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

2. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-2 Chapter Objectives 1.Define Marketing and how customers are created and retained. 2.Understand who marketers are, where they work, and marketing’s role in a firm 3.Discuss the four eras in the history of marketing. 4.Introduce the concept of Relationship Marketing. 5.Describe the five types of nontraditional marketing. 6.Briefly discuss E-marketing 7.Demonstrate the relationship between ethical marketing practices and marketplace success.

3. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-3 A Definition of Marketing Marketing: the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives. Basic Goal of Marketing – to create and retain customers

4. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-4 How to Create and Retain Customers: 1.Identify customer needs 2.Develop goods, services, and ideas (Products) that meet those needs 3.Communicate information about those goods and services to prospective buyers (Promotion) 4.Make the goods or services available at times and places that meet customers’ needs (Distribution or Place) 5.Price goods and services to reflect costs, competition, and customers’ ability to buy 6.Provide for the necessary service & follow-up to ensure customer satisfaction after the purchase

5. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Copyri ght 2009 Pearso n Educat ion, Inc. Publis hing as Prentic e Hall 1-5 Figure 1.3 The Marketing Mix

6. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Copyri ght 2009 Pearso n Educat ion, Inc. Publis hing as Prentic e Hall 1-6 Marketing as a Process Marketing planning - thinking carefully and strategically about the big picture of marketing 1.Analyzing the marketing environment 2.Developing a marketing plan 3.Deciding on a market segment 4.Choosing the marketing mix—product, price, promotion, and place

7. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Copyri ght 2009 Pearso n Educat ion, Inc. Publis hing as Prentic e Hall 1-7 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 value: Money (usually), barter of services or goods, or trade- ins or some combination

8. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Marketing Roles & Positions Marketers: Are real people who make choices that affect themselves, their companies, and millions of consumers Work cross-functionally within the marketing division and the firm as a whole Enjoy rewarding, diverse careers: See table 1.1 on pages 7-8

9. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-9 EraApproximate Time Period Prevailing Attitude ProductionPrior to 1920s“A good product will sell itself.” Produce efficiently in volume SalesPrior to 1950s“Creative advertising & selling will convince customers to buy.” One sale at a time MarketingSince 1950s“The consumer is king!” Find a need and fill it. Relationship1990s - recently“A Long-term relationship with customers will lead to success.” Four Eras in the History of Marketing

10. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-10 A 5 th Era is emerging: The Triple Bottom Line Era Triple orientation means seeking to maximize the financial, social, and environmental bottom lines. Hmmmm…. Focuses on building long-term bonds with customers Make money and a contribution to society

11. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-11 The World Has Evolved From Transaction-Based Marketing to Relationship Marketing  Transaction–based marketing (Simple exchanges)  Relationship marketing Lifetime value (LTV) of a customer Converting new customers to advocates or “evangelists”

12. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-12 Relationship Marketing – Moving Customers Though Stages 1.New Customers  2.Regular Purchasers  3.Loyal Supporters  4.Advocates! Q. Have you been moved through these stages and are now an advocate for any product?

13. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Copyri ght 2009 Pearso n Educat ion, Inc. Publis hing as Prentic e Hall 1-13 What Can Be Marketed? All Products: Any good, service, or idea Consumer goods/services Business-to-business goods/services Not-for-profit organizations and services This course will focus on “traditional” marketing, but we’ll touch upon “nontraditional” marketing along the way

14. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-14 Traditional vs. Nontraditional Marketing “Traditional” Marketing refers to product and service marketing done by for-profit companies. The majority of marketing done in the world “Nontraditional” Marketing refers to either for- profit or non-profit organizations marketing a… 1.Person 2.Place 3.Cause 4.Event 5.Organization

15. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-15 5 Types of Nontraditional Marketing 1. Person Marketing Efforts to cultivate the attention, interest, and preferences of a target market toward a celebrity or authority figure

16. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-16 2. Place Marketing Attempt to attract customers to particular areas Ex: Michigan ad promotes the State as a good business location

17. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-17 An Example of Place Marketing Advertisement

18. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-18 3. Cause Marketing Identification and marketing of a social issue, cause, or idea to Selected target markets 2 Examples of Cause Marketing Advertisements

19. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-19 4. Event Marketing The marketing of sporting, cultural, and charitable activities to selected target markets

20. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-20 5. Organization Marketing Involves attempts to influence other to accept the goals of, receive the services of, or contribute in some way to an organization. Boy Scouts of America ad targets volunteers as one of its multiple publics

21. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-21 Nontraditional Marketing Summary Chart Nontraditional Marketing Summary Chart

22. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-22 E-Marketing Online Shopping Auction sites (e-Bay) E-mail / database marketing Online newsletters & blogs Social Media such as Facebook & Twitter

23. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-23 Marketing Ethics Top Oxymorons of all time: Government OrganizationSame Difference Tight SlacksPeace Force Pretty UglyHead Butt Dodge RamJumbo Shrimp Q. Should “Marketing Ethics” be on this list?

24. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Copyri ght 2009 Pearso n Educat ion, Inc. Publis hing as Prentic e Hall 1-24 The Dark Side of Marketing Marketing is often criticized, especially personal selling and advertising Some marketing activities have detrimental effects on society (higher prices?) Illegal and immoral practices do occur  Deception and flat out lying!  Intrusion of privacy, online and in person  Annoying, both in person and via media  Pressure beyond reason; manipulation?  “Creating Demand”….especially kids, seniors, and others not of full capacity

25. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Copyri ght 2009 Pearso n Educat ion, Inc. Publis hing as Prentic e Hall 1-25 It’s Debatable Class Discussion Question Some people feel that marketers manipulate consumers, while others argue that people should be held responsible for their own choices. This ad is critical of the current trend of lawsuits brought against fast-food companies by people who blame their health problems on the fast food industry. Where do you stand? Visit ConsumerFreedom.comConsumerFreedom.com

26. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-26 Why Behave Ethically? Ethical Behavior Will Result in: Increased Customer Loyalty/Advocacy = $’s Increased Employee Morale/Loyalty = $’s Better Public Image = sales increases = $’s Feeling good about doing the right thing

27. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-27 Marketing Ethics Let’s play a Little Game… 1.Two people have $100 to divide 2.The first person decides how they would like to divide the money. He/She can only make one proposal. 3.The second person can either accept the amount proposed or both parties get nothing