CHAPTER 1 THE FIELD OF MARKETING Instructor Ambreen Ali

Chapter Goals 2 To gain an understanding of:  The relationship between exchange and marketing  How marketing applies to business and non-business situations  The evolution of marketing  Services and relationship marketing  The factors that drive customer satisfaction  The difference between marketing and selling  The marketing concept  The impact of quality, service and ethics in modern marketing  Marketing’s role in the global economy, in an individual organization, and in your life

Definition of Marketing 3  Marketing  Marketing is the total system of business activities designed to plan, price, promote, and distribute want-satisfying products, services, and ideas to target markets in order to achieve organizational objectives customer focus  Marketing means adopting a customer focus for the organization; keeping the customer’s needs in mind all the time. It may not always mean making an immediate sale.

In the Socioeconomic System: Marketing creates utilities:  Place utility  Place utility makes a product accessible to potential customers where they want it.  Time utility  Time utility makes a product available when they want it.  Information utility  Information utility is created by informing prospective buyers that a product exists.  Image utility  Image utility is the emotional or psychological value that the customer attaches to a product or brand.  Possession utility  Possession utility is created when ownership is transferred to the buyer. 4

Importance of Marketing to Organizations 5  The basic reason for firm’s existence is customers want satisfaction.  Marketing is the only revenue-producing activity for the firm.  Marketing has become increasingly important for service firms and not-for-profit organizations.

The Global Importance of Marketing 6  Nations depend upon marketing to sell their raw materials and industrial output to other countries.  Companies now compete in markets all over the world.  Honda and Toyota now build cars in Canada, starting from nothing 15 years ago.

The Importance of Marketing in Your Life 7  Marketing is a large part of your daily life. Consumers are exposed to 3,000 commercial messages a day.  Studying marketing will make you a better- informed customer.  Marketing probably relates -- directly or indirectly -- to your career aspirations.

Key Words in the Marketing Definition 8  total system:  total system: not an ad hoc approach  business activities:  business activities: but not just for businesses  plan, price, promote, distribute:  plan, price, promote, distribute: the marketing mix  want-satisfying:  want-satisfying: meeting customers’ needs  products, services, ideas:  products, services, ideas: not just products  target markets:  target markets: not a broad-brush approach  organizational objectives:  organizational objectives: not just profits

The Focus of Marketing 9 exchange  marketing involves the exchange of things of value value  much of marketing’s focus today is on the creation of value for customers needs wants  we must develop a good understanding of customer needs and wants relationship  ultimately, successful companies develop a close customer relationship

Fundamental Bases for Exchange 10  Two or more people, or units, must be involved  Parties must be willing to be involved (voluntary participation)  Each party must have something of value to contribute to the exchange  Parties must communicate with each other to facilitate the exchange process

Evolution of Marketing 11  marketing has evolved from a production, to a selling, to a marketing stage  in the production-orientation stage, emphasis was on making a better physical product  in the sales-orientation stage, the emphasis was on how to sell that product  a marketing-oriented organization places emphasis on satisfying the wants and needs of customers

Some industries and organizations remain at the production-orientation stage. PRODUCTION ORIENTATION SALES ORIENTATION Other industries and organizations have progressed only to the sales-orientation stage. Many industries and organizations have progressed to the marketing-orientation stage. PRODUCTION ORIENTATION SALES ORIENTATION MARKETING ORIENTATION Late 1800sEarly 1930sMid-1950s1900s Stages in the Evolution of Marketing 12

The Marketing Concept 13  objective is to produce long-term customer satisfaction and organizational success  all of the organization’s planning and operations are customer-oriented  all of the marketing activities of the organization should be consistently designed and delivered  all activities are intended to achieve the firm’s organizational objectives

An Innovation Based on the Marketing Orientation. 14 Relationship Marketing  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.

Drivers of Customer Satisfaction 15 core product  getting the core product right is essential services and systems  many services and systems support the core technical performance  customers expect good technical performance of the product or service interaction  they also expect to be treated well in face-to- face interaction with employees how it makes the customer feel  the company must also consider how it makes the customer feel in many subtle ways

The Difference Between Marketing and Selling 16  Marketing  Marketing is the process of determining customer wants and then developing a product to satisfy that need and still yield a satisfactory profit. It is externally focused.  Selling  Selling is producing a product and then trying to persuade customers to purchase it -- in effect, trying to alter consumer demand. It is internally focused.

How Should Marketing Be Defined? CompanyProduct- Oriented Marketing- Oriented Kodak We make cameras and film. We help preserve beautiful memories. Amazon.com We sell books and recordings. ? Hewlett- Packard We make computer printers. ? Levi Strauss We make blue jeans ? Caterpillar We make construction machinery. ?

The Marketing Concept 18 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

. 19 societal marketing concept A revised philosophy, called the societal marketing concept, involves broadly defining customer and taking a long- term view of customers’ satisfaction. The Societal Marketing Concept

Quality in Marketing 20  quality in what an organization offers is a major contributor to value and customer satisfaction  if the customer is satisfied with the quality, he or she is likely to return to buy again  quality is very much defined by the customer; it also varies across individuals and over time  quality, as perceived by the customer, is influenced not only by physical products but by service as well  requires a commitment from all staff to deliver the highest quality possible

Another Innovation: 21 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 technology.

Ethics in Marketing 22  Marketing is intended to influence the behaviour of customers and others.  The use of marketing tools can create a wide variety of ethical challenges.  There is disagreement over what constitutes ethical or unethical behaviour.  Ethics are standards of behaviour generally accepted by society.  Ethics vary from society to society.

More About Ethics 23  Corporations are taking action to instill ethical awareness in their employees by:  Avoiding unreasonable pressure on employees to perform.  Communicating clearly what is expected of employees.  Employing an “Ethics Officer” to advise employees on ethical dilemmas.  Rewarding only ethical performance.