 and 17)
• Managing the marketing organization for long term success. The marketing strategy
should consider changing global opportunities and challenges as well as social
responsibility and ethics. Management must also establish an appropriate marketing
organization. (Chapter 18)
Executive Summary
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. Marketing management is the art and science of choosing target markets
and getting, keeping, and growing customers through creating, delivering, and
communicating superior customer value. Marketers can market goods, services, events,
experiences, persons, places, properties, organizations, information, and ideas in four
different marketplaces: consumer, business, global, and nonprofit. Today’s marketplace is
fundamentally different than in the past, resulting in many new consumer and company
capabilities. Technology, globalization, and social responsibility are creating new
opportunities and challenges and significantly changing the management of marketing.
Organizations can conduct business under the production concept, the product concept, the
selling concept, the marketing concept, or the holistic marketing concept. The holistic
marketing concept (including relationship marketing, integrated marketing, internal
marketing, and performance marketing) is based on the development, design, and
implementation of marketing programs, processes, and activities that recognize their
breadth and interdependencies. Successful marketing management includes developing and
implementing marketing strategies and plans, capturing marketing insights, connecting with
customers, building strong brands, creating, delivering, and communicating value, and
managing the marketing organization within the global economy.
, Chapter 2: Marketing Strategies and Plans
Core business processes
• The market-sensing process: gathering and acting upon information about the
market.
• The new-offering realization process: researching, developing, and launching new
high-quality offerings quickly and within budget.
• The customer acquisition process: defining target markets and prospecting for new
customers.
• The customer relationship management process: building deeper understanding of,
relationships with, and offerings for individual customers.
• The fulfillment management process: receiving and approving orders, shipping
goods on time, and collecting payment.
A core competency has three characteristics:
1. It is a source of competitive advantage and makes a significant contribution to
perceived customer benefits.
2. It has applications in a wide variety of markets.
3. It is difficult to imitate for competitors.
Strategic planning
Corporate and Division:
1. Defining the corporate mission: developed collaboratively with and shared with
managers, employees, and often customers, provides a shared sense of purpose,
direction, and opportunity. Good mission statements focus on a limited number of
goals, stress the firm’s major policies and values, and define the major competitive
spheres within which the firm will operate. They also take a long-term view and are
short, memorable, and meaningful.
2. Establishing strategic business units (SBU): to develop separate strategies and assign
appropriate funding.
3. Assigning resources to each unit: decide how to allocate corporate resources to each
unit (GE/McKinsey matrix, BCG Growth-Share matrix)
4. Assessing growth opportunities: Intensive growth (Product-market expansion grid),
Integrative growth (Backward/ forward/ horizontal integration within the industry),
Diversification growth (Unrelated diversification)
