Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Marketing Creating Value for Customers Gilbert A. Churchill, Jr. J. Paul Peter

Chapter 1 Marketing: Creating Value for Customers Marketing

1948 AMA What is Marketing Slide 1-1 Marketing is the performance of business activities directed towards, and incident to, the flow of goods and services from the producer to consumer or user. Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals AMA

Ability to Communicate Offer Desire to Deal With Other Party Freedom to Accept or Reject At Least Two Parties Slide 1-2 Necessary Conditions for Exchange The interchange of something of value between parties Exchange Process

Importance of Marketing Raw Materials and Production Research and Development Packaging Distribution Selling Expense Communications Entry level salaries range between $30,000 to $50,000 Slide 1-3

Major Types of Marketing TYPEDESCRIPTIONEXAMPLE Product Marketing designed to create exchange for tangible products Marketing designed to create exchanges for intangible products Marketing designed to create favorable actions toward persons Marketing designed to attract people to places Marketing designed to create support for ideas or issues or to get people to change socially undesirable behaviors Marketing designed to attract donors, members, participants or volunteers Strategies to sell Gateway computers Strategies by Hertz to rent cars to travelers Strategies to get votes for Bill Clinton Strategies to get people to vacation in Puerto Rico Strategies to get people to stop using illicit drugs Strategies to increase membership in the National Rifle Association Service Person Place Cause Organization Table 1.1 Slide 1-4

Levels of Marketing Analysis Macromarketing The study of marketing processes, activities, institutions, and results at a societal level. –Social responsibility –Business ethics Micromarketing The study of marketing processes and activities at organizational, product, or brand levels. –Product development –Product distribution –Product pricing Slide 1-5

Marketing Management Philosophies TYPEDESCRIPTIONEXAMPLE Production Focus on efficiency of internal operations (not wants and needs) Focus on aggressive selling techniques for overcoming customer resistance Focus on satisfying customer needs and wants, long-term profitability, and integrating all organizational functions while achieving organizational objectives. Focus on developing and delivering superior value to customers as a way to achieve organizational objectives. Make the best black car you can and people will buy it You don’t like the black car? I’ll throw in a free radio What type of car do you want? You will get a 5 year 100,000 mile warranty. This car is better than the one made 3 years ago. Sales Marketing Value Table 1.1 Slide 1-6

Stakeholders in Marketing Activities Society at Large OrganizationalActivities MarketingActivities Competitors Suppliers Resellers Govt. Agencies Employees Local Communities Special Interest Groups Lenders Owners Customers Figure 1.1 Slide 1-7

Creating Value for Customers Figure 1.3 Slide 1-8

The Consequences of Superior Customer Value Long Term Profitable Relationships Customer Loyalty Customer Satisfaction and Delight Superior Customer Value Figure 1.4 Slide 1-9

Transactional vs Relationship Marketing Transactional Marketing Strategy that focus on attracting new customers –individual isolated exchanges –making the sale Relationship Marketing Strategy that entails forging long-term partnerships with customers –offering value –providing satisfaction Slide 1-10

Marketing Management Implement and control MarketingActivities DevelopingMarketingMix Understanding Customers and Markets Develop Marketing Plan and Strategies Figure 1-5 Slide 1-11 The process of setting marketing goals for an organization and planning, implementing, and controlling strategies to meet them.

Marketing Plan Executive Summary Introduction Situation Analysis Competitive Analysis Marketing Planning Implementation and Control Summary Appendix References Slide 1-12

Slide 1-13 Target Market The portion of a market that an organization attempts to serve with its marketing mix. The group most likely to buy a firm’s product

Slide 1-14 Marketing Mix The strategic tools a firm uses to create value for customers and achieve organizational objectives. Elements created by management to satisfy mutually satisfying exchanges. Price Promotion Placement Product Four P’s

Price Promotion Placement Product Slide 1-15 Marketing Mix - Product Something offered by marketers to customers for exchange. It may be a good, service, or an idea. Target Market

Slide 1-16 Marketing Mix - Price The amount of money or other resources required to exchange for goods and services. Sometimes called rent, fee, tuition, toll, etc. Price Promotion Placement Product Target Market

Slide 1-17 Marketing Mix - Placement The channels of distribution used to get products and services to market. Including wholesalers and retailers. Price Promotion Placement Product Target Market

Slide 1-18 Marketing Mix - Promotion The personal and impersonal means used to inform, persuade, and remind customers about products and services. This includes advertising, sales promotion, publicity, and personal selling. Price Promotion Placement Product Target Market