MBA 610 – Marketing Management Dr. Tarek Mady 1
Chapter 1
Defining Marketing for the 21st Century
The JMSB MBAMBA 610 – Marketing
ManagementWinter 2015
Dr. Tarek Mady
MBA 610 – Marketing Management Dr. Tarek Mady 2
Agree? Disagree? Unsure?
1. Marketing is simply another word for Advertising.2. Marketing tasks are fairly simple, particularly compared to complex and
serious roles/functions like finance and engineering.3. People who are successful in marketing are really creative and outgoing –
but are not that good with numbers and statistics.4. Marketing is all about making people buy products they don’t really
want.5. People in marketing roles tend to have little interaction with staff from
other departments (functions) within a firm.6. Many key marketing decisions within a firm are so important that the
CEO (or the senior executive team) often undertakes them (rather than the marketing department).
7. The main goal of marketing is to maximize the number of customers, all other goals are not as important.
MBA 610 – Marketing Management Dr. Tarek Mady 3
Why are we here?
MBA 610 – Marketing Management Dr. Tarek Mady 4
Ralph Waldo Emerson
“If a man makes a better
mousetrap,the world will beat a path to
his door.”
Is that true?
MBA 610 – Marketing Management Dr. Tarek Mady 5
The Mousetrap Fallacy“If a man makes a better mousetrap, the world will beat a path to his door”
Market Awareness If nobody knows you exist and have built a
mousetrap, no one will know that there is a path worth beating!
Actual Need If people do not have a mouse problem, they do
not need a mousetrap! Perceived Need
People who have mice, but are not aware of their existence, will not be interested in your mousetrap.
People who think mice are, "the cutest little things," are not good prospects either.
MBA 610 – Marketing Management Dr. Tarek Mady 6
The Mousetrap Fallacy“If a man makes a better mousetrap, the world will beat a path to his door”
Definition of “Better” Prospects will buy your product only if they agree
it is better.
MBA 610 – Marketing Management Dr. Tarek Mady 7
The Mousetrap Fallacy“If a man makes a better mousetrap, the world will beat a path to his door”
Definition of “Better” It’s “better” if I don’t have to buy cheese!
MBA 610 – Marketing Management Dr. Tarek Mady 8
The Mousetrap Fallacy“If a man makes a better mousetrap, the world will beat a path to his door”
Definition of “Better” It’s “better” if I don’t get hurt setting it up!
MBA 610 – Marketing Management Dr. Tarek Mady 9
The Mousetrap Fallacy“If a man makes a better mousetrap, the world will beat a path to his door”
Definition of “Better” It’s “better” if I catch the mouse, not
necessarily kill it!
MBA 610 – Marketing Management Dr. Tarek Mady 10
The Mousetrap Fallacy“If a man makes a better mousetrap, the world will beat a path to his door”
Definition of “Better” It’s “better” if my friends
envy me for my mousetrap . . . . For that prospect, a better
mousetrap comes in designer hues (Burberry or Louis Vuitton Mousetrap?)
MBA 610 – Marketing Management Dr. Tarek Mady 11
The Mousetrap Fallacy“If a man makes a better mousetrap, the world will beat a path to his door”
The Effort of Beating the Path Even if customers have real
needs, perceive their existence, and recognize your product as better, they still may not beat a path to your door. The effort customers will expend to
buy your product depends on their perception of its value.
MBA 610 – Marketing Management Dr. Tarek Mady 12
So what does this all mean?
MBA 610 – Marketing Management Dr. Tarek Mady 13
Marketing is…
. . . the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
MBA 610 – Marketing Management Dr. Tarek Mady 14
The simple Marketing (exchange) system
Supplier ConsumerMarketing – Exchange transaction
s
Goods /Services
Money / Patronage
MBA 610 – Marketing Management Dr. Tarek Mady 15
What is Marketing?(AMA Definition)
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.
Meeting needs profitably
MBA 610 – Marketing Management Dr. Tarek Mady 16
Marketing is embedded in all aspects of business . . .
MBA 610 – Marketing Management Dr. Tarek Mady 17
Exchange Economy
MBA 610 – Marketing Management Dr. Tarek Mady 18
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.
MBA 610 – Marketing Management Dr. Tarek Mady 19
Marketers often have to deal with several “Demand States”
• Consumers dislike the product and may even pay to avoid it.Negative demand
• Consumers may be unaware of or uninterested in the product.Nonexistent demand
• Consumers may share a strong need that cannot be satisfied by an existing product.Latent demand
• Consumers begin to buy the product less frequently or not at all.Declining demand
• Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.Irregular demand
• Consumers are adequately buying all products put into the marketplace.Full demand
• More consumers would like to buy the product than can be satisfied.Overfull demand
• Consumers may be attracted to products that have undesirable social consequences.Unwholesome demand
MBA 610 – Marketing Management Dr. Tarek Mady 20
Some terms you will hear over and over during the semester . . .
MBA 610 – Marketing Management Dr. Tarek Mady 21
Needs, wants and demands
Needs: State of felt deprivation including physical, social, and
individual needs.
Wants: Form that a human need takes, as shaped by culture and
individual personality.
Wants + Buying Power = Demand
MBA 610 – Marketing Management Dr. Tarek Mady 22
Marketing’s first task: discovering consumer needsOur Job . . .
MBA 610 – Marketing Management Dr. Tarek Mady 23
Marketing’s second task: satisfying consumer needs
MBA 610 – Marketing Management Dr. Tarek Mady 24
In theory, it’s easy
The problem is there are so many other factors, not to mention competitors trying
to “out-market” you…..
MBA 610 – Marketing Management Dr. Tarek Mady 25
The uncontrollable, environmental factors
Social Factors Economic Factors Technological Factors Competitive Factors Regulatory Factors
MBA 610 – Marketing Management Dr. Tarek Mady 26
Major Forces
Network information technology Globalization Deregulation Privatization Heightened competition Industry convergence Retail transformation Disintermediation Consumer buying power Consumer information Consumer participation Consumer resistance
MBA 610 – Marketing Management Dr. Tarek Mady 27
What do customers really need (want)?
MBA 610 – Marketing Management Dr. Tarek Mady 28
Value
the unique combination of benefits received by target buyers that includes : Quality Price Convenience On-time delivery After-sale service
MBA 610 – Marketing Management Dr. Tarek Mady 29
Value
Value is a trade-off between all the benefits an offering provides and all the costs incurred in obtaining and using the offering
Customer-perceived value, not supplier- perceived value Value may be time or situation dependent
Value = Perceived Benefits Perceived Costs
MBA 610 – Marketing Management Dr. Tarek Mady 30
So should giving value be a one time thing?
MBA 610 – Marketing Management Dr. Tarek Mady 31
What Is a Market?
The set of actual and potential buyers of a product or offering.
These people share a need or want that can be satisfied through exchange relationships.
MBA 610 – Marketing Management Dr. Tarek Mady 32
Does that mean everyone ?
MBA 610 – Marketing Management Dr. Tarek Mady 33
Target Markets, Positioning & Segmentation
Marketers start by dividing the market into segments. By examining demographic,
psychographic, and behavioural differences among buyers, marketers identify and profile distinct groups of buyers who might prefer or require varying product and service mixes.
MBA 610 – Marketing Management Dr. Tarek Mady 34
The Target Market
Because the organization obviously can’t satisfy all consumer needs, it must concentrate its efforts on certain needs of a specific group of potential consumers.
This is the target market -- one or more specific groups of potential consumers toward which an organization directs its marketing program.
MBA 610 – Marketing Management Dr. Tarek Mady 35
Positioning
… is the act of designing an organization’s offering and image so that it occupies a distinct and valued place in the target customer’s mind relative to competitive offerings.
Often associated with branding . . .
MBA 610 – Marketing Management Dr. Tarek Mady 36
Marketing itself is changing . . .
MBA 610 – Marketing Management Dr. Tarek Mady 37
New Company Capabilities
Marketers can use the Internet as a powerful information and sales channel.
Marketers can collect fuller and richer information about markets, customers, prospects, and competitors.
Marketers can tap into social media to amplify their brand message.
Marketers can facilitate and speed external communication among customers.
MBA 610 – Marketing Management Dr. Tarek Mady 38
New Company Capabilities
Marketers can send ads, coupons, samples, and information to customers who have requested them or given the company permission to send them.
Marketers can reach consumers on the move with mobile marketing.
Companies can make and sell individually differentiated goods.
MBA 610 – Marketing Management Dr. Tarek Mady 39
But not all companies adopt marketing thoughts . . .
MBA 610 – Marketing Management Dr. Tarek Mady 40
Company Orientations
Production
Product
Selling
Marketing
MBA 610 – Marketing Management Dr. Tarek Mady 41
An emerging concept . . . .
MBA 610 – Marketing Management Dr. Tarek Mady 42
Holistic Marketing Dimensions
MBA 610 – Marketing Management Dr. Tarek Mady 43
A few final words about the “4 Ps”
MBA 610 – Marketing Management Dr. Tarek Mady 44
The Four P Components of the Marketing Mix
MBA 610 – Marketing Management Dr. Tarek Mady 45
Marketing Management tasks typically go well beyond the “4Ps”
Develop market strategies and plans Capture marketing insights Connect with customers Build strong brands Shape market offerings Deliver value Communicate value Create long-term growth
MBA 610 – Marketing Management Dr. Tarek Mady 46
Alternative ways to view what we offer and what we need to focus on . . .
Typical Marketing
Mix (Four Ps)
ProductPlace
PromotionPrice
Customer Oriented
Marketing Mix (Four Cs)
Customer SolutionConvenience
CommunicationCost
Modern Marketing
Management (Four Ps)
PeopleProcessesPrograms
Performance