8

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17
LL
FA
@
Defining Marketing for the

s
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New Realities

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ai
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fo
ed

Marketing Management, 15th ed

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17
LL
FA
Kotler on Marketing

@
s
nt
The future is not ahead of us.

de
It has already happened.

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rS
Unfortunately, it is unequally

da
distributed among companies,

ai
.H
industries and nations.
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Dr
fo
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Dr A Haidar FALL 17-18

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17
Chapter Questions

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FA
1. Why is marketing important? (p. 25)

@
2. What is the scope of marketing? (p. 27)

s
nt
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3. What are some core marketing concepts? (p. 31)

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rS
4. What forces are defining the new marketing realities? (p. 35)

da
5. What new capabilities have these forces given consumers

ai
.H
and companies? (p. 38)
rA
6. What does a holistic marketing philosophy include? (p. 42)
rD
fo

7. What tasks are necessary for successful marketing

ed

management? (p. 49)

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Dr A Haidar FALL 17-18

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17
Good marketing is no accident

LL
FA
@
s
nt
• It is both an art and a science, and it results from

de
tu
careful planning and execution using state-of-the-

rS
da
art tools and techniques.

ai
.H
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rD
fo
ed
ct
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Dr A Haidar FALL 17-18

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 Dr A Haidar FALL 17-18
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es
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de
nt
s
@
FA
LL
17
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8
What is Marketing?
 8
-1
17
LL
FA
@
Marketing

s
nt
is an organizational function and a set of processes

de
tu
for creating, communicating, and delivering value to

rS
customers and for managing customer

da
ai
relationships in ways that benefit the organization

.H
rA
and its stakeholders. rD
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Dr A Haidar FALL 17-18

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17
What is marketing?

LL
FA
@
s
nt
de
• Marketing is a customer focus that permeates

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organizational functions and processes.

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Dr A Haidar FALL 17-18

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 8
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What is marketing?

17
LL
FA
@
s
• It is geared towards marketing promises through

nt
de
value proposition, enabling the fulfillment of

tu
rS
individual expectations created by such promises

da
and fulfilling such expectations through support

ai
.H
to customers’ value-generating processes thereby
rA
supporting value creation in the firm, customers
rD
fo

and stakeholders.
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Dr A Haidar FALL 17-18

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17
What is Marketing Management?

LL
FA
Marketing management is the art and science of

@
s
choosing :

nt
de
tu
Target markets and

rS
da
getting, keeping, and growing customers through

ai
.H
 creating,
 rA
delivering, and
Dr
fo

 communicating superior customer

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Dr A Haidar FALL 17-18

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 8
-1
Marketing is more than

17
LL
advertising or selling

FA
@
s
nt
This video clip explores the over focus of many

de
tu
companies on sales and particularly advertising

rS
without really trying to understand the customer

da
ai
and really understanding the totality of marketing.

.H
rA
D
www.youtube.com/watch?v=heSudg-tfIk&feature=related
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Dr A Haidar FALL 17-18

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 8
-1
Marketing debate

17
LL
FA
What is marketing?

@
s
nt
• You’ve been asked to justify an increased

de
tu
marketing budget. Explain the role of

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marketing within the organization and

da
ai
discuss why an increased spend could

.H
benefit the company.
rA
Dr
Take a position:
fo
ed

Consumers are changing and so too must

ct

marketing. Discuss.
tri
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Dr A Haidar FALL 17-18

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 8
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17
What is Marketed?

LL
FA
@
s
nt
de
tu
rS
da
ai
.H
rA
rD
fo

Oprah Winfrey has built a personal brand worth billions which

ed

she has used across many lines of business.

ct
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Dr A Haidar FALL 17-18

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 8
-1
What is Marketed?

17
LL
FA
Goods

@
s
Services

nt
de
tu
Events & Experiences

rS
da
Persons

ai
.H
Places & Properties
rA Organizations
rD
fo

Information
ed
ct

Ideas
tri
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Dr A Haidar FALL 17-18

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17
Who Markets: Marketers and Prospects

LL
FA
• A marketer is someone seeking a response (attention,

@
purchase, vote, donation, etc.) from another party called

s
nt
the prospect.

de
tu
• Marketers are responsible for stimulating demand for a

rS
da
company’s product.

ai
.H
• Marketing managers seek to influence the level, timing,
rA
and composition of demand to meet the organization’s
D
objectives.
r
fo
ed

• Eight demand states are possible:

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Dr A Haidar FALL 17-18

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 8
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17
Demand States

LL
FA
@
Negative Nonexistent Latent

s
nt
de
In each case, marketers

tu
must identify the

rS
underlying cause(s) of

da
the demand state and Declining Irregular

ai
determine a plan of

.H
Action to shift demand
to a more desired state rA
rD
fo

Full Overfull Unwholesome

ed
ct
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Dr A Haidar FALL 17-18

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17
Demand States

LL
FA
Negative demand

@
1. A major part of the market dislikes the product and

s
nt
de
may even pay a price to avoid it

tu
• vaccinations, dental work

rS
da
ai
• The marketing task is to analyze why the market dislikes the

.H
product and whether a marketing program consisting of
rA
product redesign, lower prices, and more positive promotion
Dr
can change beliefs and attitudes.
fo
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Dr A Haidar FALL 17-18

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Demand States

LL
FA
2. Non-existent demand - consumers may be unaware

@
s
or uninterested in the product.

nt
de
tu
rS
3. Latent demand - consumers may share a strong

da
need that cannot be satisfied by an existing product.

ai
.H
rA
D
4. Declining demand - consumers begin to buy the
r
fo

product less frequently or not at all.

ed
ct
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Dr A Haidar FALL 17-18

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 8
-1
Demand States

17
LL
FA
5. Irregular demand- consumer purchases vary on

@
s
a seasonal, monthly, daily, or even an hourly

nt
de
basis.

tu
rS
da
ai
.H
6. Full demand - consumers are adequately
rA
buying all product put into the marketplace.
rD
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Dr A Haidar FALL 17-18

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17
LL
FA
7. Overfull demand - too many consumers would

@
s
like to buy the product that can be satisfied.

nt
de
tu
rS
da
8. Unwholesome demand - consumers may be

ai
attracted to products that have undesirable

.H
social consequences. rA
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Dr A Haidar FALL 17-18

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 8
-1
Marketing during a recession:

17
LL
The future is bright!

FA
@
‘The business landscape has changed fundamentally; tomorrow’s environment

s
nt
will be different, but no less rich in possibilities for those who are prepared.’

de
(Davis, 2009)

tu
rS
www.youtube.com/watch?v=GEJIhkDSjNo

da
ai
View an interesting video clip from Kraft Foods on

.H
how they stay customer focused during a recession
rA
D
and really understand the core marketing focus on
r
fo

the customer.
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Dr A Haidar FALL 17-18

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 8
-1
Markets

17
LL
FA
• Marketers use the term “market” to cover various

@
groups of customers. The five basic markets are:

s
nt
de
• A) Resource Markets

tu
rS
• B) Government Markets

da
• C) Manufacturer Markets

ai
•

.H
D) Intermediary Markets
• E) Consumer Markets
rA
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Dr A Haidar FALL 17-18

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 8
Figure 1.1 Structure of Flows in a Modern

-1
17
Exchange Economy

LL
FA
@
s
nt
de
tu
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da
ai
.H
rA
Dr
fo
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Dr A Haidar FALL 17-18

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 8
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17
Market flows

LL
FA
• Sellers and buyers are connected by flows:

@
s
• Seller sends goods, services, and communications to the

nt
de
market.

tu
rS
• In return they receive money and information.

da
• There is an exchange of money for goods and services.

ai
.H
• There is an exchange of information.
rA
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Dr A Haidar FALL 17-18

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 8
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17
Figure 1.2 A Simple Marketing System

LL
FA
@
s
nt
de
Marketers view sellers as the

tu
industry and use the term

rS
market to describe customer

da
groups.

ai
.H
They talk about
rA
need markets (the diet-seeking market),
D
product markets (the shoe market),
r
Demographic markets (the millennium youth market),
fo

geographic markets (the Chinese market), or

ed

voter markets, labor markets, and donor markets.

ct
tri
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Dr A Haidar FALL 17-18

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 8
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17
Key Customer Markets

LL
FA
• Consumer Markets: Consumer goods and services such

@
s
as soft drinks and cosmetics, (establishing a superior

nt
de
brand image.

tu
rS
da
• Business Markets: Companies selling business goods

ai
.H
and services often face well-trained and well-informed
rA
professional buyers who are skilled in evaluating
D
competitive offerings.
r
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Dr A Haidar FALL 17-18

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 8
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Key Customer Markets

17
LL
FA
@
• Global Markets: Companies face challenges and

s
nt
decisions regarding which countries to enter, how to

de
tu
enter the country, how to adapt their products/services

rS
to the country, and how to price their products.

da
ai
• Nonprofit and Governmental Markets: Companies

.H
rA
selling to these markets have to price carefully because
D
these organizations have limited purchasing power.
r
fo
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Dr A Haidar FALL 17-18

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-1
Core Marketing Concepts

17
LL
FA
@
• Value and satisfaction
• Needs, wants, & demands

s
nt
• Marketing channels

de
• Target markets, positioning,

tu
• Supply chain

rS
segmentation (STP)
• Competition

da
• Offerings and brands

ai
• Marketing environment

.H
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Dr A Haidar FALL 17-18

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17
I want it, I need it…

LL
FA
@
s
Five Types of Needs

nt
de
tu
• Stated needs

rS
da
• Real needs

ai
.H
• Unstated needs
• rA
D
Delight needs
r
fo

• Secret needs
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Dr A Haidar FALL 17-18

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17
LL
i. Stated needs (the customer wants an expensive car)

FA
@
ii. Real needs (operation cost is low, not the initial price)

s
nt
de
iii. Unstated needs (the customer look for good after sales

tu
rS
services from the dealer)

da
ai
iv. Delight needs (the customer would be happy to have a

.H
navigator system or DVD in the car)
rA
D
v. Secret needs (the consumer wants to be seen by others)
r
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•Dr A Haidar FALL 17-18

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 8
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17
THE NEW MARKETING REALITIES

LL
FA
@
s
nt
de
i. Major societal Forces affecting marketing

tu
rS
ii. New Consumer Capabilities

da
ai
iii. New Company Capabilities

.H
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Dr A Haidar FALL 17-18

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 Major societal Forces affecting marketing:

8
-1
17
The marketplace isn’t what it used to be…

LL
FA
Information technology

@
s
nt
Globalization

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tu
Deregulation

rS
da
Privatization

ai
.H
Competition
rA
D
Convergence
r
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Consumer resistance
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Retail transformation
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Dr A Haidar FALL 17-18

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-1
17
New Consumer Capabilities

LL
FA
@
• A substantial increase in buying power

s
•

nt
A greater variety of available goods and services

de
• A great amount of information about practically anything

tu
rS
• Greater ease in interacting and placing and receiving orders

da
• An ability to compare notes on products and services

ai
.H
• An amplified voice to influence public opinion
rA
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Dr A Haidar FALL 17-18

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New Company Capabilities

LL
• Internet

FA
@
• Research

s
nt
•

de
Speed of internal information

tu
• Speed of external information “buzz’

rS
da
• Better target marketing

ai
.H
• Mobile marketing
rA
D
• Differentiated goods
r
fo

• Improved purchasing, recruiting, training, and

ed
ct

communications
tri
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Dr A Haidar FALL 17-18

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17
Company Orientations

LL
FA
@
s
nt
Production Product

de
tu
rS
Societal

da
Marketing

ai
.H
rA
Selling Dr Marketing
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Dr A Haidar FALL 17-18

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-1
17
LL
FA
@
Production Concept

s
nt
de
tu
• The production concept holds that consumers will

rS
prefer products that are widely available and

da
ai
inexpensive.

.H
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Dr A Haidar FALL 17-18

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17
LL
FA
@
s
nt
Product Concept

de
tu
rS
• The product concept holds that consumers will favor

da
those products that offer the most quality, performance,

ai
.H
or innovative features.
rA
rD
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Dr A Haidar FALL 17-18

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17
Selling Concept

LL
FA
@
s
• The selling concept holds that consumers and

nt
de
businesses, will ordinarily not buy enough of the

tu
rS
organization’s products, therefore, the

da
organization must undertake aggressive selling

ai
.H
and promotion effort.
rA
rD
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Dr A Haidar FALL 17-18

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17
Marketing Concept

LL
FA
@
s
nt
de
• The marketing concept holds that the key to achieving

tu
rS
organizational goals consists of the company being

da
more effective than competitors in creating, delivering,

ai
and communicating superior customer value to its

.H
chosen target markets.
rA
rD
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Dr A Haidar FALL 17-18

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17
Marketing Concept

LL
FA
@
A) Reactive market orientation—understanding and

s
meeting consumers’ expressed needs.

nt
de
tu
B) Proactive marketing orientation—researching or

rS
imagining latent consumers’ needs through a “probe-

da
and-learn” process.

ai
.H
1) Companies that practice both reactive and proactive
rA
marketing orientation are implementing a total market
rD
fo

orientation.
ed
ct
tri
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Dr A Haidar FALL 17-18

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 Dr A Haidar FALL 17-18
R
es
tri
ct
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fo
r D
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.H
ai
da
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tu
de
nt
s
@
Social Marketing

FA
LL
17
-1
8
 8
-1
17
Holistic Marketing Concept

LL
FA
@
 Holistic marketing can be seen as the development,

s
nt
design, and implementation of marketing programs,

de
processes, and activities that recognizes the breath and

tu
rS
interdependencies of their efforts.

da
ai
 Holistic marketing recognizes that “everything matters”

.H
rA
with marketing—the consumer, employees, other
D
companies, competition, as well as society as a whole.
r
fo
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Dr A Haidar FALL 17-18

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17
LL
Holistic marketing:

FA
@
i.Internal marketing

s
nt
de
tu
rS
ii.Socially responsible marketing

da
ai
.H
iii.Integrated marketing
rA
D
iv.Relationship marketing
r
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Dr A Haidar FALL 17-18

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-1
Figure 1.4 Holistic Marketing Dimensions

17
LL
FA
@
s
nt
price

de
tu
rS
da
ai
.H
Financial accountability
&

rA
D
Financial providers
r
fo
ed
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tri

The outcome is marketing network

es

Dr A Haidar FALL 17-18

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17
Relationship Marketing

LL
FA
• Relationship marketing has the aim of building

@
s
mutually satisfying long-term relationships with key

nt
de
parties—customers, suppliers, distributors, and other

tu
marketing partners.

rS
da
ai
• Relationship marketing builds strong economic,

.H
rA
technical, and social ties among the parties.
D
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fo
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Dr A Haidar FALL 17-18

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17
Relationship Marketing

LL
FA
• Marketing must not only do (CRM) but also partnership

@
s
relationship management (PRM).

nt
de
• Four key constituents for marketing are:

tu
rS
1. Customers.

da
ai
.H
2. Employees.
rA
3. Marketing partners (channel partners).
rD
fo

4. Members of the financial community.

ed
ct
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Dr A Haidar FALL 17-18

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 8
Marketing Memo: Marketing right and

-1
17
wrong

LL
FA
@
s
nt
• “Marketing Right and Wrong” lists Dr. Kotler’s

de
10 deadliest “sins” of marketing and the 10

tu
rS
“commandments” of marketing

da
ai
.H
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Dr A Haidar FALL 17-18

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17
Figure 1.5 The Four P’s

LL
FA
@
s
nt
de
tu
rS
da
ai
.H
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Dr A Haidar FALL 17-18

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-1
The 7Ps of the marketing mix

17
LL
FA
@
s
nt
de
tu
rS
da
ai
.H
rA
rD
fo
ed
ct

Figure 1.4 The 7Ps components of the marketing mix

tri
es

Dr A Haidar FALL 17-18

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17
Internal Marketing

LL
FA
@
s
Internal marketing is the task of hiring, training,

nt
de
and motivating able employees who want to

tu
rS
serve customers well.

da
ai
.H
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rD
fo
ed
ct
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Dr A Haidar FALL 17-18

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17
Performance Marketing

LL
FA
• Financial Accountability

@
Social Initiatives

s
• Social Responsibility

nt
de
Marketing • Corporate social marketing

tu
•

rS
Cause marketing

da
• Corporate philanthropy

ai
• Corporate community

.H
involvement
rA • Socially responsible
rD
business practices
fo
ed
ct
tri
es

Dr A Haidar FALL 17-18

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-1
17
Marketing Management Tasks

LL
FA
• Develop market strategies and plans

@
s
• Capture marketing insights

nt
de
• Connect with customers

tu
rS
• Build strong brands

da
•

ai
Shape market offerings

.H
• Deliver value
rA
D
• Communicate value
r
fo

• Create long-term growth

ed
ct
tri
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Dr A Haidar FALL 17-18

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-1
17
LL
FA
@
s
nt
de
tu
rS
Marketing Excellence:

da
ai
.H
NIKE
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Dr A Haidar FALL 17-18

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 8
pyramid of influence

-1
17
LL
FA
@
s
nt
de
tu
rS
da
ai
.H
rA
D
r
fo
ed
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Dr A Haidar FALL 17-18

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 8
What are the pros, cons, and risks associated

-1
17
with Nike’s core marketing strategy?

LL
FA
I. Nike’s core marketing strategies is their belief in the

@
“pyramid of influence” and its dependency on a core group

s
nt
de
of athletes to influence shoe purchases.

tu
II. this may have worked in the past, there is no guarantee

rS
da
that future athletes will command such influence on the

ai
shoe purchaser in the future.

.H
rA
III. Athlete (2) influence(s) can and could decrease due to
D
changing consumer preferences and changes in consumer
r
fo

tastes and priorities.

ed

IV. Athletic influence could be adversely affected by the

ct
tri

actions/inactions by Nike’s chosen spokespersons.

es

Dr A Haidar FALL 17-18

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 8
-1
17
LL
V. Ecommerce program Nike very well designed

FA
@
website

s
nt
VI. Product development and design

de
tu
VII. Aggressive campaign, celebrity endorsement

rS
and quality enhanced the brand image

da
ai
VIII. Creating premium consumer experience

.H
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Dr A Haidar FALL 17-18

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 8
-1
17
cons

LL
FA
• Expensive

@
s
• Type of athletes (like or dislike)

nt
de
tu
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da
ai
.H
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Dr A Haidar FALL 17-18

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 8
-1
17
RISK

LL
FA
• FAKE (COUNTERFIET)

@
s
• CURRENCY FLUCATION

nt
de
• CHANGES IN consumers taste & preferences

tu
rS
da
ai
.H
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fo
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Dr A Haidar FALL 17-18

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 8
-1
If you were Adidas, how would you compete

17
with Nike?

LL
FA
• I would emphasize my “international” scope of

@
s
producing great soccer shoes and could also

nt
de
extend my marketing to emphasize my “everyday

tu
rS
/ everyone” usage for my products.

da
• Creating a point of difference for Adidas versus

ai
.H
Nike is key to a sustainable advantage—Adidas’
rA
soccer shoes for example are a good starting
rD
fo

point to differentiate one brand versus another.

ed
ct
tri
es

Dr A Haidar FALL 17-18

R