When you finish this chapter, you should 2-2 Chapter 2 Objectives 1. Know what the marketing concept is—and how it should affect strategy planning in a firm or nonprofit organization. 2. Understand what customer value is and why it is important to customer satisfaction. 3. Understand what a marketing manager does. 4. Know what marketing strategy planning is—and why it is the focus of the book. 5. Understand target marketing. 6. Be familiar with the four Ps in a marketing mix. 7. Know the difference between a marketing strategy, a marketing plan, and a marketing program. 8. Understand the important new terms.

Simple Trade Era Production Era Sales Era Marketing DepartmentEra Marketing DepartmentEra Marketing CompanyEra Marketing CompanyEra Sell Surplus Increase Supply Beat Competition Coordinate and Control Long-Run Customer Satisfaction Long-Run Customer Satisfaction Focus: Marketing’s Changing Role 2-3

The Marketing Concept Exhibit 2-1 Profit CustomerSatisfaction CustomerSatisfaction Total CompanyEffort Total CompanyEffort The Marketing Concept 2-4

Marketing Orientation Sounds Easy,Isn’t  Even the “best” firms sometimes backslide into a production orientation  In today’s highly competitive markets it is often difficult to  keep up with changing customer needs  beat aggressive competitors to the punch  find the right focus -- one that matches the firm’s objectives and resources to market opportunities  offer customers superior value 2-5

Customer Value Reflects Benefits and Costs CostsBenefits Customer value concerns the difference between the benefits a customer sees from a firm’s market offering and the costs of obtaining those benefits The customer’s view of costs and benefits is not just limited to economic (or even rational) considerations--and a low price may NOT result in superior value

Customer Value CostsBenefits One customer’s view of the benefits and costs of a firm’s market offering may vary from another customer’s view, so firm may not be able to satisfy everybody with the same offering. Customer value concept takes the customers point of view, but customers may not explicitly weigh costs and benefits and even if they do their view may not match some “objective” reality. 2-7

Nonprofits Need Marketing, Too Poorly Organized for Marketing Poorly Organized for Marketing Non- Customer Support Non- Customer Support Non- Economic Measures Non- Economic Measures Characteristics of Nonprofit Organizations 2-8

Exhibit 2-4 The Marketing Management Process 2-9 Whole-Company Strategic Management Planning Whole-Company Strategic Management Planning MarketingPlanning MarketingPlanning Implement MarketingPlan(s) and Program Implement MarketingPlan(s) and Program Control MarketingPlan(s) and Program Control MarketingPlan(s) and Program Adjust Plans As Needed

Exhibit Marketing Strategy Planning The Marketing Mix The Marketing Mix C

2-11 The Four Ps of the Marketing Mix Exhibit 2-7 ProductPlace PricePromotion C

Product Physical Goods Service Features Quality Level Accessories Installation Instructions Warranty Product Lines Packaging Branding Place Objectives Channel Type Market Exposure Kinds of Middleman Kinds and Locations of Stores How to Handle Transporting and Storing Service Levels Recruiting Middlemen Managing Channels Promotion Objectives Blend Salespeople Kind Number Selection Training Motivation Advertising Targets Kinds of Ads Media Type Copy Thrust Who Prepares? Sales Promotion Publicity Price Objectives Flexibility Level over PLC Geographic Terms Discounts Allowances 2-12 Exhibit 2-8 Strategy Decision Areas Organized by the Four Ps

Manufacturer or producer Consumer Procter & Gamble Del Monte NissanCitibank Wholesaler Retailer Wholesaler Retailer 2-13 Exhibit 2-9 Four Examples of Basic Channels of Distribution for Consumer Products

Elements of the Marketing Program Target Market Marketing Mix Marketing Strategy Time-Related Details Marketing Plan Other Marketing Plans A Firm’s Marketing Program = = = Exhibit 2-11

Distribution of Different Firms Based on Performance Exhibit % 14% Total Failure PoorFairGoodExceptional (Well below average) (Below average) (Well above average) (Above average) 68% (Average Marketing Program) Death-wish marketing Best-practices marketing

Nonprofit Organizations Social Responsibility Marketing Management Process Strategic (Management) Planning Marketing Strategy Target Market Marketing Mix Target Marketing Mass Marketing Channel of Distribution Simple Trade Era Production Era Sales Era Marketing Department Era Marketing Company Era Marketing Concept Production Orientation Marketing Orientation Customer Value Personal Selling Mass Selling Advertising Publicity Sales Promotion Marketing Plan Implementation Operational Decisions Marketing Program Key Terms 2- 16