when they are directed to specific objects that might satisfy the need. A U.S. consumer needs food
but may want a Philly cheesesteak and an iced tea. A person in Afghanistan needs food but may
want rice, lamb, and carrots.Wants are shaped by our society. Demands are wants for specific products backed by an ability to pay. Many people want a Mercedes; only a few are able to buy one. Companies must measure not only how many people want their product, but also how many are willing and able to buy it. These distinctions shed light on the frequent criticism that “marketers create needs” or “mar-
keters get people to buy things they don’t want.” Marketers do not create needs: Needs preexist
marketers. Marketers, along with other societal factors, influence wants. They might promote the
idea that a Mercedes would satisfy a person’s need for social status.They do not,however,create the
need for social status. Some customers have needs of which they are not fully conscious or that they cannot articulate. What does it mean when the customer asks for a “powerful”lawn mower or a “peaceful”hotel? The marketer must probe further.We can distinguish five types of needs:
1. Stated needs (The customer wants an inexpensive car.)
2. Real needs (The customer wants a car whose operating cost, not initial price, is low.)
3. Unstated needs (The customer expects good service from the dealer.)
4. Delight needs (The customer would like the dealer to include an onboard GPS naviga-tion system.)
5. Secret needs (The customer wants friends to see him or her as a savvy consumer.)
Responding only to the stated need may shortchange the customer. 18 Consumers did not know
much about cellular phones when they were first introduced, and Nokia and Ericsson fought to
shape consumer perceptions of them. To gain an edge, companies must help customers learn what they want.
Target Markets, Positioning, and Segmentation Not everyone likes the same cereal, restaurant, college, or movie. Therefore, marketers start by dividing the market into segments. They identify and profile distinct groups of buyers who might prefer or require varying product and service mixes by examining demographic, psychographic, and behavioral differences among buyers.After identifying market segments,the marketer decides which present the greatest opportunities—which are its target markets. For each,the firm develops a market offering that it positions in the minds of the target buyers as delivering some central benefit(s).Volvo develops its cars for buyers to whom safety is a major concern,positioning its vehicles as the safest a customer can buy.Offerings and Brands Companies address customer needs by putting forth a value proposition,a set of benefits that sat- isfy those needs. The intangible value proposition is made physical by an offering, which can be a combination of products, services, information, and experiences.
A brand is an offering from a known source. A brand name such as McDonald’s carries many
associations in people’s minds that make up its image: hamburgers,cleanliness,convenience,cour-
teous service, and golden arches.All companies strive to build a brand image with as many strong,
favorable, and unique brand associations as possible.Value and Satisfaction The buyer chooses the offerings he or she perceives to deliver the most value, the sum of the tangible and intangible benefits and costs to her.Value, a central marketing concept, is primarily a combination of quality, service, and price (qsp), called the customer value triad.Value perceptions increase with quality and service but decrease with price.
We can think of marketing as the identification, creation, communication, delivery, and monitoring of customer value. Satisfaction reflects a person’s judgment of a product’s perceived performance in relationship to expectations.If the performance falls short of expectations,the customer is disappointed. If it matches expectations, the customer is satisfied. If it exceeds them, the customer is delighted.

To prepare to be a marketer, you need to understand what marketing is, how it works, who does it,
and what is marketed.

What Is Marketing?
Marketing is about identifying and meeting human and social needs. One of the shortest good definitions of marketing is “meeting needs profitably.” When eBay recognized that people were unable to locate some of the items they desired most, it created an online auction clearinghouse. 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.

The American Marketing Association offers the following formal definition: Marketing is the activity,set of institutions,and processes for creating,communicating,delivering,and exchanging offerings that have value for customers, clients, partners, and society at large. 7 Coping with these exchange processes calls for a considerable amount of work and skill.Marketing managementtakes place when at least one party to a potential exchange thinks about the means ofachieving desired responses from other parties. Thus we see marketing management as the art and science of choosing target markets and getting,keeping,and growing customers through creating,delivering,and communicating superior customer value.

We can distinguish between a social and a managerial definition of marketing. A social definition shows the role marketing plays in society; for example,one marketer has said that marketing’ srole is to “deliver a higher standard of living.” Here is a social definition that serves our purpose: 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.

Managers sometimes think of marketing as “the art of selling products,” but many people are surprised when they hear that selling is not the most important part of marketing! Selling is only the tip of the marketing iceberg. Peter Drucker, a leading management theorist, puts it this way:

There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the cus-tomer so well that the product or service fits him 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.

When Nintendo designed its Wii game system, when Canon launched its ELPH digital cam-era line, and when Toyota introduced its Prius hybrid automobile, these manufacturerswere swamped with orders because they had designed the right product, based on doing carefulmarketing homework

What Is Marketed?
Marketers market 10 main types of entities: goods, services, events, experiences, persons, places, properties, organizations, information, and ideas. Let’s take a quick look at these categories.

GOODS Physical goods constitute the bulk of most countries’production and marketing efforts. Each year, U.S. companies market billions of fresh, canned, bagged, and frozen food products and millions of cars, refrigerators, televisions, machines, and other mainstays of a modern economy.

SERVICES As economies advance, a growing proportion of their activities focuses on the production of services. The U.S. economy today produces a 70–30 services-to-goods mix. Services include the work of airlines, hotels, car rental firms, barbers and beauticians, maintenance and repair people, and accountants, bankers, lawyers, engineers, doctors, software programmers, and management consultants. Many market offerings mix goods and services, such as a fast-food meal.

EVENTS Marketers promote time-based events, such as major trade shows, artistic performances, and company anniversaries. Global sporting events such as the Olympics and the World Cup are promoted aggressively to both companies and fans

Marketing’s broader importance extends to society as a whole. Marketing has helped introduce and gain acceptance of new products that have eased or enriched people’s lives. It can inspire en- hancements in existing products as marketers innovate to improve their position in the market- place. Successful marketing builds demand for products and services, which, in turn, creates jobs. By contributing to the bottom line, successful marketing also allows firms to more fully engage in socially responsible activities.

CEOs recognize the role of marketing in building strong brands and a loyal customer base, in- tangible assets that contribute heavily to the value of a firm. Consumer goods makers, health care insurers, nonprofit organizations, and industrial product manufacturers all trumpet their latest marketing achievements. Many now have a chief marketing officer (CMO) to put marketing on a more equal footing with other C-level executives such as the chief financial officer (CFO) or chief information officer (CIO).

Making the right marketing decisions isn’t always easy. One survey of more than a thousand senior marketing and sales executives revealed that although 83 percent felt that marketing and sales capabilities were a top priority for their organization’s success,in rating their actual marketing effectiveness, only 6 percent felt that they were doing an “extremely good”job.

Marketers must decide what features to design into a new product or service,what prices to set, where to sell products or offer services, and how much to spend on advertising, sales, the Internet, or mobile marketing. They must make those decisions in an Internet-fueled environment where consumers, competition,technology,and economic forces change rapidly,and the consequences of
the marketer’s words and actions can quickly multiply.

Domino’s When two employees in Conover, North Carolina, posted a YouTube video showing themselves preparing sandwiches while putting cheese up their noses and violating other health-code standards, Domino’s learned an important lesson about PR and brand communications in a modern era. Once it found the employees—who claimed the video was just a gag and the sandwiches were never delivered—the company fired them. In just a few days,however,there had been more than a million downloads of the video
and a wave of negative publicity.When research showed that perception of quality for the brand had turned from positive to negative in that short time, the firm aggressively took action through social media such as Twitter, YouTube,and others.

As Domino’s learned, in an era of connectivity, it is important to respond swiftly and decisively. While marketers were coming to grips with this increasingly wired world, the economic recession of 2008–2009 brought budget cuts and intense pressure from sen- ior management to make every marketing dollar count. More than ever, marketers need to understand and adapt to the latest market- place developments. At greatest risk are firms that fail to carefully monitor their customers and competitors, continuously improve
their value offerings and marketing strategies, or satisfy their employees, stockholders, suppliers, and channel partners in the process.

Skillful marketing is a never-ending pursuit. Consider how some top firms drive business:

• OfficeMax promoted a new line of products by professional organizer Peter Walsh with Web videos and in-store events featuring local experts demonstrating his OfficeMax-branded organizing system.
• eBay promoted its “Let’s Make a Daily Deal” holiday promotion by recreating the famous 1970s TV game show Let’s Make a Deal in Times Square, adding an online component so people outside New York City could play.
• Johnson & Johnson launched BabyCenter.com to help new parents. Its success is thought to have contributed to subscription slumps experienced by parenting magazines.

Good marketers are always seeking new ways to satisfy customers and beat competition

Formally or informally, people and organizations engage in a vast numbern of activities we could call marketing. Good marketing has become increasingly vital for success. But what constitutes good marketing is constantly evolving and changing. The election of Barack Obama as the 44th President of the United States was attributed, in part, to the adoption of new marketing practices.

The “Obama for America” presidential campaign combined a charismatic politician, a powerful message of hope, and a thoroughly integrated modern marketing program. The marketing plan needed to accomplish two very different goals: expand the electorate via broader messages while targeting very specific audiences.Multimedia tactics combined offline and online media, as well as free and paid media. When research showed that the more voters learned about Obama, the more they identified with him, the campaign added long-form videos to traditional print, broadcast, and outdoor ads.The Obama team—aided by its agency GMMB—also put the Internet at the heart of the campaign, letting it serve as the “central nervous system”for PR,advertising,advance work,fund-raising,and organizing in all 50 states. Their guiding philosophy was to “build online tools to help people self-organize and then get out of their way.” Technology was a means to“empower people to do what they were interested in doing in the first place.” Although social media like Facebook, Meetup, YouTube, and Twitter were crucial,perhaps Obama’s most powerful digital tool was a massive 13.5 million–name e-mail list.What were the results of these online efforts? About $500 million (most in sums of less than $100) was raised online from 3 million donors; 35,000 groups organized through the Web site, My.BarackObama.com; 1,800 videos posted to YouTube; the creation of Facebook’s most popular page; and, of course, the election of the next President of the United States.

Good marketing is no accident , but a result of careful planning and execution using state-of-the-art tools and techniques. It becomes both an art and a science as marketers strive to find creative new solutions to often-complex challenges amid profound changes in the 21st century marketing environment. In this book, we describe how top marketers balance discipline and imagination to address these new marketing realities. In the first chapter, we lay the foundation by reviewing important marketing concepts, tools, frameworks, and issues.