1. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-1 12th edition Marketing Overview Prof. Bill White Mkt 304 Principles of Marketing

2. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-2 Chapter An Overview of Marketing 1 After this session you should be able to explain: n Exchange and marketing. n Business and nonbusiness marketing. n The evolution of marketing. n The marketing concept. n Ethics and marketing. n The marketing program. n The influence of marketing

3. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-3 The Marketing Concept n Coordinating the total resources of an organization n Toward the identification and satisfaction of customer needs and wants n In a way planned to enhance profits and/or success. n “Find (or create) a need and fill it (at a profit).

4. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-4 MARKETING CONCEPT Customer orientation Customer orientation Organization’s performance objectives Organization’s performance objectives Coordinated marketing activities Coordinated marketing activities + + + + + + Customer satisfaction Customer satisfaction Organizational success Organizational success Figure 1-2 - The Marketing Concept

5. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-5 Marketing involves stimulating and managing exchanges. The Marketer -- The Initiator The Thing Offered -- Value/Benefit The Target Market -- The Receiver Price The Marketing Exchange Model

6. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-6 The 3 Stages of Marketing Evolution in the United States n Product orientation focusing on manufacturing a product. n Sales orientation focusing on selling a product. n Market orientation focusing on satisfying the customer’s needs.

7. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-7 PRODUCT ORIENTATION SALES ORIENTATION PRODUCT ORIENTATION SALES ORIENTATION MARKET ORIENTATION Late 1800sEarly 1930sMid-1950s1990s Figure 1-1 - The Evolution of Marketing

8. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-8 Table 1-1 - How Should a Business be Defined? Company Product-Oriented Market-Oriented _______________________________________________ Kodak We make cameras and We help preserve film. beautiful memories. Amazon.com We sell books and recordings. ? Hewlett-Packard We make computer printers. ? Levi Strauss We make blue jeans. ? Steelcase We make office furniture. ? Caterpillar We make construction ? machinery.

9. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-9 Differences between Marketing and Selling Orientations. n Marketing Orientation - Customer Focused >determining customer wants and then developing a product to satisfy that need and still yield a satisfactory profit. It is externally focused. n Selling Orientation - Self-Focused > producing a product and then trying to persuade customers to purchase it -- in effect, trying to alter consumer demand. It is internally focused.

10. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-10 Recent refinements of the marketing concept: n Quality >Quality is defined by customers. >TQM - Total Quality Management. >ROQ - Return on Quality analysis. n Relationships >An attempt to build personal, long-term bonds with customers. >Relationship marketing has expanded to include all groups an organization interact with: suppliers, employees, unions, government, and even competitors.

11. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-11 Recent refinements of the marketing concept (Con’t.): n Mass Customization >An attempt to provide affordable products customized to come as close as possible to meeting the needs of individual customers. >This is made possible because of advances in information and production technology. n Value Creation >An attempt to assess what customers value in a product. >Value means more than money to customers. >Value is a concept unique to each individual.

12. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-12 n Return on Marketing Investment >Traditionally, the cost of marketing has been treated as an expense. >Since marketing can represent at least 50% of all corporate costs, it is now being looked at as an investment. n Societal Marketing Concept >Does the Marketing Concept conflict with the best interests of society? >Involves broadly defining customer and taking a long-term view of customers satisfaction. Recent refinements of the marketing concept (Con’t.):

13. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-13 A Marketing Program Consists of: n Market Segments - groups of people sharing similar wants, buying preferences, or product- use behaviors. n Target Market - market segment to which a marketing program is targeted. n Forecasting Demand - research to determine size of the market. n Position - attempts to establish a unique identity in potential customers’ minds. n Marketing Mix - >Product/Price/Distribution/Promotion

14. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-14 Ethics and Marketing n Marketing is intended to influence the beliefs and behavior of customers and others. >The products marketed and the use of marketing tools creates a wide variety of ethical challenges. n There is disagreement over what constitutes ethical or unethical behavior. >Ethics are standards of behavior generally accepted by society. >Ethics vary from society to society.

15. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-15 Ethics and Marketing (con’t.) n Corporations are taking action to instill ethical awareness in their employees by: >Communicating clearly ethical standards and expectations of employees. >Avoiding unreasonable pressure on employees to perform by ensuring that goals and deadlines are reasonable. >Employing an “Ethics Officer” to advise employees on ethical dilemmas. >Rewarding ethical behavior and punishing unethical behavior.

16. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-16 Marketing and the Global Economy n Nations depend upon marketing to sell their raw materials and industrial output to other countries. n Companies now compete in markets all over the world. n It is relatively easy to conduct business and sell products and services abroad. n The world is becoming more affluent, and therefore able to buy more stuff.

17. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-17 Marketing and the Global Economy (con’t.) n Marketing Creates Employment n Marketing Creates Utilities: >Place utility makes a product accessible to potential customers where they want it. >Time utility makes a product available when they want it. >Information utility is created by informing prospective buyers that a product exists. >Image utility is the emotional or psychological value that the customer attaches to a product or brand. >Possession utility is created when ownership is transferred to the buyer.

18. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-18 Importance of Marketing in Organizations n The basic reason for firm’s existence is customers want satisfaction. n Marketing is the primary revenue-producing activity for firms. n Marketing has become increasingly important for service firms and nonprofit organizations.

19. McGraw-Hill/Irwin Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. 1-19 Importance of Marketing in Your Life n Marketing is a large part of your daily life. Consumers are exposed to 3,000 commercial messages a day. n Studying marketing will make you a better- informed customer. n Marketing directly relates to your career aspirations. (See appendix B.)