Welcome to the World of Marketing: Create and Deliver Value Ch 01 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Chapter Objectives Understand who marketers are, where they work and marketing’s role in the firm Explain what marketing is and how it provides value to everyone involved in the marketing process Explain the evolution of the marketing concept Understand the range of services and goods that organizations market Understand value from the perspectives of customers, producers, and society Explain the basics of market planning and the marketing mix tools we use in the marketing process 2

What is Marketing? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 3 Marketing is about delivering value to everyone who is affected by a transaction

Definition of Marketing Definition of Marketing (AMA, 2007) 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. 4

MARKETING Attempts to meet the needs of… stakeholders  Buyers  Sellers  Investors  General Public Marketing Meets Needs 5

NeedWant 8 Need: difference between an actual state and an ideal state Want: desire for a particular product used to meet a need

Needs, Wants, and Benefits Needs: Can be physical or psychological Wants: Desire to satisfy needs in specific ways Benefits: Outcome sought by consumer that satisfies need or want and motivates buying behavior Demand: Customers’ desires for products coupled with the resources needed to obtain them 6

Want Need 9

Marketing Concept Satisfying consumer needs to ensure long-term profitability. Successful marketers first identify needs and then provide products to satisfy those needs. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7

Form Marketing Creates: Utility/Benefits Place Time Possession Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 10

Marketing and Exchange Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 11

GOODS PAYMENT MarketerCustomer Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Exchange 12

Marketing and Exchange An exchange occurs when something is obtained for something else in return, like cash for goods or services Buyer receives an object, service, or idea that satisfies a need Seller receives something of equivalent value An “exchange” relationship is at the heart of every marketing act.

Exchange might not take place EVEN if conditions are met. An agreement must be reached. Marketing occurs even if exchange does not take place. 1 Note: Marketing & Exchange

Production Era Triple Bottom Line Era TIMELINE Sales Era Relationship Era Evolution of a Concept Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 13

Production Era Suited to a sellers’ market where the buyer has to take what is available. “If you build it they will come…” Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 14

Sales Era 15  What the firm makes  Inward looking  Disregards market needs/consumer demand  Despite the quality of sales force, often cannot convince people to buy what is not wanted/needed Versus “Relationship or Marketing Focus”  What the market wants  Outward looking Hard-sell approach when product availability exceeds demand

(Market Orientation) Focus on meeting buyers’ needs and wants for the long run Relationship Era Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 16  Focusing on customer wants and needs to distinguish products from competitors’ offerings  Integrating the organization’s activities to satisfy these wants  Achieving the organization’s long-term goals by satisfying customer wants and needs legally and responsibly 18

(Societal Orientation) An organization exists not only to satisfy customer wants but also to preserve or enhance individuals’ and society’s long-term best interests. Focus is on maximizing 3 components: Triple Bottom Line Era Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Financial-profit Social-communities Environmental-green 17

Products: What are they? Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 18

Consumer Goods Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 19 Items purchased for personal or family use-- food, beverages, clothing, lessons, cars, haircuts, copy services, etc.

B2B Goods Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 20 Industrial goods such as raw materials or component parts. May also include finished goods sold for resale, or goods and supplies used in operating a business.

Museums, zoos, religious organizations, etc. Not-for-Profit Marketing Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 21

To the Consumer To the Seller Marketing of Value Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 23 Value- Factors such as quality, price, convenience, service, etc. Buyers weigh the importance of each element differently. Marketers need to understand which factors are important to their customers so that they can provide strong value.. There is also value to sellers-profit and satisfaction of outperforming competitors and doing a job well.

Competitive Advantage Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 24 A firm’s distinct competency. The ability to provide their customers with a benefit that their competitors cannot. Netflix developed the convenient mail/return approach to DVD distribution and later online streaming of movies to effectively compete with traditional video rental outlets.

Value Chain Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 25 A series of activities involved in designing, producing, marketing, delivering, and supporting any product

Figure 1.2 Steps in the Value Chain 26

Value (supply) Chain Inbound Logistics Bring in raw materials Operations Make final product Outbound Logistics Ship out final product Marketing/ Sales Sell the final product Service Provide needed customer support Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 27

VALUE Consumer Generated Value Give input to product design Give online reviews Discuss product on social networking sites Give online advice tutorials Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 28

Marketing activities influence the world Society and Value Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall Marketing can add or subtract value from society. Socially responsible marketing is good business in the long run.

Dark Side of Marketing Deceptive advertising Sweatshops, Shoplifting Addictive consumption Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Marketing Is a Process Marketing planning is a major portion of the process and involves: Analyzing the marketing environment Developing a marketing plan Deciding on a market segment Choosing the marketing mix—product, price, promotion, and place 32

Figure 1.3 The Marketing Mix 33 What the firm uses to create a desired response among its target market Referred to as the 4 Ps Each of the 4 Ps is a piece of the puzzle needed to successfully market the product

Copyright © 20112Pearson Education, Inc. Publishing as Prentice Hall

Product Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 34 A good, service, idea, place - whatever is offered for sale in the exchange

Price Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall The amount the consumer must give to receive the product

Promotion Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall All activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products. Includes advertising, selling, publicity, and sales promotion.

Place Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall …AND finally, the availability of the product to the customer at the desired time and location. Relates to a supply chain- or firms that work to get products from producers to consumers