© 2009 South-Western, Cengage LearningMARKETING 1 Chapter 1 MARKETING TODAY AND TOMORROW 1-1What Is Marketing? 1-2Businesses Need Marketing 1-3Understanding the Marketing Concept 1-4The Changing Role of Marketing CHAPTER 1

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 2 Focus Questions: What marketing activities are being demonstrated by Cargill in the advertisement? Why do you believe a large international company like Cargill is concerned about how to get products to consumers living in Central America? AD PROVIDED WITH PERMISSION BY CARGILL. ©2007 CARGILL, INCORPORATED.

© 2009 South-Western, Cengage LearningMARKETING Chapter WHAT IS MARKETING? GOALS Understand the importance of studying marketing. Explain what marketing is and describe important marketing functions. Define marketing.

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 4 Why Study Marketing? Where does marketing take place? Where did you seeing marketing this summer? Super Visuals, but more behind the scenes. How do businesses use Marketing? All types of businesses use marketing Producing, Distributing, Pricing, Promos, etc… There are 9 different functions!

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 5 Businesses DIRECTLY Involved in Marketing Advertising agencies Marketing research firms Import/export offices Freight companies Finance and credit firms Telemarketers Travel agencies

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 6 Businesses with MAJOR Marketing Activities Retailers Manufacturers Banks Real estate agencies Insurance companies Automobile dealers Farmers and ranchers

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 7 Businesses with LIMITED Marketing Role Law offices Medical centers Accounting firms Government agencies Universities Construction businesses Public utilities

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 8 What Is Marketing? (p.6) Marketing functions Companies use the marketing functions Brief Descriptions (Next 3 Slides) Examples  Page 7 MARKETING FUNCTIONS Market planning Product/service management Distribution Pricing Promotion Selling Marketing-information management Financing Risk management

© 2009 South-Western, Cengage LearningMARKETING 9 Marketing Functions Market Planning Identify & Understand Markets Develop Marketing Strategies Product & Service Management Design & Develop Products/Services that meet needs of prospective customers Distribution Determine Methods & Procedures for customers to locate, obtain & use products/services Chapter 1 9

© 2009 South-Western, Cengage LearningMARKETING 9 Marketing Functions Pricing Establish and Communicate value of product/service to prospective customers Promotion Communicate product info through advertising & other promo methods to encourage purchases Selling Direct personal communication to assess customer needs & satisfy them with appropriate product. Chapter 1 10

© 2009 South-Western, Cengage LearningMARKETING 9 Marketing Functions Marketing Information Management Obtain, manage & use market info to improve decision-making and marketing performances Financing Budget and provide financial assistance to customers to help them make purchases Risk Management Provide security for products, personnel and customers & reduce risks in marketing activities Chapter 1 11

© 2009 South-Western, Cengage LearningMARKETING Checkpoint ~ Page 9 Which of the 9 functions occurs when a product is developed and sold? Chapter 1 12 MARKETING FUNCTIONS Market planning Product/service management Distribution Pricing Promotion Selling Marketing-information management Financing Risk management

© 2009 South-Western, Cengage LearningMARKETING Judgment Call ~ Page 8 What other examples of misleading or inappropriate marketing have you experienced? How did you feel about the product and company? What can people do to discourage misuse of marketing when they encounter it? Chapter 1 13

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 14 Defining Marketing Marketing is the creation and maintenance of satisfying exchange relationships. (Page 9) Creation ~ Product development (service) Maintenance ~ Daily business operations Satisfying ~ Meets the needs of both businesses and customers Relationships ~ Both parties receive something of value Marketing ≠ Advertising! Marketing INCLUDES Advertising… Many marketing activities are completed before the product is ready to be sold or advertised.

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 15 BUSINESSES NEED MARKETING GOALS Explain why businesses need marketing. Understand how marketing developed as a part of business. Describe the functions of business. 1-2

© 2009 South-Western, Cengage LearningMARKETING Marketing Matters ~ Page 11 Think of some marketing activities and how they were performed 100 years ago. Discuss how those activities would be performed today. Consider all 9 Functions of Marketing. Chapter 1 16

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 17 The Need for Marketing Past Simple set of activities to attract interest & help sell the products. Present Executives know that marketing must be carefully planned & coordinated w/ other business activities to be completely effective.

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 18 The Need for Marketing Why does a business need marketing if it has a good product? What is the product? Where is the product? How do I get there? How much is the product? Is this a good value? Helps reach more customers, do so more cost efficiently and reach higher profits.

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 19 The Development of Marketing in Business Self-Sufficient Do not rely on others for things you need to survive Find or produce the food and materials needed for their families Good hunters, fisherman, farmers, etc Capable of producing shelter, clothing, etc Bartering Trade/Exchange Products (Deer Meat for Grains) Good hunter but not good at farming Good at weaving clothes, but not good at hunting Each person has something of value to exchange

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 20 The Development of Marketing in Business Specialization of labor Can produce larger quantities of one product (one they are very skilled at) rather than trying to produce many different products Money systems Currency made easier exchanges. (Deer Meat for $) Central markets More convenient locations: central travel spots (rivers / roads) Other marketing activities Retailing, Loans, Deliveries, etc. ~ Made exchange process easier with each new development or activity.

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 21 The Functions of Business Production Operations Accounting & Finance Management & Administration Marketing Coordination of business functions (Image on Page 14)

© 2009 South-Western, Cengage LearningMARKETING Production Raw Materials Mining, Logging, Oil Drilling, etc. Processing Taking raw to new form for other productions Oil Refining, Steel, Paper, Plastics, Food Products, etc Agriculture Food and other materials grown for consumption or processing of a variety of other products. Chapter 1 22

© 2009 South-Western, Cengage LearningMARKETING Production Manufacturing Use raw materials and other resources to produce products for consumers Services Performing a service to meet a need Haircuts, Lawn Care, Concert Event, etc. Merchandising Accumulate products for resale, No production/manufacturing Retailers, Wholesalers Chapter 1 23

© 2009 South-Western, Cengage LearningMARKETING Operations Ongoing Activities Designed to support the primary function of the business and keep it operating efficiently. Building & Equipment operating and maintained Products obtained, transported and stored Paperwork and Records prepared and maintained Day-to-Day Activities for Success Chapter 1 24

© 2009 South-Western, Cengage LearningMARKETING Accounting & Finances Plans and manages financial resources Maintains records and business info Capital needed and where to obtain it Budgets developed, monitored and updated Loan management, interest rates, schedules Specialized personnel to monitor finances Chapter 1 25

© 2009 South-Western, Cengage LearningMARKETING Management Develop, implement and evaluate plans and activities of the business Problem solving Manage employees Develop objectives and plans Responsible for business performance Chapter 1 26

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 27 UNDERSTANDING THE MARKETING CONCEPT GOALS Define the marketing concept. Determine how businesses implement the marketing concept. 1-3

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 28 The Marketing Concept Past Produce products the companies thought customers could afford and hoped they would purchase. Present Primary Focus: satisfying customer needs Produce products consumers want. Higher standards of living and different wants.

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 29 Elements of the Marketing Concept Identify needs of customers Develop and market products or services Operate a business profitably

© 2009 South-Western, Cengage LearningMARKETING Successful Examples Fast Food – breakfast and late night menus to offer product WHEN consumer want it Banks – online bill pay, online money transfers, online checking WHERE consumers want it Hospitals – offer wellness programs, weight loss clinics, fitness center to attract clients Colleges – offer classes to high school students to earn credit prior to graduating and interest them in enrolling full-time. Chapter 1 30

© 2009 South-Western, Cengage LearningMARKETING Consequences of not satisfying customer needs More focus on producing mass products, less on consumer wants and needs More advertising, price reductions, rebates, pressure selling, special sales & displays = more expenses = less profit! Chapter 1 31

© 2009 South-Western, Cengage LearningMARKETING Get the Message ~ Page 20 Why is word-of-mouth information so influential for many customers? If you are the marketing manager for a new brand of sunglasses, what would you do to increase the positive word-of-mouth promotion by customers? Chapter 1 32

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 33 Implementing the Marketing Concept Step # 1 ~ Identify the Market Market: description of a unique group of prospective customers a business wants to serve and their location. School Store’s Market – current students, parents, staff, and alumni

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 34 Implementing the Marketing Concept Step # 2 Develop A Marketing Mix

© 2009 South-Western, Cengage LearningMARKETING 4 P’s of Marketing Product – anything offered to a market by the business to satisfy needs Distribution (Place) – locations and methods used to make the product available to customers Price – amt customers pay and the methods of increasing the value of products to the customer Promotion – methods used and information communicated to encourage customers to purchase and to increase their satisfaction Chapter 1 35

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 36 THE CHANGING ROLE OF MARKETING GOALS Describe how businesses approach marketing differently today than they did in the past. Summarize how marketing is changing in businesses and other organizations. 1-4

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 37 Production Era Emphasis on producing and distributing new products 1900s–1920s Sales Era Emphasis on using advertising and salespeople to convince customers to buy a company’s products 1930s–1940s Marketing Department Era Emphasis on developing many new marketing activities to sell products 1950s–1960s Marketing Concept Era Emphasis on satisfying customers’ needs with a carefully developed marketing mix 1970s–Today The Changing Approach to Marketing

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 38 Improving the Marketing Concept Relationship Marketing: developing loyal customers who will continue to purchase from business for a long period of time. Customers trust and believe in business/products Companies stay in contact with customers Companies determine ways to better products Companies immediately try to solve any problems that customers might have.

© 2009 South-Western, Cengage LearningMARKETING Improving the Marketing Concept Employee Empowerment: an approach to customer service that gives employees the authority to solve many customer problems. Requires businesses to trust employees to make good decisions in the best interests of the company and customer. Provide employee training to understand resources and proper problem-solving decision-making. Provide guidelines to help determine the appropriateness of possible solutions. Chapter 1 39

© 2009 South-Western, Cengage LearningMARKETING Chapter 1 40 The Changing View of Marketing Marketing in other organizations Libraries, churches, government agencies, community organizations, military, etc. Marketers’ roles today ~ Marketing Managers Responsible for: large quantity and variety of activities. large part of a company’s budget. work with many different kinds of people/businesses.

© 2009 South-Western, Cengage LearningMARKETING Chapter Review Page 30 ~ #1-10 Page 31 ~ #11-18 Chapter 1 41