McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved th edition Marketing Overview Prof. Bill White Mkt 304 Principles of Marketing

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-2 Chapter An Overview of Marketing 1 After this session you should be able to explain: n Exchange and marketing. n Business and nonbusiness marketing. n The evolution of marketing. n The marketing concept. n Ethics and marketing. n The marketing program. n The influence of marketing

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-3 The Marketing Concept n Coordinating the total resources of an organization n Toward the identification and satisfaction of customer needs and wants n In a way planned to enhance profits and/or success. n “Find (or create) a need and fill it (at a profit).

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-4 MARKETING CONCEPT Customer orientation Customer orientation Organization’s performance objectives Organization’s performance objectives Coordinated marketing activities Coordinated marketing activities Customer satisfaction Customer satisfaction Organizational success Organizational success Figure The Marketing Concept

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-5 Marketing involves stimulating and managing exchanges. The Marketer -- The Initiator The Thing Offered -- Value/Benefit The Target Market -- The Receiver Price The Marketing Exchange Model

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-6 The 3 Stages of Marketing Evolution in the United States n Product orientation focusing on manufacturing a product. n Sales orientation focusing on selling a product. n Market orientation focusing on satisfying the customer’s needs.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-7 PRODUCT ORIENTATION SALES ORIENTATION PRODUCT ORIENTATION SALES ORIENTATION MARKET ORIENTATION Late 1800sEarly 1930sMid-1950s1990s Figure The Evolution of Marketing

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-8 Table How Should a Business be Defined? Company Product-Oriented Market-Oriented _______________________________________________ Kodak We make cameras and We help preserve film. beautiful memories. Amazon.com We sell books and recordings. ? Hewlett-Packard We make computer printers. ? Levi Strauss We make blue jeans. ? Steelcase We make office furniture. ? Caterpillar We make construction ? machinery.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-9 Differences between Marketing and Selling Orientations. n Marketing Orientation - Customer Focused >determining customer wants and then developing a product to satisfy that need and still yield a satisfactory profit. It is externally focused. n Selling Orientation - Self-Focused > producing a product and then trying to persuade customers to purchase it -- in effect, trying to alter consumer demand. It is internally focused.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Recent refinements of the marketing concept: n Quality >Quality is defined by customers. >TQM - Total Quality Management. >ROQ - Return on Quality analysis. n Relationships >An attempt to build personal, long-term bonds with customers. >Relationship marketing has expanded to include all groups an organization interact with: suppliers, employees, unions, government, and even competitors.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Recent refinements of the marketing concept (Con’t.): n Mass Customization >An attempt to provide affordable products customized to come as close as possible to meeting the needs of individual customers. >This is made possible because of advances in information and production technology. n Value Creation >An attempt to assess what customers value in a product. >Value means more than money to customers. >Value is a concept unique to each individual.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved n Return on Marketing Investment >Traditionally, the cost of marketing has been treated as an expense. >Since marketing can represent at least 50% of all corporate costs, it is now being looked at as an investment. n Societal Marketing Concept >Does the Marketing Concept conflict with the best interests of society? >Involves broadly defining customer and taking a long-term view of customers satisfaction. Recent refinements of the marketing concept (Con’t.):

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved A Marketing Program Consists of: n Market Segments - groups of people sharing similar wants, buying preferences, or product- use behaviors. n Target Market - market segment to which a marketing program is targeted. n Forecasting Demand - research to determine size of the market. n Position - attempts to establish a unique identity in potential customers’ minds. n Marketing Mix - >Product/Price/Distribution/Promotion

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Ethics and Marketing n Marketing is intended to influence the beliefs and behavior of customers and others. >The products marketed and the use of marketing tools creates a wide variety of ethical challenges. n There is disagreement over what constitutes ethical or unethical behavior. >Ethics are standards of behavior generally accepted by society. >Ethics vary from society to society.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Ethics and Marketing (con’t.) n Corporations are taking action to instill ethical awareness in their employees by: >Communicating clearly ethical standards and expectations of employees. >Avoiding unreasonable pressure on employees to perform by ensuring that goals and deadlines are reasonable. >Employing an “Ethics Officer” to advise employees on ethical dilemmas. >Rewarding ethical behavior and punishing unethical behavior.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Marketing and the Global Economy n Nations depend upon marketing to sell their raw materials and industrial output to other countries. n Companies now compete in markets all over the world. n It is relatively easy to conduct business and sell products and services abroad. n The world is becoming more affluent, and therefore able to buy more stuff.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Marketing and the Global Economy (con’t.) n Marketing Creates Employment n Marketing Creates Utilities: >Place utility makes a product accessible to potential customers where they want it. >Time utility makes a product available when they want it. >Information utility is created by informing prospective buyers that a product exists. >Image utility is the emotional or psychological value that the customer attaches to a product or brand. >Possession utility is created when ownership is transferred to the buyer.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Importance of Marketing in Organizations n The basic reason for firm’s existence is customers want satisfaction. n Marketing is the primary revenue-producing activity for firms. n Marketing has become increasingly important for service firms and nonprofit organizations.

McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved Importance of Marketing in Your Life n Marketing is a large part of your daily life. Consumers are exposed to 3,000 commercial messages a day. n Studying marketing will make you a better- informed customer. n Marketing directly relates to your career aspirations. (See appendix B.)