1. Chapter 1: An Overview of Marketing
Marketing cannot be accomplished in isolation. Even though the marketing function resides with marketers, the concept of marketing must permeate the entire organization.
Chapter 1: An Overview of Marketing
Prepared by Amit Shah, Frostburg State University
Designed by Eric Brengle, B-books, Ltd.
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Learning Outcomes
LO1
Define the term marketing
LO2
Describe four marketing management philosophies
LO3
Discuss the differences between sales and market orientations
LO4
Describe several reasons for studying marketing
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3. What is Marketing? LO1 Define the term marketing
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What is Marketing?
A Set of Activities
Products
Distribution
Promotion
Pricing
A Philosophy
An Attitude
A Perspective
A Management Orientation
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.
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5. American Marketing Association Definition
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.
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6. Employee satisfaction
What is Marketing?
Greater effort
Higher quality
Repeat business
Growth and profits
Stockholder
satisfaction
More investment
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, Wegmans Food Markets has a motto: “Employees first, customers second.” The rationale is that if employees are happy, customers will be too.
Discussion/Team Activity:
Ask class to give examples of companies that value employees and discuss how motivated employees create customer and stockholder satisfaction.
Employee satisfaction
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Exchange
Exchange
People giving up something to receive something they would rather have.
Notes:
Normally, we think of money as the medium of exchange. However, exchange does not require money and may involve barter or trade instead.
An example of exchange that does not involve money may be to neighbors who trade a rare baseball card for a valuable oil painting.
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8. 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
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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 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.
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10. Review Learning Outcome What is Marketing?
LO1
Review Learning Outcome What is Marketing?
Product
Price
Place
Promotion
Exchange
A B
Delivering
Value
Communicating
Creating
Customer value and beneficial relationships
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11. Marketing Management Philosophies
Describe four marketing management philosophies
LO2
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12. Marketing Management Philosophies
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
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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
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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
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15. 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 Zappos.com Amazon.com Overstock.com USAA Fairmont Hotels Lexus Trader Joe’s
Discuss companies that lack(ed) a market orientation. Encyclopedia Britannica Western Union Kmart
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Societal Marketing
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
Societal Marketing
Orientation
Concerns such as climate change, ozone layer depletion, fuel shortages, pollution, and raised health concerns have caused consumers and legislators to be more aware of the need for companies and consumers to adopt measures that conserve resources and cause less damage to the environment.
Discussion/Team Activity:
Ask class to give examples of companies that have made substantial commitments to either produce products using environmentally friendly processes or making more environmentally friendly products
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17. Review Learning Outcome The Four Marketing Management Philosophies
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
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18. Sales and Marketing Orientations
Discuss the differences
between sales and
market orientations
LO3
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19. Sales and Marketing 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
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Customer Value
Customer Value
The relationship between benefits and the sacrifice necessary to obtain those benefits.
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: P & G Starbucks Lexus e-Bay Starwood Hotels and Resorts Amazon.com Gartner Research TiVo
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21. 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
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22. Customer Satisfaction
The customers’ evaluation of a good or service in terms of whether it has met their needs and expectations.
Notes:
Firms that have a reputation for delivering high levels of customer satisfaction do things differently from their competitors, and these differences apply to top management as well as to lower level employees.
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23. Building Relationships
Marketing
A strategy that focuses on keeping and improving
Relationships with current customers.
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24. 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
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25. Defining a Firm’s Business
Use “customer benefits” instead of “goods/services”
-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.
Link for On-Line Activity:
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26. Review Learning Outcome Sales vs. Marketing Orientations
LO3
Review Learning Outcome Sales vs. Marketing 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.
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27. Describe several reasons for studying marketing
Why Study Marketing?
Describe several reasons for studying marketing
LO4
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Why Study Marketing?
Plays an important role in society
Vital to business survival, profits and growth
Offers career opportunities
Affects your life every day
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29. Vital Marketing Activities for Organizations
Why Study Marketing?
Vital Marketing Activities for Organizations
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
Notes:
Marketing is not just a job done by people in the marketing department of an organization, but rather a part of everyone’s job. Therefore, a basic understanding of marketing is important to all businesspeople.
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30. Review Learning Outcome Reasons for Studying Marketing
LO4
Review Learning Outcome Reasons for Studying Marketing
Why Study Marketing?
Important to Society
Important to Business
Good Career Opportunities +
Marketing affects you every day!
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