CH 01

PART
UNDERSTANDING
MARKETING MANAGEMENT
Kotler, Keller, Ang, Leong & Tan,, 4th Edition
Marketing Management An Asian Perspective
1-1
Chapter
Defining
Marketing for the 21st Century
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Kotler, Keller, Ang, Leong & Tan,, 4th Edition Marketing Management An Asian Perspective
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In this chapter, we address the following questions:
Why is marketing important? What is the scope of marketing? What are some fundamental marketing concepts? How has marketing management changed? What are the tasks necessary for successful marketing management?
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Asian brands prominently advertised in New Yorks Time Square

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The Importance of Marketing

Financial success depends on marketing No demand - no business Marketing decisions tough
What to design
What prices to offer Where to sell How much to spend on advertising
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Scope of Marketing
What is Marketing?
Marketing
An organizational function & processes to create, communicate & deliver value to customers & manage customer relationships to benefit organization & stakeholders
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Scope of Marketing What is Marketing?

Aim of marketing know & understand customer so well product fits him & sells itself
Eg: When Sony designed PlayStation
Swamped with orders WHY? Right product marketing
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Scope of Marketing Exchange and Transactions Exchange

Process to obtain desired product from someone by offering something in return
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Scope of Marketing Exchange and Transactions

For exchange potential to exist, 5 conditions: 1. At least 2 parties 2. Each has thing of value to the other 3. Capable of communication & delivery 4. Free to accept/reject offer 5. Believes it desirable to deal with the other
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WE COULD HAVE LEFT WELL ENOUGH ALONE.

BUT THAT WOULD HARDLY BE VERY CHARACTERISTIC.
NOW WOULD IT?
Lexus ads & campaign slogan The Passionate Pursuit of Perfection express its marketing philosophy: Only the best is Asian enough for its customers good
Marketing Management An Perspective
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Scope of Marketing
What is Marketed?
experiences
goods
persons
services
events
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entities
ideas
places
information
properties
organizations
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The Singapore Zoological Gardens offers varied experiences - host wedding reception - jungle breakfast with an orang utan Asian
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Billboard ads
from
Tourism Thailand
Promote Thailand where one can find happiness through shopping, outdoor activities & sightseeing
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Scope of Marketing Who Markets?

MARKETERS AND PROSPECTS
A marketer seeks response from
prospect
If 2 parties seek to sell something to each other, both are marketers
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MARKETERS AND PROSPECTS 8 demand states of consumers
1 Negative demand 2 Non-existent
demand Dislike product & pay to avoid it
Not aware/interested in product

Need not satisfied by existing product Buy less often or none Purchase vary on periodic basis Adequately buy all products in market More want product than can be satisfied Attracted to products- undesirable social consequences 1-17 Asian
3 Latent demand 4 Declining demand 5 Irregular demand 6 Full demand 7 Overfull demand 8 Unwholesome demand
A traditional dry goods & fruit market in Hanoi targeting local residents
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Figure 1.1
Structure of Flows in a Asian Modern Exchange Economy 1-19
Kotler, Keller, Ang, Leong & Tan,, 4th Edition Marketing Management An Perspective
Scope of Marketing Who Markets? KEY CUSTOMER MARKETS

Consumer Markets Sell mass consumer goods & services Business Markets Sell business goods & services Global Markets Sell goods & services in global market Non-profit & Governmental Markets Sell goods to nonprofit organizations
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Global marketing
Wall climbing
on Coke ad
attract attention & customers at 1st China International Beverage Festival in Beijing
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Figure 1.2 A Simple Marketing System

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New Consumer Capabilities The digital revolution - new capabilities in hands of consumers & businesses. What they have today that they didnt have yesterday:
1) Substantial increase in buying power
2) Greater variety of goods & services

3) Great amount of information
4) Easier to interact, place & receive orders

5) Able to compare products & services
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MARKETPLACES, MARKETSPACES, & METAMARKETS
marketplace
marketspace
a physical place
a digital place
metamarket
a cluster of related products in consumers minds, from diverse industries

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The 10 Rules of Radical Marketing 1. 2. 3. 4. 5. CEO own marketing function Marketing start & stay small & flat Get face-to-face with customers Use market research cautiously Hire passionate missionaries, not marketers 6. Love & respect customers as individuals 7. Create community of consumers 8. Rethink marketing mix 9. Compete with competitors - fresh ideas 10.Be true to the brand Asian
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Scope of Marketing
How Business & Marketing are Changing
Changing technology Globalization Deregulation Privatization Customer empowerment Customization
Heightened competition
Industry convergence Disintermediation
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Scope of Marketing
How Business & Marketing are Changing
Changing technology
i-mode (Japan)
Internet from cell phones emails, access websites when commuting when waiting for friends indispensable service
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Customer empowerment NAM HEONG Traditional Malaysian coffee shop On banner www.oldtownwhitecafe.com
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Cosmoneuticals:
Dermatology drugs Ad by Shiseido: Japanese cosmetics firm Cleanser, lotion, medication Sold in Japan drugstores
Industry convergence
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Company Orientations Toward the Marketplace

What philosophy should guide a companys marketing efforts? What relative weights should be given to the interests of organization, customers & society?
Very often these interests conflict

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Company Orientations Toward the Marketplace - The Production Concept

Consumers prefer products - widely available & inexpensive Production oriented businesses
Production efficiency, low costs & mass distribution
Huge cheap labor Market expansion

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Company Orientations Toward the Marketplace - The Product Concept
Consumers favor products with most quality, performance or innovative features

Focus on making & improving products Might commit bettermousetrap fallacy New product may not succeed unless priced, distributed, advertised & sold properly
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Company Orientations Toward the Marketplace - The Selling Concept Consumers do not buy enough products, if left alone Purpose of marketing - sell more - to more people - more often - for more money to make more profit Goods buyers dont normally buy Sell what is made not what market wants Hard selling - high risks
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Company Orientations Toward the Marketplace - The Marketing Concept

Customer-centered Sense-&-respond philosophy Right products for customers
Not right customers for products

Better than competitors - create, deliver & communicate superior value to target markets
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Company Orientations Toward the Marketplace - The Marketing Concept
Selling - needs of seller Marketing - needs of buyer Selling - convert product to cash Marketing - satisfy buyer with product
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Company Orientations Toward the Marketplace - The Holistic Marketing Concept
Holistic marketing
Develop, design & implement marketing programs, processes & activities that recognize breadth & interdependencies
Holistic marketing recognizes that
everything matters
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Figure 1.3 Holistic Marketing Dimensions Asian

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RELATIONSHIP MARKETING
Relationship marketing
satisfying long-term relationships with key parties
to earn & retain business
Marketing network
company & supporting stakeholders
mutually profitable business relationships
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RELATIONSHIP MARKETING
Company deal with customers one at a time due to computers & Internet
Eg: BMW allows buyers to design own model from many variations 80 % of cars bought in Europe - built to order
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Company Orientations Toward the Marketplace - The Holistic Marketing Concept INTEGRATED MARKETING
The marketers task
devise marketing activities &

assemble fully integrated programs
to create, communicate, & deliver

value for consumers
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Figure 1.4 The 4 P Components of the Marketing Mix
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Figure 1.5 Marketing-Mix Strategy Asian

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INTEGRATED MARKETING
Four Cs Four Ps
Product Price Place Promotion
Customer solution Customer cost Convenience Communication
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Company Orientations Toward the Marketplace - The Holistic Marketing Concept INTEGRATED MARKETING
2 key themes - integrated

marketing:
Different marketing activities employed All marketing coordinated to maximize joint effects Design & implementation of any marketing activity Asian done with all others in mind
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INTERNAL MARKETING
Ensure all in firm embraces marketing principles Hire, train & motivate able employees who want to serve customers well
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Company Orientations Toward the Marketplace - The Holistic Marketing Concept SOCIAL RESPONSIBILITY MARKETING
Social responsibility marketing

Understand broader concerns & ethical,
environmental, legal & social context of
marketing activities
Marketers to consider role they play in
social welfare
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SOCIAL RESPONSIBILITY MARKETING
Are firms that satisfy consumer wants acting in best long-run interests of consumers & society?
Fast-food - tasty but unhealthy Convenient packaging - leads to waste Satisfy consumers but hurt health, environment
McDonalds
Add healthier items (salads) Environmental initiative (paper wraps replace foam box)
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To reduce pollution:
Bharat Petroleum India get drivers use Pollution

Under Control grade petrol - HOW? Compare hazards of vehicle pollution with smoking 1-49 Asian
Fundamental Marketing Concepts, Trends & Tasks Core Concepts

NEEDS, WANTS, AND DEMANDS
Needs are basic human requirements

Needs become wants when directed to objects that satisfy the need
Demands are wants for products backed

by ability to pay
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NEEDS, WANTS, AND DEMANDS
Stated needs
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Types Of Needs
Real needs Unstated needs Delight needs Secret needs
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TARGET MARKETS, POSITIONING, AND SEGMENTATION
Divide market into segments

Greatest opportunity - target markets
Target market
Market offering positioned in minds of target buyers as beneficial

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Positioning: The 1st SUV with Anti-Rollover Technology

A Volvo ad focuses on the companys central benefit:
Safety
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OFFERINGS AND BRANDS
Intangible value proposition made physical

by an
offering, like products, services
A brand - offering from known source
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VALUE AND SATISFACTION
Value - perceived tangible & intangible benefits & costs to customers

Value = quality + service + price (QSP) customer value triad Satisfaction - comparative judgments from perceived performance compared to expectations
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MARKETING CHANNELS
To reach target market, 3 kinds of marketing channels: Communication channels Distribution channels Service channels
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SUPPLY CHAIN
Supply chain - channel - raw materials to components to final products

Eg: supply chain for womens purses - from hides tanning cutting - manufacturing & channels to customers
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COMPETITION
Competition
All actual & potential rival

offerings & substitutes that buyer might consider
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MARKETING ENVIRONMENT
Task environment - those who produce, distribute & promote offering The broad environment has demographic economic physical technological political-legal & social-cultural
6 components:
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MARKETING PLANNING
The marketing planning process
Analyze marketing opportunities Select target markets Design marketing strategies Develop marketing programs & Manage marketing effort
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Figure 1.6 Factors Influencing Company Marketing Strategy

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Fundamental Marketing Concepts, Trends & Tasks

14 shifts to marketing management in 21st century 1 2 3 4 5 6 7
marketing does marketing to organize by product units to make everything to use many suppliers to rely on old market positions to emphasize tangible assets to build brands through advertising to everyone does marketing organize by customer segments buy more goods from outside fewer suppliers in partnership uncover new ones emphasize intangible assets build brands through performance & integrated communications
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14 shifts to marketing management in 21st century
8
9
Attract customers to stores & salespeople to Sell to everyone to Focus on profitable
make products available online

be best at serving defined target focus on customer lifetime value focus to build customer share being glocal- global & local
10 transactions to
11 focus to gain market share to 12 Being local to
13 Focus on financial scorecard to focus on marketing scorecard 14 Focus on shareholders to

focusing on stakeholders
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Marketing Management Tasks Develop marketing strategies & plans Capture marketing insights & performance Connect with customers Build strong brands Shape the market offering Deliver value Communicate value Create successful long-term growth
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Final discussion
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 does much more than that and creates needs and wants that did not exist before. According to these critics, marketers encourage consumers to spend more money than they should on goods and services they really do not need.
Take a position: Marketing shapes consumer needs and wants versus Marketing merely reflects the needs and wants of consumers.
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PART

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Marketing Management An Asian Perspective

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Marketing Management An Asian Perspective

Alternative icons for weblink

In this chapter, we address the following questions:

Asian brands prominently advertised in New Yorks Time Square

The Importance of Marketing

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Marketing Management An Asian Perspective

Scope of Marketing What is Marketing?

Scope of Marketing Exchange and Transactions Exchange

Scope of Marketing Exchange and Transactions

WE COULD HAVE LEFT WELL ENOUGH ALONE.

NOW WOULD IT?

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Scope of Marketing Who Markets?

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Marketing Management An Asian Perspective

Scope of Marketing Who Markets?

Not aware/interested in product

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Scope of Marketing Who Markets? KEY CUSTOMER MARKETS

Figure 1.2 A Simple Marketing System

1) Substantial increase in buying power

2) Greater variety of goods & services

4) Easier to interact, place & receive orders

Scope of Marketing Who Markets?

a cluster of related products in consumers minds, from diverse industries

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Marketing Management An Asian Perspective

Company Orientations Toward the Marketplace

Very often these interests conflict

Company Orientations Toward the Marketplace - The Production Concept

Huge cheap labor Market expansion

Company Orientations Toward the Marketplace - The Product Concept

Consumers favor products with most quality, performance or innovative features

Company Orientations Toward the Marketplace - The Marketing Concept

Not right customers for products

Company Orientations Toward the Marketplace - The Marketing Concept

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Marketing Management An Asian Perspective

Company Orientations Toward the Marketplace - The Holistic Marketing Concept

Holistic marketing recognizes that

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Figure 1.3 Holistic Marketing Dimensions Asian

Company Orientations Toward the Marketplace - The Holistic Marketing Concept

to earn & retain business

Company Orientations Toward the Marketplace - The Holistic Marketing Concept

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Marketing Management An Asian Perspective

The marketers task

devise marketing activities &

to create, communicate, & deliver

Figure 1.4 The 4 P Components of the Marketing Mix

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Marketing Management An Asian Perspective

Kotler, Keller, Ang, Leong & Tan,, 4th Edition

Figure 1.5 Marketing-Mix Strategy Asian