©2000 Prentice Hall Chapter 1: The Concept of Marketing n The marketing concept n Different organizational philosophies about marketing n The importance of being customer focused n How marketing is changing.

©2000 Prentice Hall The Definition of Marketing n Marketing is whenever an individual or an organization has a choice to make. n Marketing includes marketing situations and personal situations.

©2000 Prentice Hall Marketing is Difficult n Marketers spend time talking to customers. n Customers do not always accurately tell you what products they want. n Competitors’ actions are difficult to predict. n Customer tastes and society change frequently. n Implementing strategies is difficult.

©2000 Prentice Hall The Marketing Concept n Marketing concept emphasizes: u A. Customer focus u B. Organizing resources to understand customer needs and wants. u C. Offering products and services that meet those needs.

©2000 Prentice Hall Generating Profits n Purpose of a business: create and keep customers n Produce and deliver products that people want. n Value at a price and under conditions that are attractive.

©2000 Prentice Hall The Marketing Concept n Being competitor focused. n Making a profit. n Serving only segments of the customer population. n Turning away customers that are unprofitable.

©2000 Prentice Hall Customer Orientation n Organizations have to produce excellent products and services. n Figure out what customers want. n Offer it in a better way than competitors.

©2000 Prentice Hall Strategic Approaches to the Marketplace n Sales driven organization “What we make, we sell.” n Technology-driven organization focuses on R&D and sales. n Marketing driven organizations. Too much money is spent on marketing research.

©2000 Prentice Hall Customer-Oriented Organization n Understand customers buy benefits, not products. n Marketing translates these benefits into products and services. n Satisfy more customers than competitors to make a profit. n Make key investments in customers long term satisfaction.

©2000 Prentice Hall Achieving Customer Orientation n Buying influence information should be distributed to every corporate function. n Make strategic and tactical decisions interfunctionally and interdivisionally. n Divisions and functions should make coordinated decisions, execute them with commitment.

©2000 Prentice Hall Customer Orientation Checklist n Are we easy to do business with? n Do we keep our promises? n Do we meet the standards we set? n Are we responsive? n Do we work together?

©2000 Prentice Hall Customer Orientation and Product innovation n Customer orientation and being market driven are consistent with revolutionary new products. n Marketers must put product concepts in terms of benefits. n Customers can tell you about problems with current products and benefits they want from new products.

©2000 Prentice Hall The Changing Nature of Marketing n Four issues affecting marketing: u A. Adoption and investment in information technology. u B. Rapid commercialization of internet. u C. Globalization of business. u D. Customer relationship-building and maintaining customer databases.

©2000 Prentice Hall The Increased Adoption of Information Technology n Companies in the United States spent over $200 billion on investments in information technology hardware. n More customer information is being collected at a more rapid pace. n Money is being poured into transaction- based information systems (TBISs) and electronic data interchange (EDI).

©2000 Prentice Hall Diffusion of Information Technology n Companies invest large sums for: u A. Better customer service operations. u B. Improved database marketing to target narrowly defined segments. u C. Help salespeople make presentations to customers with up-to-the-minute information about competitors.

©2000 Prentice Hall The Rapid Commercialization of the Internet n A communication vehicle: Companies pay money to other Web site sponsors to advertise on their sites. n A distribution channel: Companies have been successful selling products to customers from around the World via the Web. n A means for disseminating information about products or services. n A source for answering technical questions about product use.

©2000 Prentice Hall Two Internet-Related Technologies n Intranets are Web-based systems within an organization that cannot be accessed from the outside without special codes. n Extranets are pipelines from an organization to other organizations such as channel members.

©2000 Prentice Hall The Continued Globalization of Business n Europe is moving toward a common monetary unit with the introduction of the Euro. n The breakup of the Soviet Union and increased democratization of Russia are creating new market opportunities. n Asia is creating many new markets through its developing economies. n Latin America is an emerging market.

©2000 Prentice Hall The Value of the Customer Base n Lifetime customer value is the present value of a stream of revenue that can be produced by a customer. n Marketing managers will focus on the relationship between the organization and customer as the end of a successful marketing strategy. n Retaining more customers by satisfying them better than competitors will be profitable in the long run.

©2000 Prentice Hall Relationship Marketing Involves Different Activities n Database marketing, created through transactions, surveys, warranty cards, and a number of other ways. n Take products traditionally mass marketed and make them appear to be targeted - mass customization. n Customer satisfaction often done through extraordinary customer service.