Chapter 1

Defining Marketing for 
the Twenty­First 
Century

. Slide 1 in Chapter 1
 Objectives

 Understand the new economy.

 Learn the tasks of marketing.
 Become familiar with the major
concepts and tools of marketing.
 Understand the orientations
exhibited by companies.
. Slide 2 in Chapter 1
 Objectives

 Learn how companies and

marketers are responding to
new challenges.

. Slide 3 in Chapter 1
 The New Economy

 Consumer benefits from the digital

revolution include:
1. Increased buying power.
2. Greater variety of goods and services.
3. Increased information.
4. Enhanced shopping convenience.
5. Greater opportunities to compare
product information with others.
. Slide 4 in Chapter 1
 The New Economy

 Firm benefits from the digital

revolution include:
6.New promotional medium.
7.Access to richer research data.
8.Enhanced employee and customer
communication.
9.Ability to customize promotions.
. Slide 5 in Chapter 1
 10 Rules of Radical
Marketing
1. CEO must own the Marketing function
2. Make sure Marketing Dpt. starts & stays
small and flat (keep closer to market)
3. Get face to face with people who matter
most-customers “face 2 face,is mantra”
4. Use market Res. Cautiously
5. Hire passionate missionaries
. Slide 6 in Chapter 1
 10 Rules of Radical
Marketing
6.Love & respect your customers
7.Create a community of consumers
8.Rethink the marketing mix
9.Celebrate common sense
10.Be true to the brand

. Slide 7 in Chapter 1
 Marketing Tasks

 Marketing practices may pass

through three stages:
1. Entrepreneurial marketing
2. Formulated marketing
3. Intrepreneurial marketing
 As marketing becomes more
formulated, creativity is inhibited.

. Slide 8 in Chapter 1
 Marketing Defined

 Kotler’s social definition:

“Marketing is a societal process by
which individuals and groups
obtain what they need and want
through creating, offering, and
freely exchanging products and
services of value with others.”

. Slide 9 in Chapter 1
 Marketing Defined

 The AMA managerial definition:

“Marketing is the process of
planning and executing the
conception, pricing, promotion,
and distribution of ideas, goods,
and services to create exchanges
that satisfy individual and
organizational objectives.”

. Slide 10 in Chapter 1
 What Can Be Marketed?

1. Goods 6.Places
2. Services 7.Properties
3. Experiences 8.Organizations
4. Events 9.Information
5. Persons 10.Ideas
. Slide 11 in Chapter 1
 Core Marketing Concepts

 Target markets and  Exchange and

market segmentation transactions
 Marketplace, market-  Relationship and
space, metamarkets networks
 Marketers & prospects  Marketing channels
 Needs, wants, demands  Supply chain
 Product offering and  Competition
brand  Marketing environment
 Value and satisfaction  Marketing program
. Slide 12 in Chapter 1
 Core Marketing Concepts

 Target markets & segmentation

– Differences in needs, behavior,
demographics or psychographics
are used to identify segments.
– The segment served by the firm is
called the target market.
– The market offering is customized
to the needs of the target market.
. Slide 13 in Chapter 1
 Core Marketing Concepts

 Shopping can take place in a:

– Marketplace (physical entity, Lowe’s)
– Marketspace (virtual entity, Amazon)
 Metamarkets refer to complementary
goods and services that are related
in the minds of consumers.
 Marketers seek responses from
prospects.
. Slide 14 in Chapter 1
 Core Marketing Concepts

 Needs describe basic human

requirements such as food, air, water,
clothing, shelter, recreation, education,
and entertainment.
 Needs become wants when they are
directed to specific objects that might
satisfy the need. (Fast food)
 Demands are wants for specific
products backed by an ability to pay.
. Slide 15 in Chapter 1
 Core Marketing Concepts

 A Product is any offering that can

satisfy a need or want, while a brand
is a specific offering from a known
source.
 When offerings deliver value and
satisfaction to the buyer, they are
successful.

. Slide 16 in Chapter 1
 Enhancing Value

 Marketers can enhance the value of

an offering to the customer by:
– Raising benefits.
– Reducing costs.
– Raising benefits while lowering costs.
– Raising benefits by more than the
increase in costs.
– Lowering benefits by less than the
reduction in costs.
. Slide 17 in Chapter 1
 Core Marketing Concepts

 Exchange involves obtaining a desired

product from someone by offering
something in return. Five conditions
must be satisfied for exchange to occur.
 Transaction involves at least two things
of value, agreed-upon conditions, a time
of agreement, and a place of agreement.

. Slide 18 in Chapter 1
 Core Marketing Concepts

 Relationship marketing aims to

build long-term mutually satisfying
relations with key parties, which
ultimately results in marketing
network between the company and
its supporting stakeholders.

. Slide 19 in Chapter 1
 Core Marketing Concepts

Marketing  Deliver messages to

Channels and receive
messages from
target buyers.
 Communication
channels  Includes traditional
media, non-verbal
 Distribution
communication, and
channels store atmospherics.
 Service channels
. Slide 20 in Chapter 1
 Core Marketing Concepts

Marketing  Display or deliver

Channels the physical
products or
 Communication services to the
channels buyer / user.
 Distribution
channels
 Service channels
. Slide 21 in Chapter 1
 Core Marketing Concepts

Marketing  Carry out

Channels transactions with
potential buyers
 Communication by facilitating the
channels transaction.
 Distribution
channels
 Service channels
. Slide 22 in Chapter 1
 Core Marketing Concepts

 A supply chain stretches from raw

materials to components to final
products that are carried to final
buyers.
 Each company captures only a
certain percentage of the total value
generated by the supply chain.

. Slide 23 in Chapter 1
 Core Marketing Concepts

 Four levels of competition can be

distinguished by the level of product
substitutability:
– Brand competition
– Industry competition
– Form competition
– Generic competition
. Slide 24 in Chapter 1
 Core Marketing Concepts

 The following forces in the broad

environment have a major impact on
the task environment:
– Demographics
– Economics
– Natural environment
– Technological environment
– Political-legal environment
– Social-cultural environment

. Slide 25 in Chapter 1
 Core Marketing Concepts

 The marketing program is developed

to achieve the company’s objectives.
Marketing mix decisions include:
– Product: provides customer solution.
– Price: represents the customer’s cost.
– Place: customer convenience is key.
– Promotion: communicates with customer.

. Slide 26 in Chapter 1
 Company Orientations

 The orientation or philosophy of the

firm typically guides marketing efforts.
Several competing orientations exist:
– Production concept
– Product concept
– Selling concept
– Marketing concept
– Customer concept
– Societal marketing concept

. Slide 27 in Chapter 1
 The Marketing Concept

 Achieving organizational goals

requires that company be more
effective than competitors in creating,
delivering, and communicating
customer value.
 Four pillars of the marketing concept:
– Target market
– Customer needs
– Integrated marketing
– Profitability
. Slide 28 in Chapter 1
Changes in the Marketplace

 Globalization, technological
advances, and deregulation have
created many challenges:
– Customers
– Brand manufacturers
– Store-based retailers
 Both companies and marketers have
been forced to respond and adjust.

. Slide 29 in Chapter 1