Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 1 An Overview of Marketing Prepared by Deborah Baker Texas Christian University Chapter 1

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 2 Learning Objectives 1.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

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 3 Learning Objective Define the term marketing 1 1 On Line On Line

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 4 What is Marketing? All of the above, plus much more!  Personal Selling?  Advertising?  Making products available in stores?  Maintaining inventories? 1 1

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 5 What is Marketing? A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities, including: Products Pricing Promotion Distribution 1 1

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 6 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

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 7 The Concept of Exchange The idea that people give up something to receive something they would rather have. 1 1

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 8 The Concept of Exchange Necessary Conditions for Exchange At Least Two Parties Something of Value Communication and Delivery Freedom to Accept or Reject Desire to Deal With Other Party 1 1

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 9  Exchange may not take place even if conditions are met  An agreement must be reached  Marketing occurs even if exchange does not take place NO SALE The Concept of Exchange 1 1

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 10 Learning Objective Describe four marketing management philosophies. 2 2

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 11CompetingPhilosophiesCompetingPhilosophies Production Sales Market Societal Marketing Marketing Management Philosophies 2 2

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 12 Orientation Key Ideas Production Sales Market Societal Focus on efficiency of internal operations Focus on satisfying customer needs and wants while meeting objectives Focus on satisfying customer needs and wants while enhancing individual and societal well-being Focus on aggressive sales techniques and believe that high sales result in high profits Marketing Management Philosophies 2 2

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 13 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

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 14 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

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 15 Achieving a Market Orientation  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 2 2 On Line On Line

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 16 Less toxic products More durable products Products with reusable or recyclable materials Less toxic products More durable products Products with reusable or recyclable materials Societal Marketing Orientation Marketing that preserves or enhances an individual’s and society’s long-term best interests 2 2

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 17 Learning Objective Discuss the differences between sales and market orientations. 3 3

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 18 Sales vs. Market Orientations Organization’s Focus Firm’s Business For Whom? Primary Profit Goal? Tools to Achieve Selling goods and services EverybodyMaximum 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

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 19 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

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 20 Customer Value The ratio of benefits to the sacrifice necessary to obtain those benefits 3 3

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 21 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 On Line On Line

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 22 The feeling that a product has met or exceeded the customer’s expectations. Customer Satisfaction 3 3

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 23 Maintaining Customer Satisfaction  Meet or exceed customer’s expectations  Focus on delighting customers  Provide solutions to customer’s problems  Cultivate relationships, NOT one-time transactions 3 3 On Line On Line

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 24 Relationship Marketing The name of a strategy that entails forging long-term partnerships with customers, both individuals and firms. 3 3

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 25 Relationship Marketing Requirements for Building Relationships Requirements for Building Relationships Who are your customers What do customers value How do they prefer to interact What do they want to buy 3 3

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 26 Building Long-Term Relationships  Customer-oriented personnel  Effective training programs  Empowered employees  Teamwork 3 3

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 27 Defining a Firm’s Business “Benefits” instead of “goods/services”  Ensures a customer focus  Encourages innovation  Stimulates an awareness of changes in customer preferences 3 3 On Line On Line

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 28 Learning Objective Describe the marketing process. 4 4

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 29 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

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 30 Learning Objective Describe several reasons for studying marketing. 5 5

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 31 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

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 32 Why Study Marketing? “Marketing is far too important to be left only to the marketing department.” -- David Packard Hewlett-Packard “Marketing is far too important to be left only to the marketing department.” -- David Packard Hewlett-Packard 5 5

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 33  1/4th to 1/3rd of the civilian workforce in the U.S. performs marketing activities  Fast 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

Chapter 1 Marketing 7e Lamb Hair McDaniel ©2004 South-Western/Thomson Learning 34  Half of every dollar spent pays for marketing costs  Better-informed consumers  Demand for customer satisfaction Why Study Marketing? 5 5