Chapter 1 – Understanding Marketing for the Twenty-First Century
I. Learning Objectives
After reading this chapter, students should:
q Know why marketing is important 
q Know what is the scope of marketing                    
q Know some of the fundamental marketing concepts
q Know how marketing management has changed
q Know what the necessary tasks are for successful marketing management

II. Chapter Summary  
From a managerial point of view, 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. 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.

Marketers are skilled at managing demand: they seek to influence its level, timing, and composition. Marketers are involved in marketing many types of entities: goods, services, events, experiences, persons, places, properties, organizations, information, and ideas. They also operate in four different marketplaces: consumer, business, global, and nonprofit.

Marketing should not be done only by the marketing department because it needs to affect every aspect of the customer experience. To create a strong marketing organization, marketers must think like executives in other departments, and executives in other departments must think more like marketers.

Today’s marketplace is fundamentally different as major societal forces have resulted in many new consumer and company capabilities. These forces have created new opportunities and challenges and marketing management has changed significantly in recent years as companies seek new ways to achieve marketing excellence.

There are five competing concepts by which organizations can choose to conduct their business: the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The first three are of limited use today.

The holistic marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognize their breadth and interdependencies. Holistic marketing recognizes that “everything matters” with marketing and that a broad, integrated perspective is often necessary. The four components of holistic marketing are relationship marketing, integrated marketing, internal marketing, and socially responsible marketing.

The set of tasks necessary for successful marketing management includes developing marketing strategies and plans, capturing marketing insights, connecting with customers, building strong brands, shaping market offerings, delivering and communicating value, and creating long-term growth.
III. Chapter Outline
I. The Importance of Marketing and The Scope of Marketing
A. The Importance of Marketing
1. Most business disciplines are driven by the marketing function, the art of identifying needs and ensuring that organizations are optimally producing goods and services to fulfill those needs. The marketing function is becoming a critical core competency as witnessed by the creation of a chief marketing officer position     
2. Increasing competitiveness and rapidly changing consumer and business needs have created a dynamic marketplace. Organizations are challenged to closely monitor changing consumer needs and must modify, add, or remove current product offerings to meet these needs. Organizations must ensure that short-term sales-driven strategies do not hinder their long-term competitive position   
B. The Scope of Marketing
1. What is marketing?
The aim of marketing is to know and understand the customer so well that the product or service optimally meets the customer’s need. The value proposition should be so obvious that the product or service sells itself  
2. What is marketed?
a) Physical goods   
b) Services (customer services or pure services)
c) Events
d) Experiences (goods and services combined to create an experience)
e) Persons (celebrities)
f) Places (geographical destinations)
g) Properties (real estate, land, financial instruments)
h) Organizations (image)
i) Information (the Internet has increased efficiency of marketing information)
j) Ideas
3. Marketers and markets
a) A marketer is someone actively seeking one or more prospects for an exchange of values
b) A prospect is willing and able to engage in the exchange
c) Marketplace - physical
d) Metamarket - cluster of complementary goods and services across diverse set of industries, and includes metamediaries
e) Marketspace - digital

II. The Marketing Philosophy
A. The Production-Oriented - assumes consumers will favor those products that are widely available and low in cost
B. The Product-Oriented - assumes consumers will favor those products that offer the best combination of quality, performance, and innovative features
C. The Selling-Oriented - assumes organizations must undertake aggressive selling and promotion efforts to enact exchanges with otherwise passive consumers
D. The Marketing-Oriented - assumes the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets
E. The Holistic Marketing-Oriented (four dimensions)
1. Relationship marketing
a) Relationship marketing seeks long-term, “win-win” transactions between marketers and key parties (suppliers, customers, distributors)
b) The ultimate outcome of relationship marketing is a unique company asset called a “marketing network of mutually profitable business relationships”
2. Integrated marketing
a) When all of a firm’s marketing activities, internal to the organization and external within the value chain, are optimally coordinated to achieve a specific objective
b) Four P’s represent seller’s view of marketing tools leveraged in an effort to influence the buyer
c) Four C’s represent customer’s view of the buying interaction
d) Marketing mix - involves recognition and use of the four P’s (product, price, place, and promotion) and the four C’s (customer solution, customer cost, convenience, and communication) in the short run and the long run
3. Internal marketing
a) Occurs at two levels: marketing-specific activity such as sales, advertising, customer research, and customer service while the other level is somewhat removed from the direct marketing activities which include finance, accounting, operations, and human resources
b) Each person within the organization should know how his or her activity relates to the customer, thus the organization should change their business model to become more customer-centric
c) Another dimension to internal marketing is the method of marketing to and serving the internal customer
d) Internal marketing is successful when upper-level management demonstrates their buy-in on a continual basis
e) Organized resistance - some departments see marketing as a threat to their power in the organization
f) Slow learning - despite efforts by management, learning comes slowly
g) Fast forgetting - there is a strong tendency to forget marketing principles
4. Performance marketing
a) Financial Accountability - marketers are being increasingly asked to justify their investments to senior management in financial and profitability terms, as well as in terms of building the brand and growing the customer base. They’re employing a broader variety of financial measures to assess the direct and indirect value their marketing efforts create, recognizing that much of their firms’ market value comes from intangible assets, particularly their brands, customer base, employees, distributor and supplier relations, and intellectual capital. Top management is going beyond sales revenue to examine the marketing scorecard and interpret what is happening to market share, customer loss rate, customer satisfaction, product quality, and other measures
b) Social Responsibility Marketing - marketers must understand their role in social welfare. The societal marketing concept calls on them to build social and ethical considerations into their marketing practices. Examples: use biodegradable containers, avoid deceptive advertising, adhere to current and pending privacy laws and regulations, use ethnic marketing strategies appropriately
c) Cause Marketing - linking an organization’s activity with a specific cause perceived as important to the consumer can increase revenue and profits while establishing a relationship or partnership with societal groups which have a common cause. Examples: tobacco company promoting nonsmoking practices, company employees spending their day off cleaning the environment, company sponsoring a cancer prevention race
5. The customer concept - moving beyond the marketing concept especially for firms with considerable customer information

III. The Core Concepts of Marketing
A. Needs, Wants, and Demands
1. To need is to be in a state of felt deprivation of some basic satisfaction. Five types of needs: stated, real, unstated, delight, secret
2. Wants are desires for specific satisfiers of needs. There is usually one or more wants that can fulfill a need. For example, the need for nourishment can be fulfilled by eating a cheeseburger or a salad. Selection of a want to fulfill a need may be influenced by demand or other factors such as health restrictions in this example
3. Demands are wants for specific products backed by an ability and willingness to buy them
B. Exchange and Transaction
1. Exchange is the process of obtaining a desired product from someone by offering something in return 
2. When an agreement is reached between two or more parties on an exchange, a transaction may be said to take place. A transaction is a trade of values between two or more parties, involving at least two things of value, agreed conditions, a time of agreement, and a place of agreement
3. A transfer is when one party gives something of value to another party and receives nothing intangible in return
a) Transferer usually expects something in return that may not be tangible, e.g. gratitude
b) Marketers want a behavioral change, such as a request for more information or a subsequent purchase
C. Target Markets, Positioning, and Segmentation
1. Every product or service contains features that a marketer must translate into benefits for a target market 
2. The consumer perceives these benefits to be available in a product and directly impacts the perceived ability to meet the consumer need(s) or want(s)
3. Marketers break down the market into multiple segments, which are groups of customers with similar needs
4. Marketers select which segments they will market to, i.e. which segments they will target. Companies cannot be all things to all segments and thus must choose which ones to target
5. Marketers focus on specific product or service features for each segment based on that particular segment’s needs, i.e. they position their features as benefits to match the specific need
D. Offerings and Brands
1. An organization’s value proposition links the features of a product or service to a benefit that can fulfill a specific need
2. Brand - an offering from a known source. A strong brand image supports the value proposition
E. Value and Satisfaction
1. Customer value triad - combination of quality, service, and price (QSP)
2. Value is the consumer’s estimate of the product’s overall capacity to satisfy his or her needs
3. Marketers respond by changes in the triad
4. Satisfaction reflects a person’s comparative judgment resulting from a product or service’s perceived performance in relation to an expectation
F. Marketing Channels 
1. Reaching the target market is critical 
2. Achieved via two-way communication channels
a) Communication channels to deliver and receive information (media - newspapers or through the Internet)
b) Distribution channels to deliver the product or service
c) Service channels to facilitate a transaction 
G. Supply Chain 
1. Refers to the long channel process that reaches from the raw materials and components to the final product/buyers 
2. Perceived as a value delivery system
H. Competition
1. Includes actual and potential rival offerings and substitutes 
2. A broad view of competition assists the marketer to recognize the levels of competition based on substitutability: brand, industry, form, and generic
I. Marketing Environment 
1. The task environment includes: immediate actors in the production, distribution, and promotional environments 
2. The broad environments include: demographic, economic, natural, technological, political-legal, and social-cultural

IV. Dynamic Marketing Management
A. The New Marketing Realities
1. Major societal forces affecting marketing:
a) Network information technology
b) Globalization
c) Deregulation
d) Privatization
e) Heightened competition
f) Industry convergence
g) Consumer resistance
h) Retail transformation
i) Disintermediation
2. New consumer capabilities
a) A substantial increase in buying power
b) Greater variety of goods and services
c) Great deal of information available
d) Greater ease in interacting and placing orders
e) Ability to compare notes on products and services
f) Amplified voice to influence peer and public opinion
3. New company capabilities
a) Internet
b) Research
c) Speed of internal information
d) Speed of external information
e) Better target marketing
f) Mobile marketing
g) Differentiated goods
h) Improved purchasing, recruiting, training, and communications
B. Transformation Marketing 
1. Transformation marketing emphasizes that marketing management should conform and adapt to changes of environment, so as to realize gradual upgrades and to achieve more effectiveness and more efficiency
2. Marketing pattern(s)
 Transformation marketing could be divided into 4 major marketing patterns:
a) Transaction-driven
b) Relationship-driven
c) Value-driven 
d) Value network (cooperation) -driven
C. Marketing Management Tasks
1. Examining the infrastructure for marketing management (Chapter 2)
2. Conducting market-oriented and customer value by scanning the marketing environment and capturing markets (Chapter 3), creating customer value and customer relationship (Chapter 4), analyzing consumer markets (Chapter 5), and analyzing business markets (Chapter 6)
3. Choosing value by identifying market segments and targets (Chapter 7), creating positioning and dealing with competition (Chapter 8), and building brand equity (Chapter 9)
4. Offering value by setting product strategy (Chapter 10), designing and managing services (Chapter 11), and designing pricing strategies and programs (Chapter 12)
5. Delivering value by designing and managing integrated marketing channels (Chapter 13) and managing retailing, wholesaling, and logistics (Chapter 14)
6. Communicating value by designing and managing integrated marketing channels (Chapter 15), managing mass communications (Chapter 16) and personal communications (Chapter 17)
7. Creating growth and value to last by managing transformation marketing (Chapter 18) and managing marketing in the new world (Chapter 19)

V. Summary

IV. Opening Thought
Marketing is too often confused and identified with advertising or selling techniques, and our practices and theories are all too often invisible to the average consumer. The instructor should spend some class time differentiating between advertising/promotion techniques and marketing.

Students who are not marketing majors will have some difficulty accepting the encompassing role that marketing now has on the other functional disciplines within a firm. Finally, for those students who have never been exposed to marketing and its components, the instructor’s challenge is to educate the students about the world of marketing. The in-class and out-of-class assignments noted in this text should help both educate and excite the students about the “world of marketing”!

V. Teaching Strategy and Class Organization
PROJECTS
1. Semester-Long Marketing Plan Project
An effective way to help students learn about marketing management is through the actual creation of a marketing plan for a product or service. This project is designed to accomplish such a task.

Dividing the class into groups, have each group decide on a “fictional” consumer product or service they wish to bring to market. During the course of the semester, each of the elements of the marketing plan, aligned with the respective text chapter, will be due for the instructor’s review. The instructor is encouraged to review each submission and suggest areas for improvement or for more detailed study; if acceptable, students will proceed to the next phase. Students can use the computer program Marketing Plan Pro to create their proposals and submissions and in their final presentation(s). At the end of the semester, each group is to present their entire marketing plan to the class.

The following table is an outline of this process:

Chapter  Title Element of the Marketing Plan Due   
1 Understanding Marketing for the 21st Century None; form groups and begin selecting the product or service.
   
2 Examining the Infrastructure for Marketing Management Formation of groups; first presentation of “product” to instructor for approval.   
3 Scanning the Marketing Environment and Capturing Markets Competitive information and environmental scanning project(s) completed and presented for instructor’s review. Initial marketing research parameters completed; demand forecasted and target market selections defined.   
4 Creating Customer Value and Customer Relationship Students should have completed their value proposition for the fictional product and defined how they will deliver satisfaction and maintain customer loyalty.   
5 Analyzing Consumer Markets Definitive data on the consumer for the product/service including all demographic and other pertinent information obtained and ready for instructor’s approval.   
6 Analyzing Business Markets No report due for this chapter; allows students and instructor to “catch up” on the project.   
7 Identifying Market Segments and Targets Specific market segmentation, targeting, and positioning statements by the students are due.   
8 Creating Positioning and Dealing with Competition Student projects should be completed to include their fictional product or service’s brand positioning. In relation to the material contained in the chapter, students should have delineated and designed a differentiated brand positioning for their project.
Students should also be prepared to present their competitive analysis. Who are the market leaders for their chosen product or service? What niche have they identified for their product or service? Is their product or service going to be a leader, follower, or challenger to well-established products or brands?   
9 Building Brand Equity Students are to have their branding strategy developed for their project. Questions to have been completed include the brand name, its equity position, and the decisions for developing the brand strategy.   
10 Setting Product Strategy Students should have set their project’s product or service strategy. Instructors are to evaluate their submissions on the product (or service) features, quality, and price and the other considerations found in this chapter.   
11 Designing and Managing Services Those students who have selected a service idea for the marketing plan must submit their offering. Students whose project is product-based do not have anything to submit for this chapter.    
12 Developing Pricing Strategies and Programs Students should be prepared to hand in their pricing strategy decisions for their fictional product/service. In reviewing this section, the instructor should make sure that the students have addressed all or most of the material concerning pricing covered in this chapter.    
13 Designing and Managing Integrated Marketing Channels Students should present their channel decisions for getting their product or service to the consumer. The instructor should evaluate the complete­ness of the projects based on the material in this chapter.    
14 Managing Retailing, Wholesaling, and Logistics Students should be directed to turn in their retailing, wholesaling, and logistical marketing plans. Those students who are acting in the role of providing a new service should include their plans for locations, hours of operations, and  managing of demand and capacity issues.   
15 Designing and Managing Integrated Marketing Communications Students should have agreed upon their integrated marketing communications matrix. The instructor is encouraged to evaluate the submissions vis-à-vis the material presented in this chapter. In reviewing the submissions, the instructor should evaluate the continuity of the message across all possible communication media (students will tend to limit their media to television or the Internet and exclude other forms such as personal sales and radio).   
16 Managing Mass Communications  Students should submit their advertising program complete with objectives, budget, advertising message, creative strategy, media decisions, and sales and promotional materials.    
17 Managing Personal Communications: Direct Marketing, and the Sales Force Students who have decided to market their product or service through direct market channels should submit their proposals. All other groups must decide at this point if they will use a direct sales force and if so, to outline the specifics (including financials) for this option.   
18 Managing Transformation Marketing Students should have knowledge about transformation marketing that emphasizes how marketing management should conform and adapt to changes of environment, so as to realize gradual upgrades and to achieve greater effectiveness and efficiency.    
19 Managing Marketing in the New World  Students must know about the management of global marketing, how hi-technologies have changed today’s marketing practice, as well as the role of company social responsibility in creating long-term growth and value. 

Under the projects heading for each chapter will be a reminder of the material due when that chapter is scheduled to be discussed in class.

2. Have students (individually or in groups) select a local firm in their community, or a local division of a national firm, and ask these executives how their firm has responded or is responding to the major shifts in marketing management today. The students can then present these findings to the class individually or in groups. This project could span a few weeks or the entire semester.

ASSIGNMENTS
Small Group Assignments
1. In small groups (five students suggested as the maximum), have students visit their local coffee shop or Starbucks and compare this experience to the services provided in the opening vignette of the chapter. Does their local coffee shop or Starbucks contain wireless Internet access? What is the climate of the establishment—friendly or hurried? Is marketing prevalent in this establishment? If so, how and to what extent are they exposed to marketing messages—have the students keep a list of every marketing message they encounter.

2. In small groups, ask the students to visit an on-campus eatery. During this experience, have the students keep a diary of their exposures to marketing messages. How are the messages being communicated—visually through signs and posters, by sound, or via verbal means? Ask the students to break down these messages into one-minute segments, and then total the amount of messages for the time spent in the eatery. From the marketing standpoint, what conclusions can be drawn from the number of messages one is exposed to?

Individual Assignments
1. Each student is to select a company and prepare a list of all the marketing messages the company disseminates through its various communication channels. The student is to examine the company’s public relations messages, their television advertising, Internet advertising, and printed messages. Students should collect this information and try to discover if there is a commonality of message, preference for one form of communication over another (by frequency), or a series of nonrelated messages.

2. Students can choose a firm of their preference, interview key marketing management personnel and find out how the firm is reacting to the changes in marketing management for the 21st century.

Think-Pair-Share
1. Have the students reflect upon their favorite product and/or service. Then have the students collect marketing examples from each of these companies. Examples should be in the form of printed advertising, copies of television commercials, Internet advertising, or radio commercials. During class, have the students discuss what they have collected. Questions to ask during the class discussion should focus on why this particular example of advertising elicits a response from students. What do students like/dislike about this marketing message? Does everyone in the class like/dislike this advertising?

2. Have the students visit a mall or other type of retail establishment. During their visit, students are to keep a log of the marketing messages they encounter. Such messages can be in the form of emotional advertising, price-point advertisements, store design and layout, or sensory advertisements (e.g. smell or sound). Ask the students which retail establishment attracted them the most and why? Have the students share these experiences and ask if others in the class would be similarly affected (e.g. male versus female).

END-OF-CHAPTER SUPPORT
MARKETING DEBATE

Marketing shapes consumer needs and wants versus Marketing merely reflects the needs and wants of consumers.
VI. Case Study

1. Marketing in China: HK ICAC
1) How did HK ICAC achieve its goal of “Building a Clean Hong Kong” effectively?
2) From the case of HK ICAC, what did you learn about applying the concepts, methods, and strategies of marketing to nonprofit causes or objectives?

2. Marketing in China: Amway’s Transformation in China
1)  Why did Amway have to change its basic operating models twice in China?
2)  Pertaining to their strategies to enter a new market, should MNCs put localization or globalization first?
3. Chapter Case: Coca-Cola
1)  What have been the key success factors for Coca-Cola?
2)  Where is Coca-Cola vulnerable? What should they watch out for?
3)  What recommendations would you make to their senior marketing executives going forward? What should they be sure to do with their marketing?

4. To prepare a case study based on the following materials from Chapter 1 and to present these:
Case: Google

VII. Main Topic(s)
A.  “The Changing Image of Marketing”
Focus: the changing perceptions of marketing in the contemporary business environment.

Marketing Insight: Improve CMO Success

Teaching Objectives
· To explain the concepts related to understanding the role and potential of marketing in the larger business environment.
· To provide students a new and possibly different perspective on the role of marketing in business and society. 
· To indicate areas where the marketing process and concept will be useful to the student in assessing business developments.

Discussion
Introduction
What image comes to mind when you hear the word “marketing”? Some people think of advertisements or brochures, while others think of public relations (for instance, arranging for clients to appear on TV talk shows). The truth is, all of these—and many more things—make up the field of marketing. The Knowledge Exchange Business Encyclopedia defines marketing as “planning and executing the strategy involved in moving a good or service from producer to consumer”.
With this definition in mind, it’s apparent that marketing and many other business activities are related in some ways. In simplified terms, marketers and others help move goods and services through the creation and production process; at that point, marketers help move the goods and services to consumers. But the connection goes even further: Marketing can have a significant impact on all areas of the business and vice versa. In its true form, an organization can be described as a marketing-centric firm when all disciplines within the organization understand how they have an impact on the marketing effort and where they fit in the marketing strategy.
MARKETING BASICS
In introductory marketing you learned some basics—first the four P’s, and then the six P’s:
· Product - What are you selling? (It might be a product or a service)
· Price- What is your pricing strategy?
· Place or distribution—How are you distributing your product to get it into the marketplace?
· Promotion—How are you telling consumers in your target group about your product?
· Positioning—What place do you want your product to hold in the consumer’s mind?
· Personal relationships—How are you building relationships with your target consumers?
The sum of the above is called the marketing mix. It is important to have as varied a mix as possible in marketing efforts, since each piece plays a vital role and boosts the overall impact.
Let’s take a closer look at the basic P’s of marketing and particularly at how they might affect what you do in business.
§ Product
Marketers identify a consumer need and then provide the product or service to fill that need. The marketer’s job is to pinpoint and understand existing needs, expand upon them, and identify new ones. For example, because there are more singles and small families these days than in years past, marketers might see a need for products to be sold in smaller quantities and offered in smaller packages.
How can this impact other professionals in the business/marketing process? Let’s say your company has developed a new product that generates enormous consumer demand. Your marketing department may ask you to find a way to speed up the workflow in order to crank out more products faster. A year after the product is introduced, however, the market might be flooded with cheap imitations. Since one marketing strategy is to keep products price-competitive, a marketer may then ask you to find a way to make the product less expensively.
This relationship works both ways. There may be production and industrial engineers who may see a way to change the work process that would create additional options for consumers. Those engineers will also be instrumental in design and development of products for which human factors and ergonomics are important considerations. Maybe there’s room to add another product line. For instance, that product X is still blue but new product Y is red. You can suggest this to your marketing department; it, in turn, would do research to gauge potential consumer demand for the new line.
§ Price
Ideally, a marketer wants to be proactive in setting price rather than simply react to the marketplace. To that end, the marketer researches the market and competition and plots possible price points, looking for gaps that indicate opportunities. When introducing a new product, the marketer needs to be sure that the price is competitive with that of similar products or, if the price is higher, that the consumers perceive they’re getting more value for their money. Perceived value also varies by segment. Two different segments may perceive different value in the same product or service which presents an opportunity for price variation with the same product or service.
Various other technical professionals can have an important impact on marketers’ pricing decisions. Again, you may be asked to determine if productivity can be enhanced so that the product can be manufactured and then sold—for a lower price.
§ Place or distribution
What good is a product if you can’t get it to people who want to purchase it? When marketers tackle this issue, they try to figure out what the optimum distribution channels would be. For example, should the company sell the product to distributors who then wholesale it to retailers or should the company have its own direct sales force?
Marketers also look at where the product is placed geographically. Is it sold locally, regionally, nationally, and internationally? Will the product be sold only in high-end stores or strictly to discounters? Does the product serve a niche market? The answers to all of these questions also help shape how a product can be distributed in the best way.
Such distribution questions are potentially of great significance to many professionals, including industrial and other types of engineers in a company. For instance, whether a product will be marketed regionally or internationally can have enormous implications for package design as well as obvious areas of the supply chain: logistics, transportation, distribution, and warehousing.
§ Promotion
Promotion encompasses the various ways marketers get the word out about a product—most notably through sales promotions, advertising, and public relations.
Sales promotions are special offers designed to entice people to purchase a product or service or make them aware of a product or service. These can include coupons, rebate offers, two-for-one deals, free samples or trial, and contests.
Advertising encompasses paid messages that are intended to get people to notice a product. This can include magazine ads, billboards, TV and radio commercials, website ads, event sponsorships, and so forth. Perhaps the most important factor in advertising success is repetition. We’re all bombarded with an enormous number of media messages every day, so the first few times a prospective customer sees an ad, it usually barely makes a dent. Seeing the ad over and over is what burns the message into people’s minds. That’s why it’s good to run ads as frequently as possible.
Public relations refers to any non-paid communication designed to plant a positive image of a company or product in consumers’ minds. One way to accomplish this is by getting the company or product name in the news. This is known as media relations, and it’s an important aspect of public relations.
As with price, changes in demand created by promotions can have a direct impact on the work of many other professionals.
§ Positioning
By employing market research techniques and competitive analysis, the marketer identifies how the product should be positioned in the consumer’s mind. As a luxury, high-end item? A bargain item that clearly provides value? A fun product? A reliable service? Is there a strong brand name that supports how the image is fixed in the consumer’s mind? Once the marketer answers these kinds of questions, he or she develops, through a host of vehicles, the right image to establish the desired position.
This, too, can affect the work you do. If an upscale image is wanted, the materials used in the product and packaging are likely to be different from those used in a bargain product—a fact that could make the workflow significantly more complex. On the other hand, with your engineering knowledge, you may be able to suggest alternative materials that would preserve the desired image but be easier or less expensive to use.
§ Personal Relationships
In recent years, personal relationships have come to the forefront of marketing programs. Now even the largest companies want their customers to feel that they have a personal relationship with the company. Companies do this in two ways: They tailor their products as much as possible to individual specifications, and they measure customer satisfaction.
The firm’s contribution can significantly impact the area of personal relationships. If the work processes the firm creates cannot meet the customer time frames, the relationship will be damaged. If the firm develops manufacturing lines that cannot be tailored to fit individual customer needs, it will be difficult for the company to give consumers the perception of personal commitment. If salespeople promise delivery by a certain date, but the product cannot be produced on schedule, consumers will not be happy.
Services add three more “P” considerations, that of people, process, and physical evidence.
§ People deliver the service.
§ The process is the method of delivering a service.
§ Physical evidence is the environment surrounding the service.
All are critical core competencies that an organization can leverage in their service differentiation efforts.
Marketing, engineering, and many other professional activities are interrelated and interdependent disciplines. By understanding the role that marketers play in moving a good or service to consumers, others can operate more effectively, for the present and the future.

VIII. Background Article(s)
Issue: New Approaches to Marketing
Source: “New Economy Calls for New Marketing,” Computerworld (Philippines), January 5, 2001.
Discussion
Intelligent management of information and the use of technology-supported customer interactions are among the e-marketing rules for the New Economy, according to Dr. Philip Kotler.  He made this point at a seminar in the Philippines for marketing managers and sales personnel.

Kotler noted that future marketers must understand technology to respond to the new forces of today’s economy where digitalization and the Internet are becoming major sources of efficiency and profitability among companies.

The Internet, according to Kotler, paves the way for high competition, proliferation of channels and different media, globalization, and the lowering of prices of goods and services through e-commerce. Kotler noted that companies should be aware of the challenges that the Internet poses to their profitability.  “Hundreds of dot-coms have closed their doors or suffered substantial declines in value, while several admired multinationals have suffered huge losses and are engaged in layoffs. Marketing, the engine that drives growth, is in desperate need of an overhaul.”

The marketer should exploit e-business to his company’s advantage. “Go electronic and paperless. Partner with your employees, customers, suppliers, and distributors for co-prosperity,” he said.  The global economic slowdown is also making companies re-evaluate their strategies and current resource allocations to cope with falling prices and a shortage of customers. “But you can win by getting real-time information about your customers and your customers’ customers,” suggested Kotler. He added that having real-time information systems could help companies adjust fast enough to the downward trend of the economy.

“Companies are setting up separate Web portals for customers, partners, and employees. 7-11’s fifth-generation information system connects stores, headquarters, and suppliers,” according to Kotler. He also cited Procter & Gamble’s market planning dashboard to promote technology use in the marketing of its products. “By setting up a dashboard for its marketing managers that allows them to access templated processes, best practices, testing tools, scripts, industry news, and project dates, P&G is able to cope with the hard times.”
Beyond the WebSite
Companies need to go beyond the static websites of a few years ago by featuring online buying and selling, recruitment, and e-learning, said Kotler. “. . .  utilizing the Internet goes beyond the company’s website.” An organization should also develop its intranet/extranet, enterprise resource planning (ERP), supply chain management (SCM), and customer relationship management (CRM) systems.

Kotler also pointed out that marketers should “…keep in mind though that e-marketing doesn’t negate marketing fundamentals such as segmentation, targeting, positioning, the marketing mix, customer satisfaction, and value as well as customer relationship”.  Instead, the Internet creates some new challenges for the marketer, ranging from the operation of both online direct selling and reseller channels, the effectiveness of online banner advertisements, to the creation of active customer communities on the Web, and to building brand recognition on the Internet.

Electronic marketplaces have significantly reduced search and transaction costs for finding the lowest price on a global scale, noted Kotler. “With the use of e-procurement, companies can offset the price fall and save on operating expenses in the long term.”

On CRM, Kotler noted that the two best defenses against lower prices brought about by the global economic slowdown and the onset of e-commerce are CRM and stronger branding. He said that CRM is an old idea practiced by “mom and pop” stores and salespeople. “Companies are now trying to integrate different channels like sales force, branches, call centers, and websites using CRM software so that they can get a complete view of the customer across channels.”

CRM requires building a customer database by collecting all the pertinent information about individual customers and prospects, noted Kotler. “But not every business needs CRM since it is a high investment and operating expense,” he said. “But it can pay in certain situations for companies such as banks, insurance, credit card, and telephone companies that collect a lot of data.”

CRM will also be beneficial to companies that do a lot of cross-selling and up selling like Amazon.com and to organizations that have customers with highly differentiated needs. “CRM is more than equipping salespeople with sales automation tools,” said Kotler. “The marketing department must centralize information about customers and prospects and develop campaigns around it.”