©2000 prentice hall chapter 1: the concept of marketing n the marketing concept n different...

©2000 Prentice Hall

Chapter 1:The Concept of Marketing

The marketing conceptThe marketing concept Different organizational philosophies about Different organizational philosophies about

marketingmarketing The importance of being customer focusedThe importance of being customer focused How marketing is changing.How marketing is changing.


The Definition of Marketing

Marketing is whenever an individual or an Marketing is whenever an individual or an organization has a choice to make.organization has a choice to make.

Marketing includes marketing situations Marketing includes marketing situations and personal situations.and personal situations.


Marketing is Difficult Marketers spend time talking to customers.Marketers spend time talking to customers. Customers do not always accurately tell you Customers do not always accurately tell you

what products they want.what products they want. Competitors’ actions are difficult to predict.Competitors’ actions are difficult to predict. Customer tastes and society change Customer tastes and society change

frequently.frequently. Implementing strategies is difficult.Implementing strategies is difficult.


The Marketing Concept

Marketing concept emphasizes:Marketing concept emphasizes: A. Customer focusA. Customer focus B. Organizing resources to understand B. Organizing resources to understand

customer needs and wants.customer needs and wants. C. Offering products and services that C. Offering products and services that

meet those needs.meet those needs.


Generating Profits

Purpose of a business: create and keep Purpose of a business: create and keep customerscustomers

Produce and deliver products that people Produce and deliver products that people want.want.

Value at a price and under conditions that Value at a price and under conditions that are attractive. are attractive.


The Marketing Concept

Being competitor focused.Being competitor focused. Making a profit.Making a profit. Serving only segments of the customer Serving only segments of the customer

population.population. Turning away customers that are Turning away customers that are

unprofitable.unprofitable.


Customer Orientation

Organizations have to produce excellent Organizations have to produce excellent products and services.products and services.

Figure out what customers want.Figure out what customers want. Offer it in a better way than competitors.Offer it in a better way than competitors.


Strategic Approaches to the Marketplace

Sales driven organization “What we make, Sales driven organization “What we make, we sell.”we sell.”

Technology-driven organization focuses on Technology-driven organization focuses on R&D and sales.R&D and sales.

Marketing driven organizations. Too much Marketing driven organizations. Too much money is spent on marketing research.money is spent on marketing research.


Customer-Oriented Organization

Understand customers buy benefits, not Understand customers buy benefits, not products.products.

Marketing translates these benefits into Marketing translates these benefits into products and services.products and services.

Satisfy more customers than competitors to Satisfy more customers than competitors to make a profit.make a profit.

Make key investments in customers long Make key investments in customers long term satisfaction.term satisfaction.


Achieving Customer Orientation

Buying influence information should be Buying influence information should be distributed to every corporate function.distributed to every corporate function.

Make strategic and tactical decisions Make strategic and tactical decisions interfunctionally and interdivisionally.interfunctionally and interdivisionally.

Divisions and functions should make Divisions and functions should make coordinated decisions, execute them with coordinated decisions, execute them with commitment.commitment.


Customer Orientation Checklist

Are we easy to do business with?Are we easy to do business with? Do we keep our promises?Do we keep our promises? Do we meet the standards we set?Do we meet the standards we set? Are we responsive?Are we responsive? Do we work together?Do we work together?


Customer Orientation and Product innovation

Customer orientation and being market Customer orientation and being market driven are consistent with revolutionary driven are consistent with revolutionary new products.new products.

Marketers must put product concepts in Marketers must put product concepts in terms of benefits.terms of benefits.

Customers can tell you about problems with Customers can tell you about problems with current products and benefits they want current products and benefits they want from new products.from new products.


The Changing Nature of Marketing

Four issues affecting marketing:Four issues affecting marketing: A. Adoption and investment in A. Adoption and investment in

information technology.information technology. B. Rapid commercialization of internet.B. Rapid commercialization of internet. C. Globalization of business.C. Globalization of business. D. Customer relationship-building and D. Customer relationship-building and

maintaining customer databases.maintaining customer databases.


The Increased Adoption of Information Technology

Companies in the United States spent over Companies in the United States spent over $200 billion on investments in information $200 billion on investments in information technology hardware.technology hardware.

More customer information is being More customer information is being collected at a more rapid pace.collected at a more rapid pace.

Money is being poured into transaction-Money is being poured into transaction-based information systems (TBISs) and based information systems (TBISs) and electronic data interchange (EDI).electronic data interchange (EDI).


Diffusion of Information Technology

Companies invest large sums for:Companies invest large sums for: A. Better customer service operations.A. Better customer service operations. B. Improved database marketing to B. Improved database marketing to

target narrowly defined segments.target narrowly defined segments. C. Help salespeople make presentations C. Help salespeople make presentations

to customers with up-to-the-minute to customers with up-to-the-minute information about competitors.information about competitors.


The Rapid Commercialization of the Internet

A communication vehicle: Companies pay money to A communication vehicle: Companies pay money to other Web site sponsors to advertise on their sites.other Web site sponsors to advertise on their sites.

A distribution channel: Companies have been A distribution channel: Companies have been successful selling products to customers from around successful selling products to customers from around the World via the Web.the World via the Web.

A means for disseminating information about A means for disseminating information about products or services.products or services.

A source for answering technical questions about A source for answering technical questions about product use.product use.


Two Internet-Related Technologies

Intranets are Web-based systems within an Intranets are Web-based systems within an organization that cannot be accessed from organization that cannot be accessed from the outside without special codes.the outside without special codes.

Extranets are pipelines from an organization Extranets are pipelines from an organization to other organizations such as channel to other organizations such as channel members.members.


The Continued Globalization of Business

Europe is moving toward a common monetary Europe is moving toward a common monetary unit with the introduction of the Euro.unit with the introduction of the Euro.

The breakup of the Soviet Union and The breakup of the Soviet Union and increased democratization of Russia are increased democratization of Russia are creating new market opportunities.creating new market opportunities.

Asia is creating many new markets through its Asia is creating many new markets through its developing economies.developing economies.

Latin America is an emerging market.Latin America is an emerging market.


The Value of the Customer Base Lifetime customer value is the present value of a Lifetime customer value is the present value of a

stream of revenue that can be produced by a customer.stream of revenue that can be produced by a customer. Marketing managers will focus on the relationship Marketing managers will focus on the relationship

between the organization and customer as the end of a between the organization and customer as the end of a successful marketing strategy.successful marketing strategy.

Retaining more customers by satisfying them better Retaining more customers by satisfying them better than competitors will be profitable in the long run.than competitors will be profitable in the long run.


Relationship Marketing Involves Different Activities

Database marketing, created through Database marketing, created through transactions, surveys, warranty cards, and a transactions, surveys, warranty cards, and a number of other ways.number of other ways.

Take products traditionally mass marketed Take products traditionally mass marketed and make them appear to be targeted - mass and make them appear to be targeted - mass customization.customization.

Customer satisfaction often done through Customer satisfaction often done through extraordinary customer service.extraordinary customer service.

©2000 prentice hall chapter 1: the concept of marketing n the marketing concept n different...

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