Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 1 An Overview of Marketing Prepared by Deborah Baker Texas Christian University Chapter 1

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 2 Learning Objectives 1.Define the term marketing 2.Describe four marketing management philosophies 3.Explain how firms implement the marketing concept 4.Describe the marketing process and identify the variables that make up the marketing mix 5.Describe several reasons for studying marketing

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 3 Learning Objective Define the term marketing 1 1 On Line On Line

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 4 What Is Marketing? All of the above, plus much more!  Personal Selling?  Advertising?  Making products available in stores?  Maintaining inventories? 1 1

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 5 What Is Marketing? A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities, including: Products Pricing Promotion Distribution 1 1

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 6 What Is Marketing? American Marketing Association Definition 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. 1 1

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 7 The Concept of Exchange The idea that people give up something to receive something they would rather have. 1 1

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 8 The Concept of Exchange Necessary Conditions for Exchange At Least Two Parties Something of Value Communication and Delivery Freedom to Accept or Reject Desire to Deal with Other Party 1 1

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 9  Exchange may not take place even if conditions are met  An agreement must be reached  Marketing occurs even if exchange does not take place NO SALE The Concept of Exchange 1 1

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 10 Learning Objective Describe four marketing management philosophies. 2 2

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 11CompetingPhilosophiesCompetingPhilosophies Production Sales Market Societal Marketing Marketing Management Philosophies 2 2

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 12 Orientation Key Ideas Production Sales Market Societal Focus on efficiency of internal operations Focus on satisfying customer needs and wants while meeting objectives Focus on satisfying customer needs and wants while enhancing individual and societal well-being Focus on aggressive sales techniques and believe that high sales result in high profits Marketing Management Philosophies 2 2

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 13 Achieving a Market 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 2 2 On Line On Line

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 14 Less toxic products More durable products Products with reusable or recyclable materials Less toxic products More durable products Products with reusable or recyclable materials Societal Marketing Orientation Marketing that preserves or enhances an individual’s and society’s long-term best interests 2 2

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 15 Learning Objective Explain how firms Implement the marketing concept 3 3

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 16 The 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. 3 3

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 17 The Marketing Concept  Focuses on customer wants and needs to distinguish products from competition  Integrates all organization’s activities to satisfy customer wants and needs  Achieves organization’s long-term goals by satisfying customer wants and needs 3 3

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 18 Customer Value The ratio of benefits to the sacrifice necessary to obtain those benefits 3 3

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 19 Customer Value Requirements  Offer products that perform  Give consumers more than they expect  Avoid unrealistic pricing  Give the buyer facts  Offer organization-wide commitment in service and after-sales support 3 3 On Line On Line

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 20 The feeling that a product has met or exceeded the customer’s expectations. Customer Satisfaction 3 3

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 21 Maintaining Customer Satisfaction  Meet or exceed customer’s expectations  Focus on delighting customers  Provide solutions to customer’s problems  Cultivate relationships, NOT one-time transactions 3 3 On Line On Line

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 22 Relationship Marketing The name of a strategy that entails forging long-term partnerships with customers, both individuals and firms. 3 3

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 23 Relationship Marketing Requirements for Building Relationships Requirements for Building Relationships Who are your customers? What do customers value? How do they prefer to interact? What do they want to buy? 3 3

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 24 Building Long-Term Relationships  Customer-oriented personnel  Effective training programs  Empowered employees  Teamwork 3 3 On Line On Line

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 25 Learning Objective Describe the marketing process and identify the variables that make up the marketing mix. 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 26 Marketing Process Activities Understand the organization’s mission Set marketing objectives Gather, analyze, interpret “SWOT” information Develop a marketing strategy Implement the marketing strategy Design performance measures Evaluate marketing efforts--change if needed 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 27 Marketing Plan Process 4 4 Marketing Strategy Product Promotion Distribution Price Marketing Mix Business Mission Statement Objectives Situation or SWOT Analysis Implementation Evaluation Control Target Market Strategy

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 28 Environmental Scanning Collection and interpretation of information about forces, events and relationships in the external environment that may affect the future of the organization or the marketing plan implementation. 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 29 Environmental Scanning  Examination of macroenvironmental forces  Social  Demographic  Economic  Technological  Political / Legal  Competitive  Helps identify market opportunities  Provides guidelines for design of marketing strategy 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 30 Defining the Business Mission  Answers the question, “What business are we in and where are we going?”  Focuses on the market(s) rather than the good or service 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 31 The activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets. Marketing Strategy 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 32 Appeal to the entire market with one marketing mix Target Market Selections Concentrate on one marketing segment Appeal to multiple markets with multiple marketing mixes 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 33 Price Marketing Mix: The “Four Ps” Promotion Place Product 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 34 Product Strategies  The starting point of the “4 Ps”  Includes physical unit, package, warranty, service, brand, image, and value Product 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 35 Distribution (Place) Strategies Place  Product availability where and when customers want them.  Involves all activities from raw materials to finished products 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 36 Promotion Strategies Promotion  Role is to bring about exchanges with target markets  Includes integration of personal selling, advertising, sales promotion, and public relations 4 4 On Line On Line

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 37 Pricing Strategies  The most flexible of the “4 Ps”  Price X Units Sold = Total Revenue Price 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 38 Following Up the Marketing Plan  Implementation  Evaluation - (Have objectives been achieved?) 4 4

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 39 Learning Objective Describe several reasons for studying marketing. 5 5

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 40 Why Study Marketing?  Plays an important role in society  Vital to business survival, profits and growth  Offers career opportunities  Affects your life every day 5 5

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 41 Why Study Marketing? “Marketing is far too important to be left only to the marketing department.” -- David Packard Hewlett-Packard “Marketing is far too important to be left only to the marketing department.” -- David Packard Hewlett-Packard 5 5

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 42  1/4th to 1/3rd of the civilian workforce in the U.S. performs marketing activities  Fast route up the corporate ladder Professional Selling Marketing Research Advertising Retail Buying Distribution Management Product Management Product Development Wholesaling Professional Selling Marketing Research Advertising Retail Buying Distribution Management Product Management Product Development Wholesaling Why Study Marketing? 5 5

Chapter 1 Essentials of Marketing 4e Lamb Hair McDaniel ©2005 South-Western/Thomson Learning 43  Half of every dollar spent pays for marketing costs  Better-informed consumers  Demand for customer satisfaction Why Study Marketing? 5 5