1. Welcome to the World of Marketing Creating and Delivering Value

2. Chapter Objectives
Understand who marketers are, where they work, and marketing’s role in the firm
Explain what marketing is and how it provides value to everyone involved in the marketing process
Understand the range of services and goods that are marketed
Understand value from the perspectives of customers, producers, and society
Explain the basics of marketing planning and the marketing mix tools used in the marketing process
Explain the evolution of the marketing concept

3. Real People, Real Choices: Decision Time at Ron Jon Surf Shop, Inc.
How to advertise Ron Jon’s at airports?
Option 1: rental car advertising
Option 2: wall-mounted backlit photographs (dioramas)
Option 3: escalator “gateways”
Ron Jon Surf Shop

4. Welcome to a Branded World
“Brand You”
You are a product and have “market value” as a person
You “position” yourself for a job
Don’t “sell yourself short”
You package & promote yourself
MONSTER.COM

5. The Who & Where of Marketing
Marketers:
Are real people who make choices that affect themselves, their companies, & millions of consumers (see “Real People, Real Choices”)
Work cross-functionally within the firm
Enjoy exciting, diverse careers
CHECK OUT MARKETING
JOB SALARIES!

6. The Value of Marketing Definition of marketing (AMA, 2004)
An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

7. Marketing is about Meeting Needs
Meeting the needs of diverse stakeholders
Buyers, sellers, investors, community residents, citizens
Marketing concept
Identifying consumer needs and providing products that satisfy those needs

8. Discussion
The marketing concept focuses on the ability of marketing to satisfy customer needs
As a typical college student, how does marketing satisfy your needs?
What areas of your life are affected by marketing?
What areas of your life – if any -- are not affected by marketing?

9. Marketing Is about Meeting Needs (cont’d)
The modern marketplace may take the form of a mall, a mail-order catalog, a TV shopping network, an eBay auction, or an e-commerce Web site
SECONDLIFE.COM

10. Marketing Is about Creating Utility
Utility: the sum of the benefits we receive from using a product/service
Form utility
Place utility
Time utility
Possession utility

11. Marketing Is about Exchange Relationships
An exchange occurs when something is obtained for something else in return, like cash for goods or services
Buyer receives product that satisfies need
Seller receives something of equivalent value

12. The Evolution of Marketing
The Production Era
The Selling Era
The Consumer Era
The New Era

13. The Production Era
Focus on the most efficient ways to make and distribute products, like Henry Ford’s Model T & Ivory soap
Marketing plays an insignificant role

14. The Selling Era
Focus on one-time sales of goods rather than repeat business
Marketing viewed as a sales function

15. The Consumer Era Focus on satisfying customers’ needs and wants
Marketing becomes more important in the firm
Total Quality Management (TQM) widely followed in marketing community
Marriott Video

16. The New Era: Make Money and Act Ethically
Focus on building long-term bonds with customers.
Marketing uses customer relationship management (CRM) to track consumers’ preferences and tailor the value proposition to each individual

17. The New Era: Focusing on Social Benefits
Social marketing concept: satisfy customers’ needs and also benefit society
Sustainability: meeting present needs and ensuring that future generations can meet their needs

18. The New Era: Focusing on Accountability
* Measuring how much value is created by marketing activities
ROI (Return on Investment) is the direct financial impact of a firm’s expenditure of resources such as time or money

19. Measuring Value
Scorecard: marketing department’s report card on how company/brand is actually doing in achieving various goals
Quarterly Scores 2003
Item Text
1st Qtr.
2nd Qtr.
3rd Qtr.
Satisfaction with
C1 Employee responsiveness
60%
65%
68%
C2 Product selection
62%
63%
C3 Service quality
55%
Table 1.3 (Abridged)

20. Discussion
Not all firms have implemented programs that follow the marketing concept
Can you think of firms that still operate with a production orientation?
A selling orientation?
What changes would you recommend for these firms?

21. What Can Be Marketed? From serious goods and services to fun things
Goods and services mirror changes in popular culture
Marketing messages may communicate myths of a culture
Product: any good, service, or idea
Consumer goods/services
Business-to-business goods/services
Not-for-profit marketing
Idea, place, and people marketing

22. The Marketing of Value
Value: the benefits a customer receives from buying a good or service
Marketing communicates the value proposition: a marketplace offering that fairly and accurately sums up the value that the customer will realize if he/she purchases product/service

23. Value from the Customer’s Perspective
The ratio of costs to benefits
Value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself

24. Value from the Seller’s Perspective
Value for the seller takes many forms
Making a profitable exchange
Earning prestige among rivals
Taking pride in doing what a company does well
Nonprofits: motivating, educating, or delighting the public

25. Calculating the Value of a Customer
Single transactions don’t provide companies with the value they desire
Lifetime value of a customer: How much profit a company expects from a customer’s purchases now and in the future

26. Providing Value to Stakeholders
Competitive advantage: The ability of a firm to outperform the competition by providing customers with a benefit the competition cannot provide

27. Group Activity
Break into small groups and write an outline of your ideas on the following questions:
What distinctive competencies does your business college or university have?
What differential benefits does it provide for students?
What is its competitive advantage?
How could it improve its competitive position?

28. Adding Value through the Value Chain
Value chain: a series of activities involved in designing, producing, marketing, delivering, and supporting any product
Inbound logistics
Operations
Outbound logistics
Marketing final product
Service

29. Discussion
Think about a music CD you might buy in a store. What kind of value does the music retailer add?
How about the label that signs the artist?
The public relations firm that arranges a tour by the artist to promote the new CD?
The production company that shoots a music video to go along with the cut?

30. Figure 1.2: Making & Delivering Value

31. Consumer-Generated Value: From Audience to Community
Everyday people generating value instead of just buying it
People functioning in marketing roles: creating ads, providing input into new products, or serving as retailers
YOUTUBE.COM

32. Value from Society’s Perspective
How marketing transactions add or subtract value from society
Stressing ethics/social responsibility is often good business in the long run

33. The Dark Side of Marketing
* Marketers
Illegal activities such as “bait and switch”
Products that encourage antisocial behavior
*Consumers
Terrorism
Addictive consumption
Exploited people
Illegal activities
Shrinkage
Anticonsumption

34. Marketing as a Process Marketing planning
Analyzing the marketing environment
Developing a marketing plan
Deciding on a market segment
Choosing the marketing mix -- product, price, promotion, and place

35. Group Activity
An old friend has been making and selling vitamin-fortified smoothies to friends for some time.
He wants to open a shop in a small college town, but he wonders if he’ll have enough customers to keep the business going.
What can you tell him about product, price, promotion, and place (distribution) strategies that will help him get his business off the ground?
Break up into small groups to come up with ideas

36. Group Activity
Imagine one of your friends says to you, “Marketing’s not important. It’s just dumb advertising.” Another friend says, “Marketing doesn’t really affect people’s lives in any way.”
As a role-playing exercise, present your arguments against these statements to your class.

37. How it worked out at Ron Jon Surf Shop
Bill choose option 2: wall-mounted backlit photographs (dioramas)
Opened a small store in the Orlando Airport adjacent to the very busy food court
Surf and sales are up at Ron Jon!

38. Keeping it Real: Fast Forward to Decision Time at Qode
Meet Rick Szatkowski of NeoMedia Technologies
Qode links your cell phone to the Web when you enter a keyword or click a SmartCode.
Example: A code on a movie poster plays a trailer for the movie