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Ch1-Marketing Management, 16th edition -Philip Kotler
International Financial Management (Đại học Tôn Đức Thắng)
Scan to open on Studocu
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CHAPTER
1
Defining Marketing
for the New Realities
Riders in global markets
can access an affordable,
non-polluting Bird e-scooter
via smart phone (or have it
brought to their home or
business), wisk across town,
and drop it off at a public
space.
Source: Alexander Chernev
F ormally and informally, people and organizations engage in a vast number of activities that we
call marketing. In the face of the digital revolution and other major changes in the business envi-
ronment, effective marketing today is both increasingly vital and radically new. Consider the rapid
market success of the start-up Bird.
>>> Bird is an electric-scooter-sharing company dedicated to offering affordable, environmentally
friendly commuter transportation. It aims to give riders looking to take a short journey across town,
or from the subway or bus to their destination, a convenient mode of transportation that does not
pollute the air or add to traffic. Founded in September 2017 and headquartered in Venice, California,
Bird provides a fleet of shared electric scooters that can be accessed via smartphone. Rather than
requiring dedicated docking areas, Bird scooters can be picked up and dropped off on sidewalks
throughout the city. The company’s business model has proved immensely popular; in its first year of
operation its scooters were available in over 100 cities throughout North America, Europe, and Asia,
and they logged 10 million rides. Facing growing competition from other dockless scooter-sharing
2
Downloaded by Jymoh Ruggz ()
, lOMoARcPSD|38759856
PART 1 | FUNDAMENTALS OF MARKETING MANAGEMENT
start-ups, such as Lime and Spin, Bird’s business model has constantly evolved. It introduced Bird
Delivery service, which enables consumers to request a Bird to be delivered to their home or business
early in the morning to ensure that they have guaranteed transportation throughout the day. To speed
up adoption, Bird also introduced Bird Platform, a suite of products and services that gives entrepre-
neurs the opportunity to become independent operators and manage a fleet of shared e-scooters in
their community. Independent operators have the option to add their own logo to Bird scooters and
are given logistical support to charge, maintain, and distribute the e-scooters each day.1
Good marketing is no accident. It is both an art and a science, and it results from careful planning
and execution using state-of-the-art tools and techniques. Skillful marketers are continually updating
classic practices and inventing new ones to find creative, practical ways to adapt to new marketing
realities. In this chapter, we lay the foundation for sound marketing practices by reviewing important
marketing concepts, tools, frameworks, and issues.
The Scope of Marketing
To be a successful marketer, one must have a clear understanding of the essence of marketing, what
can be marketed, and how marketing works. We discuss these three aspects of marketing next.
WHAT IS MARKETING?
Marketing is about identifying and meeting human and social needs in a way that harmonizes with
the goals of the organization. When Google recognized that people needed to more effectively and
efficiently access information on the internet, it created a powerful search engine that organized and
prioritized queries. When IKEA noticed that people wanted good furnishings at substantially lower
prices, it created knockdown furniture. These two firms demonstrated marketing savvy and turned
a private or social need into a profitable business opportunity.2
The American Marketing Association offers the following formal definition: Marketing is the activ-
ity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large.3 Coping with these exchange processes calls for a
considerable amount of work and skill. Marketing management takes place when at least one party to
a potential exchange thinks about the means of achieving desired responses from other parties. Thus
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.
We can also distinguish between social and managerial definition of marketing. A social defini-
tion of marketing shows the role marketing plays in society; for example, one marketer has said that
marketing’s role is to “deliver a higher standard of living.” Our social definition of marketing: Marketing
is a societal process by which individuals and groups obtain what they need and want through creating, offering, and
freely exchanging products and services of value with others. Co-creation of value among consumers and with
Learning Objectives After studying this chapter you should be able to:
1.1 Define the scope of marketing. 1.4 Illustrate how to organize and manage a
modern marketing department.
1.2 Describe the new marketing realities.
1.5 Explain how to build a customer-centric
1.3 Explain the role of marketing in the organization.
organization.
3
Downloaded by Jymoh Ruggz ()
Ch1-Marketing Management, 16th edition -Philip Kotler
International Financial Management (Đại học Tôn Đức Thắng)
Scan to open on Studocu
Studocu is not sponsored or endorsed by any college or university
Downloaded by Jymoh Ruggz ()
, lOMoARcPSD|38759856
CHAPTER
1
Defining Marketing
for the New Realities
Riders in global markets
can access an affordable,
non-polluting Bird e-scooter
via smart phone (or have it
brought to their home or
business), wisk across town,
and drop it off at a public
space.
Source: Alexander Chernev
F ormally and informally, people and organizations engage in a vast number of activities that we
call marketing. In the face of the digital revolution and other major changes in the business envi-
ronment, effective marketing today is both increasingly vital and radically new. Consider the rapid
market success of the start-up Bird.
>>> Bird is an electric-scooter-sharing company dedicated to offering affordable, environmentally
friendly commuter transportation. It aims to give riders looking to take a short journey across town,
or from the subway or bus to their destination, a convenient mode of transportation that does not
pollute the air or add to traffic. Founded in September 2017 and headquartered in Venice, California,
Bird provides a fleet of shared electric scooters that can be accessed via smartphone. Rather than
requiring dedicated docking areas, Bird scooters can be picked up and dropped off on sidewalks
throughout the city. The company’s business model has proved immensely popular; in its first year of
operation its scooters were available in over 100 cities throughout North America, Europe, and Asia,
and they logged 10 million rides. Facing growing competition from other dockless scooter-sharing
2
Downloaded by Jymoh Ruggz ()
, lOMoARcPSD|38759856
PART 1 | FUNDAMENTALS OF MARKETING MANAGEMENT
start-ups, such as Lime and Spin, Bird’s business model has constantly evolved. It introduced Bird
Delivery service, which enables consumers to request a Bird to be delivered to their home or business
early in the morning to ensure that they have guaranteed transportation throughout the day. To speed
up adoption, Bird also introduced Bird Platform, a suite of products and services that gives entrepre-
neurs the opportunity to become independent operators and manage a fleet of shared e-scooters in
their community. Independent operators have the option to add their own logo to Bird scooters and
are given logistical support to charge, maintain, and distribute the e-scooters each day.1
Good marketing is no accident. It is both an art and a science, and it results from careful planning
and execution using state-of-the-art tools and techniques. Skillful marketers are continually updating
classic practices and inventing new ones to find creative, practical ways to adapt to new marketing
realities. In this chapter, we lay the foundation for sound marketing practices by reviewing important
marketing concepts, tools, frameworks, and issues.
The Scope of Marketing
To be a successful marketer, one must have a clear understanding of the essence of marketing, what
can be marketed, and how marketing works. We discuss these three aspects of marketing next.
WHAT IS MARKETING?
Marketing is about identifying and meeting human and social needs in a way that harmonizes with
the goals of the organization. When Google recognized that people needed to more effectively and
efficiently access information on the internet, it created a powerful search engine that organized and
prioritized queries. When IKEA noticed that people wanted good furnishings at substantially lower
prices, it created knockdown furniture. These two firms demonstrated marketing savvy and turned
a private or social need into a profitable business opportunity.2
The American Marketing Association offers the following formal definition: Marketing is the activ-
ity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at large.3 Coping with these exchange processes calls for a
considerable amount of work and skill. Marketing management takes place when at least one party to
a potential exchange thinks about the means of achieving desired responses from other parties. Thus
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.
We can also distinguish between social and managerial definition of marketing. A social defini-
tion of marketing shows the role marketing plays in society; for example, one marketer has said that
marketing’s role is to “deliver a higher standard of living.” Our social definition of marketing: Marketing
is a societal process by which individuals and groups obtain what they need and want through creating, offering, and
freely exchanging products and services of value with others. Co-creation of value among consumers and with
Learning Objectives After studying this chapter you should be able to:
1.1 Define the scope of marketing. 1.4 Illustrate how to organize and manage a
modern marketing department.
1.2 Describe the new marketing realities.
1.5 Explain how to build a customer-centric
1.3 Explain the role of marketing in the organization.
organization.
3
Downloaded by Jymoh Ruggz ()
