Copyright © Houghton Mifflin Company. All rights reserved. 1–11–1 Marketing Deals with...

Copyright © Houghton Mifflin Company. All rights reserved. 1–1

Marketing Deals with Products, Price, Distribution, and Promotion

• The Marketing Mix

–Four marketing activities—product, pricing, distribution, and promotion—that a firm can control to meet the needs of customers within its target market

ProductProduct

PricingPricing

DistributionDistribution

PromotionPromotion

TargetTargetMarketMarket


Customers Are the Focus

• Customers

–The purchasers of an organization’s products; the focal point of all marketing activities

• Target Market

–A specific group of customers on whom an organization focuses its marketing efforts• Large or small customer groups

• Single or multiple product markets

• Single or multiple products

• Local to global markets


Marketing Mix Variables

ProductProduct

PricingPricing

DistributionDistribution

PromotionPromotion

Goods, services, or ideas that satisfy customer needs

Decisions and actions that establish pricing objectives and policies and set product prices

The ready, convenient, and timely availability of products

Activities that inform customers about the organization and its products


Important Terms

• Stakeholders

– Those constituents who have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry, and outcomes; these include customers, employees, investors and shareholders, suppliers, governments, communities, and others

• Marketing

– The process of creating, pricing, distributing, and promoting, goods, services, and ideas to facilitate satisfying exchange relationships with customers and other stakeholders in a dynamic environment


Important Terms

• Customers

– The purchasers of organizations’ products; the focal point of all marketing activities

• Target Market

– A specific group of customers on whom an organization focuses its marketing efforts

• The Marketing Mix

– Four marketing activities—product, price, distribution, and promotion—that a firm can control to meet the needs of customers within its target market


Important Terms

• Product

– Goods, services, or ideas that satisfy customer needs

• Pricing

– Decisions and actions that establish pricing objectives and policies and set product prices

• Distribution

– The ready, convenient, and timely availability of products

• Promotion

– Activities that inform customers about the organization and its products


Satisfying Exchange Relationships

• Exchange

–The provision or transfer of goods, services, or ideas in return for something of value

FIGURE 1.2


Conditions for Exchange

• Exchange Conditions

–Two or more participants have something of value that the other party desires.

–Exchange provides mutual benefit/satisfaction.

–Each party has confidence in the exchange value of the other party’s offering.

–Each party must meet the expectations of the exchange to become trusted by the other parties.


Marketing Occurs in a Dynamic Environment

• Marketing Environment

–The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix

FIGURE 1.1


Components of Strategic Marketing

FIGURE 1.1


Understanding the Marketing Concept

• Marketing Concept

–A philosophy that an organization should try to satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals

–Customer satisfaction• Analysis of customers’ current and long-term

needs

• Analysis of competitors’ capabilities

• Integration of firm’s resources


The Evolution of the Marketing Concept

ProductionProductionOrientationOrientation

SalesSalesOrientationOrientation

MarketingMarketingOrientationOrientation

Late 19th century: efficient production of goods allowed firms to meet strong customer demand.

Mid-1920s–early 1950s: weakened demand required that products would have to be “sold” (personal selling, advertising, and distribution became the focus).

Early 1950s–2000s: adopting a customer focus means a commitment to researching and responding to customer needs.

FIGURE 1.3


Implementing the Marketing Concept

• Becoming marketing oriented requires

– establishing an information system to discover customers’ needs and using the information to create satisfying products.

– coordinating all marketing activities by restructuring the organization.

– obtaining the support of all managerial and staff levels in the organization.


Managing Customer Relationships

• Relationship Marketing

–Establishing long-term, mutually satisfying buyer-seller relationships allowing for cooperation and mutual dependency• Increased value of customer

(loyalty) over time results in increased profitability.


Customer Relationship Management (CRM)

• Using information about customers to create marketing strategies that develop and sustain desirable customer relationships

–Identifying buying-behavior patterns of customers

–Using behavioral information to focus on the most profitable customers


Important Terms

• Exchange

– The provision or transfer of goods, services, or ideas in return for something of value

• Marketing Environment

– The competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix

• Marketing Concept

– A philosophy that an organization should try to satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals


Important Terms

• Marketing Orientation

– An organizationwide commitment to researching and responding to customer needs

• Relationship Marketing

– Establishing long-term, mutually satisfying buyer-seller relationships allowing for cooperation and mutual dependency

• Customer Relationship Management (CRM)

– Using information about customers to create marketing strategies that develop and sustain desirable customer relationships


Value-Driven Marketing

• Value

– A customer’s subjective assessment of benefits relative to the costs in determining the worth of a product• Customer value = customer benefits – customer costs

– Customer benefits• Anything desired by the customer that is received in an

exchange

– Customer costs• Anything a customer gives up in an exchange for benefits

– Monetary price of the benefit

– Search costs (time and effort) to locate the product

– Risks associated with the exchange


Marketing Management

• Marketing Management

– The process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently

– Effectiveness• The degree to which an exchange

helps an organization achieve its objectives

– Efficiency• The process of minimizing the

resources an organization must spend to achieve a specific level of desired exchanges


Marketing Management (cont’d)

• Planning

– Assessing opportunities and resources

– Determining marketing objectives

– Developing a marketing strategy and plans for implementation and control• How, when and by whom are marketing activities

performed?

• Organizing

– Developing the internal structure of the marketing unit• Functions, products, regions, customer types


Marketing Management (cont’d)

• Implementation

– Coordinating marketing activities

– Motivating marketing personnel

– Developing effective internal communications within the unit

• Control

– Establishing performance standards

– Comparing actual performance to established standards

– Reducing the difference between desired and actual performance


Important Terms

• Value

–A customer’s subjective assessment of benefits relative to the costs in determining the worth of a product

• Customer Benefits

–Anything desired by the customer that is received in an exchange

• Customer Costs

–Anything a customer gives up in an exchange for benefits


Important Terms

• Marketing Management

– The process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently

• Effectiveness

– The degree to which an exchange helps an organization achieve its objectives

• Efficiency

– The process of minimizing the resources an organization must spend to achieve a specific level of desired exchanges

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