1. BUSI 406 Principles of Marketing: Marketing’s Value to Consumers, firms, and Society Chapter 1

2. Any questions about the syllabus or the class? Let’s Review
Today’s Agenda
Any questions about the syllabus or the class?
Let’s Review
Discuss Chapter 1

3. Must understand consumer’s needs, wants, demands
Let’s Review
What is marketing?
Must understand consumer’s needs, wants, demands
Exceeding customer expectations and maximizing Customer Satisfaction
Why is it important?
Impact of losing customers

4. What is “Marketing” & why it is important
Today’s Goals
What is “Marketing” & why it is important
Micro-marketing vs. macro-marketing
Marketing and economic development
Marketing concept – Customer value & satisfaction

5. What is Marketing About? Bicycle Example
More Than Selling and Advertising
Summary Overview
Many people are surprised when they realize how many different ideas and activities are included in the term “marketing.”
Key Issues
Most people think that marketing involves selling and advertising.
Marketing is much more than selling or advertising.
Think about a manufacturer of bicycles
many different bicycles
many brand names
many types of bicycles; various features
prices range from low to very high
Discussion Question: Why are there so many varieties of bicycles?

6. Firms Should… Analyze Needs Determine Wants Identify Competition
Predict Designs
Determine Where
Summary Overview
By focusing on the many tasks involved in producing a bicycle, it is possible to get a feel for the wider range of marketing activities.
Key Issues
Among the different things a firm must do in producing a bicycle, it must:
Analyze the needs of people for various types of bicycles;
Predict the types of bicycles consumers will want and decide which consumers to satisfy;
Estimate the number of bicycle riders and how many bicycles they might buy;
Predict when consumers will want to buy;
Determine where the consumers will be and how to get bicycles to them;
Estimate the price consumers are willing to pay for a bicycle, and if that price will result in a profit for the firm;
Decide what kinds of promotion should be used to inform consumers about the firm and its bicycles;
Estimate the impact of competition from other bicycle producers;
Figure out how to provide warranty service after a customer purchases a bike.
Discussion Question: How many of these activities are marketing activities?
Decide Promotion
Estimate Price
Provide Service

7. Production vs. Marketing
Makes sure right goods & services are produced
Production
Making Goods
Performing Services
Summary Overview
Production and marketing are both fundamental economic activities. However, some people misunderstand the relationship between them. Thus, it helps to have a clear picture of how production and marketing interact with each other.
Key Issues
Production involves:
making goods, or performing services.
making higher living standards possible.
Discussion Question: Is it true that a good product is the only thing that makes a business a success? What is needed in addition to the product?
Products do not sell themselves!
Marketing:
makes sure that the right goods and services are produced;
creates customer satisfaction: the extent to which an organization fulfills a customer’s needs, desires and expectations.
Discussion Question: If you were buying a bicycle, what needs would you have? How would your desires or wants be different from your needs? What expectations would you have about the bicycle you were purchasing?
Creates Customer Satisfaction

8. What is Marketing? Micro View Macro View and
Anticipates customers’ needs
Directs flow of goods and services
Performed by INDIVIDUAL ORGANIZATIONS
Macro View
Accomplishes the objectives of society (Every society needs it)
Matches producers and consumers
Emphasis is on WHOLE SYSTEM
Concerned with how marketing affects society and vice versa
and
 Macro-marketing’s emphasis is on how the whole marketing system works.
Key Issues
 Every society needs a macro-marketing system, because:
It helps to match supply and demand;
Different producers in a society have different objectives, resources, and skills;
Every consumer has a different set of needs;
System must effectively match consumers and producers.
 Functions of an effective macro-marketing system:
Delivering the goods and services that consumers want and need;
Getting products to them at the right time, in the right place, and at a price they’re willing to pay;
Keeping the consumers satisfied after the sale, and bringing them back to purchase again when they are ready.
Discussion Question: Which countries’ macro-marketing systems might be viewed by Americans as unfair or ineffective? Which countries’ citizens might think that the American macro-marketing system is unfair or ineffective? Try to think of specific mismatches between customer needs and the outputs of producers.

9. All Economies Need Macro Marketing Systems
Pure Subsistence Economy
A Central Market
Summary Overview
Macro-marketing systems govern the exchanges that take place in an economic system. In order to meet their unique needs, people exchange something of value that they possess in order to gain something else of value. The role of macro-marketing is highlighted by examining various types of economies, from simple to complex.
Key Issues
Pure subsistence economy: every family produces all it needs.
Discussion Question: Does macro-marketing exist in a pure subsistence economy? Why or why not?
Market evolves when families :
produce more than they need;
develop new needs for things they do not produce.
Market is:
a group of consumers with similar needs;
willing to exchange something of value to satisfy those needs.
Marketing involves exchange!
No exchange, no marketing.

10. Central Markets Help Exchange
Pots
Ten exchanges
required without
central market
Only five exchanges are required when a middleman (intermediary) is used.
Central
Market
Middleman
Hats
Baskets
Shovels
Knives

11. Online Market Example “Founded in September 1995, eBay
is The World's Online Marketplace
for the sale of goods and services
by a diverse community of individuals
and businesses. Today, the eBay community includes tens
of millions of registered members from around the world.
People spend more time on eBay than any other online site,
making it the most popular shopping destination on the Internet.”
Our Mission
“eBay's mission is to provide a global trading platform where
practically anyone can trade practically anything.”

12. Market-Directed Economy
How Decisions are Made in an Economic System (see The Economist January 2012: SOEs and State Capital)
Command
Economy
Market-Directed Economy
Government officials decide
May work well if:
Simple economy
Little Variety
Adverse Conditions
Adjusts itself
Price is value measure
Freedom of choice
Government’s role limited OR
Summary Overview
Every society needs an economic system: the way an economy organizes to use scarce resources in production and consumption. Depending upon the type of economic system, decisions about resource allocation are made differently.
Key Issues
Planned economic system:
government planners make decisions about production and distribution;
can work well in simple economies or under adverse conditions.
Market-directed economic system: individuals govern resource allocation, production and consumption
Characteristics of market-directed systems include:
Adjusts itself.
Price is a measure of value:
consumers pay what they think things are worth;
producers try to meet those price expectations.
Greatest freedom of choice:
less intervention from government planners;
more choices are available to producers and consumers.
Conflicts can arise when choices are at odds with each other or with society; this phenomenon is called the macro-micro dilemma.
The role of government is to ensure fairness and the common good.
Discussion Question: What are examples of things government planners compel consumers to buy, even in a largely market-directed economic system?

13. Over Time, Marketing’s Role Has Changed
Increase Supply
Sell Surplus
Simple Trade Era
Focus:
Production Era
Sell Surplus
Focus:
Simple Trade Era
Increase Supply
Beat Competition
Production Era
Focus:
Sales Era
Sales Era
Beat Competition
Coordinate and Control
Focus:
Marketing Department Era
Marketing Department Era
Coordinate and Control
Marketing Company Era
Long-Run
Customer Satisfaction
Focus:

14. Profit (or another measure of long-term success) as
What is the Purpose of Business and How Does the Marketing Concept contribute to that purpose?
Customer
satisfaction
Total company effort
Profit (or another measure of long-term success) as
an objective
The
Marketing
Concept
Summary Overview
The cornerstone of the marketing-oriented company is the marketing concept.
Key Issues
Production orientation--making whatever products are easy to produce and then trying to sell them.
Marketing orientation--designing marketing programs that will meet customer needs.
Marketing concept:
customer satisfaction guides the whole organization;
all individuals work together to accomplish this goal
Discussion Question: What can managers do to motivate everyone in the organization to satisfy customer needs?
requires that the company be profitable.

15. How do firms create Customer Satisfaction. (see also http://www
Summary Overview
This ad from Benadryl demonstrates that the firm attempts to create customer satisfaction by giving customers what they need—often ease and convenience.
Key Issues
Benadryl: high quality, expensive.
Not every consumer will be interested in paying for the brand name or ease of use.
Benadryl meets the needs of people who are willing to pay more.
Benadryl has responded to the need for an easier way to deliver its medicine.
The company has also provided easy dosing for its customers’ children.

16. Putting It All Together
Total Company Effort to Satisfy Customers
Total Company Effort to Satisfy Customers
Offer Superior Customer Value
Build Profitable Customer Relationships
Increase Sales to Customers
Attract
Customers
Summary Overview
This model summarizes the important ideas presented to this point.
Key Issues
In a firm that has adopted the marketing concept, everyone focuses on customer satisfaction. The organization offers superior customer value.
Value, in turn, helps attract customers and keeps them satisfied after they buy.
This satisfaction then leads to repeat purchase.
As the firm maintains this profitable relationship, the profit gives the firm the incentive and the resources to offer superior customer value.
Discussion Question: If a firm’s customers are already satisfied with the firm’s offerings, why does the firm need to look for new and better ways to provide customer value?
Adopting the marketing concept is a “win-win” situation for marketers and consumers!
Retain Customers
Satisfy
Customers

17. The Marketing Concept, Social Responsibility & Marketing Ethics
Micro - Macro
Dilemma
Group Needs
Individual Needs
Summary Overview
Organizations implement the marketing concept in the broader context of society. There are times when the society’s needs conflict with the needs of a particular individual or group, creating the micro-macro dilemma.
Key Issues
Social responsibility--an obligation to improve the organization’s positive effects on society.
Businesses must strive to reach acceptable balances.
“Should all needs be satisfied?”
Some products that many people use are not good for them.
Marketers must rely on legal and ethical standards in making decisions.
“What if profits suffer?”
Some marketers are adopting a longer-term view.
Customer satisfaction goes beyond fulfilling an immediate need.
Discussion Question: It is possible for an organization to be truly consumer-oriented and intentionally act in an unethical manner? Why or why not?
The marketing concept guides marketing ethics:
focuses the organization on the needs of consumers;
many organizations have developed codes of ethics.
Marketers should take criticisms of marketing seriously.
Social Responsibility
Should All Consumer Needs Be Satisfied?
Do All
Marketers Act Responsibly?
What if Profits Suffer?
The Marketing Concept Guides Ethics

18. First Generation Sustainability Objectives:
Social Responsibility and Beyond Sustainability Sustainability Being Green is Not Good Enough
First Generation Sustainability Objectives:
Neutral
Zero impact
Renewable
Second Generation Sustainability Objectives:
Positive impact
Recycle up the value chain

19. Unifi’s Repreve is an interesting example of Sustainability 2.0…

20. Charah offers creative, sustainable market-based solutions as an intermediary in the challenging coal ash resolution matter facing NC and other states

21. Today’s Take-Aways
Marketing is important to economic growth.
Marketing bridges the gap between producers and consumers.
Satisfying & delighting customers as well as creating value is critical for marketing success.
The power of marketing is significant – for good or for bad…

22. Read Chapter 2: Marketing Strategy Planning
For Next Class…
Read Chapter 2: Marketing Strategy Planning