A Basis for Classification
Marketing is an individualized ano highly creative process. Despite the availability of highpowered compuLers and sophisticated software capable of analyzing massive amounts of data, marketing is ~till more of an art rather than a science. Each business must customize its marketing efforts in response to its environment and the exchange process. Consequently, no two marketing strategies are exactly the same. This requirement of marketing to play slightly different roles, depending upon some set of situational criteria, has in tum provided us with a division of marketing into a number of different categories. This is not to imply, however, that there aren't general marketing principles that work in most businesses-there are. There is a right and wrong way to design a package. There are certain advertising strategies that tend to work more often than others. Rather, we are saying that because of certain factors, a busine~s's approach toward marketing and the ensuing trategy will require some modification from the basic plan. Shown in Table 1.1 arc the most common types of marketing categories. Since these various types ofmarketing will be discussed throughout this text, a brief introduction is provided at this point. Macromarketing Versus Micromarketing The division of marketing into macromarketing and micromarketing is a fairly recent one. Initially, the division was a result of the controversy concerning the responsibility of marketing. Should marketing be limited to the success of the individual firm, or should marketing consider the economic welfare of a whole society? Accepting the later, or "macro," point of view dramatically changes the way marketing is carried out. In this light, every marketing decision must be evaluated with regard to how it might positively or negatively affect each person and institution operating in that society. In 1982, Bunt and Burnett surveyed the academic community in order to define more precisely the distinction between macro- and mircomarketing. 4 Their findings suggest that the separation depends upon "what is being studied," "whether it is being viewed from the perspective of society or the firm," and "who receives the consequences of the activity." Examples of macromarketing activities are studying the marketing systems of different nations, the consequences on society of certain marketing actions, and the impact of certain technologies on the marketing transaction. The use of scanners in supermarkets and automatic teller machines in banking illustrates the last example.
Micromarketing examples include determining how Nikon Steel should segment its market, recommending how National Jewish Hospital should price their products, and evaluating the success of the "Just Say No" anti-drug campaign. Service Marketing Versus Goods Marketing The distinction between services and goods products is not always clear-cuL In general, service products tend to be intangible, are often consumed as they are produced, are difficult to standardize because they require human labor, and may require the customer to participate in the creation of the service product. Goods products tend to be just the opposite in terms of these criteria. Consequently, marketers of service products usually employ a marketing strategy quite different from that of goods marketers. For example, a local family physician creates tangibility by oroviding an environment. waiting room. examination rooms, diplomas on the walls, that convinces patients that they are receiving good health care. Conversely, coffee producers create iiltangibility in order to appear different from competitors. ~:-his is done through colorful packaging and advertisements showing people who are successful because they start each day with a cup or two or ten of Starbuck's coffee.
For-profit Marketing Versus Nonprofit Marketing
As the terms connote, the difference between for-profit and nonprofit marketing is in their primary objective. For-profit marketers measure success in terms of profitability and their ability to pay dividends or pay back loans. Continued existence is contingent upon level of profits. Nonprofit institutions exist to benefit a society, regardless of whether profits are achieved. Because of the implicit objectives assigned to nonprofits, they are subject to an entirely different additional set of laws, notably tax laws. While they are allowed to generate profits, they must use these monies in specific way~ in order to maintain their nonprufit status. There are several other factors that require adjustments to be made in the marketing strategies for nonprofits.
M ass Marketing, Direct Marketing, and Internet Marketing Mass marketing is distinguished from direct marketing in terms of the distance between the manufacturer and the ultimate user of the product. Mass marketing is characterized as having wide separation and indirect communication. A mass marketer, such as Nike, has very little direct contact with its customers and must distribute its product through various retail outlets alongside its competitors. Communication is impersonal, as evidenced by its national television and print advertising campaigns, couponing, and point-of-purchase displays. The success of mass marketing is contingent on the probability that within the huge audience exposed to the marketing strategy.. there exist sufficient potential customers interested in the product to make ~he strategy worthwhile. Direct marketing establishes a somewhat personal relationship with the customer by first allowing the customer to purchase the product directly from the manufacturer and then communicating with the customer on a first-name basis. This type of marketing is experiencing tremendous growth. Apparently, marketers have tired of the waste associated with mass IParketing and customers want more personal attention. Also, modem mechanisms for coliecting and processing accurate mailing lists have greatly increased the effectiveness of direct marketing. Catalogue companies (Spiegel, J.e. Penney), telecommunications companies (Sprint), and direct mail companies (Publishers Clearing House) are example of direct marketers. A modified type of direct marketing is represented by companies that allow ordeling of product by calling a toll-free number or mailing in an order card as part of an advertisement. Although (officially), Intemet marketing is a type of direct marketing, it has evolved so quickly and demanded the attention of so many companies that a separate section here is 'varranted. Essentially, Intemet technology (which changes by the moment) has created a new way of doing business. In the Internet age, the way consumers evaluate and follow through on their purchase decisions has changed significantly. "Call now!" is no longer an effective pitch. Consumers have control over how, when, and where they shop on the Internet. The Internet has all but eliminated the urgency of satisfying the need when the opportunity is presented. Internet marketing will b e discussed in detail in a later chapter.
Local, Regional, National, International, and Global Marketers
As one would expect, the size and location of a company's market varies greatly. Local marketers are concerned with customers that tend to be clustered tightly around the marketer. The marketer is able to learn a great deal about the customer and make necessary changes quickly. Naturally, the total potential market is limited. There is also the possibility that a new competitor or environmental factor will put a local marketer out of business. Regional marketers cover a larger geographic area that may necessitate multiple production plants and a more complex distribution network. While regional marketers tend to serve adjoining cities, parts of states, or entire states, dramatic differences in demand may still exist, requiring extensive adjustments in marketing strategy. National marketers distribute their product throughout a country. This may involve multiple manufacturing plants, a distribution system including warehouses and privately owned delivery vehicles, and different versions of the marketing "mix" or overall strategy. This type of marketing offers tremendous profit potential, but also exposes the marketer to new, aggressive competitors. International marketers operate in more than one country. As will become clear later in this book, massive adjustments are normally made in the marketing mix in various countries. Legal and cultural differences alone can greatly affect a strategy's outcome. As the U.S. market becomes more and more saturated with U.S.-made products, the continued expansion into foreign markets appears inevitable. Global marketing differs from international marketing in some very definite ways. Whereas international marketing means a company sells its goods or services in another country, it does not necessarily mean that the company has made any further commitments. Usually the product is still manufactured in the home country, sold by their people, and the profits are taken back to that country. In the case of Honda Motors, for example, it means building manufacturing plants in the U.S., hiring local employees, using local distribution systems and advertising agencies, and reinvesting a large percentage of the profits back into ' the U.S.
Consumer Goods Marketing and Business-to-Business (Industrial) Marketing
Consumer goods marketers sell to individuals who consume the finished product. Businessto-business marketers sell to other businesses or institutions that consume the product in tum as part of operating the business, or use the product in the assembly of the final product they sell to consumers. Business-to-business marketers engage in more personal selling rather than mass advertising and are willing to make extensive adjustments in factors such as the selling price, product features, terms of delivery, and so forth. For the consumer goods marketer, the various marketing components are relatively fixed. In addition, consumer goods marketers might employ emotional appeals and are faced with the constant battle of getting their product into retail outlets.
Strategic Components of Marketing
A necessary and useful starting point for the study of marketing is consideration of the management process. The management of marketing serves as the framework for the process of marketing. Marketing management also serves as a central link between marketing and the societal level and everyday consumption by the general public. Although there are many variations of the marketing process, the one shown in Figure 1.1 will be employed in this book. Our process begins with corporate-level considerations, which dictate the direction the entire organization will take. The three corporate-level con~iderations listed here (mission, objectives, and strategy) are more precisely basic management topics, but are addressed in passing in the following sections.
Functional Level Considerations
If a marketing firm is to adopt the customer-centered orientation discussed earlier, it must also extend this philosophy to the other functions/institutions with which it must interact. These functions, and the institutions that perform the functions can be categorized as nonmarketing institutions and marketing institutions. Nonmarketing institutions can exist within the organization or outside the organization. The former inciude accounting, financial planning, human resources, engineering, manufacturing, research and development, and so on. Marketing must be familia; with the capabilities of each of hese functions and plan accordingly. Establishing and maintaining rapport with leaders in these other functional areas is a challenge for every marketer. Nonmarketing institutions outside the firm facilitated the marketing process by providing experlise in areas not directly related to marketing. Examples include financial institutions that lend marketers necessary funds; regulatory institutions that pass laws to allow marketers to perform an activity; and the press, which tells the public about the activities of the marketer.
The Marketing Plan
To a great extent, the same sequence of activities performed at the corporate level is repeated at the marketing level. The primary difference is that the marketing plan is directly influenced by the corporate plan as well as tne role of the other functions within the organization. Consequently, the marketing plan must always involve monitoring and reacting to changes in the corporate plan. Apart from this need to be flexible to accommodate the corporate plan, the marketing plan follows a fairly standardized sequence. The marketing plan begins with a mission. A mission reflects the general values of the organization. What does it stand for? How does it define integrity? How does it view the people it serves? Every organization has an explicit.
Marketing is an individualized ano highly creative process. Despite the availability of highpowered compuLers and sophisticated software capable of analyzing massive amounts of data, marketing is ~till more of an art rather than a science. Each business must customize its marketing efforts in response to its environment and the exchange process. Consequently, no two marketing strategies are exactly the same. This requirement of marketing to play slightly different roles, depending upon some set of situational criteria, has in tum provided us with a division of marketing into a number of different categories. This is not to imply, however, that there aren't general marketing principles that work in most businesses-there are. There is a right and wrong way to design a package. There are certain advertising strategies that tend to work more often than others. Rather, we are saying that because of certain factors, a busine~s's approach toward marketing and the ensuing trategy will require some modification from the basic plan. Shown in Table 1.1 arc the most common types of marketing categories. Since these various types ofmarketing will be discussed throughout this text, a brief introduction is provided at this point. Macromarketing Versus Micromarketing The division of marketing into macromarketing and micromarketing is a fairly recent one. Initially, the division was a result of the controversy concerning the responsibility of marketing. Should marketing be limited to the success of the individual firm, or should marketing consider the economic welfare of a whole society? Accepting the later, or "macro," point of view dramatically changes the way marketing is carried out. In this light, every marketing decision must be evaluated with regard to how it might positively or negatively affect each person and institution operating in that society. In 1982, Bunt and Burnett surveyed the academic community in order to define more precisely the distinction between macro- and mircomarketing. 4 Their findings suggest that the separation depends upon "what is being studied," "whether it is being viewed from the perspective of society or the firm," and "who receives the consequences of the activity." Examples of macromarketing activities are studying the marketing systems of different nations, the consequences on society of certain marketing actions, and the impact of certain technologies on the marketing transaction. The use of scanners in supermarkets and automatic teller machines in banking illustrates the last example.
Micromarketing examples include determining how Nikon Steel should segment its market, recommending how National Jewish Hospital should price their products, and evaluating the success of the "Just Say No" anti-drug campaign. Service Marketing Versus Goods Marketing The distinction between services and goods products is not always clear-cuL In general, service products tend to be intangible, are often consumed as they are produced, are difficult to standardize because they require human labor, and may require the customer to participate in the creation of the service product. Goods products tend to be just the opposite in terms of these criteria. Consequently, marketers of service products usually employ a marketing strategy quite different from that of goods marketers. For example, a local family physician creates tangibility by oroviding an environment. waiting room. examination rooms, diplomas on the walls, that convinces patients that they are receiving good health care. Conversely, coffee producers create iiltangibility in order to appear different from competitors. ~:-his is done through colorful packaging and advertisements showing people who are successful because they start each day with a cup or two or ten of Starbuck's coffee.
For-profit Marketing Versus Nonprofit Marketing
As the terms connote, the difference between for-profit and nonprofit marketing is in their primary objective. For-profit marketers measure success in terms of profitability and their ability to pay dividends or pay back loans. Continued existence is contingent upon level of profits. Nonprofit institutions exist to benefit a society, regardless of whether profits are achieved. Because of the implicit objectives assigned to nonprofits, they are subject to an entirely different additional set of laws, notably tax laws. While they are allowed to generate profits, they must use these monies in specific way~ in order to maintain their nonprufit status. There are several other factors that require adjustments to be made in the marketing strategies for nonprofits.
M ass Marketing, Direct Marketing, and Internet Marketing Mass marketing is distinguished from direct marketing in terms of the distance between the manufacturer and the ultimate user of the product. Mass marketing is characterized as having wide separation and indirect communication. A mass marketer, such as Nike, has very little direct contact with its customers and must distribute its product through various retail outlets alongside its competitors. Communication is impersonal, as evidenced by its national television and print advertising campaigns, couponing, and point-of-purchase displays. The success of mass marketing is contingent on the probability that within the huge audience exposed to the marketing strategy.. there exist sufficient potential customers interested in the product to make ~he strategy worthwhile. Direct marketing establishes a somewhat personal relationship with the customer by first allowing the customer to purchase the product directly from the manufacturer and then communicating with the customer on a first-name basis. This type of marketing is experiencing tremendous growth. Apparently, marketers have tired of the waste associated with mass IParketing and customers want more personal attention. Also, modem mechanisms for coliecting and processing accurate mailing lists have greatly increased the effectiveness of direct marketing. Catalogue companies (Spiegel, J.e. Penney), telecommunications companies (Sprint), and direct mail companies (Publishers Clearing House) are example of direct marketers. A modified type of direct marketing is represented by companies that allow ordeling of product by calling a toll-free number or mailing in an order card as part of an advertisement. Although (officially), Intemet marketing is a type of direct marketing, it has evolved so quickly and demanded the attention of so many companies that a separate section here is 'varranted. Essentially, Intemet technology (which changes by the moment) has created a new way of doing business. In the Internet age, the way consumers evaluate and follow through on their purchase decisions has changed significantly. "Call now!" is no longer an effective pitch. Consumers have control over how, when, and where they shop on the Internet. The Internet has all but eliminated the urgency of satisfying the need when the opportunity is presented. Internet marketing will b e discussed in detail in a later chapter.
Local, Regional, National, International, and Global Marketers
As one would expect, the size and location of a company's market varies greatly. Local marketers are concerned with customers that tend to be clustered tightly around the marketer. The marketer is able to learn a great deal about the customer and make necessary changes quickly. Naturally, the total potential market is limited. There is also the possibility that a new competitor or environmental factor will put a local marketer out of business. Regional marketers cover a larger geographic area that may necessitate multiple production plants and a more complex distribution network. While regional marketers tend to serve adjoining cities, parts of states, or entire states, dramatic differences in demand may still exist, requiring extensive adjustments in marketing strategy. National marketers distribute their product throughout a country. This may involve multiple manufacturing plants, a distribution system including warehouses and privately owned delivery vehicles, and different versions of the marketing "mix" or overall strategy. This type of marketing offers tremendous profit potential, but also exposes the marketer to new, aggressive competitors. International marketers operate in more than one country. As will become clear later in this book, massive adjustments are normally made in the marketing mix in various countries. Legal and cultural differences alone can greatly affect a strategy's outcome. As the U.S. market becomes more and more saturated with U.S.-made products, the continued expansion into foreign markets appears inevitable. Global marketing differs from international marketing in some very definite ways. Whereas international marketing means a company sells its goods or services in another country, it does not necessarily mean that the company has made any further commitments. Usually the product is still manufactured in the home country, sold by their people, and the profits are taken back to that country. In the case of Honda Motors, for example, it means building manufacturing plants in the U.S., hiring local employees, using local distribution systems and advertising agencies, and reinvesting a large percentage of the profits back into ' the U.S.
Consumer Goods Marketing and Business-to-Business (Industrial) Marketing
Consumer goods marketers sell to individuals who consume the finished product. Businessto-business marketers sell to other businesses or institutions that consume the product in tum as part of operating the business, or use the product in the assembly of the final product they sell to consumers. Business-to-business marketers engage in more personal selling rather than mass advertising and are willing to make extensive adjustments in factors such as the selling price, product features, terms of delivery, and so forth. For the consumer goods marketer, the various marketing components are relatively fixed. In addition, consumer goods marketers might employ emotional appeals and are faced with the constant battle of getting their product into retail outlets.
Strategic Components of Marketing
A necessary and useful starting point for the study of marketing is consideration of the management process. The management of marketing serves as the framework for the process of marketing. Marketing management also serves as a central link between marketing and the societal level and everyday consumption by the general public. Although there are many variations of the marketing process, the one shown in Figure 1.1 will be employed in this book. Our process begins with corporate-level considerations, which dictate the direction the entire organization will take. The three corporate-level con~iderations listed here (mission, objectives, and strategy) are more precisely basic management topics, but are addressed in passing in the following sections.
Functional Level Considerations
If a marketing firm is to adopt the customer-centered orientation discussed earlier, it must also extend this philosophy to the other functions/institutions with which it must interact. These functions, and the institutions that perform the functions can be categorized as nonmarketing institutions and marketing institutions. Nonmarketing institutions can exist within the organization or outside the organization. The former inciude accounting, financial planning, human resources, engineering, manufacturing, research and development, and so on. Marketing must be familia; with the capabilities of each of hese functions and plan accordingly. Establishing and maintaining rapport with leaders in these other functional areas is a challenge for every marketer. Nonmarketing institutions outside the firm facilitated the marketing process by providing experlise in areas not directly related to marketing. Examples include financial institutions that lend marketers necessary funds; regulatory institutions that pass laws to allow marketers to perform an activity; and the press, which tells the public about the activities of the marketer.
The Marketing Plan
To a great extent, the same sequence of activities performed at the corporate level is repeated at the marketing level. The primary difference is that the marketing plan is directly influenced by the corporate plan as well as tne role of the other functions within the organization. Consequently, the marketing plan must always involve monitoring and reacting to changes in the corporate plan. Apart from this need to be flexible to accommodate the corporate plan, the marketing plan follows a fairly standardized sequence. The marketing plan begins with a mission. A mission reflects the general values of the organization. What does it stand for? How does it define integrity? How does it view the people it serves? Every organization has an explicit.
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