Post on 04-Apr-2018
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Essentials of Marketing
Chapter 1
Marketings Value toConsumers, Firms, andSociety
McGraw-Hill/I rwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
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At the end of this presentation, you should
be able to:
1. Know what marketing is and why you should learnabout it.
2. Understand the difference between marketing and
macro-marketing.
3. Know the marketing functions and why marketing
specialistsincluding intermediaries and
collaboratorsdevelop to perform them.
4. Understand what a market-driven economy is and howit adjusts the macro-marketing system.
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At the end of this presentation, you should
be able to:
5. Know what the marketing concept isand how itshould guide a firm or nonprofit organization.
6. Understand what customer value is and why it is
important to customer satisfaction.
7. Know how social responsibility and marketing ethics
relate to the marketing concept.
8. Understand the important new terms.
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More than Selling or Advertising
All ThoseBicycles!
The Management Job in Marketing
More than Selling and Advertising
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Things a Firm Should Do in Producing a
Bike
Themarketingmix
Themarketingmix
Predict Wants
Estimate Demand
Predict When
Determine Where
Estimate Price
Decide Promotion
Estimate Competition
Provide Service
Analyze Needs
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Production vs. Marketing
Creates Customer Satisfaction
Marketing
Makes sure right goods &
services are produced
Production
Making Goods
Performing Services
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Marketing Is Important to You!
Important to every consumer!
Important to your job!
Affects innovation and
standard of living
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Marketing
Stimulates
New Ideas
Courtesy of The Procter & Gamble Company.
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Marketing Affects Innovation
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What Is Marketing?
and
Macro View
Social process
Matches supplywith demand
Micro View
Set of activities
Performed byindividualorganizations
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Marketing
Key
Characteristics
Profit andNonprofit
More thanPersuasion
Begins withNeeds
Doesnt Go It
Alone
Involves
Exchanges
BuildsRelationships
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Building
Customer
Relationships
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Macro-Marketing
Key
Characteristics
MatchesProducers and
Consumers
Emphasis is on
Whole System
EveryEconomy
Needs It
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Can Mass Production Satisfy a Societys
Consumption Needs?
Economies of Scale - Lower Unit Cost
UnitCost
$
Producers ConsumersMarketing
Functions
Marketing Bridges the Gap!
Output
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Overcoming
Spatial
Separation
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Marketing Facilitates Production and
Consumption (Exhibit 1-1)
Production Sector
Marketingneeded toovercome
discrepanciesand separations
Discrepancies of Quantity
Discrepancies ofAssortment
Spatial Separation
Separation in Time
Separation of Information
Separation in Values
Separation of Ownership
Consumption Sector 116
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Universal Functions of Marketing
MarketingFunctions
Buying Selling
Transporting
Storing
Standardization
& GradingFinancing
Risk Taking
Market
Information
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Who Performs Marketing Functions?
Transport
Firms
ISP's
Product
Testing
Firms
Ad Agencies
Research
Firms
Wholesalers Other
Specialists
Retailers
Consumers
Producers
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How Decisions are Made in an Economic
System
OR
CommandEconomy
Governmentofficials decide
May work well if:
Simpleeconomy
Little Variety Adverse
Conditions
Market-DirectedEconomy
Adjusts itself
Price is valuemeasure
Freedom ofchoice
Governments
role limited
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Model of a Market-Directed Macro-Marketing
System (Exhibit 1-2)
Many Individual Producers(heterogeneous supply)
Intermediaries Collaborators
Perform universal marketing functions
To overcome discrepancies andseparation of producers and consumers
To create value and direct flow ofneed-satisfying goods and services
Many Individual Consumers
(heterogeneous demand)
Monitoring by government(s)and public interest groups
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Marketings Role Has Changed Over Time
Focus:Sell Surplus
Long-Run
Customer Satisfaction
Focus:
Focus:Increase Supply
Focus:Beat Competition
Focus:Coordinate and Control
Simple Trade Era
Production Era
Sales Era
Marketing DepartmentEra
Marketing Company Era
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The Marketing Concept (Exhibit 1-3)
Profit (or another measure
of long-term success) as
an objective
Total
company
effort
Customer
satisfaction
The
Marketing
Concept
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Creating
Customer
Satisfaction
Prestige Brands Holdings, Inc. 123
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Checking Your Knowledge
A store that is popular with newlyweds runs a wedding gift registry.
Five minutes before closing time on a Sunday, a young couple entersthe store and wants to registera process that usually takes 30
minutes or more. A sales associate advises the couple to come back
when they have more time, even though a recent memo from the
stores regional manager specifically instructed store personnel to
stay after closing time to help such customers. Which key elementof the marketing concept is the main problem area in this situation?
A. Customer need
B. Total company effort
C. Customer satisfaction
D. Marketing orientation
E. Product orientation
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Adopting the
Marketing
Concept
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The Marketing Concept and Customer Value
Costs Benefits
Take Customers Point
of View
Customer May NotDwell on Value
Where DoesCompetition Fit?
Customer ValueBuilds Relationships
Customer ValueReflects
Benefits and Costs
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Costs, Benefits, and Customer Value
(Exhibit 1-5)
Perceived
superior
value
Perceived
inferior
value
High
HighLow
Low
Costs target customersees to obtain benefits
Benefits target
customer seesin a firms
goods andservices
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Interactive Exercise: Customer Value
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Checking Your Knowledge
Which of the following statements, made by marketing managers,illustrates an understanding of the concept of customer value?
A. Its more important to acquire new customers than to retain
old ones.B. The only time its really necessary to demonstrate
superior customer value is right before the actual sale.
C. My main concern is with meeting this months sales
quotaIll worry about relationship building later.
D. I might think my product is a good value, but what really
counts is if the customer thinks its a good value.
E. Customer value really boils down to which product is the
least expensive. 129
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Checking Your Knowledge
A computer manufacturer is attempting to increase thecustomer value associated with purchases of its products.Which of the following might be a way to achieve thisincrease in value?
A. Reduce price.
B. Increase technical support for customers.
C. Increase warranty coverage.
D. Offer free shipping.
E. Any of the above, depending on the needs of thetarget market.
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Total CompanyEffort to Satisfy
Customers
Total CompanyEffort to Satisfy
Customers
Putting It All Together (Exhibit 1-6)
Build Profitable
CustomerRelationships
Attract
Customers
Offer Superior
Customer Value
Satisfy
Customers
Retain Customers
Increase Sales to
Customers
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Th M k ti C t A li i N fit
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The Marketing Concept Applies in Nonprofit
Organizations
Newcomersto Marketing
Will Satisfied
Customers
OfferSupport?
The BottomLine?
May Not BeOrganized for
Marketing
Characteristics
of Nonprofit
Organizations
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Government
Marketing
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M k ti C t U d b N fit
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Marketing Concept Used by Nonprofit
Services
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Th M k ti C t S i l
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Social
Responsibility
The Marketing Concept, Social
Responsibility, and Marketing Ethics
Should AllConsumer
Needs Be
Satisfied?
What if Profits
Suffer?
Micro - MacroDilemma
The Marketing Concept Guides Ethics
Group Needs Individual Needs
Do All
Marketers Act
Responsibly?
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The Micro-
Macro
Dilemma
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Social Responsibility
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You should now be able to:
1. Know what marketing is and why you should learnabout it.
2. Understand the difference between marketing and
macro-marketing.
3. Know the marketing functions and why marketing
specialistsincluding intermediaries and
collaboratorsdevelop to perform them.
4. Understand what a market-driven economy is and howit adjusts the macro-marketing system.
138
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You should now be able to:
5. Know what the marketing concept isand how itshould guide a firm or nonprofit organization.
6. Understand what customer value is and why it is
important to customer satisfaction.
7. Know how social responsibility and marketing ethics
relate to the marketing concept.
8. Understand the important new terms.
139
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Key Terms
Production
Customer satisfaction
Innovation
Marketing
Pure subsistence economy
Macro-marketing
Economies of scale
Universal functions ofmarketing
Buying function
Selling function
Transporting function
Storing function
Standardization and grading
Financing
Risk-taking
Market information function Intermediary
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Key Terms
Collaborators
E-commerce
Economic system
Command economy
Market-directed economy
Simple trade era
Production era
Sales era
Marketing department era
Marketing company era
Marketing concept
Production orientation
Marketing orientation
Customer value
Micro-macro dilemma
Social responsibility
Marketing ethics