CHAPTER 1
To Start, Recommendations of Kotler
To start, I want to highlight three recommendations given byProfessor Philip Kotler in one of his lectures: managing the present,selectively forgetting the past, and creating the future.
1. Managing the present: To Kotler, managing the presentinvolves deep knowledge of the environment in which thecompany is in, including the client and other stakeholders,so that managers can make right decisions related toproducts, processes, and threads, either in the sense ofcreating them or even abandoning them.
2. Selectively forgetting the past: Exploiting accumulatedexperience is increasingly important in the maintenanceof customers and markets. It should include theflexibility to abandon practices that are proven to notrepresent value for the client nor for the organization.
3. Creating the future: For the future, Kotler emphasizesMarketing 3.0, which focuses on the moral and ethicalvalues of organizations, as well as their relation toenvironmental issues.
The tolerance of new ideas is one of the characteristics thatKotler attributes to enduring companies. For these companies,says Kotler, priorities are: valuing people, not assets; directionand controls that become looser over time; and an organizationdedicated to learning and community involvement.
Finally, Professor Kotler summarizes: The ancient philosophyof the relationship between business and society made us believethat "what is good for business is good for society!" The newphilosophy, on the other hand, is that "what is good for society isgood for organizations."
Thus, we propose to readers to anticipate the future of theirorganizations from the ideas presented here and practice planningmarketing that enables the effective management of the present andthe selective forgetfulness of what has passed.
CHAPTER 2
After All, What Is Marketing?
Initially we are going to understand the etymology of the wordmarketing, and then explore it as an administrative activity.
MARKET INGMERCADO LOGY
The word mercado comes from the Latin language and means"market." The English suffix logy comes from the Greek languageand means "the study of." So, mercadology means "the study ofthe market."
However, studying the market is just the beginning of theprocess, because the marketing activities in a company originateafter the market is researched. By possession of knowledge aboutthe characteristics of target customers—their needs, desires, andpurchase behaviors—the company can be prepared to serve them.
The American Marketing Association (AMA) definesmarketing as "the activity, set of institutions, and processes forcreating, communicating, delivering, and exchanging offerings thathave value for customers, clients, partners, and society at large"(AMA 2008).
It is possible to summarize the definition of marketing and itsactivity as follows:
Marketing is the organization response to the demands ofconsumer, through adjustments performed in theiroperational processes.
In the first part of the definition that was presented—marketingis the organization response to the demands of the consumer—anadaptation of the definition given by Jerome McCarthy andWilliam D. Perreault Jr. (1960), one of the precursors in marketingstudies, two words deserve to be highlighted: response anddemand, because they point to the actions of marketing directedoutside of the organization. Considering that you can only answercorrectly when you know the question, it is impossible to promotethe satisfaction of the client without knowing his needs and desires.This means researching the market and getting closer to the realityof the customer to have a greater chance of success in offeringproducts and services that satisfy him.
In the second part of the definition—through adjustmentsperformed in their operational processes—we stress the wordsadjustments and processes, which point into the organization. Thatis, after knowing the market, we must prepare ourselves to serve it.And that includes the company as a whole, not just the marketingarea. From the president to the janitor, everyone should be orientedfor the customer.
In short, marketing is the activity that builds brands of valuein the market by offering products and services with a focus onthe expectations of its effective and potential customers and onorganizational objectives.
CHAPTER 3
And What Is Not Marketing?
After defining marketing, it is worth clarifying what marketingis not. We call this conceptual clarification.
First, marketing is not a fad, because no fashion would last solong and would not develop with such strength as occurred withthe subject of marketing within the context of science in businessadministration.
Marketing is not just propaganda, as some still think it is. Infact, advertising is the marketing tool that most appears, that moststands out, because it happens in front of the cameras. Nobody seeswhat happens when the company is planning or conducting marketresearch. People do not take note of the anguish experienced byexecutives and businessmen in developing new products. Peopledo not take note of what they live as they decide the price of aproduct or its distribution to become competitive and accessible tothe consumer.
But everyone sees the advertisement. It is on the billboards, inmagazines, in newspapers, on packaging, and on television, amongother media that surround us daily.
Marketing is not fooling people, under any circumstances.That's lack of ethics and respect, shame, not marketing. Some evenmake false advertising, but this is a distortion of the concept ofmarketing. Marketing has, in essence, the honest-exchange relationfrom company to consumer, based on win-win, not win-lose, assome assume.
Marketing does not finish with the sale. The sale process isjust the beginning of a relationship that should last for a long time,if it is in the interest of both sides. The moment of the sale is theconfirmation of the promise made by the company in the media.The satisfaction is just confirmed later, and repurchase depends onthis satisfaction.
What gives longevity to companies in the market is thecontinuing relationship they have with their customers. As therelationship progresses, the client represents less cost to theorganization, because it is not necessary to invest in order to winhim and there is less risk of default when you know the reputationof the one with whom you negotiate.
Marketing is not just for big companies. Moreover, the smallerthe company, the greater is the chance it will have to be closer toits customer, to hear him, to exchange ideas and learn about him.Of course, when you give examples of marketing actions, largeorganizations' brands are known by more people, but that does notmean that only large corporations are able to do marketing.
Marketing is not just for private companies. There are manypublic companies that do good marketing, all over the world,through logistics efficiency, product development, and targetedcustom or environmental actions that contribute to the constructionof brands' market value.
Marketing activities have been equally important to theBrazilian government to stimulate the correct and healthy behaviorof the Brazilian population, such as the practice of prenatal testing,prevention of prostate cancer and breast cancer, and respect totraffic safety, including the use of helmets, seat belts, and childsafety seats in the backseat, as well as campaigns against alcoholfor those who will drive.
Finally, it is worth mentioning that marketing is not justfor companies that seek profit. NGOs—nongovernmentalorganizations—as well as some charities demonstrate commitmentto the provision of real value to society.
Having made these conceptual clarifications, we can move onto analyze the activities of a marketing professional.
CHAPTER 4
What Are the Activities of the Marketing Area?
Many theories are supported by paradigms that are meant tofacilitate their understanding and operationalization. So it is withthe mix or composite marketing or simply the 4Ps (product, price,place, and promotion), which represent the pillars of marketingactivity. But what is the origin of the marketing mix?
The concept of marketing mix was designed in the fifties(Grönroos 1994) by Professor Neil Borden of Harvard BusinessSchool. In 1964, he authored an article entitled "The Conceptof the Marketing Mix," which was published as a chapter in theGeorge Schwartz's book entitled Science in Marketing (Borden1984).
The marketing mix created by Borden (1984) originallycontained twelve elements. They are:
• Product—quality and design appropriate to the targetmarket;
• Pricing—price policy;
• Branding—brand policy;
• Channels of distribution—channels between producersand consumers, and efforts to ensure harmony in the channel;
• Personal selling—sales staff;
• Advertising—how much to spend and the platform to beadopted of product and company image;
• Promotion—special plans for sale;
• Packaging—decisions about packaging and labels;
• Display—methods of exposure of products andcommunication pieces that help the sales process;
• Servicing—decisions on necessary services;
• Physical handling—logistics (warehousing, transportation,and inventory);
• Fact-finding and analysis—acquisition, analysis, and useof data in marketing operations.
In 1960, Professor Jerome McCarthy and William D. PerreaultJr., in their book Basic Marketing: A Managerial Approach,presented the twelve elements of the marketing mix proposed byNeil Borden synthesized in four variables beginning with the letter"P," making the "mix" known as the 4Ps of marketing: product,price, place, and promotion.
In the concept of the product were included attributes of theproduct itself, branding, packaging, and servicing, as listed byBorden. The price, which involves, in addition to the amount paidby the customer, payment methods and deadlines, among others, isequal to Borden's term of pricing. The place, whose best translationis distribution, includes the decisions of channels and logisticsdistribution of products, services, and information to the clientthat Borden called physical handling (storage, transportation, andinventory). And, in the element promotion, or communication, arethe variables of advertising, sales promotion, personal selling, anddisplay, also listed by Borden. Finally, fact-finding and analysis,cited by Borden but not directly included in the four Ps, givessupports to all marketing operations with acquisition, analysis, anduse of market information.
These four elements of marketing—product, price, place, andpromotion—on the one hand facilitated the understanding of thesubject, but on the other, they brought a problem of definitionof the functions of the marketing professional. After all, wecannot imagine a person or department responsible for all ofthese elements, whose management involves different areas andfunctions within an organization.
What occurs in most organizational structures is that decisionson the product are made in the areas of R&D (Research andDevelopment) and production. Issues relating to price are underthe responsibility of finance. Distribution is handled by thearea of distribution and logistics. Finally, communication is theresponsibility of the marketing area, as shown below.
However, professionals in the media, including advertisers,make advertising, sales promotion, and public relationsassignments. Personal selling, in turn, is another form of marketingcommunication, which most often is handled by an area knownas sales management or business management, as shown in thediagram below.
Given this reality, what are the functions of the marketingprofessional? How is it possible for this professional to work thefour fundamental elements of marketing when they are spreadthroughout the entire organization?
Actually, the 4Ps are the cornerstones of marketing for anorganization as a whole. To the marketers is due the activities ofmarketing research, marketing planning, and customer relationshipto guide the construction of these four pillars, as shown in thefollowing diagram.
Through market research, the marketing professional feedsthe organization information about its customers and competitors,aiding strategic, tactical, and operational decision making. Often,research institutes are hired to assist in the application of research.
With the planning activity, the marketer directs all actionsrelating to product, price, distribution, and communicationdeveloped by the various organizational areas, integratingthem into the concept of customer focus. Mason, Mayer, andWilkinson (1993) added, though, two Ps they called compoundretailer: Presentation, or point of sale (also included in P:Place or distribution), and People (considered in all marketingpillars). At the moment of marketing planning, it can be helpfulto have consultants who can contribute to the construction andimplementation of the plan without employment that sometimescompromises the mechanisms of execution and plan control.
Finally, with the relationship activity, the marketingprofessional brings to the company the "voice of the customer" andtakes to him the organization's response.
Even when there is not formally a marketing area in thecompany, its activities must be present, seeking the ultimate goalof building value brands, winning and keeping customers, andensuring profitability for the organization.
From Borden's and McCarthy's messages, we conclude thatthe 4 Ps—product, price, place, and promotion—together form thepillars of the marketing of an organization, but the responsibility ofits construction involves all who are part of it.
CHAPTER 5
Why Do Marketing?
One of the most frequent questions in the corporate andacademic environment concerns the real need for a companyto do marketing; after all, marketing actions for achieving andmaintaining customers not only require time for planning, but alsofinancial resources for their implementation. It would be easier iforganizations devoted their time and resources just to selling andmaking a profit without much effort being devoted to it. But thingsdo not work this way.
It has become increasingly difficult for successful marketrelations to happen spontaneously. There is a lot of effortnecessary for achieving and maintaining clients, who have becomeincreasingly demanding.
Now let's talk about some of the many reasons whyorganizations should do marketing. We will discuss, first, changesin consumer behavior, then changes in competition, and finally, theactions of the state.
5.1 Changes in Consumer Behavior
There is no denying that the consumer has changed. Oversupplybeyond demand in the market has put numerous options in front ofthe consumer. Sales are appealing from all sides. The packaging,promotion, advertisements, new products, everything are reasonsto seduce and delight consumers.
But the fact is that they are not so easily seduced, anddelighting consumers has been one of the most arduous tasks ofmarketing management.
What is this new consumer like? Below are some of thecharacteristics of the consumer of today:
More demanding
More selective
More rational
More unfaithful
More well informed
Enjoys personalized treatment
No time available
Customers are more demanding; there is no denying that.They ask for and charge everything. They want the best offer, withmaximum convenience at the lowest price.
Customers are more selective. They select products, brands,stores, salespeople, prices, and payment methods. All that isoffered to the consumer goes through a rigorous selective processof options so there is no regret in relation to the purchase made.
Customers are more rational. Rationality is expressed, forexample, by opting for the most expensive product because itensures greater reliability at the time of a repair, a service need, acomplaint, or even a repurchase.
Customers are less faithful. Today it has become common touse the term customer loyalty. But, in essence, what does the wordloyalty mean?
According to the dictionary, loyalty is to be faithful, to notchange, to not use something else. It means that if a consumer is infact loyal to one brand of a product, he will not use another brandof the same product category. Likewise, if you are loyal to a store,such as a supermarket, you will not buy anywhere else but there.It's the extreme, but this is the real definition of the word loyalty.
Making a client loyal is, therefore, one of the most difficultactivities of a company, particularly because the consumer oftoday loves novelty and, in most cases, cannot resist the manytemptations to try the new. There are many offers. And by the timehe experiences such offers, he has already left the idea of beingfaithful. Some might say it was just to prove a point. Nevertheless,the concept of fidelity was damaged.
It's the same thing that happens in marriage. Can a husband orwife call himself or herself faithful, but "try new things"? Even if itis "only once"? The same thought applies to the trade in which theconcept of loyalty is involved.
