What is Marketing?
Marketing is an organizational function and a
set of processes for creating, communicating,
and delivering value to customers and for
managing customer relationships in ways that
benefit the organization and its stakeholders.
What is Marketing Management?
Marketing management is the art and
science of choosing target markets and
getting, keeping, and growing customers
through creating, delivering, and
Communicating superior customer value.
Company Orientations
The five distinct marketing concepts are: Production, Product, Selling, Marketing,
and Holistic. These philosophies have evolved over time and began with the
production concept. The evolution of a new marketing concept does not mean that
all companies are changing. Many companies continue to operate under the
production concept.
Under a production philosophy the company will seek to mass produce products
and to distribute them on a wide scale. The belief is that consumers prefer products
that are widely available and inexpensive.
The product concept proposes that consumers prefer products that have higher
quality, performance, or are more innovative. Often, managers focus too much on
the product (a better mousetrap) but this does not always equal success.
The selling concept argues that members of a market will not purchase enough
product on their own so companies use the “hard-sell” to increase demand.
Typically used with unsought goods such as insurance or cemetery plots, or when
companies face overcapacity.
The marketing concept first emerged in the 1950’s and focuses more on the
customer with a “sense-and-respond” attitude. Companies that have embraced the
marketing concept have been shown to achieve superior performance than
competitors.
The holistic concept takes a philosophy that everything matters in marketing.
Figure 1.4 (next slide) outlines the Holistic Marketing Concept.
The Value delivery approach to Marketing
Successful marketers must focus on delivering value to
customers. This is accomplished by:
• Choosing the value – Here marketers do their homework to
segment the market, select the appropriate target, and develop
the offerings value proposition.
• Providing the value – Entails selecting specific product features,
prices, and distribution.
• Communicate the value – The third phase, communicating the
value, is accomplished through the use of the sales force, the
Internet, advertising, and other communication methods to
announce and promote the product.
What is Holistic Marketing?
• Holistic marketing sees itself as integrating the value exploration,
value creation, and value delivery activities with the purpose of
building long-term, mutually satisfying relationships and coprosperity among key stakeholders.
• Holistic marketers thus succeed by managing a superior value chain
that delivers a high level of product quality, service, and speed. They
achieve profitable growth by expanding customer share, building
customer loyalty, and capturing customer lifetime value.
• Holistic marketers address three key management questions:
1. Value exploration—How a company identifies new value opportunities
2. Value creation—How a company efficiently creates more promising
new value offerings
3. Value delivery—How a company uses its capabilities and
infrastructure to deliver the new value offerings more efficiently.
Good Mission Statements
1. Focus on a limited number of goals Focus on a limited number of goals
2. Stress major policies and values
3. Define major competitive spheres
4. Take a long-term view
5. Short, memorable, meaningful
Product Orientation vs. Market Orientation
• Companies often define themselves in terms of products: They
are in the “auto business” or the “clothing business.” Market
definitions of a business, however, describe the business as a
customer satisfying process.
• Transportation is a need: the horse and carriage, automobile,
railroad, airline, ship, and truck are products that meet that
need.
• Viewing businesses in terms of customer needs can suggest
additi l dditional growth opport itiunes. T blae 2.3 li tss companies th ta
have moved from a product to a market definition of their
business. It highlights the difference between a target market
definition and a strategic market definition.
Dimensions That Define a Business
A business can define itself in terms of three dimensions: customer
groups, customer needs, and technology.
Consider a small comp y an that defines its business as desig g nin
incandescent lighting systems for television studios. Its customer
group is television studios; the customer need is lighting; the
technology is incandescent lighting. The company might want to
expand to make lighting for homes, factories, and offices, or it could
supply other services television studios need, such as heating,
ventilation, or air conditioning.
