2007 Pearson Education Canada1 Marketing 11 Chapter 1: Contemporary Marketing What is Marketing? p. 1-10

2007 Pearson Education Canada2 Marketing Definition “A process that identifies a need and then offers a means (a good or service) of satisfying it.” All marketing is focused on a kind of transaction or exchange between the organization and the customer.

2007 Pearson Education Canada3 In Other Words… What do people need (want)? What do people need (want)? How can I come up with a unique way of filling that need? How can I come up with a unique way of filling that need? –Unique! If you are going to introduce a new product, you had better make sure it’s not already been done by somebody else!

2007 Pearson Education Canada4 Tim Horton’s: Ranked Canada’s Best-Managed Brand The reasons are all marketing related: The reasons are all marketing related: –Strong customer service –Popular products –Prolific community involvement –A large number of locations –Implementation of an efficient business system to deliver products –Consistent delivery of brand promise

2007 Pearson Education Canada5 Dell Computer Inc. Prior to Dell, all computer companies marketed computers the same way Prior to Dell, all computer companies marketed computers the same way Dell markets custom-designed computers (made to customer specifications) directly to the customer Dell markets custom-designed computers (made to customer specifications) directly to the customer Expensive distributions costs are eliminated Expensive distributions costs are eliminated Provides savings and convenience to customers Provides savings and convenience to customers Dell introduced a new form of exchange and new benefits Dell introduced a new form of exchange and new benefits

2007 Pearson Education Canada6 Task of Marketing Collect, analyze, and apply information about customers. Collect, analyze, and apply information about customers. Develop marketing programs that respond to the changing needs & preferences of customers, including: Develop marketing programs that respond to the changing needs & preferences of customers, including: –products, –prices, –placement (or distribution), and –promotion. “The goal of the company is to stay one step ahead of the competition by offering goods & services that provide customers with value, all the time.”

2007 Pearson Education Canada7 Market-Driven Success A company requires knowledge of its competitors’ products and how customers view them. A company requires knowledge of its competitors’ products and how customers view them. This is how McDonald’s remains number one in fast-food retailing, Nike number one in athletic shoes, and Wal-Mart number one in department store. This is how McDonald’s remains number one in fast-food retailing, Nike number one in athletic shoes, and Wal-Mart number one in department store.

2007 Pearson Education Canada8 The 4 P’s of Marketing Product Product Price Price Placement Placement Promotion Promotion This will be on every marketing test you will ever take! So remember it!

2007 Pearson Education Canada9 Marketing Past and Present Over time the orientation of business has changed: Production Sales Marketing Social Responsibility

2007 Pearson Education Canada10 Production Orientation Sell what you can produce Sell what you can produce Limited or no choice for customer Limited or no choice for customer Profit from production efficiency Profit from production efficiency “They can have any colour of car as long as it’s black” - Henry Ford

2007 Pearson Education Canada11 Selling Orientation Products matched to customer needs (e.g. quality, variety, etc.) Products matched to customer needs (e.g. quality, variety, etc.) Choices more readily available Choices more readily available Profits based on expanded sales Profits based on expanded sales More variety meant that companies had to “sell” their goods More variety meant that companies had to “sell” their goods

2007 Pearson Education Canada12 Marketing Orientation All activity revolves around customers and their satisfaction All activity revolves around customers and their satisfaction Extremely competitive because of wide choice of goods and services Extremely competitive because of wide choice of goods and services Make what you can sell, instead of selling what you can make Make what you can sell, instead of selling what you can make “Have it your way” - Burger King

2007 Pearson Education Canada13 The Marketing Concept The Marketing Orientation embodies the Marketing Concept: The Marketing Orientation embodies the Marketing Concept: “The essential task of the organization is to determine the needs and wants of a target market and then to deliver a set of satisfactions in such a way that the organization’s product is perceived to be a better value than a competing product”

2007 Pearson Education Canada14 Marketing Concept Applied Harley-Davidson Harley-Davidson –Image & reputation are legendary –Refocused on a more specific target market to fend off Japanese competitors (Honda, Suzuki, Yamaha) –Targets CEOs, lawyers, doctors, etc. –Got to know it’s core customers and changed it’s marketing & product to suit their needs

2007 Pearson Education Canada15 Socially Responsible Marketing Orientation Fulfill society’s expectations (e.g. for a safe environment) Fulfill society’s expectations (e.g. for a safe environment) Be a good corporate citizen Be a good corporate citizen Higher short-term costs accepted in return for long- term profit Higher short-term costs accepted in return for long- term profit Both efficient production and marketing to an informed consumer in a rapidly changing environment contribute to profit. Both efficient production and marketing to an informed consumer in a rapidly changing environment contribute to profit. Relationship between marketer and customer crucial to profit (implement customer relationship management programs). Relationship between marketer and customer crucial to profit (implement customer relationship management programs).

2007 Pearson Education Canada16 SRM in Action Toyota : developed the first mass-produced and mass-marketed hybrid vehicle Toyota : developed the first mass-produced and mass-marketed hybrid vehicle –Toyota Prius is the first hybrid vehicle that provides the comfort, features, and performance of a mid-sized sedan –Competes effectively with conventional 4- cylinder mid-sized sedans (the marketing concept) –Prius sedan is in a class by itself when it comes to fuel efficiency & emissions performance

2007 Pearson Education Canada17 Socially Responsible Marketing SRM can be divided into two main areas: 1.Programs that conserve, preserve, and protect the environment 2.Programs that support causes (a.k.a. cause marketing)

2007 Pearson Education Canada18 Cause Marketing Allows companies to meet both social responsibility and business goals Allows companies to meet both social responsibility and business goals Aligning business activities with consumer cause concerns has sales potential Aligning business activities with consumer cause concerns has sales potential

2007 Pearson Education Canada19 Cause Marketing in Action KitchenAid Canada has formed a partnership with the Canadian Breast Cancer Society KitchenAid Canada has formed a partnership with the Canadian Breast Cancer Society Encourages consumers to host cooking parties at home to raise funds Encourages consumers to host cooking parties at home to raise funds Instead of bringing a hostess gift, people donate money Instead of bringing a hostess gift, people donate money

2007 Pearson Education Canada20 Cause Marketing in Action Toyota has joined with Earth Day Canada Toyota has joined with Earth Day Canada Provides entry scholarships to students who have demonstrated outstanding achievement in academics and environmental community service Provides entry scholarships to students who have demonstrated outstanding achievement in academics and environmental community service

2007 Pearson Education Canada21 Assignment: Read p Read p Complete WSH 1.1 Complete WSH 1.1 Study for the Quiz tomorrow Study for the Quiz tomorrow