Chapter 1

What is Marketing? 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.

Simply put, Marketing is all about satisfying needs.

Marketing is an Exchange of Value

An exchange is the process by which some transfer of value occurs between a buyer and a seller.– At least two parties (individuals or

organizations) must be (freely) willing to make a trade;

– Each must have something the other values;– Each party is capable of communication and

deliver.

(Almost) Anything Can be Marketed

ConsumerGoods

andServices

ConsumerGoods

andServices

Business-to-

BusinessMarketing

Business-to-

BusinessMarketing

Idea,Place,People

Marketing

Idea,Place,People

Marketing

Not-For-Profit

Marketing

Not-For-Profit

Marketing

When Did Marketing Begin?

Product OrientationProduct Orientation

Selling OrientationSelling Orientation

Customer OrientationCustomer Orientation

•Most Efficient Production & Distribution•Seller’s Market

•Satisfies Customers’ Needs and Wants•Total Quality

Market OrientationMarket Orientation •Benefits to Customers, Plus Firm’s Employees, Shareholders, and Communities Focus on customer wants and needs and differentiation.

•Marketing as a Sales Function•Buyer’s Market

The Marketing Concept

The Marketing Concept is the idea that the social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting organizational objectives.

Needs, Wants and Benefits

NeedsNeeds

WantsDesire to Satisfy Needs in

Ways That are Culturally and Socially Influenced. Let’s

go eat a cheeseburger.

BenefitsOutcome Sought by a

Consumer That Motivates Buying Behavior. Now I’m

full; I feel better.

Difference Between a Consumer’s Actual State and Some Ideal or Desired State.

I’m Hungry!

Social Marketing Concept

ConsumersConsumers CompanyCompany

SocietySociety

Orientation that Focuses on Satisfying Consumers Needs While Also Addressing the Needs of the

Larger Society.

Social Marketing includes ‘Society at large’ as a constituency marketing seeks to provide value.

Marketing is a Process

“Marketing is a process of planning and executing...”

The concept of Relationship Marketing sees marketing as a process of building long-term relationships with customers to keep them satisfied and to keep them coming back.

Customer SatisfactionCustomer Satisfaction

Customers’ evaluation of a product or Customers’ evaluation of a product or service in terms of whether it has met service in terms of whether it has met their needs and expectations.their needs and expectations.

Does satisfaction lead to brand loyalty?Does satisfaction lead to brand loyalty?

Customer ValueCustomer Value

The relationship between the benefits The relationship between the benefits and the sacrifice necessary to obtain and the sacrifice necessary to obtain those benefitsthose benefits

How Do We Achieve Customer How Do We Achieve Customer Value?Value?

Offer products that perform Offer products that perform Earn the consumers’ trust – warranties and Earn the consumers’ trust – warranties and

guarantees?guarantees? Avoid unrealistic pricingAvoid unrealistic pricing Full disclosure of facts – what do they need?Full disclosure of facts – what do they need? Commitment to service and after sales Commitment to service and after sales

supportsupport CocreationCocreation

Disney Does Right!Disney Does Right! Every employee’s job title is Customer Every employee’s job title is Customer

Service Representative?Service Representative? Training – sufficient and with the customer Training – sufficient and with the customer

and product in mind (i.e., everyone picks up and product in mind (i.e., everyone picks up trash!)trash!)

Empowerment – Enable employees to Empowerment – Enable employees to “solve” and “fix” problems … give them that “solve” and “fix” problems … give them that magical experience they expect!magical experience they expect!

Teamwork – help each other, jump in Teamwork – help each other, jump in

Customer Relationship Customer Relationship Management Management

A company-wide business strategy A company-wide business strategy designed t =o to optimize profitablity, designed t =o to optimize profitablity, revenue, and customer satisfaction by revenue, and customer satisfaction by focusing on highly defined and precise focusing on highly defined and precise customer groups.customer groups.

Markets, Consumers and Demand

Market

Customerswho share a common

need that can be satisfied by a

specific productAND

who are willing, able and have the authority to make the exchange.

Customers

PotentialCustomers

DEMAND

Finding and Reaching a Target Market

Step 1. Segmenting the Market– Divide the overall market into segments, in which

consumers have similar characteristics.

Step 2. Selecting a Target Market– Evaluate the segments identified in the segmentation

process; select target market(s).

Step 3. Positioning the Product– Marketer plans the product’s market position, which is

how the target market perceives the product in comparison to competitors’ brands.

How is Marketing Done?

Marketers Develop and Implement a Marketing Plan Based on the Following Information:

Organization’s Strengths and Weaknesses

Organization’s Strengths and Weaknesses

Organization’s Overall ObjectivesOrganization’s Overall Objectives

Opportunities and Threats to theOrganization in the Marketplace

Opportunities and Threats to theOrganization in the Marketplace

Marketing’s Tools: The Marketing Mix

ProductGood, Service, Idea, Place, Person

ProductGood, Service, Idea, Place, Person

PriceAssignment of Value

PriceAssignment of Value

PlaceAvailability of Product

PlaceAvailability of Product

PromotionActivities to Inform Consumers

PromotionActivities to Inform Consumers

Tools that Are Used Together to Create a Desired Response Among a Set of Defined Customers

Tools that Are Used Together to Create a Desired Response Among a Set of Defined Customers

Why is Marketing Important?

Marketing Creates Utility– Form Utility– Place Utility– Time Utility– Possession Utility

Marketing’s Role in the Firm– A firm’s marketing-related decisions must

affect and be affected by its other operations such as accounting and manufacturing.

Why is Marketing Important?

Marketing’s Role in Our Daily Lives– Popular Culture– Marketing and Myths

Marketing’s Role in Society– Ethical Behavior is Good Business– Social and Ethical Criticisms of Marketing