Transcript ch01

PART
1
UNDERSTANDING
MARKETING MANAGEMENT
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An Asian Perspective
4th Edition
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Chapter
1
Defining
Marketing for the 21st
Century
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An Asian Perspective
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Icons used
 Click on icon to go directly to
the website
 Click on icon to go directly to
the attached video
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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?Asian
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Marketing Management - An
4th Edition
Perspective
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Marketing is everywhere
Asian brands prominently advertised
Asian
in New York’s 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?
“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 –
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 –
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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Scope of Marketing
–
Exchange and Transactions
© Kotler, Keller, Ang, Leong & Tan
Lexus ads & campaign slogan
“The Passionate Pursuit of Perfection”
express its marketing philosophy:
Asian enough for its customers
Only the best is good
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Marketing Management - An
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Perspective
Scope of
Marketing
What is
Marketed?
experiences
persons
goods
events
services
10
entities
places
ideas
information
properties
organizations
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Scope of Marketing
What is Marketed?
The Singapore Zoological Gardens offers varied
experiences - host wedding reception - jungle
breakfast
Asianwith an orang utan
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Scope of Marketing
What is Marketed?
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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Scope of Marketing – Who Markets?
MARKETERS AND PROSPECTS
8 demand states of consumers
1 Negative demand
Dislike product & pay to avoid it
2 Non-existent
Not aware/interested in product
demand
3 Latent demand
Need not satisfied by existing product
4 Declining demand
Buy less often or none
5 Irregular demand
Purchase vary on periodic basis
6 Full demand
7 Overfull demand
8 Unwholesome
demand
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Adequately buy all products in market
More want product than can be
satisfied
Attracted to products- undesirable
Asian
social consequences
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Marketing Management - An
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Scope of Marketing –
Who Markets?
MARKETS
 Market
– Physical place – buyers, sellers buy & sell goods
– To economists: collection of buyers & sellers who
transact over a product/product class
A traditional dry goods & fruit market in Hanoi
Asian
targeting
local residents
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Five basic markets & their connecting flows
Figure 1.1
Asian
Structure of Flows in a Modern
Exchange Economy 1-19
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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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Scope of Marketing – Who Markets?
KEY CUSTOMER MARKETS
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 didn’t 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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Scope of Marketing – Who Markets?
MARKETPLACES, MARKETSPACES, & METAMARKETS
marketplace
a physical place
marketspace
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. CEO own marketing function
2. Marketing start & stay small & flat
3. Get face-to-face with customers
4. Use market research cautiously
5. 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
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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
– An example
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i-mode (Japan)
 Internet over cell phones
 Emails, access websites
when commuting
when waiting for friends
 Indispensable service
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Scope of Marketing –
How Business & Marketing are Changing
Customer Empowerment
– An example
NAM HEONG Traditional Malaysian coffee shop
 Advertises website on banner www.oldtownwhitecafe.com
 Web visitors - can find out more about Nam Heong’s
white coffee brand Old Town Asian
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© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An
4th Edition
Perspective
Scope of Marketing –
How Business & Marketing are Changing
Cosmoneuticals:
 Dermatology drugs
Ad by Shiseido:
Japanese cosmetics
firm
 Cleanser, lotion,
medication
 Sold in Japan drugstores
 Industry
convergence
– An example
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Company Orientations Toward
the Marketplace
What philosophy should guide a
company’s 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
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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 don’t 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
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Company Orientations Toward the Marketplace The Holistic Marketing Concept
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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Company Orientations Toward the Marketplace The Holistic Marketing Concept
RELATIONSHIP MARKETING
Company able to 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 marketer’s 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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Asian
Figure 1.5 Marketing-Mix
Strategy
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Company Orientations Toward the Marketplace The Holistic Marketing Concept
INTEGRATED MARKETING
Four Cs
Four Ps
 Product
 Price
 Place
 Customer
solution
 Customer cost
 Convenience
 Communication
 Promotion
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Company Orientations Toward the Marketplace The Holistic Marketing Concept
INTEGRATED MARKETING
2
key themes - integrated marketing:
Different marketing activities used
All marketing coordinated - maximize joint
effects
Design & implementation
of any marketing activity
done with all others in mind
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Company Orientations Toward the Marketplace The Holistic Marketing Concept
INTERNAL MARKETING
Ensure all in firm embraces
marketing principles
Hire, train & motivate able
employees who want to serve
customers well
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Table 1.1 Assessing which Company
Departments are Customer-Minded
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Table 1.1 Assessing which Company
Departments are Customer-Minded
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Table 1.1 Assessing which Company
Departments are Customer-Minded
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Table 1.1 Assessing which Company
Departments are Customer-Minded
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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 - role they play in social
welfare
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Company Orientations Toward the Marketplace The Holistic Marketing Concept
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

Eg: McDonald’s – what did they do?
 Add healthier items (salads)
 Environmental initiative (paper wraps replace foam box)
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© Kotler, Keller, Ang, Leong & Tan
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Company Orientations Toward the Marketplace
- The Holistic Marketing Concept
SOCIAL RESPONSIBILITY MARKETING
To reduce pollution:
 Bharat Petroleum India
– get drivers to use
Pollution Under Control grade petrol - HOW?
Asianpollution with smoking
 Compare hazards of vehicle
1-53
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An
4th Edition
Perspective
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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Fundamental Marketing Concepts, Trends &
Tasks – Core Concepts
NEEDS, WANTS, AND DEMANDS
Stated needs
5
Types
Of
Needs
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Real needs
Unstated needs
Delight needs
Secret needs
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Fundamental Marketing Concepts, Trends
& Tasks – Core Concepts
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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Fundamental Marketing Concepts, Trends & Tasks – Core Concepts
TARGET MARKETS, POSITIONING & SEGMENTATION
Positioning:
“The 1st SUV with Anti-Rollover Technology”
A Volvo ad
focuses on the
company’s
central benefit:
Safety
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Fundamental Marketing Concepts, Trends &
Tasks – Core Concepts
OFFERINGS AND BRANDS
Intangible value proposition made physical
by an
offering, like products, services
A brand - offering from known source
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Fundamental Marketing Concepts, Trends
& Tasks – Core Concepts
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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Fundamental Marketing Concepts, Trends
& Tasks – Core Concepts
MARKETING CHANNELS
To reach target market, 3 kinds of
marketing channels:
Communication channels
Distribution channels
Service channels
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Fundamental Marketing Concepts, Trends
& Tasks – Core Concepts
SUPPLY CHAIN
Supply chain - channel - raw
materials to components to final
products
Eg:
supply chain for women’s purses - from
hides – tanning – cutting - manufacturing
& channels to customers
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Fundamental Marketing Concepts, Trends
& Tasks – Core Concepts
COMPETITION
Competition
All actual & potential rival
offerings & substitutes that
buyer might consider
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Fundamental Marketing Concepts,
Trends & Tasks – Core Concepts
MARKETING ENVIRONMENT
Task environment - those who produce,
distribute & promote offering
The broad environment has
1.
2.
3.
4.
5.
6.
6 components:
Demographic
Economic
Physical
Technological
Political-legal
Social-cultural
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Fundamental Marketing Concepts, Trends
& Tasks – Core Concepts
MARKETING PLANNING
The marketing planning process





Analyze marketing opportunities
Select target markets
Design marketing strategies
Develop marketing programs &
Manage marketing effort
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An Asian Perspective
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Figure 1.6 Factors Influencing Company
Marketing Strategy
Asian
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An
4th Edition
Perspective
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Fundamental Marketing Concepts, Trends
& Tasks
14 shifts to marketing management in 21st century
1
marketing does marketing to
everyone does marketing
2
organize by product units to
organize by customer segments
3
make everything to
buy more goods from outside
4
use many suppliers to
fewer suppliers in “partnership”
5
rely on old market positions to
uncover new ones
6
emphasize tangible assets to
emphasize intangible assets
7
build brands through
advertising to
build brands through performance
& integrated communications
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Fundamental Marketing Concepts, Trends
& Tasks
14 shifts to marketing management in 21st century
8
Attract customers to
stores & salespeople to
make products available online
9
Sell to everyone to
be best at serving defined target
Focus on profitable
10 transactions to
focus on customer lifetime value
11 focus to gain market share to
focus to build customer share
12 Being local to
being “glocal”- global & local
13 Focus on financial scorecard to focus on marketing scorecard
14 Focus on shareholders to
© Kotler, Keller, Ang, Leong & Tan
focusing on stakeholders
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Fundamental Marketing Concepts, Trends
& Tasks –
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
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An Asian Perspective
4th Edition
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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.
© Kotler, Keller, Ang, Leong & Tan
Marketing Management - An Asian Perspective
4th Edition
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Video Links
Secondary Videos to watch:
 Song Airlines (8:50 min)
 Marriott (9:35 min)
 Sony Metreon (8:30 min)
 Motorola (14:28 min)
Click here to watch the video clips from
the US Website.
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