©2002 South-Western Chapter 1 Version 6e1 chapter An Overview of Marketing 1 1 Prepared by Deborah Baker Texas Christian University

©2002 South-Western Chapter 1 Version 6e2 chapter Learning Objectives Define the term marketing 2.Describe four marketing management philosophies 3.Discuss the differences between sales and market orientations 4.Describe the marketing process 5.Describe several reasons for studying marketing

©2002 South-Western Chapter 1 Version 6e3 Learning Objective Define the term marketing 1 1

©2002 South-Western Chapter 1 Version 6e4 What is Marketing? All of the above, plus much more!  Personal Selling?  Advertising?  Making products available in stores?  Maintaining inventories? 1 1

©2002 South-Western Chapter 1 Version 6e5 What is Marketing? A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities, including: Products Pricing Promotion Distribution 1 1

©2002 South-Western Chapter 1 Version 6e6 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. 1 1

©2002 South-Western Chapter 1 Version 6e7 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 1 1

©2002 South-Western Chapter 1 Version 6e8 The Concept of Exchange The idea that people give up something to receive something they would rather have. 1 1

©2002 South-Western Chapter 1 Version 6e9 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 Conditions for Exchange 1 1

©2002 South-Western Chapter 1 Version 6e10  Exchange may not take place even if conditions met  An agreement must be reached  Marketing occurs even if exchange does not take place NO SALE The Concept of Exchange 1 1

©2002 South-Western Chapter 1 Version 6e11 Learning Objective Describe four marketing management philosophies. 2 2

©2002 South-Western Chapter 1 Version 6e12CompetingPhilosophiesCompetingPhilosophies Production Sales Market Societal Marketing Marketing Management Philosophies 2 2

©2002 South-Western Chapter 1 Version 6e13 Marketing Management Philosophies 2 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

©2002 South-Western Chapter 1 Version 6e14 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. 2 2

©2002 South-Western Chapter 1 Version 6e15 The Marketing Concept  Focuses on customer wants and needs to distinguish products from competition  Integrates all organization’s activities to satisfy customer wants and needs  Achieves organization’s long-term goals by satisfying customer wants and needs 2 2

©2002 South-Western Chapter 1 Version 6e16 Market Orientation Requirements  Top management leadership  A customer focus  Competitor intelligence  Interfunctional coordination  Customer relationships 2 2

©2002 South-Western Chapter 1 Version 6e17 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 2 2

©2002 South-Western Chapter 1 Version 6e18 Learning Objective Discuss the differences between sales and market orientations. 3 3

©2002 South-Western Chapter 1 Version 6e19 Sales vs. Market Orientations Organization’s Focus Firm’s Business For Whom? Primary Profit Goal? Tools to Achieve Selling goods and services Everybody Maximum sales volume Primarily promotion Inward Sales Orientation Market Orientation OutwardCoordinated use of all marketing activities Customer satisfaction Specific groups of people Satisfying wants and needs 3 3

©2002 South-Western Chapter 1 Version 6e20 The Organization’s Focus Create Customer Value Create Customer Value Build Long-Term Relationships Maintain Customer Satisfaction Maintain Customer Satisfaction Key Issues in Developing Competitive Advantage 3 3

©2002 South-Western Chapter 1 Version 6e21 Customer Value The ratio of benefits to the sacrifice necessary to obtain those benefits 3 3

©2002 South-Western Chapter 1 Version 6e22 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 3 3

©2002 South-Western Chapter 1 Version 6e23 The feeling that a product has met or exceeded the customer’s expectations. Customer Satisfaction 3 3

©2002 South-Western Chapter 1 Version 6e24 Maintaining Customer Satisfaction  Meet or exceed customer’s expectations  Focus on delighting customers  Provide solutions to customer’s problems 3 3

©2002 South-Western Chapter 1 Version 6e25 Relationship Marketing The name of a strategy that entails forging long-term partnerships with customers, both individuals and firms. 3 3

©2002 South-Western Chapter 1 Version 6e26 Relationship Marketing’s Importance Attracting a new customer may be TEN TIMES the cost of keeping an old customer 3 3

©2002 South-Western Chapter 1 Version 6e27 Building Long-Term Relationships  Customer-oriented personnel  Effective training programs  Empowered employees  Teamwork 3 3

©2002 South-Western Chapter 1 Version 6e28 Empowerment Delegation of authority to solve customers’ problems quickly. 3 3

©2002 South-Western Chapter 1 Version 6e29 Defining a Firm’s Business “Benefits” instead of “goods/services”  Ensures a customer focus  Encourages innovation  Stimulates an awareness of customer change 3 3

©2002 South-Western Chapter 1 Version 6e30 Learning Objective Describe the marketing process. 4 4

©2002 South-Western Chapter 1 Version 6e31 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 4 4

©2002 South-Western Chapter 1 Version 6e32 Learning Objective Describe several reasons for studying marketing. 5 5

©2002 South-Western Chapter 1 Version 6e33 Why Study Marketing?  Plays an important role in society  Vital to business survival, profits and growth  Offers career opportunities  Affects your life every day 5 5

©2002 South-Western Chapter 1 Version 6e34 Why Study Marketing? “Marketing is too important to be left to the marketing department.” -- David Packard Hewlett-Packard “Marketing is too important to be left to the marketing department.” -- David Packard Hewlett-Packard 5 5

©2002 South-Western Chapter 1 Version 6e35  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 Professional Selling Marketing Research Advertising Retail Buying Distribution Management Product Management Product Development Wholesaling Why Study Marketing? 5 5

©2002 South-Western Chapter 1 Version 6e36  Half of every dollar spent by consumers pays for marketing costs  Become a better- informed consumer Why Study Marketing? 5 5