Marketing Notes General Introduction

Chapter One

Welcome to the World of Marketing:

Create and Deliver Value

Copyright 2013 Pearson Canada Inc. 1 - 2

Chapter ObjectivesChapter ObjectivesI. Explain what marketing is and how value creation is

central to the marketing conceptII. Explain how marketing is a decision-making process and

describe the planning and the marketing mix tools that managers use in the marketing process

III. Understand key issues relating to making ethical marketing decisions in a sustainable world and be able to discuss different perspectives of marketing

IV. Be able to discuss ethical issues related to marketing decisions


I. Explain what marketing is and how value creation is central to

the marketing concept


Chapter 1- In-class Activity 1

Introduction of the different facets of marketing.

Write down the first word that pops into your head when you hear these words: your college name, soup, jeans, marketing, and salesperson.

Write down how you would describe marketing to a friend who asked you what marketing is.


What is Marketing?What is Marketing?Marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large.

– 2007 American Marketing Association


Marketing is about Creating Marketing is about Creating Customer ValueCustomer Value

Value: Value: The benefits a customer receives from buying

a good or service Value from customer’s perspective:

A bundle of benefits consumers seek to satisfy needs or wants relative to costs

Value from seller’s perspective • Lifetime value of a customer:Lifetime value of a customer:

Total profit from a particular customer for a firm over his/her lifetime


Marketing Meets NeedsMarketing Meets Needs

Marketing meets the needs of diverse stakeholders

• Stakeholders are buyers, sellers, investors, community residents, citizens, consumers

Marketing concept• Identifying and satisfying consumer needs

to ensure long-term profitability


Needs, Wants, DemandsNeeds, Wants, Demands

NeedsNeeds• Difference between an actual state and an

ideal state WantsWants

• Desire to satisfy needs in specific ways that are culturally or socially influenced

DemandDemand• Desire for products coupled with the

resources to obtain them


MarketMarket

In marketing, when we refer to “market”, we mean consumers

MarketMarket • A group of consumers with a common need

that can be satisfied by a product Target marketTarget market

• The group(s) of consumers a company chooses to serve


MarketplaceMarketplace

MarketplaceMarketplace• Any location or medium used to conduct an

exchange• The modern marketplace takes many forms

– Physical, online, or virtual marketplace– e.g., shopping malls, stores, mail-order, TV

shopping networks, eBay auction, online stores, virtual worlds


Marketing and Exchange Marketing and Exchange RelationshipRelationship

The heart of marketing is an exchange relationship.

ExchangeExchange• Transfer of value between a buyer & a seller• Buyer receives an object, service, or idea that

satisfies a need• Seller receives something of equivalent value


In-class Activity 2

Relationship of Marketing in an organization

Why do you think marketing needs to be embraced by all employees and departments of a company? For example, why do a firm’s accountants need to be concerned about the marketing strategy of a company?


The Who and Where of MarketingThe Who and Where of Marketing

Marketers• Come from many different backgrounds• Work in many locations• Maintain cross-functional relationships

within the firm• Enjoy exciting, diverse careers


Think, Pear and Share

The role of Marketing in everyday lifeWhat did you have for breakfast today? Why did you have breakfast at all? Why did you choose the foods that you chose? What benefit did you get out of your breakfast? How are products designed to deliver these benefits?


What Can We MarketWhat Can We Market

Q: What can we market? A: Any products (i.e., any goods, services,

or ideas …)• Consumer goods/services• business-to-business goods/services• Not-for-profit marketing• Ideas, places, people marketing


In-class Activity 3

In groups of 4 or 5 come up with an example of:

a consumer service a business to business good/service a not-for-profit organization, a place and a person? Discuss with your group and share

with the class.


II. Explain how marketing is a decision making process and describe the planning and the

marketing mix tools that managers use in the marketing

process


Marketing: A Decision-Making Marketing: A Decision-Making ProcessProcess

Marketing is a decision-making process that involves the following:

• Understand the opportunity-Env. Analysis, SWOT.

• Develop marketing strategy-Segmentation, Targeting, Positioning

• Design marketing mix-4ps• Realize value-Implementation/Evaluation


Marketing Strategy: Specify the Marketing Strategy: Specify the ValueValue

Segmentation• Divide the overall market into groups of

consumers, with consumers within a group sharing similar needs, wants, preferences, and behaviors

Targeting• Decide how many market segments to focus on

Positioning• Arrange the brand to be know by customers as

being different and better than competitors


Positioning a Brand Involves Positioning a Brand Involves Specifying the Following …Specifying the Following …

Distinctive competency• What a brand does really well, and better

than its competition? Differential benefit

• What is the benefit that is uniquely offered by the brand?

Brand personality• What is the distinctive, desirable image of

the brand?


Marketing Mix: Create the ValueMarketing Mix: Create the Value

The 4 Ps

Product Price Promotion (Communications) Place (Distribution)


Group In-class Activity 4

In group develop two different marketing mixes for bicycles designed for two different target markets/purposes—one bicycle is for professional bicycle racers (think Lance Armstrong) and the other bicycle is for middle-aged women who want a little exercise.

How will the marketing mixes for these two products differ?


Add Value Through the Value Add Value Through the Value Chain Chain

Many players work together to create and deliver value to customers through value chain

Value chain• A series of activities involved in designing,

producing, marketing, delivering, and supporting any product

• It includes– Inbound logistics, operations, outbound logistics,

marketing & sales, service


Consumer-Generated ValueConsumer-Generated ValueA recent development in marketing involves

consumers’ contribution to value creation. People also generate value and content instead

of just passively accepting products. http://www.crashthesuperbowl.com

Social networking continues to grow and leverages Web 2.0.

Open source business models are on the rise. http://www.moodle.com

http://www.crashthesuperbowl.com/

http://www.moodle.com/


Think, Pear and Share -How marketers use different elements of the marketing mix.

Let’s look at the cereals you ate this morning and examine the different elements of the marketing mix.

Product – Think of Lucky Charms versus Rice Krispies? How are these products

designed differently? Why? How do their names relate to the product?

Do cereals come in different sizes? (regular, single packs, and jumbo packs). Why?

What needs do these different sizes meet?


Place - Where did you buy the cereal? (e.g. club stores, grocery stores,

convenience stores, restaurant, Internet).

Price - Was price a factor in your selection? For example did you buy a cereal that was on sale?

Promotion – Do you recall seeing any advertising for the cereal?


III. Understand key issues relating to making ethical marketing

decisions in a sustainable world and be able to discuss different

perspectives of marketing


The Global Environment of The Global Environment of BusinessBusiness

Forward thinking companies welcome new concepts that promote the idea of sustainable development• Triple bottom line• Customer relationship management (CRM)• Social marketing concept• Sustainability• Green marketing


Triple Bottom Line Triple Bottom Line Is a perspective that emphasizes the need to

maximize three components: Financial Bottom Line

• Financial profits for stakeholders• ROI (return on investment) measures value

Social bottom line• Contributing to the communities

Environmental bottom line • Creating sustainable business practices that

preserve the environment


Customer Relationship Customer Relationship ManagementManagement

Marketing uses customer relationship management (CRM)

• CRM involves systematically tracking consumers’ needs in ways that also benefit society and delivers profit to the firm


Social Marketing ConceptSocial Marketing Concept Social marketing concept

• Management philosophy that marketers must satisfy customers’ needs in ways that also benefit society and deliver value to the firm

Sustainable development• Creating products that meet present needs and

ensuring that future generations can meet their needs


Social Marketing Concept Social Marketing Concept (ctn’d)(ctn’d)

Green marketing is one type of sustainable business practice

Green marketing: the development of marketing strategies that support environmental stewardship

Visit Ads of the World to see examples of Volkswagen’s green marketing and sustainable business practices

ROI (return on investment) measures value

http://adsoftheworld.com/media/print/volkswagen_ecofriendly

http://adsoftheworld.com/media/print/volkswagen_water


Other Perspectives of Other Perspectives of Marketing Marketing

Product orientation

Selling orientation

Consumer orientation


Product OrientationProduct Orientation

A management philosophy that emphasizes the most efficient ways to produce and distribute products

• Obsessed with low costs in production and distribution

• Not concerned with how to best to satisfy consumers’ needs

• Focus on products rather than consumers


Selling OrientationSelling OrientationA managerial view of marketing as a

sales function, or a way to move products out of warehouses to reduce inventory

• Focus on aggressive selling, building sales volumes, rather than satisfying consumers’ needs

• When product availability exceeds demand, businesses may focus on a one-time sales of goods rather than repeat business


Consumer OrientationConsumer Orientation

A management philosophy that emphasizes satisfying customers’ needs and wants

• More progressive than the previous two orientations

• Emphasize that marketers need to be proactive & responsive in identifying & satisfying consumers’ needs


In-class Activity 6- How organizations In-class Activity 6- How organizations can adopt different orientations over can adopt different orientations over

timetime Product Orientation Product Orientation – – Has anyone ever Has anyone ever

ordered a burger with no pickles or no onions?ordered a burger with no pickles or no onions? Consumer Orientation Consumer Orientation – How has McDonald’s – How has McDonald’s

changed its menu in the past year and Why? changed its menu in the past year and Why? What about trans fats in its frying oils?What about trans fats in its frying oils?

Social Marketing Orientation Social Marketing Orientation – – How has How has McDonald’s worked to help society? How about McDonald’s worked to help society? How about the environment? (Move away from Styrofoam the environment? (Move away from Styrofoam containers)containers)


IV. Be able to discuss ethical issues related to marketing

decisions


Ethical Behavior in MarketingEthical Behavior in Marketing Stressing socially responsible and ethical

decisions is good business Companies should respect business ethics and

may develop their own code of ethics• Business ethics

• Rule of conduct in an organization (i.e., how members of a firm judge what is right and what is wrong for the firm)

• Code of ethics• Written standards of behavior to which

everyone in the organization must subscribe


The Dark Side of Marketing

When marketers break the bond of trust with stakeholders, they move to the dark side of marketing

Criticisms of marketing include the following:• Marketing corrupts society• Marketing & advertising are unnecessary• Marketers manipulate consumers• Marketers support addictive consumption• Marketers exploit people


People Fight Back

Consumerism• A social movement that attempts to protect

consumers from harmful business practices Consumers’ Association of Canada (CAC)

• Inform & educate consumers• Advocate on consumers’ behalf, e.g.

• Establish protective legislation for consumers• Fight negative-option marketing

Marketing Notes General Introduction

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