Chapter 1: Customer-Driven Strategic Marketing Pride/Ferrell Foundations of Marketing Fourth Edition Prepared by Milton Pressley University of New Orleans

Objectives Define marketing Understand several important marketing terms including target market, marketing mix, marketing exchanges, and marketing environment Be aware of the marketing concept and marketing orientation Understand the importance of building customer relationships Explain the major marketing functions that are a part of the marketing management process Understand the role of marketing in our society

Marketing Defined Marketing is the process of creating, distributing, promoting, and pricing goods, services, and ideas, to facilitate satisfying exchange relationships with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment.

Fig. 1.1 Components of Strategic Marketing

Discussion Question What do you think is the difference between “marketing” and “selling”? Why do you think the term “marketing” is used interchangeably with “selling” by many (most?) business people?

Who is the Focus of Marketing? Customers The purchasers of organizations’ products; the focal point of all marketing activities. The Target Market Old Navy focuses on its target market to meet their needs Who is their target market?

Target Market Target Market-is a specific group of customers on whom an organization focuses its marketing efforts. Appealing to health-conscious customers

Discussion Question What do you think might be a good target market for Michelin Tires? After discussing this, click on the @ symbol below to see the target markets defined by Michelin. @

The Marketing Mix Variables Marketers combine and balance four elements when determining how to satisfy customers’ needs for a product: Product Price Distribution Promotion

Product Variable A product can be a: Good Service Idea Product Petzl’s ad focuses on the quality, comfort, and reliability of its climbing helmet

Price Variable Relates to decisions and actions associated with establishing pricing objectives and policies Relates to determining product prices Determines the value of the exchange Price The Mini Cooper is promoted as being both affordable to buy and economical on fuel

Distribution Variable Make products available in quantities desired Minimize costs: Inventory Transportation Storage Select/motivate intermediaries Establish/maintain inventory control Develop/manage transportation and storage systems

Promotion Variable Inform individuals or groups about the organization and its products/services Advertising Public relations Personal selling Promotions Street teams Viral marketing

Discussion Question Other than those discussed in the book or by your instructor, give an example of a: - good - service - idea

Discussion Question Click on the Television below, watch the commercial, and discuss whether the promotional message is primarily about a good, service or an idea.

Relationships with Customers Exchange - the provision or transfer of goods, services, or ideas in return for something of value

Stakeholders Constituents who have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry, and outcomes. The Customer as a Stakeholder Yoplait donates to breast cancer research.

Marketing Environment The six types of forces that surround the customer and affect the marketing mix: Economic forces Political forces Legal and regulatory forces Technological forces Socio-cultural forces Competitive forces Unlike marketing-mix variables, an organization has no control over these forces

Discussion Question Pick a product that you want to market. Discuss how each of the forces in the marketing environment will effect your marketing mix.

The Marketing Concept A managerial philosophy that an organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals. The Marketing Concept SSI understands the importance of a customer orientation by listening to customers and providing great service

The Evolution of the Marketing Concept The marketing concept has changed over time:

Marketing Orientation An organization-wide commitment to researching and responding to customer needs.

Implementing the Marketing Concept First, establish an information system to discover customers’ real needs Use the information to create satisfying products Coordinate all activities

Managing Customer Relationships Relationship Marketing Establishing long term mutually satisfying, buyer/seller relationships.

Customer Relationship Marketing (CRM) Using information about customers to create marketing strategies that develop and sustain desirable customer relationships.

Value-Driven Marketing Value-a customer’s subjective assessment of benefits relative to costs in determining the worth of a product. Value Customer Benefits Customer Costs = –

Marketing Management The process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently.

Why Marketing Plays An Important Role in Our Global Economy

After Reviewing This Chapter You Should: Be able to define marketing Understand several important marketing terms including target market, marketing mix, marketing exchanges, and marketing environment Be aware of the marketing concept and marketing orientation Understand the importance of building customer relationships Explain the major marketing functions that are a part of the marketing management process Understand the role of marketing in our society

Key Concepts Marketing Customers Target market Marketing mix Products Exchanges Stakeholders Marketing environment Marketing concept Marketing orientation Relationship marketing Customer relationship management (CRM) Value Marketing management