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Copyright 2004 © Pearson Education Canada Inc
Changing Economy & Marketing Scenario
1-1
Prof. G.M. ChowdhuryIBA, DU
February 2013
04/08/23
Copyright 2004 © Pearson Education Canada Inc
• Marketing takes a day to learn. Unfortunately it takes
a lifetime to master.
Philip Kotler, Marketing Guru
• Business has only two functions – marketing and innovation.
Milan Kundera, writer of Czech origin
• CREATIVITY is thinking up new things. INNOVATION is
doing new things
Theodore Levitt, Marketing Guru
• The aim of marketing is to know and understand the
customer so well the product or service fits him and sells
itself.
Peter Drucker, Marketing Guru
1-2
04/08/23
Copyright 2004 © Pearson Education Canada Inc
Objectives
• In this session we will address the
following questions:▫ What is the new economy like?
▫ What are the tasks of marketing?
▫ What are the major concepts and tools of
marketing?
▫ What orientations do companies exhibit in the
marketplace?
▫ How are companies and marketers responding
to the new challenges?
1-3
04/08/23
Copyright 2004 © Pearson Education Canada Inc
Three Certainties have to be observed by successful companies
• Global forces will continue to affect everyone’s
business and personal life.
• Technology will continue to advance and amaze
us.
• There will be a continuing push toward
deregulation of the economic sector.
1-4
04/08/23
Copyright 2004 © Pearson Education Canada Inc
•Globalization
•Technological advances and
•Deregulation
But what is marketing and what does
it have to do with these issues?
1-5
Three developments that spell endless opportunities
04/08/23
Copyright 2004 © Pearson Education Canada Inc
Marketing Defined
Marketing deals with identifying and
meeting human and social needs. One of
the shortest definitions of marketing is
“meeting needs profitably.”
1-6
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Copyright 2004 © Pearson Education Canada Inc
• According to a social definition, “marketing is a societal
process by which individuals and groups obtain what they
need and want through creating, offering, and exchanging
products and services of value freely with others.”
• As a managerial definition, marketing has often been
described as “the art of selling products.”
• Peter Drucker, a leading management theorist, says that
“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.”
1-7
Marketing Defined…..Contd.04/08/23
Copyright 2004 © Pearson Education Canada Inc
The New Economy
• Substantial increase in buying power
• A greater variety of goods and services
• A greater amount of information about practically
anything
• A greater ease in interacting and placing and
receiving orders
• Companies can facilitate and speed up
communications among employees.
1-8
04/08/23
Copyright 2004 © Pearson Education Canada Inc
The New Economy …..Contd.
• Companies can have 2-way communication
with customers and prospects
• Companies can customize offerings and
services to individual customers.
• The Internet can be used as a communication
channel for purchasing, training, and
recruiting.
1-9
04/08/23
Copyright 2004 © Pearson Education Canada Inc
Marketing Task• Rules of radical marketing
▫ The CEO must own the marketing function.
▫ Make sure the marketing department starts small
and flat and stays small and flat.
▫ Get face to face with the people who matter most
– the customers.
▫ Love and respect your customers.
▫ Create a community of consumers.
▫ Rethink the marketing mix.
▫ Be true to the brand.
1-10
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Copyright 2004 © Pearson Education Canada Inc
Marketing Task …..Contd.
•Three stages of marketing practice:
▫Entrepreneurial Marketing
▫Formulated Marketing
▫Intrepreneurial Marketing
1-11
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Copyright 2004 © Pearson Education Canada Inc
The Scope of Marketing
• Places
• Properties
• Organizations
• Information
• Ideas
•Goods
•Services
•Experiences
•Events
•Persons
1-12
04/08/23
Copyright 2004 © Pearson Education Canada Inc
Core Marketing Concepts
▫Marketplace, Marketspace, and
Metamarket
▫Marketers and Prospects
▫Needs, Wants, and Demands
▫Product, Offering, and Brand
▫Value and Satisfaction
▫Competition
▫Marketing Environment
1-13
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Copyright 2004 © Pearson Education Canada Inc
Marketing mix
1-14
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Copyright 2004 © Pearson Education Canada Inc
Marketing Approaches
•production concept
•product concept
•selling concept
•marketing concept
•and societal marketing concept.
1-15
04/08/23
Copyright 2004 © Pearson Education Canada Inc
Marketing Approaches – Production Concept
One of the oldest, which holds that consumers
prefer products that are widely available and
inexpensive.
• Managers concentrate on achieving high production
efficiency, low costs, and mass distribution.
• Makes sense in developing countries, where consumers are
more interested in obtaining the product than in its
features.
• Also used when a company wants to expand the market.
1-16
04/08/23
Copyright 2004 © Pearson Education Canada Inc
Marketing Approaches- Product Concept
Holds that consumers favor those products that offer the most quality, performance, or innovative features.
• The focus is on making superior products and improving them over time, assuming that buyers can appraise quality and performance.
• Companies design their products with little or no customer input
• Can lead to marketing myopia.
1-17
04/08/23
Copyright 2004 © Pearson Education Canada Inc
Marketing Approaches- Selling ConceptHolds that consumers and businesses, if left
alone, will ordinarily not buy enough of the organization’s products. The organization must, therefore, undertake an aggressive selling and promotion effort.
• As consumers must be coaxed into buying, the company has a battery of selling and promotion tools to stimulate buying.
• Practiced most aggressively with unsought goods—goods that buyers normally do not think of buying, such as insurance and funeral plots.
• Also practiced when firms have overcapacity. Their aim is to sell what they make rather than make what the market wants.
1-18
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Copyright 2004 © Pearson Education Canada Inc
Marketing ConceptHolds that the key to achieving organizational goals consists of the company being more effective than its competitors in creating, delivering, and communicating customer value to its chosen target markets.
Rests on four pillars: ▫ target market▫ customer needs▫ integrated marketing and ▫ profitability.
1-19
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Copyright 2004 © Pearson Education Canada Inc
Marketing Approaches1-20
Selling•focuses on the needs of the seller
•preoccupied with the seller’s need to convert his product into cash•takes an inside-out perspective.
•takes an inside-out perspective - starts with the factory, focuses on existing products, and calls for heavy selling and promoting to produce profitable sales.
Marketing •focuses on the needs of the buyer.
•preoccupied with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it.
•takes an outside-in perspective - starts with a well-defined market, focuses on customer needs, coordinates activities that affect customers, and produces profits by satisfying customers.
04/08/23
Copyright 2004 © Pearson Education Canada Inc
Societal Marketing Concept
The societal marketing concept
calls upon marketers to build
social and ethical
considerations into their
marketing practices
1-21
04/08/23
Copyright 2004 © Pearson Education Canada Inc
How Business and Marketing are Changing
•Company responses and adjustments
▫Reengineering
▫Outsourcing
▫E-commerce
▫Benchmarking
▫Alliances
1-22
Partner-suppliers
Market-centered
Global and local
Decentralized
04/08/23
Copyright 2004 © Pearson Education Canada Inc
How Business and Marketing are Changing
▫ Customer relationship marketing
▫ Customer lifetime value
▫ Customer share
▫ Target marketing
▫ Customization
▫ Customer database
1-23
Integrated marketing
communications
Channels as partners
Every employee a
marketer
•Marketer Responses and Adjustments
04/08/23