1. An Overview of Marketing
Lamb, Hair, McDaniel
Chapter 1 An Overview of Marketing
CHAPTER 1
An Overview of Marketing
“Marketing is too important to be left only to the marketing department.” – David Packard
© WINDSOR & WIEHAHN/STONE/GETTY IMAGES

2. Learning Outcomes LO 1 Define the term marketing
Chapter 1 An Overview of Marketing
Learning Outcomes
LO 1 Define the term marketing
LO 2 Describe four marketing management philosophies
LO 3 Discuss the differences between sales and market orientations
LO 4 Describe several reasons for studying marketing

3. Define the term marketing
Chapter 1 An Overview of Marketing
What Is Marketing?
Define the term marketing
LO1

4. Marketing… LO1 Two Facets:
Chapter 1 An Overview of Marketing
Marketing…
Two Facets:
A philosophy, an attitude, a perspective, or a management orientation that stresses customer satisfaction.
An organizational activity, set of institutions, and processes.
NOTES:
Marketing has two facets. First, it’s a philosophy. Second, 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.
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 involves building long-term, mutually rewarding relationships. It entails an understanding that organizations have many connected stakeholder partners, including employees, suppliers, stockholders, distributors, and others.
LO1

5. American Marketing Association Definition
Chapter 1 An Overview of Marketing
What Is Marketing?
American Marketing Association Definition
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.
Note: This is the NEW definition of Marketing from the AMA as of October 25, 2007.
LO1

6. Chapter 1 An Overview of Marketing
What Is Marketing?
Marketing entails processes that focus on delivering value and benefits to customers, not just selling goods and services.
NOTES:
When an organization creates a high level of employee satisfaction, this leads to greater effort, which leads to higher quality, and so on…
For example, The Home Depot belives that its employees are its biggest competitive advantage. “Taking care of our people” is listed as the first value on the company Web site.
Discussion/Team Activity:
Ask class to give examples of companies that value employees and discuss how motivated employees create customer and stockholder satisfaction.
LO1

7. Exchange LO1 Conditions for Exchange At Least Two Parties
Chapter 1 An Overview of Marketing
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
LO1

8. Exchange LO1 Exchange may not take place even if conditions are met.
Chapter 1 An Overview of Marketing
Exchange
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 the automobile shopping example.
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 marketing when exchanges did occur, then when exchanges did not occur.
LO1

9. Marketing Management Philosophies
Chapter 1 An Overview of Marketing
Marketing Management Philosophies
Describe four marketing management philosophies
LO2

10. The Four Marketing Management Philosophies
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
LO2

11. Production Orientation
Chapter 1 An Overview of Marketing
Production Orientation
Field of Dreams orientation
“If you build it, they will come.”
Doesn’t consider if what is produced meets market needs
Discuss Apple as an example of Production Orientation.
LO2 11

12. Sales Orientation LO2 Marketing = Selling Things/Collecting Money
Chapter 1 An Overview of Marketing
Sales Orientation
Marketing = Selling Things/Collecting Money
Disregards market needs and consumer demand.
Often find that, despite the quality of their sales force, they cannot convince people to buy goods or services that are neither wanted nor needed.
Discuss the Toyota example and its use of incentives to bring customers back. Ask students if they think in the given situation that this was an effective marketing strategy.
LO2 12

13. Market Orientation LO2 Marketing Concept
Chapter 1 An Overview of Marketing
Market Orientation
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
Understanding your competitive arena and competitors’ strengths and weaknesses is a critical component of a market orientation.
LO2

14. Achieving a Marketing Orientation
Chapter 1 An Overview of Marketing
Achieving a Marketing 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
Discussion/Team Activity:
Discuss companies that have a market orientation. L.L.Bean
Amazon.com
Four Seasons Hotels and Resorts
Publix Super Markets
2. Discuss how Western Union lack(ed) a market orientation.
LO2

15. Societal Marketing Orientation
Chapter 1 An Overview of 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.
For example:
Less toxic products
More durable products
Products with reusable or recyclable
materials
LO2

16. Questions That Help Determine Marketing Philosophy
Chapter 1 An Overview of Marketing
Questions That Help Determine Marketing Philosophy
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/need, and how can we benefit society?
Orientation
Focus
LO2

17. Differences between Sales and Market Orientations
Chapter 1 An Overview of Marketing
Differences between Sales and Market Orientations
Discuss the differences
between sales
and market
orientations
LO3

18. Comparing the Sales and Market Orientations
Chapter 1 An Overview of Marketing
Comparing the Sales and Market Orientations
Compare through 5 characteristics:
Organization’s focus
Firm’s business
Those to whom the product is directed
Firm’s primary goal
Tools the organization uses to achieve its goals
LO3

19. The Organization’s Focus
Chapter 1 An Overview of Marketing
The Organization’s Focus
Sales Orientation Inward looking What the firm makes Market Orientation Outward looking What the market wants
LO3 19

20. Chapter 1 An Overview of Marketing
Customer Value
The relationship between benefits and the sacrifice necessary to obtain those benefits.
LO3 20

21. Customer Value Requirements
Chapter 1 An Overview of Marketing
Customer Value Requirements
Offer products that perform
Earn trust
Avoid unrealistic pricing
Give the buyer facts
Offer organization-wide commitment in service and after-sales support
Co-creation with customers
Notes:
Customer value is not simply a matter of high quality or high price. Instead, the customer’s perception of value is the product/service quality they expect and a price they are willing to pay.
Value also includes customization and fast delivery.
Discussion/Team Activity:
Discuss ways that successful companies deliver superior customer value. Examples: Dell Computer Corporation Lexus Mercedes Benz Amazon.com Southwest Airlines
LO3

22. Customer Satisfaction
Chapter 1 An Overview of Marketing
Customer Satisfaction
Customer Satisfaction is…
the customers’ evaluation of a good or service in terms of whether that good or service has met their needs and expectations.
Discuss the example of how Walmart improved its customer satisfaction score.
LO3 22

23. Building Relationships
Chapter 1 An Overview of Marketing
Building Relationships
Relationship Marketing is…
a strategy that focuses on keeping and improving relationships with customers.
Successful strategies need:
Customer-Oriented Personnel
Effective Training Programs
Empowered Employees
Teamwork
LO3 23

24. Building Relationships
Chapter 1 An Overview of Marketing
Building Relationships
Customer-oriented personnel
Every employee represents the firm in the eyes of the customer.
Employee training programs
Empowered employees
Employees are given more authority to solve customer problems on the spot.
Teamwork
Emphasizing cooperation over competition while helping a customer.
Discussion/Team Activity:
Discuss companies that have made significant efforts at building long-term relationships. Examples: Four Seasons Coca-Cola Delta Air Lines Hershey Kellogg Nautilus Sears
LO3

25. Defining a Firm’s Business
Chapter 1 An Overview of Marketing
Defining a Firm’s Business
Sales Orientation
Goods and services
Market Orientation
Benefits that customers seek
Ensures a customer focus
Encourages innovation and creativity
Stimulates an awareness of changes in customer preferences
Notes:
A sales-oriented firm defines its business in terms of goods and services. A market-oriented firm defines its business in terms of the benefits sought by customers.
A market orientation does not always mean that the customers will receive what they want, such as tires that last for 100,000 miles for $25.
Go to Britannica’s Web site. What evidence do you see that Britannica has redefined its core business? What do you think its business definition currently is? How has the company met the challenge of CD-ROM technology and online content distribution?
LO3

26. Sales vs. Market Orientations
LO3
Chapter 1 An Overview of Marketing
Sales vs. Market Orientations
Primary
Profit Goal?
Organization’s
Focus
Firm’s
Business
For
Whom?
Tools to Achieve
Sales Orientation
Inward
Selling goods and services
Everybody
Maximum sales volume
Primarily promotion
NOTES:
1) sales-oriented firms focus on their own needs; market-oriented firms focus on customers’ needs and preferences.
2) sales-oriented companies consider themselves to be deliverers of goods and services, whereas market-oriented companies view themselves as satisfiers of customers.
3) sales-oriented firms direct their products to everyone; market-oriented firms aim at specific segments of the population.
4) although the primary goal of both types of firms is profit, sales-oriented businesses pursue maximum sales volume through intensive promotion, whereas market-oriented businesses pursue customer satisfaction through coordinated activities.
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.
Market Orientation
Outward
Satisfying wants and needs
Specific groups of people
Customer satisfaction
Coordinated use of all marketing activities

27. Describe several reasons for studying marketing
Chapter 1 An Overview of Marketing
Why Study Marketing
Describe several reasons for studying marketing
LO4

28. + Why Study Marketing? LO4 Reasons for Studying Marketing
Chapter 1 An Overview of Marketing
Why Study Marketing?
Reasons for Studying Marketing
Important to Society
Important to Business
Good Career Opportunities
Role in
Everyday
Life +
Marketing affects you every day!
LO4

29. “Company Clip” Video - Method
Chapter 1 An Overview of Marketing
Chapter 1 Videos
“Company Clip” Video - Method
Do you think the company is best described as having a market orientation or a societal-marketing orientation?
Beyond the Book 29