An Overview of Marketing 1 chapter Prepared by Deborah Baker Texas Christian University Chapter 1 Version 3e Chapter 1 Version 6e

chapter 1 Learning Objectives 1. Define the term marketing 2. Describe four marketing management philosophies 3. Explain how firms implement the marketing concept 4. Describe the marketing process and identify the variables that make up the marketing mix 5. Describe several reasons for studying marketing 1 chapter Chapter 1 Version 3e

Define the term marketing 1 Learning Objective Define the term marketing Chapter 1 Version 3e

1 What is Marketing? Personal Selling? Advertising? Making products available in stores? Maintaining inventories? All of the above, plus much more! Chapter 1 Version 3e

1 plus What is Marketing? A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities, including: Products Pricing Promotion Distribution plus Chapter 1 Version 3e

American Marketing Association Definition 1 What is Marketing? American Marketing Association Definition Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. Chapter 1 Version 3e

The Concept of Exchange 1 The Concept of Exchange Desire to Deal With Other Party Freedom to Accept or Reject Something of Value Ability to Communicate Offer At Least Two Parties Necessary Conditions for Exchange Chapter 1 Version 3e

The Concept of Exchange 1 The Concept of Exchange The idea that people give up something to receive something they would rather have. Chapter 1 Version 3e

Conditions for Exchange 1 Conditions for Exchange There must be at least two parties and each party… Must have something the other party values Must communicate and deliver goods Must be free to accept or reject offer Must want to deal with other party Chapter 1 Version 3e

The Concept of Exchange 1 The Concept of Exchange Exchange may not take place even if conditions met An agreement must be reached Marketing occurs even if exchange does not take place However... NO SALE Chapter 1 Version 3e

Describe four marketing management philosophies. 2 Learning Objective Describe four marketing management philosophies. Chapter 1 Version 3e

Marketing Management Philosophies 2 Competing Philosophies Production Sales Market Societal Marketing Chapter 1 Version 3e

Marketing Management Philosophies 2 Philosophy Key Ideas Production Sales Market Societal Focus on efficiency of internal operations Focus on satisfying customer needs and wants Focus on satisfying customer needs and wants while enhancing individual and societal well-being Focus on aggressive techniques for overcoming customer resistance Chapter 1 Version 3e

Market Orientation Requirements 2 Market Orientation Requirements Top management leadership A customer focus Competitor intelligence Interfunctional coordination Customer relationships Chapter 1 Version 3e

Societal Marketing Orientation 2 Societal Marketing Orientation Marketing that preserves or enhances an individual’s and society’s long-term best interests Less toxic products More durable products Products with reusable or recyclable materials Chapter 1 Version 3e

Explain how firms implement 3 Learning Objective Explain how firms implement the marketing concept Chapter 1 Version 3e

2 The Marketing Concept The idea that the social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting organizational objectives. Chapter 1 Version 3e

2 The Marketing Concept Focusing on customer wants and needs can be a source of competitive advantage by: Creating customer value Maintaining customer satisfaction Building long-term relationships Chapter 1 Version 3e

3 Customer Value The ratio of benefits to the sacrifice necessary to obtain those benefits Chapter 1 Version 3e

Customer Value Requirements 3 Customer Value Requirements Offer products that perform Give consumers more than they expect Avoid unrealistic pricing Give the buyer facts Offer organization-wide commitment in service and after-sales support Chapter 1 Version 3e

Customer Satisfaction 3 Customer Satisfaction The feeling that a product has met or exceeded the customer’s expectations. Chapter 1 Version 3e

Maintaining Customer Satisfaction 3 Maintaining Customer Satisfaction Meet or exceed customer’s expectations Focus on delighting customers Provide solutions to customer’s problems Chapter 1 Version 3e

Relationship Marketing 3 Relationship Marketing The name of a strategy that entails forging long-term partnerships with customers, both individuals and firms. Chapter 1 Version 3e

Relationship Marketing’s Importance 3 Attracting a new customer may be TEN TIMES the cost of keeping an old customer Chapter 1 Version 3e

Building Long-Term Relationships 3 Building Long-Term Relationships Customer-oriented personnel Effective training programs Empowered employees Teamwork Chapter 1 Version 3e

Delegation of authority to solve customers’ problems quickly. 3 Empowerment Delegation of authority to solve customers’ problems quickly. Chapter 1 Version 3e

Describe the marketing process and identify the variables that make up 4 Learning Objective Describe the marketing process and identify the variables that make up the marketing mix Chapter 1 Version 3e

Marketing Process Activities 4 Marketing Process Activities Understand the organization’s mission Set marketing objectives Gather, analyze, interpret “SWOT” information Develop a marketing strategy Implement the marketing strategy Design performance measures Evaluate marketing efforts--change if needed Chapter 1 Version 3e

Environmental Scanning 4 Environmental Scanning Collection and interpretation of information about forces, events and relationships in the external environment that may affect the future of the organization or the marketing plan implementation. Chapter 1 Version 3e

Environmental Scanning 4 Environmental Scanning Examination of macroenvironmental forces Social Demographic Economic Technological Political / Legal Competitive Helps identify market opportunities Provides guidelines for design of marketing strategy Chapter 1 Version 3e

4 The Marketing Mix A unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. Chapter 1 Version 3e

Marketing Mix: The “Four Ps” 4 Marketing Mix: The “Four Ps” Price Promotion Place Product Chapter 1 Version 3e

4 Product Strategies The starting point of the “4 Ps” Includes physical unit, package, warranty, service, brand, image, and value Product Chapter 1 Version 3e

Distribution (Place) Strategies 4 Distribution (Place) Strategies Product availability where and when customers want them. Involves all activities from raw materials to finished products Place Chapter 1 Version 3e

4 Promotion Strategies Role is to bring about exchanges with target markets Includes integration of personal selling, advertising, sales promotion, and public relations Promotion Chapter 1 Version 3e

4 Pricing Strategies The most flexible of the “4 Ps” Price Price X Units Sold = Total Revenue Price Chapter 1 Version 3e

Describe several reasons for studying marketing. 5 Learning Objective Describe several reasons for studying marketing. Chapter 1 Version 3e

5 Why Study Marketing? Plays an important role in society Vital to business survival, profits and growth Offers career opportunities Affects your life every day Chapter 1 Version 3e

“Marketing is too important marketing department.” 5 Why Study Marketing? “Marketing is too important to be left to the marketing department.” --David Packard Hewlett-Packard Chapter 1 Version 3e

5 Why Study Marketing? 1/4th to 1/3rd of the entire civilian workforce in the U.S. performs marketing activities Fastest route up the corporate ladder Professional Selling Marketing Research Advertising Retail Buying Distribution Management Product Management Product Development Wholesaling Chapter 1 Version 3e

5 Why Study Marketing? Half of every dollar spent by consumers pays for marketing costs Become a better-informed consumer Chapter 1 Version 3e