Chapter 1 (No Photos)

8/9/2019 Chapter 1 (No Photos)

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MARKETING

IN A

CHANGING

WORLD

Chapter 1


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Definition of Marketing

A social and managerial process whereby individualsand groups obtain what they need and want throughcreating and exchanging products and value withothers.


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What is Marketing?

Marketing is the delivery ofcustomer satisfaction at aprofit Give the customer what he needs,

but also make a profit. Difference between Sales andMarketing Sales:Make a product and sell Marketing: Find out what a

customer needs & make it; It willsell!

Is Pakistan turning into amarketing dominated society?


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Marketing definitions:

Needs, Wants & Demands

Need:A state of felt deprivation

WantThe form taken by a human

need as shaped by culture andindividual personality

DemandsHuman wants that are backed

by buying power

Need Vs.Want?E.g,Designer shirt /

sunglasses / expensive mobilephones


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Marketing definitions:

Products Vs. Services

ProductAnything that can be

offered to a market. Itincludes physical objects,services, persons, places,organizations, and ideas.

ServiceAny activity or benefit that

one party can offer toanother that is essentiallyintangible.


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Marketing definitions: Value,

satisfaction & quality

Customer Value Difference between the cost and how

much use does he get out of it? Value = Benefit - Cost

Customer Satisfaction The extent to which a products

perceived performance matches abuyers expectations.

Total Quality management Programs designed to constantly

improve the quality of products,services and marketing processes


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Marketing definitions: Exchange,

Transactions, and Relationships

MarketsThe set of all actual and potential buyers of a

product or service.

E

xchangeThe act of obtaining a desired object from someone byoffering something in return.

TransactionA trade between two parties that involves at least two

things of value, agreed upon conditions, a time ofagreement, and a place of agreement.

Relationship marketing:The process of creating, maintaining, and enhancing

strong, value laden relationships with customers and other

stakeholders.


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Main forces in a modern marketing

system

Suppliers

Competitors

Company

(marketer)

Marketing

intermediaries

End User

market

Environment


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Marketing Management

The analysis, planning,implementation, andcontrol of programsdesigned to create,build, and maintainbeneficial exchangeswith target buyers for

the purpose of achievingorganizationalobjectives.


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De-marketing

Marketing to reducedemand temporarily or

permanently; the aim is

not to destroy demand,but only to reduce or shiftit.

E.g., KESC, Suzuki etc


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Philosophiesy Production concept: Customers will buy products

that are cheap and affordable.E.g., Chinese goods.y Selling concept: For people to buy products, you

have to do a lot of advertising.y Can good advertising sell a bad product? (GoodMilk)

y Product concept: Keep making better products andthe customer will buy them.y What if the product is not needed by anyone?


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PhilosophiesyMarketing

concept: Find

what thecustomerneeds andaddress those

needs betterthan thecompetitor.


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Societal Marketing

Societal

marketing

concept:

Marketing with asocial conscience

and care aboutthe society ingeneral. E.g.,

PSOTreePlantation drive,

UBL Insurance


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THE 22 IMMUTABLE LAWS OFMARKETING

byRies &Trout


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Law #1: The law of

leadership The Law of Leadership affirms the importance of

being number one in a category. People usually knowwho the number one player is, but often cannot even

name the number two.


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Law #2: The law of the

category The Law of the Category says that if you cannot be

first in your category, setup a new category.

But do make sure there are enough of thosepeople. Every difference defines a category, but notevery category matters. .


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Law #3: The Law of the Mind

The Law of theMind says it is better to be

first in the mind than first in the marketplace.


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Law #4: The Law of

Perception The Law ofPerception says that in the battle

between products, perception is more

important than reality.


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Law #5: The Law of Focus

Law of Focus says that "the most powerful concept inmarketing is owning a word in the prospect's mind."

"No matter how complicated the product, no matter howcomplicated the needs of the market, it's always better tofocus on one word or benefit than two or three or four.

Don't try to associate your product with a word in thecustomer's mind if that word is already associated with yourcompetitor.


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Law #6: The Law of

Exclusivity The Law ofExclusivity says that "Two companies

cannot own the same word in the prospect's

mind."


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Law #7: The Law of the

Ladder

The Law of the Ladder acknowledges that in mostmarket categories, there is actually more than oneavailable slot in the mind of the customer.

For now, let's just remember that every category levelhas its own ladder.

The mind of the customer can only remember a fewrungs. Research indicates a maximum of about seven,and a more practical limit of about two or three.


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Law #8: The Law of Duality

The Law ofDuality says that "in the long run, every marketbecomes a two-horse race."

Young markets have many rungs on the ladder. They are

highly fragmented. Gradually, as the market matures,players disappear and the market settles on exactly twoprimary players. Examples of this phenomenon areeverywhere: Coke and Pepsi Nike and Reebok

M

cD

onalds and Burger King It often takes a long time for things to settle down, but in the

end, markets usually give people what they want, which istwo strong choices. Buyers don't like choosing between tenor twenty players. It's too stressful.


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Law #9: The Law of the

Opposite The Law of the Opposite says that the #2

player should generally do the opposite of

what the #1 player is doing. The worst thing you can do is to try and beat

the #1 player at his own game .


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Law #10: The Law of Division

The Law ofDivision observes that over time, a categorytends to divide and become two or more categories.

A new market category starts out very broad. Forexample, in the beginning of the automobile industry,the only category was "cars". Over time, categoriesbreak up into smaller and more specializedsubcategories. Today, there are quite a few brands of car,

each catering to a specialized niche.


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Law #12: The Law of Line

Extension The Law of Line Extension says that it is a mistake

to take the name of one product and apply it to

another.

Companies do this often, but it basically neverworks.

We think that the power of the brand will help sell the new

product. Instead, the brand itself is tarnished.

People start to get confused about what the brand means.


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Law #13: The Law of

Sacrifice The Law of Sacrifice says that "you have to give

up something in order to get something".


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Law #14: The Law of Attributes

The Law ofAttributes says that "for everyattribute, there is an opposite, effectiveattribute. E.g., Crest toothpaste fights cavities, but Close Up

freshens breath.

Sunsilk makes your hairy shiny, but Pantenemakes your hair healthy.

LUX makes your skin beautiful, but Safeguardkeeps your skin healthy.


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Law #15: The Law of Candor

The Law of Candor says that "when you admit anegative, the prospect will give you a positive".

Every negative statement you make about yourself is

instantly accepted as truth. Positive statements, onthe other hand, are looked at as dubious at best.


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Law #16: The Law of Singularity

The Law of Singularity says that "in each situationonly one move will produce substantial results".

One bold stroke is much better than a bunch of

small marketing efforts. The success of our marketing campaigns is defined

by the best idea on our list, not the length of thatlist. .


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Law #17: The Law of

Unpredictability The Law of Unpredictability says, "Unless you write

your competitors' plans, you can't predict the future

long-range planning doesn't work. We can try to

observe and follow trends.W

e can make big-picturepredictions. But if we try to make detailed plans overthe long term, our competitors will surprise us.

One way to cope with an unpredictable world is tobuild an enormous amount of flexibility into your

organization.


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Law #18: The Law of Success

The Law of Success says that "success often leads toarrogance, and arrogance to failure".

Forgetting the customer is a fatal disease. Don't let

it happen to you.

Don't get out of touch. When you do, you'll start tomake bad marketing decisions.


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Law #19: The Law of Failure

The Law of Failure says that "failure is to be

expected and accepted".

Nothing interesting ever happens unless wetake risks.

When you realize you've made a mistake, cut

your losses.


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Law #20: The Law of Hype

The Law ofHype talks about the fact that"history is filled with marketing failures that

were successful in the press".


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Law #21: The Law of Acceleration

The Law ofAcceleration says that "successfulprograms are not built on fads, they're built ontrends".

When something new becomes big and hot,companies jump on the bandwagon, spending a

lot of money doing so. They invest in newequipment. They work hard to make themselvesprepared to deliver products for the fad.

And then the fad stops, and the company is leftwith problems


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Law #22: The Law of Resources

The Law ofResources says that "without

adequate funding, an idea won't get off the

ground".

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