1. Marketing
Chapter 1
Overview of Marketing
James Bowen, Phd

2. Chapter Roadmap

3. Building Value BlackBerry launched in 2000
available on 270 networks in over 110 countries
sales of over $3 billion, 35% outside North America
satisfies demand for information in real time

4. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
What is Marketing?
Marketing is a set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships.
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

5. Marketing is NOT
Just about buyers and sellers exchanging money for goods and services
or about making a profit

6. Marketer’s Responsibility
Marketers must address the ethical implications of their actions on society in general.

7. Value is in essence what you get for what you give up.
The fundamental purpose of marketing is to create value for both the firm and customer.
Value is in essence what you get for what you give up.
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

8. Test Your Knowledge
1-8
Which of the following statements about marketing is NOT true?
A) Marketing entails an exchange.
B) Marketing is simply about making a profit.
C) Good marketing requires thoughtful planning.
D) Because marketing costs money, good marketers carefully seek potential customers who have both an interest in the product and an ability to buy.
Answer: B

9. Marketing’s Core Aspects

10. Core One: Satisfying Customer Needs and Wants
Begins with
understanding their
needs and wants
Developing products
and services

11. Satisfying Customer Needs and Wants
How does a company address the diverse needs and wants of consumers for dental care products?

12. Case in Point: Crest Challenge Answer Results
Address the diverse needs and wants of consumers for dental care products.
Develop a deep understanding of what benefits consumer are seeking in their dental care products and develop brands designed to deliver those benefits.
Crest provides a wide variety of dental care products to deliver the desired benefits.

13. Core Two: Marketing Entails Exchange
The exchange can occur between any two parties
Not simply a buyer and seller exchanging money for a good or service (barter)
Can be an exchange of information for convenience
What is the exchange at a museum or a lecture?

14. Marketing Entails an Exchange
Customers/ Consumers (Buyers)
Communications/Delivery
CHAPTERS.ca
Money/Information
Goods/Services Producers (Sellers)

15. Test Your Knowledge
1-15
Which of the following is NOT part of a marketing exchange?
A) Sellers provide products or services.
B) Sellers communicate and facilitate delivery.
C) Marketers assess the effectiveness of their advertising.
D) Buyers complete the exchange by giving money and information to the seller.
Answer: C

16. Core Three: Marketing Requires Product, Price, Place, and Promotion Decisions

17. Product
Goods
Services
Ideas

18. Price
time
Price is everything the buyer gives up in exchange for the product- more then money
money
energy

19. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Place
All activities necessary to get the product to the right customer when that customer wants it.
Supply chain management is the field that examines these activities.
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

20. Place: Marketing Channels Distribution Strategy
How does a company get the product to the right customer when and where they want it?
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

21. Case in Point: Country Grocer
Challenge
Answer
Results
To expand distribution beyond the Ottawa area.
Using an online distribution system to allow customers all over Canada to order directly from its store in Ottawa.
Canadian Federation of Independent Grocers award of merit for 8 consecutive years
Awarded the National Silver Award as the best store in Canada in the small surface category.
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

22. Promotion The communication activities of marketing
Used to inform, persuade and remind potential buyers
Used to influence their opinions or elicit a response
Discussion question
Who is the target audience?
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

23. Test Your Knowledge
1-23
Promotion is ____________ by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response.
A) smoke-and-mirrors
B) coercion
C) teasing
D) communication
Answer: D

24. Marketing Shaped by External Forces

25. Core Four: Marketing Can Be Performed by Both Individuals and Organizations
B2B: Wholesaling is often only Business to Business
B2C: All retailing is Business to Consumer selling
C2C: Swap Meets, EBay, yard sales, etc.
Different types of marketing
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

26. Core Five: Marketing Occurs in Many Settings
Both profit and non-profit entities
Developing economies
Entire industries

27. Internet Marketing 1.1 Facebook – social utility or marketing tool?
> 46 million members
used by TD Bank, Molson, AOL Canada, Boston Pizza, LouLou magazine to reach target audiences
privacy concerns?

28. Core Six: Marketing Helps Create Value
product would sell itself
focus on what consumers want and need before design or production
Production-oriented era
Market-oriented era
Sales-oriented era
Value-based marketing era
personal selling and advertising
relationship of benefits to costs, or what you get for what you give up
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
firm’s focus went from the needs of the firm to the needs of the market

29. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Adding Value 1.1
VOSS = super premium water
$40 for 500 ml bottle
Packaging inspired by fragrance industry
Limited distribution built trendy image
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

30. Value-Based Marketing
Firms must offer customers something in excess of that being offered by the competitors.
Firms must understand how each aspect of their product/service creates value for customers.
Discussion question #1
What do you think are the key features of a hotel that create value?
Discussion question #2
How do the keys features vary depending on the segment of traveller?

31. Value is in the Eye of the Beholder
That movie was a waste of money.
That movie was so worth seeing!
Discussion question
If they saw the same movie, what could account for the difference in value derived from the experience?
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

32. How Firms Compete on the Basis of Value
Constantly changing consumers perceptions
Firms must constantly monitor the marketplace in order to create value
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33. Test Your Knowledge What must firms do to become value driven?
1-33
What must firms do to become value driven?
A) Share information, balance benefits and costs, and build customer relationships.
B) Set low prices, put profit above service, and use effective marketing strategies.
C) Make logistics a priority, expand globally, and always offer new goods and services.
D) Keep a vigilant eye on the market-place, undercut competitors, and provide competitive salaries.
Answer: A

34. Entrepreneurial Marketing
Imasight based in Quebec
Offers digital radiography technology
See more patients
Better utilize the physical space in hospitals and medical clinics
Eliminate expensive and harmful chemicals
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35. Becoming Value Driven: Sharing Information
Information technology such as Customer Relationship Management (CRM) programs are increasingly used by marketers to ensure that data is transmitted throughout the firm.
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

36. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Sharing Information
Why is sharing and coordinating information such a critical success factor for any firm?
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

37. © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Case in Point: Zara
Challenge
Answer
Results
How does the flagship brand of Europe’s fastest growing apparel retailer keep up with the latest trends?
By implementing sophisticated information technology into its customer tracking and supply chain functions.
Zara now has over 760 women’s clothing stores in 55 countries.
Products move from design through the supply chain and onto the stores shelves in about two weeks.
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

38. Becoming Value Driven: Balancing Benefits and Cost
Understand key benefits
Focus on key benefits
Eliminate cost of less strategic benefits
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

39. Becoming Value Driven: Building Relationships With Customers
Take a long term view of customer relationships
Use data to assist in maintaining the relationship
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

40. Why is Marketing Important?
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

41. Marketing Expands Firms Global Presence
Starbucks often promotes the same product in different countries. What products do you see in common?
Starbucks Canada
Starbucks Germany
Starbucks Taiwan
Starbucks Australia
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

42. Marketing As Pervasive Across the Supply Chain
Each step in the supply chain involves marketing
All members in the chain must ultimately focus on creating value for their customer and the end user consumer
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

43. Test Your Knowledge
1-43
Which of the following would NOT be considered part of a supply chain?
A) consumer
B) retailer
C) manufacturer
D) customer service representative
Answer: D

44. Marketing Makes Life Easier and Provides Employment Opportunities
Choices of products and services choices as well as information about those choices
Employment in diverse fields such as research, sales, promotions, global marketing
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

45. Marketing Can Be Entrepreneurial
Though important to large firms, marketing is equally important to the success of small ventures—especially new ventures.
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

46. Chapter 1 Glossary
Customer relationship management: A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm’s most valued customers.
Goods: Items that you can physically touch.
Ideas: Include thoughts, opinions, and philosophies, and intellectual concepts such as these also can be marketed.
Services: Intangible customer benefits that are produced by people or machines and cannot be separated from the producer.
Supply chain: The group of firms that make and deliver a given set of goods and services.
Supply chain management: Refers to a set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction into a seamless value chain.

47. Chapter 1 Glossary
Value-based Marketing: Marketing that focuses on providing customers with benefits that far exceed the cost (money, time, effort) of acquiring and using a product or service while providing a reasonable return to the firm
Need: A person feeling physiologically deprived of basic necessities, such as food, clothing, and shelter
Want: The particular way in which a person chooses to satisfy a need, which is shaped by a person’s knowledge, culture, and personality.