1
DEFINING MARKETING:
CHAPTER THE EUROPEAN CONTEXT
CHAPTER QUESTIONS
• Why is marketing important and what is the scope of marketing?
• How do we understand markets and customers?
• How is marketing practiced?
• What are the European marketing realities, company and consumer challenges?
• What is the philosophy of marketing?
• How is marketing in a post modern world and retro marketing practiced?
• What is an overview of marketing management?
CHAPTER SUMMARY
Marketing is crucial for business success, focusing on understanding customers and
marketing to them or ‘meeting needs profitably’. Marketing management is the art and
science of choosing target markets and getting, keeping and increasing customers through
creating, managing, communicating and delivering superior customer value.
Marketing can be used for services, products, events, experiences, persons, places and
ideas. There are many key markets, including consumer, business, global and non-profit,
voluntary and government markets. Much of marketing takes place in a network of firms
and customers. Marketing no longer competes against one company but against a
network of companies. Marketing has five main practices, including transactional,
database, emarketing, interaction and network, each of which is used depending on the
customer and the industry, but there is usually a dominant marketing practice. These
reflect a transactional to relational perspective to marketing.
The European marketing environment presents some challenges for marketers. From a
company perspective there is heightened competition, globalisation, increased ICT,
industry convergence, disintermediation and retailer transformation. From a consumer
perspective there is increased consumer sophistication and particularly a technology
savvy customer who has greater choice, greater information and greater access to
products and services 24/7.
Though a simple idea, the philosophy of marketing, which is customer focused, can be
hard for companies to embrace. Many companies are stuck in a production or selling
philosophy that overlooks the core needs of their customers and achieves organisational
goals by being more effective than the competition in creating, managing, delivering and
communicating superior customer value to their chosen target market. Postmodern
marketing suggests that we should challenge marketing assumptions and tease, torment,
,Instructor’s Manual for the first European edition of Marketing Management
tempt and tantalize customers. The move to postmodern marketing is reflective of a move
to a more knowledge society where the customer understands tricksterism, exclusivity,
amplifications, secrecy and entertainment as core creative needs of marketing mix
programmes.
The overview of marketing management sets out the core marketing tasks necessary for
success to include developing marketing strategies and plans, capturing marketing
insights, choosing target markets and positioning and then using the marketing mix to
connect with customers, shaping the market offerings, delivering and communicating
value and creating long-term growth through building strong
DETAILED CHAPTER OUTLINE
1. The Importance of Marketing
Marketing is a complex set of tasks as well as a philosophy of business. Marketing
managers must make major strategic or long-term decisions along with tactical or short-
term decisions. Strategically they must consider which features to design into new services
or products, what kind of price to offer customers, what channels to use to distribute their
services and products, how much to spend on communications including advertising, sales
or Internet, and which other media is most appropriate. Tactically, they must also decide
on details.
2. The Scope of Marketing
To prepare to be marketers, you need to understand what marketing is, how it works, what
is marketed, and who does the marketing.
A. What Is Marketing?
Marketing deals with identifying and meeting human and social needs. One of the
shortest definitions of marketing is “meeting needs profitably.” This is called balanced
centricity, which is a focus on the customer and on the company and its objectives.
Christian Gronroos defined marketing as “a customer focus that permeates
organizational functions and processes and is geared towards marketing promises
through value proposition, enabling the fulfillment of individual expectations created
by such promises and fulfilling such expectations through support to customers’
value-generating processes, thereby supporting value creation in the firm’s as well as
its customers’ and other stakeholders’ processes.
Marketing management is the art and science of choosing target markets, and getting,
keeping, and increasing customers through creating, managing, communicating, and
delivering superior customer value.
A social definition of marketing is that “marketing is a societal process by which
individuals and groups obtain what they need and want through creating, offering, and
2
© Pearson Education 2009
, Chapter 1: Defining Marketing – The European Context
freely exchanging products and services of value with others.” Just like an iceberg,
over 80-90% of marketing occurs out of the sight of the consumer.
Peter Drucker describes the process of marketing this way: “the aim of marketing is to
know and understand the customer so well that the product or service fits him/her and
sells itself. Ideally marketing should result in a customer who is ready to buy. All that
should be needed then is to make the product or service available.”
B. Understanding Markets and Consumers
Marketing managers can market seven entities: services, products, experiences,
people, places, and ideas.
The top European companies and service companies are listed in Table 1.1.
1. Services include such products as airlines, hotels, car hire, hairdressers, and so on.
This text takes a service-dominant approach to marketing, meaning that rather
than four Ps of the marketing mix, we focus on seven, including three service mix
elements (process, physical evidence, and people).
2. The manufacture of physical products was the traditional cornerstone of economic
activity in Europe.
3. The servicisation of products refers to the relative importance of the service
dimension in a given product offering.
4. Events like music shows, trade fairs, and football represent a form of product.
5. Experiences like theme parks can be created, staged, and marketed.
6. Celebrity marketing is big business.
7. Places compete actively to attract tourists, factories, company headquarters, and
new residents. Six European countries are in the world’s top ten destinations for
holiday makers as shown in Table 1.2.
8. Ideas are marketed using social marketing which uses tools and techniques of
marketing to change people’s behavior.
C. Marketing’s Role in Creating Demand
Marketers must have the ability to stimulate demand for their company’s services and
products. Eight states of market demand are possible. In each case, marketers must
identify the underlying cause of the demand state and then determine a plan of action
to shift the demand to a more desirable state.
1. Full demand means consumers buy all products brought to market.
2. Overfull demand means there are more consumers demanding the service or
product than can be satisfied.
3. Irregular demand means consumer purchases vary on a seasonal, monthly,
weekly, daily, or even hourly basis.
4. Declining demand means consumers begin to buy the service or product less
frequently or not at all.
3
© Pearson Education 2009
, Instructor’s Manual for the first European edition of Marketing Management
5. Negative demand means that consumers dislike the service or product and may
even pay a price to avoid it.
6. Nonexistent demand means that consumers may be unaware of or uninterested in
the product or service.
7. Latent demand means that consumers may share a strong need that cannot be
satisfied by an existing product or service.
8. Unwholesome demand means that consumers may be attracted to services or
products that have undesirable social consequences.
D. Markets
Economists describe a market as a collection of buyers and sellers who transact over a
particular product or product class.
Marketers use the term “market” to cover various groups of customers. The five basic
markets are resource markets, government markets, manufacturer markets,
intermediary markets, and consumer markets. Figure 1.1 illustrates the network of the
health care market.
Figure 1.2 illustrates a simple marketing system.
Each nation’s economy and the global economy are linked through exchange
processes. This is referred to as a network economy. A network economy is driven by
a dynamic and knowledge-rich technology dominant environment, meaning that the
hierarchical stand-alone organizations have changed into a variety of network forms
where:
• Internal networks are designed to reduce hierarchy and open firms to their
environments
• Vertical networks maximize the productivity of serially dependent functions
by creating partnerships among independent skill-specialized firms
• Intermarket networks seek to leverage horizontal synergies across industries,
and
• Opportunity networks are organized around customer needs and market
opportunities and designed to search for the best solutions to them.
1. Consumer markets focus on consumer purchases that are generally made by
individual decision makers or a decision-making unit. Figure 1.3 illustrates the
European purchasing power in 2007.
2. Business markets means marketing focused on understanding business buying
centres and how business purchases in different ways to consumers.
3. Global markets require a global mindset. Getting a global mindset requires three
components: a) think globally, b) think locally, and c) think globally and locally
simultaneously.
4. Nonprofit, voluntary, and government markets also require marketing expertise.
4
© Pearson Education 2009
DEFINING MARKETING:
CHAPTER THE EUROPEAN CONTEXT
CHAPTER QUESTIONS
• Why is marketing important and what is the scope of marketing?
• How do we understand markets and customers?
• How is marketing practiced?
• What are the European marketing realities, company and consumer challenges?
• What is the philosophy of marketing?
• How is marketing in a post modern world and retro marketing practiced?
• What is an overview of marketing management?
CHAPTER SUMMARY
Marketing is crucial for business success, focusing on understanding customers and
marketing to them or ‘meeting needs profitably’. Marketing management is the art and
science of choosing target markets and getting, keeping and increasing customers through
creating, managing, communicating and delivering superior customer value.
Marketing can be used for services, products, events, experiences, persons, places and
ideas. There are many key markets, including consumer, business, global and non-profit,
voluntary and government markets. Much of marketing takes place in a network of firms
and customers. Marketing no longer competes against one company but against a
network of companies. Marketing has five main practices, including transactional,
database, emarketing, interaction and network, each of which is used depending on the
customer and the industry, but there is usually a dominant marketing practice. These
reflect a transactional to relational perspective to marketing.
The European marketing environment presents some challenges for marketers. From a
company perspective there is heightened competition, globalisation, increased ICT,
industry convergence, disintermediation and retailer transformation. From a consumer
perspective there is increased consumer sophistication and particularly a technology
savvy customer who has greater choice, greater information and greater access to
products and services 24/7.
Though a simple idea, the philosophy of marketing, which is customer focused, can be
hard for companies to embrace. Many companies are stuck in a production or selling
philosophy that overlooks the core needs of their customers and achieves organisational
goals by being more effective than the competition in creating, managing, delivering and
communicating superior customer value to their chosen target market. Postmodern
marketing suggests that we should challenge marketing assumptions and tease, torment,
,Instructor’s Manual for the first European edition of Marketing Management
tempt and tantalize customers. The move to postmodern marketing is reflective of a move
to a more knowledge society where the customer understands tricksterism, exclusivity,
amplifications, secrecy and entertainment as core creative needs of marketing mix
programmes.
The overview of marketing management sets out the core marketing tasks necessary for
success to include developing marketing strategies and plans, capturing marketing
insights, choosing target markets and positioning and then using the marketing mix to
connect with customers, shaping the market offerings, delivering and communicating
value and creating long-term growth through building strong
DETAILED CHAPTER OUTLINE
1. The Importance of Marketing
Marketing is a complex set of tasks as well as a philosophy of business. Marketing
managers must make major strategic or long-term decisions along with tactical or short-
term decisions. Strategically they must consider which features to design into new services
or products, what kind of price to offer customers, what channels to use to distribute their
services and products, how much to spend on communications including advertising, sales
or Internet, and which other media is most appropriate. Tactically, they must also decide
on details.
2. The Scope of Marketing
To prepare to be marketers, you need to understand what marketing is, how it works, what
is marketed, and who does the marketing.
A. What Is Marketing?
Marketing deals with identifying and meeting human and social needs. One of the
shortest definitions of marketing is “meeting needs profitably.” This is called balanced
centricity, which is a focus on the customer and on the company and its objectives.
Christian Gronroos defined marketing as “a customer focus that permeates
organizational functions and processes and is geared towards marketing promises
through value proposition, enabling the fulfillment of individual expectations created
by such promises and fulfilling such expectations through support to customers’
value-generating processes, thereby supporting value creation in the firm’s as well as
its customers’ and other stakeholders’ processes.
Marketing management is the art and science of choosing target markets, and getting,
keeping, and increasing customers through creating, managing, communicating, and
delivering superior customer value.
A social definition of marketing is that “marketing is a societal process by which
individuals and groups obtain what they need and want through creating, offering, and
2
© Pearson Education 2009
, Chapter 1: Defining Marketing – The European Context
freely exchanging products and services of value with others.” Just like an iceberg,
over 80-90% of marketing occurs out of the sight of the consumer.
Peter Drucker describes the process of marketing this way: “the aim of marketing is to
know and understand the customer so well that the product or service fits him/her and
sells itself. Ideally marketing should result in a customer who is ready to buy. All that
should be needed then is to make the product or service available.”
B. Understanding Markets and Consumers
Marketing managers can market seven entities: services, products, experiences,
people, places, and ideas.
The top European companies and service companies are listed in Table 1.1.
1. Services include such products as airlines, hotels, car hire, hairdressers, and so on.
This text takes a service-dominant approach to marketing, meaning that rather
than four Ps of the marketing mix, we focus on seven, including three service mix
elements (process, physical evidence, and people).
2. The manufacture of physical products was the traditional cornerstone of economic
activity in Europe.
3. The servicisation of products refers to the relative importance of the service
dimension in a given product offering.
4. Events like music shows, trade fairs, and football represent a form of product.
5. Experiences like theme parks can be created, staged, and marketed.
6. Celebrity marketing is big business.
7. Places compete actively to attract tourists, factories, company headquarters, and
new residents. Six European countries are in the world’s top ten destinations for
holiday makers as shown in Table 1.2.
8. Ideas are marketed using social marketing which uses tools and techniques of
marketing to change people’s behavior.
C. Marketing’s Role in Creating Demand
Marketers must have the ability to stimulate demand for their company’s services and
products. Eight states of market demand are possible. In each case, marketers must
identify the underlying cause of the demand state and then determine a plan of action
to shift the demand to a more desirable state.
1. Full demand means consumers buy all products brought to market.
2. Overfull demand means there are more consumers demanding the service or
product than can be satisfied.
3. Irregular demand means consumer purchases vary on a seasonal, monthly,
weekly, daily, or even hourly basis.
4. Declining demand means consumers begin to buy the service or product less
frequently or not at all.
3
© Pearson Education 2009
, Instructor’s Manual for the first European edition of Marketing Management
5. Negative demand means that consumers dislike the service or product and may
even pay a price to avoid it.
6. Nonexistent demand means that consumers may be unaware of or uninterested in
the product or service.
7. Latent demand means that consumers may share a strong need that cannot be
satisfied by an existing product or service.
8. Unwholesome demand means that consumers may be attracted to services or
products that have undesirable social consequences.
D. Markets
Economists describe a market as a collection of buyers and sellers who transact over a
particular product or product class.
Marketers use the term “market” to cover various groups of customers. The five basic
markets are resource markets, government markets, manufacturer markets,
intermediary markets, and consumer markets. Figure 1.1 illustrates the network of the
health care market.
Figure 1.2 illustrates a simple marketing system.
Each nation’s economy and the global economy are linked through exchange
processes. This is referred to as a network economy. A network economy is driven by
a dynamic and knowledge-rich technology dominant environment, meaning that the
hierarchical stand-alone organizations have changed into a variety of network forms
where:
• Internal networks are designed to reduce hierarchy and open firms to their
environments
• Vertical networks maximize the productivity of serially dependent functions
by creating partnerships among independent skill-specialized firms
• Intermarket networks seek to leverage horizontal synergies across industries,
and
• Opportunity networks are organized around customer needs and market
opportunities and designed to search for the best solutions to them.
1. Consumer markets focus on consumer purchases that are generally made by
individual decision makers or a decision-making unit. Figure 1.3 illustrates the
European purchasing power in 2007.
2. Business markets means marketing focused on understanding business buying
centres and how business purchases in different ways to consumers.
3. Global markets require a global mindset. Getting a global mindset requires three
components: a) think globally, b) think locally, and c) think globally and locally
simultaneously.
4. Nonprofit, voluntary, and government markets also require marketing expertise.
4
© Pearson Education 2009
