MARKETING IN 21ST CENTURY LEARNING OBJECTIVES After reading this chapter, students should know: - Importance of Marketing - Scope of Marketing - Fundamental marketing concepts - Marketing Environment - Necessary tasks are for successful marketing management Dr. Sandhir Sharma
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MARKETING IN 21ST CENTURY
LEARNING OBJECTIVES After reading this chapter, students should know: - Importance of Marketing - Scope of Marketing - Fundamental marketing concepts - Marketing Environment - Necessary tasks are for successful marketing management Dr. Sandhir Sharma
Marketing for Managers Chapter 1
Chitkara University – Distance Learning Program
Opening Case
It is ironic. The Ministry of Tourism‘s TV commercials starring a beaming Aamir Khan are aired
between the very same news bulletins that broadcast the latest updates on the many scams surrounding
the Commonwealth Games. In such a milieu, the Ministry of Tourism‘s pedantic ‗Atithi Devo Bhava‘
message ends up looking moronic, because the viewers are disgusted thinking ‗Ye Babu Kab ...Kab
Sudharenge‘. And at the heart of these divergent views lies the battle that Brand India fights everyday:
the imagery and perceptions of good old Bharat that refuses to be wished away as the country
desperately tries to live up to it‘s newly burnished ‗arrived‘ image.
In a perception driven world, nation brands are a dual edged sword. They can either deliver a
handsome dividend if managed properly or can make an economy a pariah. In that context, the babus
of Bharat are taking baby steps to do away with the land of snake charmers legacy, and similar
perceptions of the past that are difficult to shake away. After 2007, when Incredible !ndia became the
credo for projecting an India version 2.0 to the world, creating symbols of success has become a new
ritual. Recently, the Indian currency, the rupee, got a new symbol, Nandan Nilekani‘s Unique
Identification Authority‘s new logo with the sun over a fingerprint will be unveiled soon, Indian
Railways is looking to rebrand itself and get a new logo. And land at the New Delhi airport and
Commonwealth Game‘s mascot Sheru greets visitors, promising a dekko of a new improved India.
That‘s not all, the rebranding fever has really caught on: different Indian states have got into the act
too, Madhya Pradesh, Sikkim, Assam, among others, are all busy carving out a distinct identity in one
of the world‘s most diverse economies. Union minister of commerce and industry, (MOS) Jyotiraditya
Scindia is talking about creating a global brand out of Indian Tea. Some years back, the young
minister led the rebranding of the eponymous Indian postal services transforming it into the swish
India Post. Even the corporate world underwent a makeover in the last decade or so to put its best foot
forward as it looked westwards for expansion. After the Tata's new logo and rebranding in 1999, a
slew of corporates like Godrej's, Avantha group, L&T and SAIL, got an image makeover. To say
nothing of the public sector banks. Spurred by competition from private and global banking brands
and the very real need to discard a stodgy solid bureaucratic image, many of them have gone in for
extensive makeovers. The State Bank of India in particular is trying to bridge the same yawning gulf,
morphing people from both Bharat and India into its 'Banker For Every Indian' campaign. Bank of
Baroda rebranded itself in 2005. "We wanted to make sure that consumers and employees start
identifying with the bank as a partner in their progress," says MD Mallya, chairman and managing
director, Bank of Baroda. With IT and Technology reshaping India's image overseas it was clear the
symbols of the past had to be cast aside. In all, it was as if India and many of its iconic government
entities and entrepreneurs were eager for a new identity.
But how effective is all of this in leaving people with the impression that the totality of Brand India
has changed and is changing? The answer is disheartening. "In its present form, it's just not generating
the desired effect," observes Suhel Seth, managing partner at Counselage India, who is also the brand
advisor to Indian Railways. "India's branding is by accident and not by design. Different government
departments are branding themselves in isolation. In reality, there has to be a lot of coordination to
ensure consistency, engagement and strategy behind the exercise," he adds. The reasons for failure are
very simple. Often the main agents driving these exercises are politicians and bureaucrats, few of
whom have the business and marketing expertise to perform a brand management role. The sad part is
Marketing for Managers Chapter 1
Chitkara University – Distance Learning Program
that professional marketers and advertisers have the expertise, but lack the mandate and when roped in
by the babudom, the red tape stifles creativity and out of the box thinking.
The crux of the problem is that rebranding and a new logo do not mean anything if the overall brand
experience doesn't change. A new swanky airport does not equal a vastly improved brand India, if the
moment you step outside, the pothole congested roads, the shaky taxis and in case of Mumbai, the
cluster of slums proclaim it all a façade. Take for example the Commonwealth Games: on paper, an
excellent opportunity to showcase India just like South Africa did during the FIFA World Cup. As
the land of possibility, Africa's largest economy presented itself as full of diverse opportunity to attract
reverence and the monies. But for India the Commonwealth Games might just turn into an
international embarrassment rather than a timely opportunity to change the orbit for Brand India.
Again the old ways of life of Bharat are tripping new India. VK Malhotra, vice president - organising
committee, CWG 2010, admits "At the moment, the Commonwealth Games are giving out a bad
image of India." He also smirks at the committee chairman's ambition of hosting the Asiads and later
the Olympics. "We might get to host the Asian Games but Olympics are impossible," he signs off.
The overall architecture of Brand India and what it truly stands for is incoherent with different arms
saying different things. According to experts, nation and departmental branding have a wide range of
stakeholders who use numerous channels to reach a diverse audience. It's thus difficult to encapsulate
a multifaceted entity into a distilled brand. The plethora of uncontrollable factors that can affect
perceptions make the task all the more complex. "When we talk of branding India, we are really
talking about whitewashing certain aspects of the country and promoting some parts of the story,"
feels Santosh Desai, brand guru and MD and CEO, Future Brands. "India needs many sub-brands for
different purposes," Desai says citing the examples of Kerala (God's Own Country) and Rajasthan
(The Incredible State of India) within the tourism piece. Smaller brand stories on the FDI, currency-
branding front, he feels, can be similarly conveyed.
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Case Point: The Great Indian Makeover: Marketing the Nation
The word ―Marketing‖ encompasses such a broad scope of activities and ideas that settling on one
definition is often difficult. If we ask three people to define marketing, different definitions are likely
to follow. In 21st century, over exposure to advertising and personal selling leads most of us to link
marketing with selling or to think that marketing activities start after goods and services have been
produced. In actual, marketing starts the moment an idea is generated to run a business. Marketing
involves customer needs, securing information needed to design and produce goods or services that
match buyer expectations, satisfying preferences of customers, creating and maintaining relationship
with customers and suppliers. Any business around the world is not restricted to one or couple of
activities. Business is generally combinations of various steps to be taken sequentially in order to
raise profits and be sustainable for long term in the market place. Marketing is required at every
step of business.
One must understand it very clearly that Marketing is broader concept no only related to
Organisations, its products and consumers rather it is connected to People, Societies, Values, Global
World. This inter functional & institutional integration has raised several challenges to the thinkers of
the world at present. Thus, Marketing is everywhere. Formally or informally, people and
organizations engage in a vast number of activities that could be called marketing. Good marketing is
no accident, but a result of careful planning, execution and efficient communication. Marketing is
both an ―art‖ and a ―science‖—there is invariable strain between the conceptual side of marketing and
the creative side. Concepts are one side of the coin and creativity is another.
Marketing for Managers Chapter 1
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Importance of Marketing
Marketing is a very important aspect in business since it contributes greatly to the success of the
organization. Production and distribution depend largely on marketing. Many people think that
sales and marketing are basically the same. These two concepts are different in many aspects.
Marketing covers advertising, promotions, public relations, and sales. It is the process of
introducing and promoting the product or service into the market and encourages sales from the
buying public. Sales refer to the act of buying or the actual transaction of customers purchasing
the product or service.
Since the goal of marketing is to make the product or service widely known and recognized to
the market, marketers must be creative in their marketing activities. In this competitive nature of
many businesses, getting the product noticed is not that easy.
Strategically, the business must be centered on the customers more than the products. Although
good and quality products are also essential, the buying public still has their personal
preferences. If you target more of their needs, they will come back again and again and even
bring along recruits. If you push more on the product and disregard their wants and the benefits
they can get, you will lose your customers in no time. The sad thing is that getting them back is
the hardest part.
Marketing Promotes Product Awareness to the Public
It has already been mentioned in the previous paragraph that getting the product or service
recognized by the market is the primary goal of marketing. No business possibly ever thought of
just letting the people find out about the business themselves, unless you have already
established a reputation in the industry. But if you are a start-out company, the only means to be
made known is to advertise and promote. Your business may be spending on the advertising and
promotional programs but the important thing is that product and company information is
disseminated to the buying public.
Various types of marketing approaches can be utilized by an organization. All forms of
marketing promote product awareness to the market at large. Offline and online marketing make
it possible for the people to be educated with the various products and services that they can take
advantage of.
A company must invest in marketing so as not to miss the opportunity of being discovered. If
expense is to be considered, there are cost-effective marketing techniques a company can embark
on such as pay-per-click ads and blogging.
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Marketing Helps Boost Product Sales
Apart from public awareness about a company‘s products and services, marketing helps boost
sales and revenue growth. Whatever your business is selling, it will generate sales once the
public learns about your product through TV advertisements, radio commercials, newspaper ads,
online ads, and other forms of marketing. The more people hear and see more of your
advertisements, the more they will be interested to buy.
If your company aims to increase the sales percentage and double the production, the marketing
department must be able to come up with effective and strategic marketing plans.
Marketing Builds Company Reputation
In order to conquer the general market, marketers aim to create a brand name recognition or
product recall. This is a technique for the consumers to easily associate the brand name with the
images, logo, or caption that they hear and see in the advertisements.
For example, McDonalds is known for its arch design which attracts people and identifies the
image as McDonalds. For some companies, building a reputation to the public may take time but
there are those who easily attract the people. With an established name in the industry, a business
continues to grow and expand because more and more customers will purchase the products or
take advantage of the services from a reputable company.
Origin of Marketing
The actual term ‗marketing‘ may be a creation of recent history, often associated with the dawn
of the 20th century. However the actions of marketing date back thousands of years. We know
from excavations of caves that early civilizations used ‗advertising‘ to inform other members of
the community of events and issues, indeed also to warn them of perils in the area. Equally
customers or consumers, as we know them, are far from being a recent phenomenon. Customers
are as old as the first transaction between two people. The social, economic, political and
technological changes during the 20th century revolutionized the way we lived and worked.
Moreover these ‗revolutions‘ provided the means or the platform for an equally dramatic change
in the marketing of products and services linked to dynamic competitive environments. The 21st
century obviously remains an unknown quantity. Already in its early years 21st Century has
witnessed tremendous growth in certain business sectors, decline in others, increased
competition in both home and international markets, societal change and geopolitical turmoil.
Where the next 20 or so years will lead us is anyone‘s guess. However, marketing, in one form or
another, will play an integral role in reacting to change and even shaping change.
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Scope of Marketing Marketing is something that affects every one of us every waking moment of our lives – even
though we may not necessarily be conscious of it. From that very moment we stir out of deep
sleep, turn on the radio or television, and walk around the house, we are bombarded by
marketing messages. They are not always in the form of advertisements beaming from the radio
or television. Think of the packaging in your kitchen or bathroom. Even on non-commercial
radio and television stations there are still marketing messages, in the form of publicity and
public relations. Even before we leave the house we have already seen or heard hundreds of
marketing messages. Then it just explodes – newspapers, magazines, billboards and posters.
There are messages everywhere, invading every aspect of our lives.
All this relates to marketing, but how do we define marketing? This is not as easy as one might
think. Indeed as Cooke, Rayburn and Abercrombie (1992) suggested, ‗after about 80 years of
formal marketing education (thought) there is no consensus on the definition of market‘. Has this
perspective changed? No. It is perhaps a scary thought that a subject that is a major course at the
vast majority of universities has no hard and fast definition. However, being able to debate a
definition for marketing allows us to consider the subject as being flexible and dynamic, just like
the world we live in. In the next section we investigate some of the various definitions of
marketing, drawing on a range of subject areas. It may well turn out that there is no one
definition that fits all aspects of marketing. As marketers we may have to be flexible in our
understanding of the subject, and its relationship with us both as individuals and a society,
especially within a turbulent macro environment.
Different approaches to Definition of Marketing
An Economics Approach
With an economics approach the emphasis is on products (usually referred to as goods) and
services, sources of supply, the most commonly used channels of distribution and the functions
performed during the marketing process (Cooke et al. 1992).
Three definitions can be provided on the basis of the economics approach:
Marketing is the performance of business activities directed toward, and incident to, the flow of
goods and services from producer to consumer or user.
(American Marketing Association (AMA) 1948)
Marketing embraces all the business activities involved in getting commodities of all kinds,
including services, from the hands of producers and manufacturers into the hands of the final
consumers. All the business steps through which goods progress on their way to final
consumption is the concern of marketing. This is especially true of the points in those stages at
which change of ownership takes place. (McNair et al. 1975)
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Marketing is the performance of business activities that direct the flow of goods and services
from producer to consumer or user. (AMA 1960)
As Cooke et al. (1992) state, there are several key words that summarize these definitions:
goods/services
transfer of ownership
storage
flow of goods/services
distribution/transport
functions.
A consumer’s (or buyer’s) approach
This perspective arises out of consumers‘ dissatisfaction with products, services and the
organizations that provide them. Linked to this is the subsequent need for governments to protect
individual consumer rights through legislation. The dissatisfaction emanated from the following
views:
The marketing system was unresponsive to consumer wants.
Marketing practitioners were unscrupulous.
Marketers made claims that were not borne out by the actual performance of the
product.
Consumers sought increased product quality.
Increasing concern over hazardous and unsafe products entering the marketplace,
especially electrical goods and children‘s toys.
Concern over misleading advertising, deceptive packaging and labeling.
These definitions provide an insight into the consumer perspective:
Marketing consists of four general activities:
1. Identifying and selecting the type of customer that the business will cultivate, learning his
needs and desires;
2. Designing products or services that the firm can sell at a profit in conformity with customers
desires;
3. Persuading customers to buy at the firm‘s offerings;
4. Storing, moving, and displaying goods after they leave the production site.
(Oxenfeldt 1966)
Note the use of the word ‗his‘. Perhaps the focus remained male dominated?
That process through which a business enterprise, institution, or organization 1. selects target
customers or constituents, 2. assesses the needs or wants of such target customers, and 3.
manages its resources to satisfy those customer needs or wants. (Star et al. 1977)
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As Cooke et al. (1992) state, there are several key words that summarize these definitions:
consumer
meet – fulfill – satisfy
product (goods and services)
wants
determine – assess needs
needs
target customers.
The societal approach
This can be considered as a needs-fulfilling exchange or relationship activity that is present, to a
greater or lesser degree, within all cultures. Cooke et al. (1992) suggest that it is the ‗process of
exchange in society and this process must occur in society so that the consumption of values can
occur‘. They continue: The societal view of marketing as exchange relationships begin with the
basic idea that most human behavior is the planned, purposeful quest and search for want
satisfaction. Individuals act to satisfy their wants and desires. Goods, services, or ideas are the
source of this satisfaction.
Cunningham and Cunningham (1981) suggest that societal marketing performs three essential
functions:
1 As an information network – knowing and understanding the consumer‘s changing
needs and wants.
2 Equalizing the distribution function – efficiently and effectively managing the supply
and demand of products and services.
3 Centralizing the exchange function – efficient provision of distribution and payment
processing systems.
These definitions provide an insight into the societal perspective:
Marketing may be thought of as that phase of business activities which human activities are
satisfied by the exchange of goods and services, on the one hand, for some valuable
consideration using money or its equivalent on the other. (Pyle 1931)
Marketing is the delivery of a standard of living to society. (Mazur 1947)
As Cooke et al. (1992) state, there are several key words that summarise these definitions: