1. Essentials of Marketing
A Global Managerial Approach
A Global Managerial Approach
William D. Perreault Jr. E. Jerome McCarthy
For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
William D. Perreault Jr. and E. Jerome McCarthy
For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

2. CHAPTER ONE Marketing’s Value to Consumers, Firms, and Society
For use only with Perreault and McCarthy texts.
© 2006 McGraw-Hill Companies, Inc.
McGraw-Hill/Irwin
For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

3. When we finish this lecture you should
1. Know what marketing is and why you should learn about it.
2. Understand the difference between micro-marketing and macro-marketing.
3. Know the marketing functions and why marketing specialists—including intermediaries and facilitators—develop to perform them.
4. Understand what a market-driven economy is and how it adjusts the macro-marketing system.
5. Know what the marketing concept is—and how it should guide a firm or nonprofit organization.
At the end of this presentation, you should:
Know what marketing is and why you should learn about it.
Understand the difference between micro-marketing and macro-marketing.
Know the marketing functions and why marketing specialists—including intermediaries and facilitators—develop to perform them.
Understand what a market-driven economy is and how it adjusts the macro-marketing system.
Know what the marketing concept is—and how it should guide a firm or nonprofit organization.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

4. When we finish this lecture you should
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.
At the end of this presentation, you should:
Understand what customer value is and why it is important to customer satisfaction.
Know how social responsibility and marketing ethics relate to the marketing concept.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

5. Marketing—What’s It All About?
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More than Selling and Advertising
All Those Bicycles!
More than Selling and Advertising
Summary Overview
Many people are surprised when they realize how many different ideas and activities are included in the term “marketing.”
Key Issues
Most people think that marketing involves selling and advertising.
Marketing is much more than selling or advertising.
Think about a manufacturer of bicycles:
many different bicycles
many brand names
many types of bicycles; various features
prices range from low to very high
Discussion Question: Why are there so many varieties of bicycles? : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

6. Things a Firm Should Do in Producing a Bike
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Analyze Needs
Analyze Needs
Predict Wants
Predict Wants
Estimate Demand
Estimate Demand
Predict When
Predict When
Determine Where
Summary Overview
By focusing on the many tasks involved in producing a bicycle, it is possible to get a feel for the wider range of marketing activities.
Key Issues
Among the different things a firm must do in producing a bicycle, it must:
Analyze the needs of people for various types of bicycles;
Predict the types of bicycles consumers will want and decide which consumers to satisfy;
Estimate the number of bicycle riders and how many bicycles they might buy;
Predict when consumers will want to buy;
Determine where the consumers will be and how to get bicycles to them;
Estimate the price consumers are willing to pay for a bicycle, and if that price will result in a profit for the firm;
Decide what kinds of promotion should be used to inform consumers about the firm and its bicycles;
Estimate the impact of competition from other bicycle producers;
Figure out how to provide warranty service after a customer purchases a bike.
Discussion Question: How many of these activities are marketing activities?
Determine Where
Estimate Price
Estimate Price
Decide Promotion :
Decide Promotion
Estimate Competition : :
Estimate Competition
Provide Service : : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin : : :

7. Production vs. Marketing
Creates Customer Satisfaction
Marketing
Makes sure right goods & services are produced
Production vs. Marketing
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Production
Making Goods
Performing Services
Summary Overview
Production and marketing are both fundamental economic activities. However, some people misunderstand the relationship between them. Thus, it helps to have a clear picture of how production and marketing interact with each other.
Key Issues
Production involves: making goods, or performing services.
Discussion Question: Is it true that a good product is the only thing that makes a business a success? What is needed in addition to the product?
Products do not sell themselves!
Marketing:
makes sure that the right goods and services are produced;
creates customer satisfaction: the extent to which an organization fulfills a customer’s needs, desires and expectations.
Discussion Question: If you were buying a bicycle, what needs would you have? How would your desires or wants be different from your needs? What expectations would you have about the bicycle you were purchasing? : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

8. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Exhibit 1-1
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Types of Utility and How They Are Provided
Provided by production with
guidance of marketing
Provided by marketing
Time
Utility
Value that comes
from satisfying
human needs
Form
Summary Overview
Production and marketing work together to create utility: the power to satisfy human needs. There are five kinds of economic utility.
Key Issues
Form utility--provided when someone produces something tangible.
Task utility--provided when someone performs a task for someone else.
Time utility--having the product available when the customer wants it.
Place utility--having the product available where the customer wants it.
Discussion Question: Can you think of examples of businesses that excel in providing time and place utility?
Possession utility--obtaining a good or service and the right to use or consume it.
Place
Task
Possession : : : : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

9. Interactive Exercise: Utility
For complete information and suggestions on using this Interactive Exercise, please refer to the “Notes on the Interactive Exercise” section for this chapter in the Multimedia Lecture Support Package to Accompany Essentials of Marketing.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

10. Marketing Is Important to You!
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Important to every consumer!
Important to every consumer!
Important to your job!
Summary Overview
Marketing is a pervasive activity. It is something that eventually touches everyone and it dramatically affects peoples’ daily lives. The principles learned in marketing courses are directly and immediately applicable to students’ daily lives.
Key Issues
Marketing is important to every consumer.
People bear the costs of marketing via price.
Everyone buys or uses a product or service.
People shop, are exposed to advertising, and provide information to businesses.
Marketing is important to your job.
People have to market themselves.
Marketing offers career opportunities.
Organizations exist to satisfy customers; marketing contributes to success.
Discussion Question: How would a knowledge of marketing benefit an accountant? A computer system designer? An attorney? A physician?
Marketing also affects the standard of living and economic growth:
stimulates research and innovation;
creates new/improved products;
generates a higher standard of living.
Important to your job!
Affects economic growth and
standard of living! : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin :

11. Marketing Stimulates New Ideas
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Summary Overview
Marketing stimulates research, new ideas, and new innovations, such as this RCA Personal Digital Player.
Key Issues
This advertisement illustrates being proactive rather than reactive:
searching for opportunities to meet the emerging needs.
Technology is advancing very rapidly.
Marketers must look for new ideas to stay ahead of competition.
Discussion Question: Can you think of other industries or product/service categories in which marketers have been particularly innovative over the past few years? +
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

12. Affects Economic Growth
Courtesy of Whirlpool Corp.
Marketing stimulates the development of innovations. This ad for the Whirlpool Duet washer and dryer shows how marketing not only generates completely new products, but improvements to mature products—such as major appliances.
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13. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
What Is Marketing?
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Micro
Set of activities
Performed by organizations
Macro
Social process
Matches supply with demand OR
Summary Overview
Marketing is more than selling and advertising, but it also possible to define marketing too broadly. In defining marketing, there are really two alternative views--micro-marketing or macro-marketing.
Key Issues
Micro-marketing--activities that:
anticipate customer needs;
direct flows of goods and services to customers.
are performed by organizations.
Macro-marketing--social process that:
accomplishes the objectives of society;
effectively matches supply and demand.
is concerned with how marketing activities affect society, and vice versa.
Discussion Question: Why is it important for marketers to understand both the micro- and macro- definitions of marketing? : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

14. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Micro-Marketing
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Profit and Nonprofit
Profit and Nonprofit
More than Persuasion
More than Persuasion
Key
Characteristics
Focus of Your Text
Begins with Needs
Begins with Needs
Summary Overview
Micro-marketing is done by organizations; beyond that general definition, there are several specific aspects of micro-marketing that marketers should consider.
Key Issues
Micro-marketing:
applies to both profit and nonprofit organizations;
more than persuasion;
Discussion Question: What are some of the marketing activities other than persuasion?
begins with customer needs;
does not do it alone or take the place of other business activities;
involves exchanges—consumers exchange something of value to acquire something of value.
builds a relationship with the customer that will lead to repeat purchase.
The focus of the text is on management-oriented micro-marketing.
Doesn’t Go It Alone
Builds Relationships
Builds Relationships
Doesn’t Go It Alone :
Involves Exchanges :
Involves Exchanges : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin : : :

15. Building Customer Relationships
This slide relates to material on p. 9.
Summary Overview
In this ad, Ductmate explains how it creates and maintains ongoing relationships with customers.
Key Issues
Ductmate’s engineers climb down from the “ivory tower”:
on the road;
interacting with customers;
learning about customer needs;
developing creative ways to meet those needs.
Discussion Question: Can you think of other ways in which an organization can understand its customers better? +
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

16. Macro-Marketing Emphasis on Whole System Emphasis on Whole System Key
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Emphasis on Whole System
Emphasis on Whole System
Key
Characteristics
Every Economy Needs It
Every Economy Needs It
Summary Overview
In contrast to micro-marketing, macro-marketing’s emphasis is on how the whole marketing system works.
Key Issues
Every economy needs a macro-marketing system, because:
variation exists among the types of producers that can meet needs;
every consumer has a different set of needs;
system must effectively match consumers and producers.
Discussion Question: Which countries’ macro-marketing systems might be viewed by Americans as unfair or ineffective? Which countries’ citizens might think that the American macro-marketing system is unfair or ineffective? Try to think of specific mismatches between customer needs and the outputs of producers. : :
Matches Producers and Consumers :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

17. Can Mass Production Satisfy a Society’s Consumption Needs?
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Economies of Scale Lower Cost
Cost $
Summary Overview
Marketing is needed to overcome the difference between maximizing production efficiency and the preferences people have for consuming products and services.
Key Issues
Economies of scale lower cost.
As production increases, the cost of each good decreases.
Marketing helps companies find more outlets for products.
Discussion Question: How does marketing find more outlets (consumers) for products?
Effective marketing links producers and consumers.
Consumers’ needs and patterns of consumption differ from how production facilities operate effectively.
Marketing activities create more efficient links between consumers and producers.
Marketing functions narrow the gap.
The “how” and “by whom” aspects of marketing vary.
The universal marketing functions that must occur can be identified.
Output
Producers
Consumers
Marketing
Functions
Marketing Bridges the Gap! : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

18. Overcoming Spatial Separation
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Summary Overview
Effective marketing provides consumers with a variety of ways to meet their unique needs. Most carpet consumers live far away from carpet factories. S & S Mills helps to overcome this spatial separation.
Key Issues
S&S Mills uses direct distribution to sell its carpet.
S & S appeals to the consumer who wants to save money and forego some of the benefits of shopping in a retail store.
Other customers want to see a large selection at a local store--and the retail store might provide extra services.
Discussion Question: Try to think of a product or service category in which consumers tend to expect--and receive--more choices over time. How have marketers responded to these needs? +
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

19. The Universal Functions of Marketing
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Buying
Marketing
Functions
Buying
Selling
Selling
Market
Information
Transporting
Transporting
Summary Overview
The universal marketing functions help the macro-marketing system overcome separations and discrepancies between those wishing to participate in an exchange. The fulfillment of these functions in a particular country or culture varies widely, but all the functions are needed in any macro-marketing system.
Key Issues
Buying: looking for and evaluating goods and services.
Selling: promoting the product to prospective buyers.
Transporting: moving the goods from place to place.
Storing: holding an inventory of goods until needed by customers.
Standardization and grading: sorting products by size and quality.
Discussion Question: Can you think of products that have to be sorted or evaluated before you can purchase them? Hint: think about agriculture.
Financing: providing necessary cash and credit to produce, transport, store, promote, sell, and buy products.
Risk taking: assuming responsibility for uncertainties.
Discussion Question: What are some examples of the risks taken in business enterprise?
Market information: the collection, analysis, and distribution of all the information the marketer needs to plan, implement, and control need-satisfying marketing activities.
Risk Taking
Risk Taking
Storing
Storing :
Financing
Standardization
& Grading :
Financing
Standardization
& Grading : : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin : : :

20. Who Performs Marketing Functions?
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Producers
Wholesalers
Other
Specialists
Retailers
Transport
Firms
ISP's
Product
Testing
Ad Agencies
Research
Summary Overview
Individuals and organizations perform marketing functions. It is often easiest to think of producers, such as manufacturers of tangible products and providers of intangible services. However, there are many other marketing performers.
Key Issues
Consumers:
needs drive the marketing responses of many organizations;
provide marketing information to organizations.
Marketing specialists: such as intermediaries, execute tasks related to buying and selling.
Facilitators: firms that provide marketing functions other than buying and selling.
advertising agencies, marketing research firms;
independent product-testing laboratories;
Internet service providers; transporting firms, etc.
Universal functions of marketing need to be performed by someone.
There can be specialization in the performance of these functions.
Functions can also be shared and shifted among the marketing performers.
Discussion Question: Why doesn’t each of the organizations or individuals in a macro-marketing system perform all of the marketing functions? : :
Consumers : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

21. How Decisions Are Made in an Economic System
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Planned Economic System
Market-Directed System
Government planners decide
Can work well if:
Simple economy
Adverse Conditions
Adjusts itself
Price is value measure
Freedom of choice
Government’s role limited OR
Summary Overview
Every society needs an economic system: the way an economy organizes to use scarce resources in production and consumption. Depending upon the type of economic system, decisions about resource allocation are made differently.
Key Issues
Planned economic system:
government planners make decisions about production and distribution;
can work well in simple economies or under adverse conditions.
Market-directed economic system: individuals govern resource allocation, production and consumption.
Characteristics of market-directed systems include:
Adjusts itself.
Price is a measure of value:
consumers pay what they think things are worth;
producers try to meet those price expectations.
Greatest freedom of choice:
less intervention from government planners;
more choices are available to producers and consumers.
The role of government is to ensure fairness and the common good.
Discussion Question: What are examples of things government planners compel consumers to buy, even in a largely market-directed economic system? : : : : : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin : :

22. Marketing’s Role Has Changed Over Time
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Increase Supply
Sell Surplus
Simple Trade Era
Focus:
Production Era
Sell Surplus
Focus:
Simple Trade Era
Increase Supply
Beat Competition
Production Era
Focus:
Sales Era
Summary Overview
As marketing has evolved, its focus has changed from a focus on products to a focus on customer needs. An important point to remember is that some managers have not made it all the way to the final stages of marketing evolution.
Key Issues
Simple trade era--families trade or sell their output to local middlemen.
Production era--company focuses on production of a few specific products:
no ceiling on demand for the firm's products;
focus on producing more efficiently, selling what it's easy to produce.
Sales era--competition increases:
finite demand for firm's products and services;
surplus of products for sale;
focus on pushing products via promotion, beating competition.
Marketing department era--emphasis on coordinating marketing activities in a marketing department.
Marketing company era--marketing is an overall philosophy:
everyone in the organization is involved in increasing customer satisfaction;
short-run and long-term planning;
guided by the marketing concept.
Discussion Question: Many companies profess to be customer-oriented, but their customer service still leaves a lot to be desired. Why?
Sales Era
Beat Competition
Coordinate and Control
Focus:
Marketing Department Era :
Marketing Department Era
Coordinate and Control
Marketing Company Era
Long-Run
Customer Satisfaction
Focus: : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin : :

23. Exhibit 1-4 The Marketing Concept The Marketing Concept
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The Marketing Concept
Customer Satisfaction
Total Company Effort
The Marketing Concept
Summary Overview
The cornerstone of the marketing-oriented company is the marketing concept.
Key Issues
Production orientation--making whatever products are easy to produce and then trying to sell them.
Marketing orientation--designing marketing programs that will meet customer needs.
Marketing concept:
customer satisfaction guides the whole organization;
all individuals work together to accomplish this goal
Discussion Question: What can managers do to motivate everyone in the organization to satisfy customer needs?
requires that the company be profitable. :
Profit :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin :

24. Creating Customer Satisfaction
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Summary Overview
This ad from Allen Edmonds demonstrates that the firm attempts to create customer satisfaction by giving customers what they need--different shoes for different occasions.
Key Issues
Allen Edmonds shoes: high quality, expensive.
Not every consumer will be interested in paying for Allen Edmonds quality.
Allen Edmonds meets the needs of people who are willing to pay more.
Allen Edmonds has responded to the need for more styles.
The company has developed a “recrafting” process for old shoes; it builds long-term relationships with the firm’s customers. +
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

25. Adoption of the Marketing Concept
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Summary Overview
Adoption of the marketing concept has varied by type of organization, but the concept continues to penetrate organizations of all types.
Key Issues
Consumer product companies were first to accept the marketing concept.
Service industries are catching up.
Telecom Italia is an example of a service firm that is trying to adopt the marketing concept.
It is easy for firms to slip back into a production orientation. It is often difficult to:
keep up with changing customer needs;
beat aggressive competitors to the punch;
find the right focus;
offer customers superior value.
Discussion Question: Considering Telecom Italia’s ad promise (only six days to install telephone service), what challenges will it face in continuing to be customer-oriented? +
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

26. The Marketing Concept and Customer Value
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Take Customer’s Point of View
Customer May Not Dwell On Value
Take Customer’s Point of View
Customer May Not Dwell On Value
Where Does Competition Fit?
Summary Overview
To better understand what it takes to satisfy a customer, it’s useful to take the customer’s point of view.
Key Issues
Customer value is the difference between the benefits a customer sees from a marketing offering and the costs of obtaining those benefits.
Different customers may see the benefits and costs in different ways.
The customer may not always dwell on value as a key determinant of buying behavior.
Discussion Question: Can you give examples of firms that provide you with superior customer value? Do other consumers view this value in the same way?
Where does competition fit?
A firm that offers superior customer value is likely to win customers.
Customer value builds relationships.
Understanding customer value is especially important when products and services are very similar. :
Where Does Competition Fit?
Customer Value Builds Relationships
Costs
Benefits : : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

27. Interactive Exercise: Customer Value
The objective of this exercise is to show a graphical example illustrating the concept of customer value, using eight different brands of vacuum cleaners. They are positioned against each other based on: (a) the benefit ratings they received as a result of an independent lab test, and (b) their retail prices.
Working through the exercise, the students will learn:
How to use the available information to compute a price index and benefit index for each brand;
How to compute a customer value index for each brand;
How the judgments about value differ depending on the type of index used and the total number of brands considered.
For more detailed instructions on how to use the Interactive Exercise, see the included Word document located in the assets folder for this chapter.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

28. Putting It All Together
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Superior Customer Value
Total Company Effort to Satisfy Customers
Customer Acquisition
Customer Satisfaction
Superior Customer Value
Total Company Effort to Satisfy Customers
Customer Satisfaction
Customer Retention
Customer Acquisition
Summary Overview
This model summarizes the important ideas presented to this point.
Key Issues
In a firm that has adopted the marketing concept, everyone focuses on customer satisfaction. The organization offers superior customer value.
Value, in turn, helps attract customers and keeps them satisfied after they buy.
This satisfaction then leads to repeat purchase.
As the firm maintains this profitable relationship, the profit gives the firm the incentive and the resources to offer superior customer value.
Discussion Question: If a firm’s customers are already satisfied with the firm’s offerings, why does the firm need to look for new and better ways to provide customer value?
Adopting the marketing concept is a “win-win” situation for marketers and consumers! :
Customer Retention
Profitable Relationships with Customers : : :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

29. The Marketing Concept Applies in Nonprofit Organizations
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Characteristics of Nonprofit Organizations
Newcomers to Marketing
Newcomers to Marketing
Support and “Satisfied Customers”
Support and “Satisfied Customers”
Summary Overview
The marketing concept is also applicable to nonprofit organizations such as museums, libraries, charities, and political parties.
Key Issues
Nonprofit organizations are relative newcomers to marketing.
Nonprofit organizations often have a different idea of support and “satisfied customers” than do business firms.
Nonprofits often exist to accomplish a goal unrelated to traditional customer satisfaction.
Many nonprofits raise money from non-customer groups and then spend it on other “customers”.
They may not have a traditional “bottom line” economic measure of success.
Discussion Question: What is the “profit” for a political party? A library? A museum? A symphony orchestra? A blood bank?
Nonprofit organizations may not be organized for marketing.
The marketing concept provides a focus on what is really needed.
Marketing Concept Provides Focus
The Bottom Line
The Bottom Line : :
May Not Be Organized for Marketing
May Not Be Organized for Marketing :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin : :

30. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Government Marketing
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Summary Overview
Adoption of the marketing concept has brought focus to the U.S. Postal Service, a government agency, in the face of increased competition from more traditional profit-oriented delivery and transportation service firms.
Key Issues
The United States Postal Service is promoting its services:
to firms that are trying to target personalized communications;
to help develop closer customer relationships.
Discussion Question: What obstacles will the Postal Service have to overcome in persuading businesses to use the Postal Service as the vehicle for direct mail promotional campaigns? Are these obstacles related to the differences between profit and nonprofit organizations? +
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

31. Marketing Concept Use by Nonprofit Services
Courtesy of the Science Museum of Minnesota
Museums like this one are both service and nonprofit organizations. Both types of organizations have been slower to adopt the marketing concept than consumer product companies. However, many have now integrated the marketing concept into their operations.
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32. The Marketing Concept, Social Responsibility, and Marketing Ethics
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Micro-Macro Dilemma
Group Needs
Individual Needs
Social Responsibility
Social Responsibility
Should All Needs Be Satisfied?
Should All Needs Be Satisfied?
What if Profits Suffer?
Summary Overview
Organizations implement the marketing concept in the broader context of society. There are times when the society’s needs conflict with the needs of a particular individual or group, creating the micro-macro dilemma.
Key Issues
Social responsibility--an obligation to improve the organization’s positive effects on society.
Businesses must strive to reach acceptable balances.
“Should all needs be satisfied?”
Some products that many people use are not good for them.
Marketers must rely on legal and ethical standards in making decisions.
“What if profits suffer?”
Some marketers are adopting a longer-term view.
Customer satisfaction goes beyond fulfilling an immediate need.
Discussion Question: It is possible for an organization to be truly consumer-oriented and intentionally act in an unethical manner? Why or why not?
The marketing concept guides marketing ethics:
focuses the organization on the needs of consumers;
many organizations have developed codes of ethics.
Marketers should take criticisms of marketing seriously. : : :
The Marketing Concept Guides Ethics :
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin :

33. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Key Terms
This slide refers to boldfaced terms appearing in Chapter 1.
Production
Customer satisfaction
Utility
Form utility
Task utility
Time utility
Place utility
Possession utility
Innovation
Micro-marketing
Pure subsistence economy
Macro-marketing
Economies of scale
Universal functions of marketing
Buying
Selling
Transporting
Storing
Standardization and grading
Summary Overview
These are key terms you should be familiar with based upon the material in this presentation.
Key Issues
Production: actually making goods or performing services.
Customer satisfaction: the extent to which a firm fulfills a consumer's needs, desires, and expectations.
Utility: the power to satisfy human needs.
Form utility: provided when someone produces something tangible.
Task utility: provided when someone performs a task for someone else--for instance when a bank handles financial transactions.
Time utility: having the product available when the customer wants it.
Place utility: having the product available where the customer wants it.
Possession utility: obtaining a good or service and having the right to use or consume it.
Innovation: the development and spread of new ideas, goods, and services.
Micro-marketing: the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client.
Pure subsistence economy: each family unit produces everything it consumes.
Macro-marketing: a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society.
Economies of scale: as a company produces larger numbers of a particular product, the cost for each of these products goes down.
Universal functions of marketing: buying, selling, transporting, storing, standardizing and grading, financing, risk taking, and market information.
Buying: looking for and evaluating goods and services.
Selling: promoting the product.
Transporting: the marketing function of moving goods.
Storing: the marketing function of holding goods.
Standardization and grading: sorting products according to size and quality.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

34. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Key Terms
This slide refers to boldfaced terms appearing in Chapter 1.
Financing
Risk-taking
Market information
Intermediary
Middleman
Facilitators
E-commerce
Economic system
Planned economic system
Market-directed economic system
Simple trade era
Production era
Sales era
Marketing department era
Marketing company era
Marketing concept
Production orientation
Marketing orientation
Customer value
Summary Overview
These are additional key terms.
Key Issues
Financing: provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products.
Risk-taking: bearing the uncertainties that are part of the marketing process.
Market information: the collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities.
Intermediary: a middleman.
Middleman: someone who specializes in trade rather than production, sometimes called an intermediary.
Facilitators: firms that provide one or more of the marketing functions other than buying or selling.
E-commerce: exchanges between individuals or organizations--and activities that facilitate those exchanges--based on applications of information technology.
Economic system: the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society.
Planned economic system: government planners decide what and how much is to be produced and distributed by whom, when, to whom, and why.
Market-directed economic system: consumers make a society’s production decisions when they make their choices in the marketplace.
Simple trade era: a time when families traded or sold their surplus output to local middlemen who resold these goods to other consumers or distant middlemen.
Production era: a time when a company focuses on production of a few specific products--perhaps because few of these products are available in the market.
Sales era: a time when a company emphasizes selling because of increased competition.
Marketing department era: a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities.
Marketing company era: a time when, in addition to short-run marketing planning, marketing people develop long range plans--sometimes 10 or more years ahead--and the whole company effort is guided by the marketing concept.
Marketing concept: the idea that an organization should aim all its efforts at satisfying its customers--at a profit.
Production orientation: making whatever products are easy to produce and then trying to sell them.
Marketing orientation: trying to carry out the marketing concept.
Customer value: the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

35. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Key Terms
This slide refers to boldfaced terms appearing in Chapter 1.
Micro-macro dilemma
Social responsibility
Marketing ethics
Summary Overview
These are additional key terms.
Key Issues
Micro-macro dilemma: what is good for some producers and consumers may not be good for society as a whole.
Social responsibility: a firm's obligation to improve its positive effects on society and reduce its negative effects.
Marketing ethics: the moral standards that guide marketing decisions and actions.
© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin