Chapter 1 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MARKETING: THE ART AND SCIENCE OF SATISFYING CUSTOMERS 1

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Heidelberg Declaration of 1543 ▮ That I with body and soul, both in life and death, am not my own, but belong unto my faithful Savior Jesus Christ; who, with his precious blood, has fully satisfied for all my sins, and delivered me from all the power of the devil; and so preserves me that without the will of my heavenly Father, not a hair can fall from my head; yea, that all things must be subservient to my salvation, and therefore, by his Holy Spirit, He also assures me of eternal life, and makes me sincerely willing and ready, henceforth, to live unto him.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers 1. Define Marketing Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers ▮ Marketing - An organizational function and a set of processes for: Creating, communicating, and delivering value to customers Managing customer relationships in ways that benefit the organization and its stakeholders A Definition of Marketing Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers ▮ American Marketing Association’s ▮ American Marketing Association’s new official definition of marketing released August 2004: Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers 2. What is the ultimate goal of marketing? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers ▮ The passion to understand and satisfy the needs of customers in well-defined target markets. Ultimate Goal of Marketing Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers 3. What are the core marketing concepts? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Core Concepts of Marketing (1 of 2) ▮ Needs (a state of felt deprivation) ▮ Wants (needs shaped by culture and individual personality) ▮ Demands ▮ Marketing Offers (product, service, and experience) ▮ Value

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Core Concepts of Marketing (2 of 2) ▮ Satisfaction (customer expectations) ▮ Exchange ▮ Transaction ▮ Market (set of all actual and potential buyers of a product or service) ▮ Utility (want satisfying power of a good or service)

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Utility ▮ Production and marketing together create utility ▮ Utility - The want-satisfying power of a good or service 12

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Four Types of Utility 13 TABLE 1.1

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers 4. What are the six eras in the history of marketing? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

Six Eras of Marketing SALES PRODUCTION PRODUCT MARKETING SOCIETY RELATIONSHIP

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Five Eras of Marketing History 16 FIGURE 1.1

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers The Production Era ▮ Period before 1925 ▮ Production orientation - Stressing efficiency in producing a quality product, with the attitude toward marketing that “a good product will sell itself” ▮ Business success was defined solely in terms of production successes ▮ Characterized by production shortages and intense consumer demand 17

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers The Sales Era ▮ Sales orientation - Customers will resist purchasing nonessential items Only personal selling and creative advertising would persuade them to buy ▮ With the sophistication of production techniques, output grew from the 1920s into the early 1950s Manufacturers began to increase their emphasis on effective sales forces 18

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers The Marketing Era ▮ Emergence of the marketing concept Shift from a seller’s market to a buyer’s market A strong buyer’s market created the need for consumer orientation Marketing concept - A companywide consumer orientation to achieve long-run success A strong market orientation improves market success and overall performance 19

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers The Relationship Era ▮ Emerged during the 1990s and continues to grow in importance ▮ Relationship marketing - Developing long- term, value-added relationships over time with customers and suppliers ▮ Strategic alliances and partnerships benefit everyone 20

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers The Social Era ▮ Characterized by the accessibility to the Internet and the creation of social media sites ▮ Routine use of the Web and social networking sites by companies to connect to consumers 21

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers 5. What is Marketing Myopia? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Marketing Myopia ▮ Marketing myopia - Management’s failure to recognize the scope of its business ▮ Overcoming marketing myopia Developing broader marketing-oriented business ideas focusing on customer need satisfaction 23

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Avoiding Marketing Myopia 24 TABLE 1.2

AVOIDING MARKETING MYOPIA

Broad vs. Narrow ▮ Broad Definition Furniture Telecommunications Beverages Global mail delivery Travel & tourism ▮ Narrow Definition Wrought-iron lawn furniture Long-distance telephone service Soft drinks Overnight package delivery Caribbean cruises

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Not-for-Profit Marketing ▮ Marketing in not-for-profit organizations Operate in both the public and private sector Adopt marketing strategies to meet service objectives Communicate their messages through advertisements relating to their goals Form alliances with for-profit firms to promote each other’s causes 27

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers 6. What are the characteristics of not-for-profit marketing? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Characteristics of Not-for-profit Marketing ▮ Focus is to generate revenue to support their causes and not on the bottom line ▮ May market tangible goods and services ▮ Markets to multiple audiences ▮ Often possess some degree of monopoly power in a given geographic region ▮ Service users have less control over the firm’s future 29

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers 7. What are the five types of non-traditional marketing? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Categories of Nontraditional Marketing 31 TABLE 1.3

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Nontraditional Marketing ▮ Person marketing – Efforts to cultivate the attention, interest, and preferences of a target market toward a person Celebrity endorsements ▮ Place marketing - Efforts to attract people and organizations to a particular geographic area Tourism enhancements 32

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Nontraditional Marketing ▮ Cause marketing - Identification and marketing of a social issue, cause or idea to selected target markets ▮ Many profit-seeking firms link their products to social causes ▮ Strong support among customers and employees for cause-related marketing 33

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Nontraditional Marketing ▮ Event marketing - Marketing of sporting, cultural, and charitable activities to selected target markets Also, includes sponsorship of such events by firms ▮ Event sponsorships have gained effectiveness in increasing brand recognition, enhancing image, boosting purchase volume 34

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Nontraditional Marketing ▮ Organization marketing - Intended to persuade others to: Accept the organization’s goals Receive its services Contribute to the organization in some way ▮ Adopted by mutual-benefit organizations, service organizations, and government organizations 35

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Non-Traditional Marketing ▮ A two-page magazine ad with a photograph of the beach in Barbados ▮ A poster informing music lovers of an upcoming Toby Mac concert ▮ A recruitment ad for the Coast Guard ▮ A radio ad advising teenagers not to drink ▮ The mayor’s efforts to attract enough voters to be re-elected

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Marketing: The Art and Science of Satisfying Customers Developing Partnerships and Strategic Alliances ▮ Relationship marketing extends to business-to- business relationships with suppliers, distributors, and other partners ▮ Strategic alliances - Partnerships in which two or more companies combine resources and capital to create competitive advantages in a new market 37