Chapter 1 Marketing: The Art and Science of Satisfying Customers Principles of Contemporary Marketing Kurtz & Boone Chapter 1 Marketing: The Art and Science of Satisfying Customers

Chapter Objectives Define marketing, explain how it creates utility, and describe its role in the global marketplace. Contrast marketing activities during the four eras in the history of marketing. Explain the importance of avoiding marketing myopia. Describe the characteristics of not-for-profit marketing. Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Chapter Objectives Identify and briefly explain each of the five types of nontraditional marketing. Explain the shift from transaction-based marketing to relationship and social marketing. Identify the universal functions of marketing. Demonstrate the relationship between ethical business practices, social responsibility, sustainability and marketplace success. Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

What is Marketing? Organizations must create utility to survive Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Copyright © 2012 by South Western, a division of Cengage Learning Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

A Definition of Marketing Marketing - An organizational function and a set of processes for: Creating, communicating, and delivering value to customers Managing customer relationships in ways that benefit the organization and its stakeholders Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Today’s Global Marketplace Factors that have extended economic views Increase in international trade agreements Growth of electronic business Interdependence of the world’s economies Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Four Eras in the History of Marketing The essence of marketing is the exchange process Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

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Characteristics of the Four Eras Era in marketing Focus Production Era Production orientation Sales Era Sales orientation Marketing Era Consumer orientation Relationship Era Relationship marketing Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Avoiding Marketing Myopia Marketing myopia - Management’s failure to recognize the scope of its business Focusing on customer need satisfaction can overcome myopia Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Not-for-Profit Marketing Marketing in not-for-profit organizations Marketing strategy is adopted to meet service objectives Not-for-profit organizations form alliances with business firms for mutual benefit Characteristics of not-for-profit marketing Does not focus on bottom line Markets to multiple audiences Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

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Relationship Marketing Focus is on moving the customers up the loyalty ladder to increase their lifetime value Interactive marketing creates direct communication with customers, allows larger exchanges, and puts the customer in control It is increasingly taking place on social media sites like Facebook, Twitter, and blogs Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

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Partnerships and Strategic Alliances Strategic alliances provide firms competitive advantage Forms of alliances Product development partnerships Vertical alliances Not-for-profits often raise awareness and funds through strategic partnerships Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Costs and Functions of Marketing Firms spend money (thereby incurring costs) to create utility Functions of marketing Exchange functions - Buying and selling Physical distribution functions - Transporting and storing Facilitating functions - Standardizing and grading, financing, risk taking, and securing marketing information Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Copyright © 2012 by South Western, a division of Cengage Learning Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.

Ethics and Social Responsibility Companies that promote ethics and social responsibility produce increased employee loyalty and customer growth Social responsibility programs are meant to enhance the society but help in improving public image of the firm Sustainable products and practices are goals of socially responsible firms Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.