1. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel 2008-2009 1 CHAPTER An Overview of Marketing

2. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 2 Learning Outcomes Define the term marketing Describe four marketing management philosophies Discuss the differences between sales and market orientations Describe several reasons for studying marketing LO 1 LO 2 LO 3 LO 4

3. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 3 Define the term marketing What Is Marketing? LO 1

4. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 4 LO 1 What Is Marketing? Stresses Customer Satisfaction A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities… Products Distribution Promotion Pricing

5. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 5 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. What Is Marketing? LO 1 American Marketing Association Definition

6. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 6 What Is Marketing? LO 1 Greater effort Higher quality Repeat business Growth and profits Stockholder satisfaction More investment Employee satisfaction

7. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 7 Exchange Chapter PHOTO Here People giving up something to receive something they would rather have. LO 1

8. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 8 Exchange LO 1 At Least Two Parties Something of Value Communication and Delivery Freedom to Accept or Reject Desire to Deal with Other Party Conditions for Exchange

9. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 9 Exchange  Exchange may not take place even if conditions are met  An agreement must be reached  Marketing occurs even if exchange does not take place LO 1

10. Chapter 1Copyright ©2009 Cengage Learning Inc. All rights reserved 10 LO 1 Beyond the Book Watch an Ad – Get Free Software In exchange for “free” online word-processing, calendar support, or network management services, many budget- conscious corporate users are willing to have the sponsor’s advertisements on the pages they use. SOURCE: Vauhini Vara, “Companies Tolerate Ads to Get Free Software,” Wall Street Journal, March 27, 2007, B1, B3. …BUT FIRST, AN AD FROM OUR SPONSOR…

11. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 11 REVIEW LEARNING OUTCOME LO 1 Product Price Place Promotion Exchange A B Delivering Value Communicating Value Creating Value Customer value and beneficial relationships

12. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 12 Describe four marketing management philosophies Marketing Management Philosophies LO 2

13. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 13 Sales Market Societal Production internal capabilities of the firm satisfying customer needs and wants while meeting objectives satisfying customer needs and wants while enhancing individual and societal well-being aggressive sales techniques and belief that high sales result in high profits OrientationFocus is on… LO 2 Marketing Management Philosophies

14. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 14 Market Orientation Marketing Concept The idea that the social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting organizational objectives. LO 2

15. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 15 The Marketing Concept  Focusing on customer wants and needs to distinguish products from competitors’ offerings  Integrating all the organization’s activities to satisfy these wants  Achieving the organization’s long-term goals by satisfying customer wants and needs legally and responsibly LO 2

16. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 16 Achieving a Marketing Orientation  Obtain information about customers, competitors, and markets  Examine the information from a total business perspective  Determine how to deliver superior customer value  Implement actions to provide value to customers Online http://www.westernunion.com LO 2

17. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 17 Societal Marketing Orientation Societal Marketing Orientation An organization exists not only to satisfy customer wants but also to preserve or enhance individuals’ and society’s long- term best interests. Less toxic products More durable products Products with reusable or recyclable materials LO 2

18. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 18 REVIEW LEARNING OUTCOME Production Sales Marketing Societal What can we make or do best? How can we sell more aggressively? What do customers want and need? What do customers want and need, and how can we benefit society? OrientationFocus LO 2

19. Chapter 1Copyright ©2009 Cengage Learning Inc. All rights reserved 19 LO 2 Beyond the Book Listen to your customers... Tom Kelley with Jonathan Littman, The Ten Faces of Innovation: IDEO's Strategies for Defeating the Devil's Advocate and Driving Creativity Throughout Your Organization, Currency/Doubleday, 2005 … but look to the future, as well. "If I had asked my customers what they wanted," Henry Ford once remarked, "they would have said a faster horse."

20. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 20 Discuss the differences between sales and market orientations Sales and Marketing Orientations LO 3

21. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 21 You can compare these orientations against these five categories: Comparing the Sales and Market Orientations LO 3  Organization’s focus  Firm’s business  Those to whom the product is directed  Firm’s primary goal  The tools used to achieve those goals

22. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 22 Customer Value The relationship between benefits and the sacrifice necessary to obtain those benefits. LO 3

23. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 23  Offer products that perform  Earn trust  Avoid unrealistic pricing  Give the buyer facts  Offer organization-wide commitment in service and after-sales support Customer Value Requirements LO 3

24. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 24 Customer Satisfaction The feeling that a product met or exceeded the customer’s expectations. LO 3

25. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 25 Building Relationships Relationship Marketing A strategy that focuses on keeping and improving relationships with current customers. LO 3

26. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 26 Building Relationships  Customer-oriented personnel  Employee training programs  Empowered employees  Teamwork LO 3

27. Chapter 1Copyright ©2009 Cengage Learning Inc. All rights reserved 27 LO 3 Beyond the Book Building From Within SOURCE: The Corporate Learning Factbook® 2007: Statistics, Benchmarks and Analysis of the U.S. Corporate Training Market, Bersin & Associates / Karen O’Leonard, January 2007. Today's companies must build from within, putting more emphasis (and money) on rapidly training younger employees for greater responsibilities. Growing U.S. economy + Aging workforce “War for new talent" + Lack of middle managers

28. Chapter 1Copyright ©2009 Cengage Learning Inc. All rights reserved 28 Biz Flix The Jerk LO 3

29. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 29 Online http://www.britannica.com Defining a Firm’s Business Use “benefits” instead of “goods/services”  Ensures a customer focus  Encourages innovation and creativity  Stimulates an awareness of changes in customer preferences LO 3

30. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 30 REVIEW LEARNING OUTCOME LO 3 Sales vs. Market Orientations Sales Orientation Market Orientation Organization’s Focus Firm’s Business For Whom? Primary Profit Goal? Tools to Achieve Selling goods and services EverybodyMaximum sales volume Primarily promotion Inward OutwardCoordinated use of all marketing activities Customer satisfaction Specific groups of people Satisfying wants and needs

31. Chapter 1Copyright ©2009 Cengage Learning Inc. All rights reserved 31 LO 3 Beyond the Book Anatomy of an Ad Tag line ties into relationship marketing Package is part of the product Samples are a type of promotion Ways company creates value Product directed at people who are not confident selecting paint colors Store is place Pink ribbon shows element of societal marketing orientation

32. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 32 Describe several reasons for studying marketing Why Study Marketing LO 4

33. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 33  Plays an important role in society  Vital to business survival, profits and growth  Offers career opportunities  Affects your life every day Why Study Marketing? LO 4

34. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 34 Why Study Marketing LO 4 Vital Marketing Activities Assess the wants and satisfaction of customers Design and manage product offerings Determine prices and pricing policies Develop distribution strategies Communicate with present and potential customers

35. Chapter 1 Copyright ©2009 by Cengage Learning Inc. All rights reserved 35 REVIEW LEARNING OUTCOME LO 4 Reasons for Studying Marketing Why Study Marketing? Important to Society Important to Business Good Career Opportunities + Marketing affects you every day!