1. Welcome to the World of Marketing: Create and Deliver Value
Chapter 1
Welcome to the World of Marketing: Create and Deliver Value

2. 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 process
Understand the range of services and goods that organizations market
Understand value from the perspectives of customers, producers, and society
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

3. Real People, Real Choices: Decision Time at Ron Jon Surf Shop, Inc.
Which tactic should Ron use to advertise at airports?
Option 1: Focus advertising on rental cars by placing Ron Jon ads on maps and mirror hangers
Option 2: Advertise on wall-mounted backlit photographs (dioramas)
Option 3: Advertise on escalator “gateways”
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

4. Welcome to a “Brand You”
You are a product and have “market value” as a person
You “position” yourself for a job interview
Don’t “sell yourself short”
Personal image consultants often help people to devise a “marketing strategy”
Your choice of goods and services allows you to package and promote yourself
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

5. The Who and Where of Marketing
Marketers:
Are real people who make choices that affect themselves, their companies, and millions of consumers (see “Real People, Real Choices”)
Work cross-functionally within the firm
Enjoy exciting, diverse careers
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

6. The Value of Marketing Definition of marketing (AMA, 2007)
Marketing is 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.
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

7. Marketing Meets Needs
Marketing meets the needs of diverse stakeholders
Stakeholders are buyers, sellers, investors, community residents, citizens
Marketing concept
Identifying and satisfying consumer needs to ensure long-term profitability
The modern marketplace
Takes many forms, including a mall, eBay auction, e-commerce Web site
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

8. Marketing is about Creating Utility
Utility: The sum of the benefits we receive from using a product/service
Form utility
Place utility
Time utility
Possession utility
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

9. Marketing is about Exchange Relationships
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
Example: money, barter of services or goods, trade-ins
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

10. The Evolution of Marketing
The Production Era
Production orientation
The Sales Era
Selling orientation
The Relationship Era
Consumer orientation
Total quality management
The Triple Bottom Line Era
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

11. The Production Era Dominated by production orientation:
A management philosophy that emphasizes the most efficient ways to produce and distribute products.
Marketing played an insignificant role
Henry Ford’s Model T and Ivory soap are examples of products that were created under a production orientation
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

12. The Sales Era
When product availability exceeds demand, businesses may focus on a one-time sales of goods rather than repeat business
Dominated by selling orientation:
Managerial view of marketing as a sales function, or a way to move products out of warehouses to reduce inventory
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

13. The Relationship Era Focused on a customer orientation:
A management philosophy that emphasizes satisfying customers’ needs and wants
Marketing becomes more important in the firm
Total Quality Management (TQM) is widely followed in the marketing community
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

14. The Triple Bottom Line Era: Make Money and a Contribution
Focuses on building long-term bonds with customers
Triple orientation seeks to maximize the financial, social, and environmental bottom lines
Marketing uses customer relationship management (CRM)
CRM involves systematically tracking consumers’ needs in ways that also benefit society and delivers profit to the firm
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

15. The Triple Bottom Line Era: Make Money and a Contribution
Social marketing concept:
Management philosophy that marketers must satisfy customers’ needs in ways that also benefit society and deliver value to the firm
Sustainability:
Creating products that meet present needs and ensuring that future generations can have their needs met
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

16. The Triple Bottom Line Era: Make Money and a Contribution
Greater focus on accountability
ROI (Return on Investment) is the direct financial impact of a firm’s expenditure of resources such as time or money
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

17. What Can Be Marketed? From “serious” goods/services to fun things
Products mirror changes in popular culture
Marketing messages often communicate myths
Product: any good, service, or idea
Consumer goods/services
Business-to-business goods/services
Not-for-profit marketing
Idea, place, and people marketing
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

18. The Marketing of Value Value:
The benefits a customer receives from buying a good or service
Marketing communicates the value proposition:
A marketplace offering that fairly and accurately sums up the value that the customer will realize if he/she purchases product/service
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

19. Value from the Customer’s Perspective
Customer perspective:
Value is the ratio of costs (price) to benefits (utilities)
Value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself
Brand image is a critical component
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

20. Value from the Seller’s Perspective
Value for the seller takes many forms
Making a profitable exchange
Earning prestige among rivals
Taking pride in doing what a company does well
Nonprofits: motivating, educating, or delighting the public
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

21. Building Value Through Customers
Customers are now regarded as partners rather than victims
It is more expensive to attract new customers than to retain current ones
Calculating the lifetime value of a customer allows a firm to decide which customers are “worth keeping” vs. which should be “fired”
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

22. Providing Value Through Competitive Advantage
Creating a competitive advantage requires:
Identification of a distinctive competency: The ability of a firm to outperform the competition by providing customers with a benefit the competition cannot provide
Turning distinctive competencies into differential benefits
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

23. Adding Value Through the Value Chain
Value chain: A series of activities involved in designing, producing, marketing, delivering, and supporting any product
Inbound logistics
Operations
Outbound logistics
Marketing final product
Service
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

24. Consumer-Generated Value: From Audience to Community
Everyday people functioning in marketing roles such as:
Creating ads
Providing input into new product development
Serving as retailers
Social networking is growing explosively
Wisdom of crowds
Open source business models
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

25. Value from Society’s Perspective
Marketing transactions and company activities influence the world and add or subtract value from society
Stressing ethical or socially responsible decisions is often good business in the long run
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

26. The Dark Side of Marketing
Marketing is often criticized
Illegal practices do occur
Some marketing activities have detrimental effects on society
The dark side of marketing:
Terrorism, addictive consumption, exploitation, illegal activities, shrinkage, anticonsumption
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

27. Marketing as a Process
Marketing planning (thinking carefully and strategically about the big picture)
Analyzing the marketing environment
Developing a marketing plan
Deciding on a market segment
Choosing the marketing mix—product, price, promotion, and place
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

28. Real People, Real Choices: Decision Made at Ron Jon Surf Shop
Bill chose option 2
Implementation: Ron Jon tested the use of dioramas in the Orlando Airport at gate arrival and baggage claim areas. Survey data gathered at the Cocoa Beach store showed that shoppers noticed airport ads
Measuring Success: Distributed 7,500 shopper surveys; collected demographic and travel data (for non-residents)
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

29. Meet Richard of PaperBackSwap
Keeping It Real: Fast-Forward to Next Class Decision Time at PaperBackSwap
Meet Richard of PaperBackSwap
Firm is considering methods of building Web site traffic and customers for PaperBackSwap
The decision to be made: Which environmental trend should be used to propel the new service into the limelight?
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

30. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2009 Pearson Education, Inc.  
Publishing as Prentice Hall
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall