ch01 Marketing

An Overview of Marketing
Chapter 1
Prepared by
Deborah Baker
Texas Christian University
Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 1

©2005 South-Western/Thomson Learning
Learning Objectives
1. Define the term marketing

2. Describe four marketing management
philosophies
3. Explain how firms implement the marketing
concept
4. Describe the marketing process and identify
the variables that make up the marketing mix
5. Describe several reasons for studying
marketing

1 Learning Objective
On
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http://www.soapworks.com
http://www.soapworks.com
Define the term

marketing

1 What Is Marketing?
 Personal Selling?
 Advertising?
 Making products available in stores?
 Maintaining inventories?
All of the above, plus much more!

A Philosophy A Set of Activities,

including:
An Attitude
Products
A Perspective
Pricing
A Management
Orientation Promotion
Distribution

American Marketing Association Definition
Marketing is the process of planning and

executing the conception, pricing, promotion,
and distribution of ideas, goods, and services
to create exchanges that satisfy individual and
organizational goals.

1 The Concept of Exchange
The idea that people give up

something to receive
something they would rather
have.

At
AtLeast
Least Two
Two Parties
Parties
Something
Somethingof
ofValue
Value
Necessary
Necessary
Conditions
Conditions Communication
Communicationand
and Delivery
Delivery
for
for Exchange
Exchange
Freedom
Freedom to
to Accept
Acceptor
orReject
Reject
Desire
Desire to
to Deal
Deal with
with Other
Other Party
Party
 Exchange may not take place

even if conditions are met
ALE  An agreement must be reached
O S
N
 Marketing occurs even if
exchange does not take place

Describe four
marketing
management
philosophies.

Marketing Management
2
Philosophies
Production
Production
Sales
Sales
Market
Market
Competing
Competing
Philosophies
Philosophies
Societal
Societal Marketing
Marketing

Marketing Management
2
Philosophies
Orientation
Orientation Key Ideas
Production
Production Focus on efficiency of internal operations
Focus on aggressive sales techniques and

Sales
Sales believe that high sales result in high profits
Focus on satisfying customer needs and wants

Market
Market
while meeting objectives
Focus on satisfying customer needs and
Societal
Societal wants while enhancing individual and
societal well-being
2 Achieving a Market Orientation
On
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http://www.westernunion.com
http://www.westernunion.com
 Obtain information about customers, competitors,

and markets
 Examine the information from a total business
perspective
 Determine how to deliver superior
customer value
 Implement actions to provide value
to customers

2 Societal Marketing Orientation
Marketing that preserves or

enhances an individual’s and
society’s long-term best
interests

 Less
Less toxic
toxic products
products
 More
 More durable
durable products
products

 Products
Products with
with reusable
reusable
or
or recyclable
recyclable materials
materials
Explain how firms

Implement the marketing
concept

3 The Marketing Concept
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.

3 The Marketing Concept
 Focuses on customer wants and needs to

distinguish products from competition
 Integrates all organization’s activities to

satisfy customer wants and needs
 Achieves organization’s long-term goals by

satisfying customer wants and needs

3 Customer Value
The ratio of benefits to the

sacrifice necessary to obtain
those benefits

3 Customer Value Requirements
On
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http://www.ZanesCycles.com
http://www.ZanesCycles.com
 Offer products that perform

 Give consumers more than they expect
 Avoid unrealistic pricing
 Give the buyer facts
 Offer organization-wide commitment in
service and after-sales support

3 Customer Satisfaction
The feeling that a product has

met or exceeded the
customer’s expectations.

3 Maintaining Customer Satisfaction
On
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http://www.volvocars.com
http://www.volvocars.com
 Meet or exceed customer’s expectations

 Focus on delighting customers
 Provide solutions to customer’s problems
 Cultivate relationships,
NOT one-time transactions

3 Relationship Marketing
The name of a strategy

that entails forging
long-term partnerships
with customers, both
individuals and firms.

3 Relationship Marketing
Who
Who are
are your
your customers?
customers?
What
What do
do customers
customers value?
value?
What
What do
do they
they want
want to
to buy?
buy?
Requirements
Requirements
for
for
Building
Building How
How do
do they
they prefer
prefer to
to interact?
interact?
Relationships
Relationships

3 Building Long-Term Relationships
On
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http://disney.go.com/
http://disney.go.com/
 Customer-oriented personnel
 Effective training programs
 Empowered employees
 Teamwork

Describe the marketing

process and identify the
variables that make up
the marketing mix.

4 Marketing Process Activities
Understand
Understand the
the organization’s
organization’s mission
mission
Set
Set marketing
marketing objectives
objectives
Gather,
Gather, analyze,
analyze, interpret
interpret “SWOT”
“SWOT” information
information
Develop
Develop aa marketing
marketing strategy
strategy
Implement
Implement the
the marketing
marketing strategy
strategy
Design
Design performance
performance measures
measures
Evaluate
Evaluate marketing
marketing efforts--change
efforts--change ifif needed
needed
Marketing Plan
4
Business Mission
Process
Statement
Objectives
Situation or SWOT
Analysis
Marketing Strategy
Target Market
Strategy
Marketing Mix
Product Distribution
Promotion Price
Implementation
Evaluation
Control
4 Environmental Scanning
Collection and interpretation of

information about forces, events
and relationships in the external
environment that may affect the
future of the organization or the
marketing plan implementation.

4 Environmental Scanning
 Examination of macroenvironmental forces

Social
Demographic
Economic
Technological
Political / Legal
Competitive
 Helps identify market

opportunities
 Provides guidelines for

design of marketing strategy
4 Defining the Business Mission
 Answers the question,

“What business are we in
and where are we going?”
 Focuses on the market(s)

rather than the good or service

4 Marketing Strategy
The activities of selecting and

describing one or more target
markets and developing and
maintaining a market mix that will
produce mutually satisfying
exchanges with target markets.

4 Target Market Selections
Appeal
Appeal to
to the
the entire
entire market
market
with
with one
one marketing
marketing mix
mix
Concentrate
Concentrate on
on one
one
marketing
marketing segment
segment
Appeal
Appeal to
to multiple
multiple markets
markets
with
with multiple
multiple marketing
marketing mixes
mixes

4 Marketing Mix: The “Four Ps”
Price
Price
Promotion
Promotion
Place
Place
Product
Product

4 Product Strategies
 The starting point of the

“4 Ps”
Product
Product  Includes physical unit,
package, warranty,
service, brand, image,
and value

4 Distribution (Place) Strategies
 Product availability where

and when customers
want them.
Place
Place
 Involves all activities from
raw materials to finished
products

4 Promotion Strategies
On
OnLine
Line
http://www.paramount.com
http://www.paramount.com
http://www.warnerbros.com
http://www.warnerbros.com
http://www.universalstudios.com
http://www.universalstudios.com
 Role is to bring about
exchanges with target
markets
Promotion
Promotion
 Includes integration of
personal selling,
advertising, sales
promotion, and public
relations
4 Pricing Strategies
 The most flexible of the

“4 Ps”
Price
Price
 Price X Units Sold =
Total Revenue

4 Following Up the Marketing Plan
 Implementation
 Evaluation - (Have objectives

been achieved?)

Describe several reasons

for studying marketing.

5 Why Study Marketing?
 Plays an important role in society
 Vital to business survival, profits

and growth
 Offers career opportunities
 Affects your life every day

“Marketing
“Marketing is is far
far too
too important
important
to
to be
be left
left only
only to
to the
the
marketing
marketing department.”
department.”
----David
David Packard
Packard
Hewlett-Packard
Hewlett-Packard

 1/4th to 1/3rd of the •• Professional

ProfessionalSelling
Selling
civilian workforce •• Marketing
MarketingResearch
Research
in the U.S. performs •• Advertising
Advertising
marketing activities •• Retail
RetailBuying
Buying
•• Distribution
DistributionManagement
Management
 Fast route up the
•• Product
ProductManagement
Management
corporate ladder
•• Product
ProductDevelopment
Development
•• Wholesaling
Wholesaling

 Half of every dollar spent

pays for marketing costs
 Better-informed consumers
 Demand for customer

satisfaction


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An Overview of Marketing

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 1

1. Define the term marketing

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 2

Define the term

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 3

All of the above, plus much more!

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 4

A Philosophy A Set of Activities,

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 5

American Marketing Association Definition

Marketing is the process of planning and

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 6

The idea that people give up

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 7

 Exchange may not take place

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 9

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 10

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 11

Focus on aggressive sales techniques and

Focus on satisfying customer needs and wants

 Obtain information about customers, competitors,

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 13

Marketing that preserves or

Explain how firms

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 15

The idea that the social and

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 16

 Focuses on customer wants and needs to

 Integrates all organization’s activities to

 Achieves organization’s long-term goals by

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 17

The ratio of benefits to the

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 18

 Offer products that perform

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 19

The feeling that a product has

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 20

 Meet or exceed customer’s expectations

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 21

The name of a strategy

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 22

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 23

 Effective training programs

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 24

Describe the marketing

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 25

Collection and interpretation of

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 28

 Examination of macroenvironmental forces

 Helps identify market

 Provides guidelines for

 Answers the question,

 Focuses on the market(s)

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 30

The activities of selecting and

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 31

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 32

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 33

 The starting point of the

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel 34

 Product availability where