Chapter 1 Ver 2e©2000 South-Western College Publishing1 Chapter 1 An Overview of Marketing Prepared by Deborah Baker Texas Christian University

Chapter 1 Ver 2e©2000 South-Western College Publishing2 1.Define the term marketing 2.Describe four marketing management philosophies 3.Explain how firms implement the marketing concept (continued) Chapter 1 Objectives

Chapter 1 Ver 2e©2000 South-Western College Publishing3 Chapter 1 Objectives (continued) 4.Describe the marketing process and identify the variables that make up the marketing mix 5.Describe several reasons for studying marketing

Chapter 1 Ver 2e©2000 South-Western College Publishing4 What is Marketing? All of the above, plus much more!  Personal Selling?  Advertising?  Making products available in stores?  Maintaining inventories?

Chapter 1 Ver 2e©2000 South-Western College Publishing5 What is Marketing? A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities, including: Products Services Pricing Promotion Distribution

Chapter 1 Ver 2e©2000 South-Western College Publishing6 “The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available…” Peter F. Drucker Management: Tasks, Responsibilities, Practices (New York: Harper & Row, 1973) What is Marketing?

Chapter 1 Ver 2e©2000 South-Western College Publishing7 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. What is Marketing?

Chapter 1 Ver 2e©2000 South-Western College Publishing8 The Concept of Exchange Desire to Deal With Other Party Freedom to Accept or Reject Something of Value Ability to Communicate Offer At Least Two Parties Necessary Conditions for Exchange

Chapter 1 Ver 2e©2000 South-Western College Publishing9 The Concept of Exchange  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

Chapter 1 Ver 2e©2000 South-Western College Publishing10 Marketing Management Philosophies  Production Orientation  Sales Orientation  Market Orientation  Societal Orientation

Chapter 1 Ver 2e©2000 South-Western College Publishing11 Philosophy Marketing Management Philosophies Key Ideas Production Sales Market Focus on aggressive techniques for overcoming customer resistance Societal Focus on efficiency of internal operations Focus on satisfying customer needs and wants Focus on satisfying customer needs and wants while enhancing individual and societal well-being

Chapter 1 Ver 2e©2000 South-Western College Publishing12 Marketing Management Philosophies  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 Market Concept

Chapter 1 Ver 2e©2000 South-Western College Publishing13 Marketing Management Philosophies  Top management leadership  A customer focus  Competitor intelligence  Interfunctional coordination Market Concept Requirements

Chapter 1 Ver 2e©2000 South-Western College Publishing14 Developing Competitive Advantage Create Customer Value Create Customer Value Build Long-Term Relationships Maintain Customer Satisfaction Maintain Customer Satisfaction Companies Create Competitive Advantage by Stressing Customer Importance

Chapter 1 Ver 2e©2000 South-Western College Publishing15 Developing Competitive Advantage Create Customer Value Create Customer Value  Offer products that perform  Give consumers more than they expect  Avoid unrealistic pricing  Give the buyer facts  Offer organization-wide commitment in service and support

Chapter 1 Ver 2e©2000 South-Western College Publishing16 Developing Competitive Advantage Maintain Customer Satisfaction Maintain Customer Satisfaction  Meet or exceed customer’s expectations  Focus on keeping customers satisfied  Provide solutions to customer’s problems

Chapter 1 Ver 2e©2000 South-Western College Publishing17 Developing Competitive Advantage  Forge long-term partnerships with customers  Develop customer-oriented personnel  Training  Empowerment  Teamwork  Use Internet as a tool Build Long-Term Relationships

Chapter 1 Ver 2e©2000 South-Western College Publishing18 Importance of Relationship Marketing Attracting a new customer may be FOUR TIMES the cost of keeping an old customer

Chapter 1 Ver 2e©2000 South-Western College Publishing19 Gather, analyze, interpret information about environment Understand organization’s mission and marketing’s role Conduct a market opportunity analysis Implement the marketing strategy Evaluate marketing efforts and make changes Develop a marketing strategy Marketing Activities

Chapter 1 Ver 2e©2000 South-Western College Publishing20 Marketing Strategy Organization Mission EvaluationEvaluation Market Opportunity Analysis Analysis Target Market Selection Selection Market Objectives Marketing Mix EnvironmentalScanningEnvironmentalScanning ImplementationImplementation The Marketing Process

Chapter 1 Ver 2e©2000 South-Western College Publishing21 The Marketing Process Activities in the Marketing Process Activities in the Marketing Process Environmental Scanning Organization Mission Market Opportunity Analysis Marketing Strategy Implementation Evaluation Target Market Marketing Mix

Chapter 1 Ver 2e©2000 South-Western College Publishing22 Social Forces Demographic Forces Economic Forces Technological Forces Political & Legal Forces Competitive Forces UncontrollableEnvironmentalInfluencesUncontrollableEnvironmentalInfluences Environmental Scanning

Chapter 1 Ver 2e©2000 South-Western College Publishing23 Why Study Marketing?  Plays an important role in society  Vital to business survival, profits, and growth  Offers career opportunities  Affects your life every day “Marketing is too important to be left to the marketing department.” --David Packard, Hewlett-Packard “Marketing is too important to be left to the marketing department.” --David Packard, Hewlett-Packard

Chapter 1 Ver 2e©2000 South-Western College Publishing24 Why Study Marketing?  Between a fourth and a third of the entire civilian workforce in the United States performs marketing activities  Fastest 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

Chapter 1 Ver 2e©2000 South-Western College Publishing25 Why Study Marketing?  Half of every dollar spent by consumers pays for marketing costs  Understand the buying process  Negotiate more effectively with sellers  Become a better-informed consumer  Be better prepared to demand satisfaction when products do not meet standards