Page 31 - Marketing Management

8 PART 1 UNDERSTANDING MARKETING MANAGEMENT

Marketers are skilled at stimulating demand for their products, but that’s a limited view of what
they do. Just as production and logistics professionals are responsible for supply management, mar-
keters are responsible for demand management. They seek to influence the level, timing, and com-
position of demand to meet the organization’s objectives. Eight demand states are possible:
1. Negative demand—Consumers dislike the product and may even pay to avoid it.
2. Nonexistent demand—Consumers may be unaware of or uninterested in the product.
3. Latent demand—Consumers may share a strong need that cannot be satisfied by an existing
product.
4. Declining demand—Consumers begin to buy the product less frequently or not at all.
5. Irregular demand—Consumer purchases vary on a seasonal, monthly, weekly, daily, or even
hourly basis.
6. Full demand—Consumers are adequately buying all products put into the marketplace.
7. Overfull demand—More consumers would like to buy the product than can be satisfied.
8. Unwholesome demand—Consumers may be attracted to products that have undesirable so-
cial consequences.
In each case, marketers must identify the underlying cause(s) of the demand state and deter-
mine a plan of action to shift demand to a more desired state.

MARKETS Traditionally, a “market”was a physical place where buyers and sellers gathered to buy
and sell goods. Economists describe a market as a collection of buyers and sellers who transact over
a particular product or product class (such as the housing market or the grain market).
Five basic markets and their connecting flows are shown in Figure 1.1. Manufacturers go to
resource markets (raw material markets, labor markets, money markets), buy resources and turn
them into goods and services, and sell finished products to intermediaries, who sell them to con-
sumers. Consumers sell their labor and receive money with which they pay for goods and services.
The government collects tax revenues to buy goods from resource, manufacturer, and intermediary
markets and uses these goods and services to provide public services. Each nation’s economy, and
the global economy, consists of interacting sets of markets linked through exchange processes.
Marketers use the term market to cover various groupings of customers. They view sellers as
constituting the industry and buyers as constituting the market. They talk about need markets (the
diet-seeking market), product markets (the shoe market), demographic markets (the youth mar-
ket), and geographic markets (the Chinese market); or they extend the concept to cover voter mar-
kets, labor markets, and donor markets, for instance.
Figure 1.2 shows the relationship between the industry and the market. Sellers and buyers
are connected by four flows. Sellers send goods and services and communications such as ads and
direct mail to the market; in return they receive money and information such as customer attitudes
and sales data. The inner loop shows an exchange of money for goods and services; the outer loop
shows an exchange of information.

|Fig. 1.1| Resources Resources
Resource
Money Money
Structure of Flows markets
in a Modern Exchange
Economy Taxes, Services,
goods
money
Services,
money Taxes
Manufacturer Government Consumer
markets markets markets
Taxes, goods Services
Services, Taxes,
money goods

Money Money
Intermediary
Goods and services markets Goods and services