© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1: Customer-Driven Strategic Marketing Pride/Ferrell Foundations of Marketing Fourth Edition Prepared by Milton Pressley University of New Orleans

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Objectives 1.Define marketing 2.Understand several important marketing terms including target market, marketing mix, marketing exchanges, and marketing environment 3.Be aware of the marketing concept and marketing orientation 4.Understand the importance of building customer relationships 5.Explain the major marketing functions that are a part of the marketing management process 6.Understand the role of marketing in our society

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Defined Marketing is the process of creating, distributing, promoting, and pricing goods, services, and ideas, to facilitate satisfying exchange relationships with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Fig. 1.1 Components of Strategic Marketing

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Discussion Question 1.What do you think is the difference between “marketing” and “selling”? 2.Why do you think the term “marketing” is used interchangeably with “selling” by many (most?) business people?

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Who is the Focus of Marketing? Customers The purchasers of organizations’ products; the focal point of all marketing activities. –The Target Market Old Navy focuses on its target market to meet their needs Who is their target market?

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Target Market Target Market-is a specific group of customers on whom an organization focuses its marketing efforts. Appealing to health- conscious customers

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Discussion Question What do you think might be a good target market for Michelin Tires? After discussing this, click on symbol below to see the target markets defined by Michelin.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Marketing Mix Variables Marketers combine and balance four elements when determining how to satisfy customers’ needs for a product: Product Price Distribution Promotion

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Product Variable A product can be a: –Good –Service –Idea Product Petzl’s ad focuses on the quality, comfort, and reliability of its climbing helmet

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Price Variable Relates to decisions and actions associated with establishing pricing objectives and policies Relates to determining product prices Determines the value of the exchange Price The Mini Cooper is promoted as being both affordable to buy and economical on fuel

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Distribution Variable Make products available in quantities desired Minimize costs: –Inventory –Transportation –Storage Select/motivate intermediaries Establish/maintain inventory control Develop/manage transportation and storage systems

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Promotion Variable Inform individuals or groups about the organization and its products/services –Advertising –Public relations –Personal selling –Promotions –Street teams –Viral marketing

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Discussion Question Other than those discussed in the book or by your instructor, give an example of a: - good - service - idea

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Discussion Question Click on the Television below, watch the commercial, and discuss whether the promotional message is primarily about a good, service or an idea.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Relationships with Customers Exchange - the provision or transfer of goods, services, or ideas in return for something of value

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Stakeholders Constituents who have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry, and outcomes. The Customer as a Stakeholder Yoplait donates to breast cancer research.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Environment The six types of forces that surround the customer and affect the marketing mix: –Economic forces –Political forces –Legal and regulatory forces –Technological forces –Socio-cultural forces –Competitive forces Unlike marketing-mix variables, an organization has no control over these forces

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Discussion Question Pick a product that you want to market. Discuss how each of the forces in the marketing environment will effect your marketing mix.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Marketing Concept A managerial philosophy that an organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals. The Marketing Concept SSI understands the importance of a customer orientation by listening to customers and providing great service

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Evolution of the Marketing Concept The marketing concept has changed over time:

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Orientation An organization-wide commitment to researching and responding to customer needs.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Implementing the Marketing Concept First, establish an information system to discover customers’ real needs Use the information to create satisfying products Coordinate all activities

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Managing Customer Relationships Relationship Marketing –Establishing long term mutually satisfying, buyer/seller relationships.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Customer Relationship Marketing (CRM) Using information about customers to create marketing strategies that develop and sustain desirable customer relationships.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Value-Driven Marketing Value-a customer’s subjective assessment of benefits relative to costs in determining the worth of a product. Customer Benefits Customer Costs Value = –

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Management The process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Why Marketing Plays An Important Role in Our Global Economy Marketing Consumes Large Proportion of Buyers’ Dollars Is Used by Non-Profits Is Important to Business and the Economy Fuels the Global Economy EnhancesConsumerAwareness Connects People through Technology Promotes Welfare of Consumers and Society Creates Career Prospects

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. After Reviewing This Chapter You Should: 1.Be able to define marketing 2.Understand several important marketing terms including target market, marketing mix, marketing exchanges, and marketing environment 3.Be aware of the marketing concept and marketing orientation 4.Understand the importance of building customer relationships 5.Explain the major marketing functions that are a part of the marketing management process 6.Understand the role of marketing in our society

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Key Concepts Marketing Customers Target market Marketing mix Products Exchanges Stakeholders Marketing environment Marketing concept Marketing orientation Relationship marketing Customer relationship management (CRM) Value Marketing management