MKT 201 Principles of Marketing Chapter 1

Stresses Customer Satisfaction Chapter 1 An Overview of Marketing What Is Marketing? Stresses Customer Satisfaction A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities… Products Distribution Promotion Pricing NOTES: Marketing has two facets. The first is that it’s a philosophy. Second, marketing is an organization function and a set of processes used to implement the philosophy. David Packard, cofounder of Hewlett-Packard, stated that “marketing is too important to be left only to the marketing department.” Marketing is a process that focuses on delivering value and benefits to customers. It uses communication, distribution, and pricing strategies to provide customers with the goods and services they want. It includes building long-term, mutually rewarding relationships. It entails an understanding that organizations have many connected stakeholder partners, including employees, suppliers, stockholders, distributors, and others.

What Is Marketing? Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (AMA – Approved – October 2007)

Exchange Exchange People giving up something to receive something they would rather have.

Exchange Conditions for Exchange At Least Two Parties Something of Value Communication and Delivery Freedom to Accept or Reject Desire to Deal with Other Party Conditions for Exchange

Exchange Exchange may not take place even if conditions are met Chapter 1 An Overview of Marketing Exchange may not take place even if conditions are met An agreement must be reached Marketing occurs even if exchange does not take place Notes: An exchange may not take place even if all conditions are met. An agreement between buyer and seller is required before an exchange occurs. Discuss examples: * Automobile shopping * Jewelry shopping Marketing (for example, advertising, personal selling, sales promotion, etc.) can occur even if exchange does not take place. Discussion/Team Activity: Ask class to give examples of shopping when exchanges did occur, then when exchanges did not occur.

Marketing Management Philosophies Orientation Focus is on… Production Chapter 1 An Overview of Marketing Sales Market Societal Production internal capabilities of the firm satisfying customer needs and wants while meeting objectives satisfying customer needs and wants while enhancing individual and societal well-being aggressive sales techniques and belief that high sales result in high profits Orientation Focus is on… Notes: Four competing philosophies influence an organization’s marketing processes. Point out that a firm’s capabilities, such as production, are major considerations in strategic market planning. However, the guiding factor with all orientations should be the determination of what customers want, not what management thinks should be produced or sold. Discussion/Team Activity: Discuss examples of companies/organizations whose marketing management philosophies match each orientation. Production: Henry Ford’s Model T availability in any color as long as it was black Sales: Dot.com businesses in the late 1990s. Market: Ritz Carlton Hotels, Coach Societal: The Body Shop, Turtle Wax, method

Market Orientation 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.

The Marketing Concept Focusing on customer wants and needs to distinguish products from competitors’ offerings Integrating all the organization’s activities to satisfy these wants Achieving the organization’s long-term goals by satisfying customer wants and needs legally and responsibly

Achieving a Marketing Orientation Chapter 1 An Overview of Marketing Obtain information about customers, competitors, and markets Examine the information from a total business perspective Determine how to deliver superior customer value Implement actions to provide value to customers Online: Has Western Union rebounded from its failure to define its competitive arena as telecommunications? Describe the company’s value proposition, the market its serves, and whom it seems to be competing against. Discussion/Team Activity: Discuss companies that have a market orientation. Marriott International Burton Snowboards Dell Computers Southwest Airlines Discuss companies that lack(ed) a market orientation. Encyclopedia Britannica Western Union Kmart

Societal Marketing Societal Marketing Orientation An organization exists not only to satisfy customer wants but also to preserve or enhance individuals’ and society’s long-term best interests. Less toxic products More durable products Products with reusable or recyclable materials

REVIEW LEARNING OUTCOME Production Sales Marketing Societal What can we make or do best? How can we sell more aggressively? What do customers want and need? What do customers want and need, and how can we benefit society? Orientation Focus

Comparing the Sales and Market Orientations You can compare these orientations against these five categories: Organization’s focus Firm’s business Those to whom the product is directed Firm’s primary goal The tools used to achieve those goals

Customer Satisfaction The feeling that a product met or exceeded the customer’s expectations.

Building Relationships Relationship Marketing A strategy that focuses on keeping and improving relationships with current customers.

Building Relationships Chapter 1 An Overview of Marketing Building Relationships Customer-oriented personnel Employee training programs Empowered employees Teamwork Discussion/Team Activity: Discuss companies that have excelled at building long-term relationships. Examples: USAA Coca-Cola Walt Disney Southwest Airlines Wegmans Food Markets Nordstrom FedEx

REVIEW LEARNING OUTCOME Chapter 1 An Overview of Marketing REVIEW LEARNING OUTCOME 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 Outward Coordinated use of all marketing activities Customer satisfaction Specific groups of people Satisfying wants and needs NOTES: This comparison is not meant to belittle the role of promotion, especially personal selling, in the marketing mix. Salespeople in market-oriented organizations are generally perceived as problem solvers and links to supply sources and new products. Discussion/Team Activity: Identify organizations with sales or market orientations. Discuss the effectiveness of each organization’s strategy.

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

Vital Marketing Activities Why Study Marketing Vital Marketing Activities Assess the wants and satisfaction of customers Design and manage product offerings Determine prices and pricing policies Develop distribution strategies Communicate with present and potential customers

REVIEW LEARNING OUTCOME Reasons for Studying Marketing Why Study Marketing? Important to Society Important to Business Good Career Opportunities + Marketing affects you every day!