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McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.


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Define marketing and identify thediverse factors influencing marketingactivities.

Explain how marketing discovers andsatisfies consumer needs.

Distinguish between marketing mixfactors and environmental forces. O3

LO2

LEARNING OBJECTIVES (LO)AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:

LO

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Explain how organizations build strongcustomer relationships and customervalue through marketing.

Describe how today

s customerrelationship era differs from prior eras.

LO4

LO5

LEARNING OBJECTIVES (LO)AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:

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DISCOVERING HOW COLLEGE STUDENTS STUDYHELPS LAUNCH A NEW PRODUCT AT 3M

SatisfyingStudent

Study Needs

DiscoveringStudent StudyNeeds

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http://www.3m.com/us/office/postit/promos/flaghighlighter/


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Marketing is NOT Easy

WHAT IS MARKETING?O

You Are a Marketing Expert Already Involved in 1,000s of Buying Decisions

May Be Involved in Selling Decisions

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1. True 2. True 3. (c ) plastic bottles

FIGURE 1-1 The see-if-you

re-really-a-marketing-expert test

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Marketing Seeks to:

Exchange

Discover Needs and Wants of Customers

Satisfy Them

WHAT IS MARKETING?DELIVERING BENEFITS

LO

AMA Definition of Marketing

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http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx


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FIGURE 1-2 A marketing department relatesto many people, organizations, andenvironmental forces

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WHAT IS MARKETING?REQUIREMENTS FOR MARKETING TO OCCUR

LO

Two + Parties withUnsatisfied Needs

A Desire and Abilityto be Satisfied

A Way for the Parties

to CommunicateSomethingto Exchange

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http://www.people.com/people/


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HOW MARKETINGDISCOVERS CONSUMER NEEDS

THE CHALLENGE: NEW PRODUCTS

LO2

Consumers May Not Know or CannotDescribe What They Need or Want

Most New Products Fail

Focus on the Consumer Benefit

Learn From the Past

The Challenge:

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Dr. Care Vanilla-Mint Aerosol ToothpasteWhat benefits

and what showstoppers?

LO2

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Terrafugia TransitionWhat benefits


LO2

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http://core.kerin.tv/qr1-1


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Pepsi NextWhat benefits


LO2

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Need Want

Does Marketing Persuade

People to Buy theWrong

Things?

Market

HOW MARKETINGDISCOVERS CONSUMER NEEDS

NEEDS VS. WANTS

LO2

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FIGURE 1-3 Marketing seeks to discoverconsumer needs through research and thensatisfy them with a marketing program

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HOW MARKETINGSATISFIES CONSUMER NEEDS

LO3

Promotion

Place

Target Market

The 4 Ps: ControllableMarketing Mix Factors

Product

Price $499

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HOW MARKETINGSATISFIES CONSUMER NEEDS

LO3

Technological

Regulatory

Uncontrollable Environmental Forces

Social

Economic

Competitive

Customer Value Proposition

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THE MARKETING PROGRAMCUSTOMER VALUE AND RELATIONSHIPS

LO4

Best Price Best Service

Customer Value

Best Product

Value Strategies

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Southwest Airlines, Starbucks, and Home DepotWhat customer value strategy?

O4

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http://www.youtube.com/watch?v=a_yf-7mSzz0&hd=1http://www.youtube.com/watch?v=vYp2byYBovo&hd=1http://www.youtube.com/watch?v=F2GN6RyyLI4


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THE MARKETING PROGRAMRELATIONSHIP MARKETING

LO4

Easy to Understand

Relationship Marketing

Hard to Do

Marketing Program

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3M

S STRATEGY & MARKETING PROGRAMHELPING STUDENTS STUDY

LO4

Move from Ideas toa MarketableHighlighter Product

Add the Post-it Flag Pen

Develop a MarketingProgram for thePost-it FlagHighlighter and Pen

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FIGURE 1-4 Marketing programs for twonew 3M Post-it brand products targeted attwo distinct customer segments: collegestudents and office workers

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3M STRATEGY & MARKETING PROGRAMMARKETPLACE SUCCESS?

LO4

Developed ThirdGeneration Post-it Flag Highlighter

Appeared onThe Opr ahWinfrey Sho w

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FIGURE 1-A Four different orientations inthe history of American business

Production Era

Sales Era

Marketing Concept Era

Customer Relationship Era

Market Orientation

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HOW MARKETING BECAME IMPORTANTEVOLUTION OF THE MARKET ORIENTATION

LO5

Customer RelationshipManagement (CRM)

Customer Experience

Direct Contacts: Buying the Service

Indirect Contacts: Word-of-Mouth

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HOW MARKETING BECAME IMPORTANTETHICS AND SOCIAL RESPONSIBILITY

LO5

Ethics

Social Responsibility

Societal Marketing Concept

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HOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETING

LO5

Who Markets?

What Is Marketed?

Products

(Goods)

Services Ideas

Hermitage

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HOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETING

LO5

Who Benefits?

Who Buys & Uses What Is Marketed? Ultimate Consumers

Organizational Buyers

How Do Consumers Benefit?: Utility Form Utility

Place Utility

Time Utility

Possession Utility 1-29


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3M

S POST-IT FLAG HIGHLIGHTER:EXTENDING THE CONCEPT!

VIDEO CASE 1

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VIDEO CASE 13M

s Post-it Flag Highlighter

1. (a ) How did 3M

s DavidWindorski get ideas from collegestudents to help him in designingthe final commercial version ofthe Post-it Flag Highlighter?(b) How were these ideasimportant to the success of theproduct?

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2. What ( a ) special advantages and(b) potential problems did 3Mhave in introducing a newhighlighter-with-flags product forcollege students?

VIDEO CASE 13M


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3. Visit your college bookstorebefore you answer. ( a ) Wherewould you display the Post-it Flag Highlighter in a collegebookstore and ( b) How can thedisplay increase studentawareness of the product?

VIDEO CASE 13M


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5. What are the ( a ) specialopportunities and ( b) potentialchallenges for 3M in taking itsPost-it Flag Highlighter intointernational markets? ( c ) Onwhich countries should 3M focusits marketing efforts?

VIDEO CASE 13M


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Marketing

Marketing is the activity forcreating, communicating,

delivering, and exchangingofferings that benefit theorganization, its stakeholders,

and society at large.

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Exchange

Exchange is the trade of thingsof value between buyer and seller

so that each is better off after thetrade.

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Market

A market consists of people withboth the desire and the ability to

buy a specific offering.

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Marketing Mix

The marketing mix consists ofthe marketing manager

s

controllable factors

product,price, promotion, and place thatcan be used to solve a marketing

problem.

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Customer Value Proposition

Customer value proposition isthe cluster of benefits that an

organization promises customersto satisfy their needs.

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Environmental Forces

Environmental forces consist ofthe uncontrollable forces in a

marketing decision involvingsocial, economic, technological,competitive, and regulatory forces.

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Customer Value

Customer value is the uniquecombination of benefits received

by targeted buyers that includesquality, convenience, on-timedelivery, and both before-sale

and after-sale service at aspecific price.

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Relationship Marketing

Relationship marketing linksthe organization to its individual

customers, employees, suppliers,and other partners for theirmutual long-term benefits.

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Marketing Program

A marketing program is a planthat integrates the marketing mix

to provide a good, service, or ideato prospective buyers.

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Marketing Concept

A marketing concept is theidea that an organization should

(1) strive to satisfy the needs ofconsumers (2) while also trying toachieve the organization

s goals.

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Market Orientation

A market orientation occurs whenan organization focuses its effortson (1) continuously collectinginformation about customers needs,(2) sharing this information acrossdepartments, and (3) using it tocreate customer value.

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Societal Marketing Concept

Societal marketing concept isthe view that organizations should

satisfy the needs of consumers ina way that provides for society

swell-being.

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Product

A product is a good, service, oridea consisting of a bundle of

tangible and intangible attributesthat satisfies consumers

needsand is received in exchange formoney or something else of value .

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Ultimate Consumers

Ultimate consumers consist ofthe people who use the goods

and services purchased for ahousehold. Also calledconsumers , buyers , or customers .

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Utility

Utility consists of the benefits orcustomer value received by users

of the product.

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