LEARNING OBJECTIVES
In this chapter, we will address the following questions:
1. Why is marketing important?
2. What is the scope of marketing?
3. What are some fundamental marketing concepts?
4. How has marketing management changed in recent years?
5. What are the tasks necessary for successful marketing management?
SUMMARY
1. Marketing is an organizational function and a set of processes for creating,
communicating, and delivering value to customers and for managing customer relationships in
2. Marketers are skilled at managing demand: they seek to influence its level, timing, and
3. Marketing is not done only by the marketing department. It needs to affect every aspect of
4. Today’s marketplace is fundamentally different as a result of major societal forces that
5. There are five competing concepts under which organizations can choose to conduct their
6. The holistic marketing concept is based on the development, design, and implementation
of marketing programs, processes, and activities that recognize their breadth and
C H A P T E R
1
DEFINING MARKETING
FOR THE 21ST CENTURY
7. The set of tasks necessary for successful marketing management includes developing
marketing strategies and plans, capturing marketing insights, connecting with customers,
OPENING THOUGHT
Marketing is too often confused and identified with advertising or selling techniques, and our
practices and theories are all too often invisible to the average consumer. The instructor should
spend some class time differentiating between advertising/promotion techniques and
marketing.
TEACHING STRATEGY AND CLASS ORGANIZATION
PROJECTS
1. Semester-Long Marketing Plan Project
An effective way to help students learn about marketing management is through the actual
creation of a marketing plan for a product or service. This project is designed to
accomplish such a task.
Dividing the class into groups, have each group decide on a “fictional” consumer product
The following is an outline of this process:
Chapter #
Title
Element of the Marketing Plan Due
1
Defining Marketing for
the 21st Century
None, group formation and begin the process
of selecting the product or service.
2
Developing Marketing
Strategies and Plans
Formation of groups; first presentation of
“product” to instructor for approval.
3
Collecting Information
and Forecasting Demand
Competitive information and environmental
scanning project(s) completed and presented
for instructor’s review.
Research
completed; demand forecasted and target
market selections defined.
5
Creating Long-Term
Loyalty Relationships
Students should have completed their value
proposition for the fictional product, defined
how they will deliver satisfaction, and
maintain customer loyalty.
6
Analyzing Consumer
Markets
Definitive data on the consumer for the
product/service including all demographic and
other pertinent information obtained and ready
for instructor’s approval.
7
Analyzing Business
Markets
No report due for this chapter; allows students
and instructor to “catch up” on the project.
8
Identifying Market
Segments and Targets
Specific market segmentation, targeting, and
positioning statements by the students due.
9
Creating Brand Equity
At this point in the semester, students are to
have their “branding” strategy developed for
their project. Questions to have been
completed include the brand name, its equity
position, and the decisions in developing the
brand strategy.
designed a differentiated brand positioning for
their project.
product/service? Is their product or service
going to be a leader, follower, or challenger to
well-established products or brands?
12
Setting Product Strategy
chapter.
based” component do not have anything to
submit for this chapter.
14
Developing Pricing
Strategies and Programs
At this point in the semester–long project,
students should be prepared to hand in their
pricing strategy decisions for their fictional
product/service. In reviewing this section, the
instructor should make sure that the students
concerning pricing covered in this chapter.
consumer. In evaluating this section, the
instructor should evaluate the completeness of
chapter.
At this point in the semester-long project,
students should have set their group project’s
product or service strategy. Instructors are to
evaluate their submissions on the product (or
service) features, quality, and price and other
considerations of “product” found in this
16
Managing Retailing,
Wholesaling, and
Logistics
At this point in the semester-long project for
the “fictional” product or service, students
should be directed to turn in their retailing,
wholesaling, and logistical marketing plans.
Those students who are acting in the role of
providing a new “service” should include here
their plans for locations, hours of operations,
and how their “service” plans on managing
demand and capacity issues.
media (students will tend to concentrate their
media on television or on the Internet and
exclude other forms such as personal selling
and radio).
Experiences, and Public
Relations
media decisions, and sales and promotional
materials.
Selling
direct sales force, and if so, to outline the
specifics (including financials) for this option.
20
Introducing New Market
Offerings
At this point in the semester-long project, in
this section should be a brief write up by the
students as to the consumer-adoption process
for their new product. How will the consumer
learn about their new product and how quickly
will they adopt it? Will the product be targeted
to the heavy users and early adopters first, then
early and late majorities? What is their
estimated time for full adoption?
groups should begin their presentations to the
class.
marketing plans contains a holistic view of the
marketing process.
Under the projects heading for each chapter will be a reminder of the material due when that
chapter is scheduled to be discussed in class.
ASSIGNMENTS
In small groups, ask the students to comment on the recent Presidential election and discuss
how they thought the messages were communicated—visually through signs and posters, by
sound, or via verbal communication? Ask the students to break down these messages into 1-
minute segments, and then total the amount of messages for the time spent. What conclusions
can you draw from the number of messages you were exposed to in the time period for
marketers?
Assign students the task of visiting some companies Web sites to see if they feel that the
Have the students read Suzanne Vranica’s “Marketers Aim New Ads at Video iPod Users,”
Wall Street Journal, January 31, 2006 and Li Yuan and Brian Steinberg’s “Sales Call: More
Ads Hit Cellphone Screens,” Wall Street Journal, February 2, 2006, p. B3 and comment on
how effective they believe cell phone advertisements will be in the future.
END–OF–CHAPTER SUPPORT
MARKETING DEBATE—Does Marketing Create or Satisfy Needs?
Marketing has often been defined in terms of satisfying customers’ needs and wants. Critics,
however, maintain that marketing goes beyond that and creates needs and wants that did not
exist before. They feel marketers encourage consumers to spend more money than they should
on goods and services they do not really need.
Take a position
Marketing shapes consumer needs and wants versus marketing merely reflects the needs and
wants of customers.
same needs and wants of others. Marketers by their efforts increase peer pressure, and group
thinking, by showing examples of what others may have that they do not. An individual’s
freedom to choose is substantially weakened by constant and consistent exposure to a range of
needs and wants of others. Marketers should understand that when it comes to resisting the
pressure to conform, that individuals are and can be weak in their resolve. Marketers must take
an ethical position to only market to those consumers able to purchase their products.
MARKETING DISCUSSION
Consider the broad shifts in marketing. Do any themes emerge in them? Can you relate the
shifts to the major societal forces? Which force has contributed to which shift?
Marketing Excellence: Nike
1. What are the pros, cons, and risks associated with Nike’s core marketing strategy?
Suggested Answer:
One of Nike’s core marketing strategies is their belief in the “pyramid of influence” and its
2. If you were adidas, how would you compete with Nike?
Suggested Answer: I would emphasize my “international” scope of producing great soccer
shoes and could also extend my marketing to emphasize my “everyday / everyone” usage for
Marketing Excellence: GOOGLE
1. With a portfolio as wide as Google’s, what is the company’s core brand value?
Suggested Answer: Google’s core brand value is “to organize the world’s information and
2. What’s next for Google? Is it doing the right thing taking on Microsoft with the concept of
cloud computing, and Apple in the fight for Smartphone?
Student answers will vary depending upon the “allegiance” to Apple products, but for the
DETAILED CHAPTER OUTLINE
Formally or informally, people and organizations engage in a vast number of activities
we could call marketing. Good marketing has become increasingly vital for success. But
THE IMPORTANCE OF MARKETING
The first decade of the 21st Century challenged firms to prosper financially and even survive in
the face of an unforgiving economic environment. Marketing is playing a key role in
THE SCOPE OF MARKETING
To prepare to be a marketer, you need to understand what marketing is, how it works, who
does it, and what is marketed.
What Is Marketing?
Marketing is about identifying and meeting human and social needs. One of the shortest good
definitions of marketing is “meeting needs profitably.”
A) The American Marketing Association offers the following formal definition:
“Marketing is the activity, set of institutions, and processes for creating,
What Is Marketed?
Marketers market 10 main types of entities: goods, services, events, experiences, persons,
places, properties, organizations, information, and ideas. Let’s take a quick look at these
categories.
A) Goods
D) Experiences
By orchestrating several services and goods, a firm can create, stage, and market
experiences. Walt Disney World’s Magic Kingdom allows customers to visit a fairy
kingdom, a pirate ship, or a haunted house.
G) Properties
Properties are intangible rights of ownership to either real property (real estate) or
financial property (stocks and bonds).
H) Organizations
Organizations work to build a strong, favorable, and unique image in the minds of
their target publics.
Who Markets?
Marketers and Prospects
A marketer is someone who seeks a response—attention, a purchase, a vote, a donation—
from another party, called the prospect.
A) Marketers are skilled at stimulating demand for their products
Markets
Traditionally, a “market” was a physical place where buyers and sellers gathered to buy and
sell goods. Economists describe a market as a collection of buyers and sellers who transact
over a particular product or product class.
The five basic markets are:
A) Resource Markets
A) Sellers and buyers are connected by flows:
1) Seller sends goods, services, and communications to the market.
Marketers use the term market to cover various grouping as customers. They view sellers as
constituting the industry and buyers as constituting the market. They talk about need markets,
product markets, demographic markets, and geographic markets; or they extend the concept to
cover voter markets, labor markets, and donor markets.
C) Global Markets
Companies in the global marketplace must decide which countries to enter; how to
enter each; how to adapt product and service features to each country; how to price
products in different countries; and how to design communications for different
cultures.
Marketplaces, Marketspaces, Metamarkets
A) The marketplace is physical,
CORE MARKETING CONCEPTS
Needs, Wants, and Demands
Needs (basic human requirements, needs become wants when they are directed to specific
objects that may satisfy the need.)
Marketers do not create needs, needs pre-exist marketers. Marketers influence wants.
We distinguish five types of needs:
A) Stated needs
1) Demographic information
2) Psychographic information
C) Market offering – develops an offering to satisfy the wants of the target market
D) Offering and Brands
I) Value proposition: a set of benefits they offer to customers to satisfy their needs
F) Marketing Channels: To reach a target market, the marketer uses three kinds of
marketing channels.
I) Communication channels
II) Distribution channels
III) Service channels
G) Supply Chain
I) The supply chain is a longer channel stretching from raw materials to components
to finished products carried to final buyers.
e. Technological
f. Political-Legal
g. Social-Cultural
THE NEW MARKETING REALITIES
Major societal forces affecting marketing:
A) Network information technology
B) Globalization
C) Degregulation
D) Privatization
New Consumer Capabilities: These major societal forces create complex challenges for
marketers, but they have also generated a new set of capabilities to help companies cope and
respond.
A) Marketers can use the Internet as a powerful information and sales channel
B) Marketers can collect fuller and richer information about markets, customers, and
prospects
I) Companies can facilitate and speed internal communication among their employees
by using the Internet as a private Intranet
J) Companies can improve their cost efficiency by skillful use of the Internet
MARKETING IN THE ORGANIZATION
Although an effective CMO is crucial, increasingly marketing is not done only by the
marketing department. Because marketing must affect every aspect of the customer
COMPANY ORIENTATION TOWARD THE MARKETPLACE
Review of the evolution of earlier marketing ideas:
The Production Concept
The Selling Concept
A) The selling concept holds that consumers and businesses, will ordinarily not buy
enough of the organization’s products, therefore, the organization must undertake
aggressive selling and promotion effort.
The Marketing Concept
A) The marketing concept holds that the key to achieving organizational goals consists of
the company being more effective than competitors in creating, delivering, and
communicating superior customer value to your chosen target markets.
The Holistic Marketing Concept
The holistic marketing concept is based on the development, design, and implementation of
Holistic marketing:
A) Relationship marketing
B) Integrated marketing
Relationship Marketing: a key goal of marketing is to develop deep, enduring relationships
with people and organizations that directly or indirectly affect the success of the firm’s
marketing activities.
Four key constituents of relationship marketing are:
a. Customers
The ultimate outcome of relationship marketing is a unique company asset called a marketing
network, consisting of the company and its supporting stakeholders.
The operating principle is simple: build an effective network of relationships with key
stakeholders and profits will follow.
Integrated Marketing
Integrated marketing occurs when the marketer devises marketing activities and assembles
marketing programs to create, communicate, and deliver value for consumers such that “the
whole is greater than the sum of its parts.”
Two key themes are:
1) Many different marketing activities can create, communicate, and deliver
value
Internal Marketing
Internal marketing, an element of holistic marketing, is the task of hiring, training, and
motivating, able employees who want to serve customers well.
Performance Marketing
Performance marketing requires understanding the financial and non-financial returns to
business and society from marketing activities and programs.
THE NEW 4 P’S
Old 4 P’s New 4 P’s
Product People
Place Processes
MARKETING MANAGEMENT TASKS
With the holistic marketing philosophy as a backdrop, we can identify a specific set of tasks
that make up successful marketing management and marketing leadership.
MARKETING MANAGEMENT TASKS: ZEUS INC.
A) Developing Marketing Strategies and Plans (Chapter 2).
B) Capturing Marketing Insights (Chapters 3 and 4).
Marketing memo: Marketer’s frequently asked questions
