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CHAPTER # 1: Defining Marketing for the New Realities

Definition of Marketing : Marketing is the activity, set of institutions, and


processes for creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large
1. Why is marketing important?
Marketing plays a critical role in the financial success and overall value of a
business:
Financial Success Often Depends on Marketing Ability: Effective
marketing drives sales by identifying customer needs and promoting products
that fulfill those needs. This leads to revenue generation and profitability,
making marketing a key driver of a company's financial success.
Successful Marketing Builds Demand, Creating Jobs: By generating
demand for products and services, marketing stimulates economic activity.
This increased demand often requires companies to expand operations,
leading to job creation. Thus, marketing not only benefits the company but
also contributes to broader economic growth.
Marketing Builds Strong Brands and a Loyal Customer Base: Strong
brands and customer loyalty are invaluable assets. Marketing helps create a
positive brand image and fosters customer loyalty through consistent
messaging and engagement. These intangible assets enhance a firm's
market value, making it more competitive and resilient in the long term.
Overall, marketing is essential for driving financial success, supporting
economic growth, and building the intangible assets that contribute to a
firm's lasting value.
2. What is the scope of marketing?
Marketing Management: This involves planning, organizing, implementing,
and controlling marketing activities to meet organizational goals. It
encompasses tasks like market research, product development, pricing,
promotion, distribution, and customer relationship management.
What is Marketed: Almost everything can be marketed, including:
Goods: Tangible products like cars, electronics, and clothing.
Services: Intangible offerings like banking, insurance, and education.
Experiences: Events or activities that provide memorable customer
experiences, like concerts or travel.
People: Individuals, such as celebrities or political candidates, who are
marketed to build a public image.
Places: Cities, countries, or tourist destinations marketed to attract visitors
or residents.
Ideas: Concepts, such as public health campaigns or social movements,
marketed to influence attitudes and behaviors.
Who Markets:
Businesses: Companies market their products or services to generate
revenue and profit.
Nonprofits: Organizations market causes or services to gain support,
donations, or volunteers.
Individuals: People market themselves for jobs, personal branding, or to
build a following.
Governments: Market policies, programs, or national interests both
domestically and internationally.
Key Customer Markets:
Consumer Markets: Individuals and households that buy goods and
services for personal use.
Business Markets: Organizations that buy products or services for use in
production, operations, or resale.
Global Markets: International customers who buy goods and services across
borders.
Government Markets: Government agencies that purchase products or
services for public use.
Nonprofit and NGO Markets: Organizations that buy goods and services to
support their missions.
3. What are some core marketing concepts?
Core marketing concepts revolve around understanding and addressing
consumer needs and creating value in a competitive environment
Needs, Wants, and Demands:
Needs are essential human requirements, such as food and shelter.
Example: Everyone needs water to survive.
Wants are desires shaped by culture, personality, or lifestyle.
Example: A person might want a luxury car for status.
Demands occur when wants are backed by purchasing power.
Example: Someone wants an iPhone and has the money to buy it, so it
becomes a demand.
Target Markets, Positioning, and Segmentation:
Segmentation involves dividing a market into distinct groups based on
shared characteristics.
Example: A company might segment the market by age, targeting teenagers
versus older adults.
Target Markets are the specific groups a company aims to serve.
Example: A toy company might target young children as its primary market.
Positioning is how a brand is perceived relative to competitors.
Example: Tesla positions itself as a high-tech, sustainable car brand,
differentiating itself from traditional automakers.
Value Proposition, Offerings, and Brands:
A Value Proposition is the unique benefit a product provides to customers.
Example: FedEx’s value proposition is reliable, fast delivery ("When it
absolutely, positively has to be there overnight").
Offerings include the combination of products, services, and experiences a
company provides.
Example: Apple offers smartphones, tablets, and a seamless ecosystem
experience across devices.
Brands are identities and promises associated with specific offerings.
Example: Nike's brand is associated with performance, innovation, and
inspiration ("Just Do It").
Marketing Channels:
Marketing Channels are the pathways through which a company delivers
its products or services to customers.
Example: A company can use physical stores, e-commerce websites, social
media, or third-party retailers like Amazon to reach customers.
Example: Coca-Cola uses a vast distribution network that includes
supermarkets, vending machines, and restaurants.
Impressions and Engagements:
Impressions refer to the number of times an advertisement or brand
message is displayed or seen by the audience.
Example: A billboard on a busy highway generates thousands of impressions
daily.
Engagements involve customer interactions with the brand, such as likes,
shares, comments, or purchases.
Example: A viral social media post with high engagement might include
numerous likes, shares, and comments, indicating strong audience
interaction.
Value and Satisfaction:
Value is the perceived benefit a customer receives relative to the cost of a
product.
Example: A budget airline offers value by providing low-cost flights with no-
frills services.
Satisfaction occurs when a product meets or exceeds customer
expectations.
Example: A customer might feel satisfied with their new smartphone if it
performs as expected or better.
Supply Chain:
The Supply Chain includes all processes involved in producing, distributing,
and delivering a product to customers.
Example: A clothing brand’s supply chain might involve sourcing raw
materials like cotton, manufacturing garments in factories, and distributing
them through retail stores.
Competition:
Competition refers to other companies offering similar products or services.
Example: Pepsi and Coca-Cola are direct competitors in the soft drink
industry, constantly vying for market share.
Marketing Environment:
The Marketing Environment includes external factors like economic
conditions, cultural trends, regulations, and technological changes that
influence marketing strategies.
Example: A recession might lead a luxury brand to adjust its marketing
strategies to appeal to more cost-conscious consumers.

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