3. Nature of Marketing
To create value by allowing people and organizations to obtain what they need and want

4. The Exchange Relationship
The act of giving up something (money, credit, labor, goods) in return for something else (goods, services, or ideas)

5. The Exchange Process: Giving Up One Thing in Return for Another

6. Marketing Creates Utility
Utility--a product’s ability to satisfy human needs and wants
Place
Time
Ownership
Form

7. Functions of Marketing
Buying
Selling
Transporting
Storing
Grading
Financing
Marketing research
Risk taking

8. The Marketing Concept
The idea that an organization should try to satisfy customer’s needs through coordinated activities that allow it to achieve its own goals (profit)
Did You Know?
Trying to determine a customer’s true needs
is difficult because no one fully understands
what motivates people to buy.

9. Evolution of the Marketing Concept
The production orientation
During the second half of the 19th century
The sales orientation
By the early part of the 20th century
The marketing orientation
By the 1950s

10. Marketing Orientation
Requires organizations to:
Gather information about customer needs
Share that information throughout the entire firm
Use that information to help build long-term relationships with customers

11. Developing Marketing Strategy
A plan of action for developing pricing, distributing and promoting products that meet the needs of specific customers
Two major components:
Selecting a target market
Developing the appropriate marketing mix

12. Selecting a Target Market
A group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas
Target market
A more specific group of consumers on whose needs and wants a company focuses its marketing effort

13. Total-Market Approach
The marketer tries to appeal to everyone and assumes that all buyers have the same needs

14. Target Market Strategies Total-Market Approach

15. Market Segmentation Market Segmentation:
A strategy to divide the total market into groups of people who have relatively similar product needs

16. Market Segment
A collection of individuals, groups, or organizations who share one or more characteristics and have similar product needs and desires

17. Minority Buying Power by Race,1990 versus 2003 & 2005

18. Niche Market
Narrow market segment focus when efforts are on one small, well-defined segment that has a unique, specific set of needs

19. Bases for Segmenting Markets
Demographic
Geographic
Psychographic
Behavioristic
Did You Know?
During its first year of operation, sales of Coca-Cola averaged just nine drinks per day for total first-year sales of $50. Today, Coca-Cola products are consumed at the rate of one billion drinks per day.

20. The Keys to Successful Market Segmentation
Consumers’ product needs must be heterogeneous
Segments must be identifiable and divisible
The market must be divided so segment sales, cost, and profit can be compared
One segment must have enough profit potential to justify a special marketing strategy
The chosen segment must be reached by the firm with a particular marketing strategy

21. Developing the Marketing Mix

22. Product
A good, service, or idea that has tangible and intangible attributes that provide satisfaction and benefit to consumers
Products should be sold at a profit

23. Price
A value placed on a product or service that is exchanged between a buyer and seller

24. Distribution
Making products available to consumers in the quantities and locations desired

25. Promotion
A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals and organizations to accept goods, services, and ideas

26. Marketing Research & Information Systems
A systematic, objective process of getting customer information to guide marketing decisions
Marketing information system
A framework for assessing information about customers from internal and external sources

27. Collecting Data Primary data Secondary data
Marketing information that is observed, recorded, or collected directly from respondents
Secondary data
Information that is compiled inside or outside an organization for some purpose other than changing the current situation

28. Buying Behavior
The decision processes and actions of people who purchase and use products

29. Psychological Variables of Buying Behavior
Perception
Motivation
Learning
Attitude
Personality

30. Social Variables of Buying Behavior
Social roles
Reference groups
Social classes
Culture

31. If you had an extra $1,000 to spend, what would you do with the money?
How America Spends
If you had an extra $1,000 to spend, what would you do with the money?
Source: “If you had an extra $1,000 to spend, what would you do with the money?,” USA Today, January 11, 2006, p.B1.

32. U.S. Chocolate Consumption
Chocolate consumed by Americans
11.7 lbs./person
Increase in sales (2003 vs. 1998)
11%
Favorite forms of chocolate
Reese’s Peanut Butter Cups
Kit Kat
Popable Pieces (such as M&Ms)
Source: Sandra Yin (2004) “Chock Full of Gold,” American Demographics, February 1, (accessed August 3, 2004).

33. Consumers Showing a Preference for Additional Ingredients in their Chocolate
Nuts
72%
Caramel
71%
Peanut Butter
64%
Crispies
56%
Cookies
50%
Coconut
47%
Mint Flavor
45%
Raisins
39%
Coffee Flavor
29%
None of these 2%
Source: Sandra Yin (2004) “Chock Full of Gold,” American Demographics, February 1, (accessed August 3, 2004).

34. The Marketing Environment
External forces that directly or indirectly influence the development of marketing strategies
Political
Legal
Regulatory
Social
Competitive
Economic, and technological

35. The Marketing Mix and the Marketing Environment

36. Obesity Share by Nation

37. Solve the Dilemma
What do you think were the main concerns with the Olympus 2-door sports coupe?
Is there a market for a 2-seat, $32,000 sports car when the Miata sells for significantly less?
Evaluate the role of the marketing mix in the Olympus introduction.
What are some of the marketing strategies auto manufacturers use to stimulate sale of certain makes of automobiles?

38. Explore Your Career Options
How will a career in marketing be enhanced by knowledge about customer buying behavior and customer service?

39. Additional Discussion Questions and Exercises
Utility is the ability of a product to satisfy human needs and wants.
What are the four kinds of utility?
Why are intermediaries helpful in distribution?
What are some different forms of promotion?
What is the difference between primary data and secondary data?
What are some sources for obtaining secondary data?

40. Chapter 12 Quiz
When a business segments markets on the basis of personality characteristics, motives, and lifestyles, that segmentation is based on
demographics
geographic factors
psychographics
behavioristic characteristics
The act of giving up one thing in return for something else is
marketing
utility
an exchange
promotion

41. Chapter 12 Quiz
The psychological factor described as “changes in a person’s behavior based on information and experience” is termed:
Perception
Motivation
Personality
Learning
In developing a marketing mix, what should be the central focus of all marketing activities?
Price
Buyer or target market
Product
Promotion

42. Multiple Choice Questions about the Video
The person responsible for helping the Pike Place Fish Market achieve such success is:
Emeril Lagassi
John Yokoyama
Frederick Taylor
Abraham Maslow
The only advertising done by Pike Place Fish Market is on:
QVC
Food TV
CNN
Its Web site