Lessons from Chapter 1

Marketing challenges and opportunities in the new economy include:

  • a shift in power to customers caused by increased access to information.
  • a massive increase in product selection due to line extensions and global sourcing.
  • greater audience and media fragmentation as customers spend more time with interactive media and less time with traditional media.
  • changing customer perceptions of value and demands for greater convenience.
  • shifting demand patterns for certain product categories, especially those delivered electronically.
  • new sources of competitive advantage such as partnerships and alliances.
  • new concerns over privacy, security, and ethics.
  • unclear legal jurisdictions, especially in global markets.

Marketing:

  • is parallel to other business functions such as production, research, management, human resources, and accounting. The goal of marketing is to connect the organization to its customers.
  • is defined as 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.
  • has changed in focus over the past 20 years. Today, marketing stresses value and customer relationships.
  • is linked with our standard of living, not only in terms of enhanced consumption and prosperity, but also in terms of society's well-being.

Basic marketing concepts include:

  • market—a collection of buyers and sellers.
  • marketplace—a physical location where buyers and sellers meet to conduct transactions.
  • marketspace—an electronic marketplace not bound by time or space.
  • metamarket—a cluster of closely related goods and services that centers around a specific consumption activity.
  • metamediary—a single access point where buyers can locate and contact many different sellers in the metamarket.
  • exchange—the process of obtaining something of value from someone by offering something in return; this usually involves obtaining products for money. There are five conditions of exchange:
  • There must be at least two parties to the exchange.
  • Each party has something of value to the other party.
  • Each party must be capable of communication and delivery.
  • Each party must be free to accept or reject the exchange.
  • Each party believes that it is desirable to exchange with the other party.
  • product—something that can be acquired via exchange to satisfy a need or a want.
  • utility—the ability of a product to satisfy a customer's needs and wants. The five types of utility provided through marketing exchanges are form utility, time utility, place utility, possession utility, and psychological utility.

Major marketing activities and decisions include:

  • strategic and tactical planning.
  • social responsibility and ethics.
  • research and analysis.
  • developing competitive advantages and a strategic focus for the marketing program.
  • marketing strategy decisions, including decisions related to market segmentation and target marketing, the product, pricing, distribution, and promotion, which will create competitive advantages over rival firms.
  • implementing and controlling marketing activities.
  • developing and maintaining long-term customer relationships, including a shift from transactional marketing to relationship marketing.

Some of the challenges involved in developing marketing strategy include:

  • unending change—customers change, competitors change, and even the marketing organization changes.
  • the fact that marketing is inherently people-driven.
  • the lack of rules for choosing appropriate marketing activities.
  • the basic evolution of marketing and business practice in our society.
  • the increasing demands of customers.
  • an overall decline in brand loyalty and an increase in price sensitivity among customers.
  • increasing customer cynicism about business and marketing activities.
  • competing in mature markets with increasing commoditization and little real differentiation among product offerings.
  • increasing expansion into foreign markets by U.S. and foreign firms.
  • aggressive cost-cutting measures in order to increase competitiveness.
  • increasing cooperation with supply chain partners and competitors.