Chapter 1 Marketings Value to Consumers Firms and

Chapter 1 Marketing’s Value to Consumers, Firms, and Society For use only with Perreault/Cannon/ Mc. Carthy texts, © 2009 Mc. Graw-Hill Companies, Inc. Mc. Graw-Hill/Irwin www. mhhe. com/fourps

Marketing—What’s It All About? More than Selling or Advertising All Those More than Selling and Advertising Bicycles!

Things a Firm Should Do in Producing a Bike Analyze Needs Predict Wants Estimate Demand Predict When Determine Where Estimate Price Decide Promotion Estimate Competition Provide Service

Production vs. Marketing Makes sure right goods & services are produced Production • Making Goods • Performing Services Creates Customer Satisfaction

Marketing Is Important to You! Important to every consumer! Important to your job! Affects innovation and standard of living

What Is Marketing? Micro View Macro View • Set of activities • Social process • Performed by individual organizations and • Matches supply with demand

Macro-Marketing Emphasis on Whole System Every Economy Needs It Key Characteristics Matches Producers and Consumers

Universal Functions of Marketing Buying Market Information Selling Transporting Marketing Functions Risk Taking Financing Storing Standardization & Grading

Who Performs Marketing Functions? Producers Wholesalers Transport Firms Retailers Ad Agencies ISP's Product Testing Firms Other Specialists Research Firms Consumers

How Decisions are Made in an Economic System Command Economy • Government officials decide • May work well if: • Simple economy • Little Variety • Adverse Conditions Market-Directed Economy • Adjusts itself OR • Price is value measure • Freedom of choice • Government’s role limited

Marketing’s Role Has Changed Over Time Simple Trade Era Focus: Sell Surplus Production Era Focus: Increase Supply Sales Era Focus: Beat Competition Marketing Department Era Focus: Coordinate and Control Marketing Company Era Focus: Long-Run Customer Satisfaction

The Marketing Concept (Exhibit 1 -3) Total company effort Customer satisfaction The Marketing Concept Profit (or another measure of long-term success) as an objective

Creating Customer Satisfaction

Adopting The Marketing Concept Now Flying To More Places In Europe.

The Marketing Concept and Customer Value Take Customer’s Point of View Customer May Not Dwell On Value Costs Benefits Where Does Competition Fit? Customer Value Builds Relationships

Interactive Exercise: Customer Value © 2009 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Price Benefit Rating Price Index Benefit Index Value Index Dirt Devil 90 58 26. 09956501 91. 33858268 65. 23901767 GE 110 58 31. 89946834 91. 33858268 59. 43911433 Oreck 380 58 110. 1981634 91. 33858268 -18. 85958069 Kenmore 199 66 57. 70903818 103. 9370079 46. 22796969 Hoover 300 75 86. 99855002 118. 1102362 31. 1116862 Kirby 990 66 287. 0952151 103. 9370079 -183. 1582072 344. 83 63. 5 Average

Putting It All Together (Exhibit 1 -6) Total Company Effort to Satisfy Customers Build Profitable Customer Relationships Offer Superior Customer Value Increase Sales to Customers Attract Customers Retain Customers Satisfy Customers

The Marketing Concept Applies in Nonprofit Organizations Support and “Satisfied Customers” Newcomers to Marketing Concept Provides Focus Characteristics of Nonprofit Organizations The Bottom Line ? May Not Be Organized for Marketing

Government Marketing

The Marketing Concept, Social Responsibility, and Marketing Ethics Group Needs Social Responsibility Micro - Macro Dilemma Should All Needs Be Satisfied? Individual Needs What if Profits Suffer? The Marketing Concept Guides Ethics

You should now be able to: 1. 2. 3. 4. Know what marketing is and why you should learn about it. Understand the difference between marketing and macro-marketing. Know the marketing functions and why marketing specialists—including intermediaries and collaborators—develop to perform them. Understand what a market-driven economy is and how it adjusts the macro-marketing system.

You should now be able to: 5. 6. 7. Know what the marketing concept is—and how it should guide a firm or nonprofit organization. Understand what customer value is and why it is important to customer satisfaction. Know how social responsibility and marketing ethics relate to the marketing concept.

Key Terms • • Production Customer satisfaction Innovation Marketing Pure subsistence economy Macro-marketing Economies of scale Universal functions of marketing • • • Buying Selling Transporting Storing Standardization and grading Financing Risk-taking Market information Intermediary

Key Terms • • • Collaborators E-commerce Economic system Command economy Market-directed economy Simple trade era Production era Sales era Marketing department era • • Marketing company era Marketing concept Production orientation Marketing orientation Customer value Micro-macro dilemma Social responsibility Marketing ethics