An Overview of Marketing Chapter 1 Prepared by

An Overview of Marketing Chapter 1 Prepared by Deborah Baker Texas Christian University Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 1

Learning Objectives 1. Define the term marketing 2. Describe four marketing management philosophies 3. Discuss the differences between sales and market orientations 4. Describe the marketing process 5. Describe several reasons for studying marketing Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 2

1 Learning Objective On Line http: //www. soapworks. com Define the term marketing Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 3

1 What is Marketing? u Personal Selling? u Advertising? u Making products available in stores? u Maintaining inventories? All of the above, plus much more! Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 4

1 What is Marketing? A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities, including: Products Pricing Promotion Distribution Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 5

1 What is Marketing? 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. Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 6

1 The Concept of Exchange The idea that people give up something to receive something they would rather have. Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 7

1 The Concept of Exchange At Least Two Parties Something of Value Necessary Conditions for Exchange Communication and Delivery Freedom to Accept or Reject Desire to Deal With Other Party Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 8

1 The Concept of Exchange u LE u A S O N u Exchange may not take place even if conditions are met An agreement must be reached Marketing occurs even if exchange does not take place Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 9

2 Learning Objective Describe four marketing management philosophies. Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 10

Marketing Management Philosophies 2 Production Sales Competing Philosophies Market Societal Marketing Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 11

Marketing Management Philosophies 2 Orientation Production Sales Market Societal Key Ideas Focus on efficiency of internal operations Focus on aggressive sales techniques and believe that high sales result in high profits Focus on satisfying customer needs and wants while meeting objectives Focus on satisfying customer needs and wants while enhancing individual and societal well-being Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 12

2 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. Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 13

2 The Marketing Concept u Focuses on customer wants and needs to distinguish products from competition u Integrates all organization’s activities to satisfy customer wants and needs u Achieves organization’s long-term goals by satisfying customer wants and needs Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 14

2 Achieving a Market Orientation On Line http: //www. westernunion. com u Obtain information about customers, competitors, and markets u Examine the information from a total business perspective u Determine how to deliver superior customer value u Implement actions to provide value to customers Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 15

2 Societal Marketing Orientation Marketing that preserves or enhances an individual’s and society’s long-term best interests ü Less toxic products ü More durable products ü Products with reusable or recyclable materials Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 16

3 Learning Objective Discuss the differences between sales and market orientations. Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 17

3 Sales vs. Market Orientations Organization’s Firm’s Focus Business Inward Sales Orientation Outward Market Orientation For Whom? Selling Everybody goods and services Satisfying wants and needs Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning Specific groups of people Primary Profit Goal? Tools to Achieve Maximum sales volume Primarily promotion Customer Coordinated satisfaction use of all marketing activities 18

The Organization’s Focus 3 Key Issues in Developing Competitive Advantage Create Customer Value Build Long-Term Relationships Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning Maintain Customer Satisfaction 19

3 Customer Value The ratio of benefits to the sacrifice necessary to obtain those benefits Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 20

3 Customer Value Requirements On Line http: //www. Zanes. Cycles. 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 Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 21

3 Customer Satisfaction The feeling that a product has met or exceeded the customer’s expectations. Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 22

3 Maintaining Customer Satisfaction On Line http: //www. volvocars. com u Meet or exceed customer’s expectations u Focus on delighting customers u Provide solutions to customer’s problems u Cultivate relationships, NOT one-time transactions Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 23

3 Relationship Marketing The name of a strategy that entails forging long-term partnerships with customers, both individuals and firms. Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 24

3 Relationship Marketing Who are your customers What do customers value Requirements for Building Relationships What do they want to buy Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning How do they prefer to interact 25

3 Building Long-Term Relationships u Customer-oriented personnel u Effective training programs u Empowered employees u Teamwork Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 26

3 Defining a Firm’s Business On Line http: //www. britannica. com “Benefits” instead of “goods/services” u Ensures a customer focus u Encourages innovation u Stimulates an awareness of changes in customer preferences Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 27

4 Learning Objective Describe the marketing process. Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 28

4 Marketing Process Activities Understand the organization’s mission Set marketing objectives Gather, analyze, interpret “SWOT” information Develop a marketing strategy Implement the marketing strategy Design performance measures Evaluate marketing efforts--change if needed Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 29

5 Learning Objective Describe several reasons for studying marketing. Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 30

5 Why Study Marketing? u Plays an important role in society u Vital to business survival, profits and growth u Offers career opportunities u Affects your life every day Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 31

5 Why Study Marketing? “Marketing is far too important to be left only to the marketing department. ” --David Packard Hewlett-Packard Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 32

5 Why Study Marketing? u u 1/4 th to 1/3 rd of the civilian workforce in the U. S. performs marketing activities Fast route up the corporate ladder • Professional Selling • Marketing Research • Advertising • Retail Buying • Distribution Management • Product Development • Wholesaling Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 33

5 Why Study Marketing? u Half of every dollar spent pays for marketing costs u Better-informed consumers u Demand for customer satisfaction Chapter 1 Marketing 7 e Lamb Hair Mc. Daniel © 2004 South-Western/Thomson Learning 34