A Global Managerial Approach

Basic MarketingBasic Marketing

CHAPTER ONECHAPTER ONE

Marketing’s Value to Consumers, Firms, and Society

CHAPTER ONECHAPTER ONE

Marketing’s Value to Consumers, Firms, and Society

1. Know what marketing is and why you should learn about it.

2. Understand the difference between micro-marketing and macro-marketing.

3. Know the marketing functions and why marketing specialists—including intermediaries and facilitators—develop to perform them.

4. Understand what a market-driven economy is and how it adjusts the macro-marketing system.

5. Know what the marketing concept is—and how it should guide a firm or nonprofit organization.

When we finish this lecture you should

6. Understand what customer value is and why it is important to customer satisfaction.

7. Know how social responsibility and marketing ethics relate to the marketing concept.

When we finish this lecture you should

More than Selling and AdvertisingMore than Selling and Advertising

More than Selling and AdvertisingMore than Selling and Advertising

All Those Bicycles!All Those Bicycles!

Marketing—What’s It All About?

Analyze NeedsAnalyze NeedsAnalyze NeedsAnalyze Needs

Predict WantsPredict WantsPredict WantsPredict Wants

Estimate DemandEstimate DemandEstimate DemandEstimate Demand

Predict WhenPredict WhenPredict WhenPredict When

Determine WhereDetermine WhereDetermine WhereDetermine Where

Estimate PriceEstimate PriceEstimate PriceEstimate Price

Decide PromotionDecide PromotionDecide PromotionDecide Promotion

Estimate CompetitionEstimate CompetitionEstimate CompetitionEstimate Competition

Provide ServiceProvide Service

Things a Firm Should Do in Producing a Bike

Creates Customer SatisfactionCreates Customer Satisfaction

Marketing

Makes sure right goods & services are produced

Production

• Making Goods

• Performing Services

Production vs. Marketing

Types of Utility and How They Are Provided

Provided by marketingProvided by production withguidance of marketing

Task

Time

Place

Possession

UtilityValue that comesfrom satisfyinghuman needs

Form

Exhibit 1-1

Interactive Exercise: Utility

Important to every consumer!Important to every consumer!Important to every consumer!Important to every consumer!

Important to your job!Important to your job!Important to your job!Important to your job!

Affects economic growth and standard of living!Affects economic growth and standard of living!

Marketing Is Important to You!

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Marketing Stimulates New Ideas

OR

MacroMacro

• Social process

• Matches supply with demand

MicroMicro

• Set of activities

• Performed by organizations

What Is Marketing?

Profit and NonprofitProfit and NonprofitProfit and NonprofitProfit and Nonprofit More than PersuasionMore than Persuasion

Begins with NeedsBegins with Needs

Doesn’t Go It AloneDoesn’t Go It Alone

Involves ExchangesInvolves Exchanges

Builds RelationshipsBuilds Relationships

Focus of Your TextFocus of Your Text

Involves ExchangesInvolves Exchanges

More than PersuasionMore than Persuasion

Begins with NeedsBegins with Needs

Builds RelationshipsBuilds Relationships Doesn’t Go It AloneDoesn’t Go It Alone

Micro-Marketing

KeyCharacteristicsKeyCharacteristics

Building Customer Relationships

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Every Economy Needs ItEvery Economy Needs ItEmphasis on Whole SystemEmphasis on Whole System

KeyCharacteristicsKeyCharacteristics

Matches Producers and ConsumersMatches Producers and Consumers

Emphasis on Whole SystemEmphasis on Whole System Every Economy Needs It

Macro-Marketing

ProducersProducers ConsumersConsumersMarketingFunctionsMarketingFunctions

Marketing Bridges the Gap!Marketing Bridges the Gap!

Cost $

Output

Economies of Scale Lower CostEconomies of Scale Lower Cost

Can Mass Production Satisfy a Society’s Consumption Needs?

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Overcoming Spatial Separation

MarketingFunctions

BuyingBuying SellingSelling

TransportingTransporting

StoringStoring

Standardization& GradingStandardization& GradingFinancingFinancing

Risk TakingRisk Taking

BuyingBuying SellingSelling

TransportingTransporting

StoringStoring

Standardization& GradingStandardization& GradingFinancingFinancing

Risk TakingRisk Taking

MarketInformationMarketInformation

The Universal Functions of Marketing

TransportFirms

ISP's

ProductTestingFirms

Ad Agencies

ResearchFirms Consumers

Producers Wholesalers OtherSpecialists

Retailers

Who Performs Marketing Functions?

OR

Planned Economic System

Planned Economic System

• Government planners decide

• Can work well if:

• Simple economy

• Adverse Conditions

Market-Directed System

Market-Directed System

• Adjusts itself

• Price is value measure

• Freedom of choice

• Government’s role limited

How Decisions Are Made in an Economic System

Sell SurplusSell SurplusFocus:

Simple Trade EraSimple Trade Era

Increase SupplyIncrease Supply

Sell SurplusSell SurplusSimple Trade EraSimple Trade Era

Focus:Production EraProduction Era

Focus:

Increase SupplyIncrease Supply

Beat CompetitionBeat Competition

Production EraProduction Era

Focus:Sales EraSales Era

Focus:

Sales EraSales EraBeat CompetitionBeat Competition

Coordinate and ControlCoordinate and ControlFocus:

Marketing Department EraMarketing Department Era

Focus:

Marketing’s Role Has Changed Over Time

Marketing Department EraMarketing Department EraCoordinate and ControlCoordinate and Control

Marketing Company EraMarketing Company Era Long-RunCustomer SatisfactionLong-RunCustomer SatisfactionFocus:

Focus:

TheMarketingConcept

Customer Satisfaction

Total Company Effort

Profit

The Marketing ConceptExhibit 1-4

Creating Customer Satisfaction

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Adoption of the Marketing Concept

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Take Customer’s Point of ViewTake Customer’s Point of ViewTake Customer’s Point of ViewTake Customer’s Point of View

Customer May Not Dwell On ValueCustomer May Not Dwell On ValueCustomer May Not Dwell On ValueCustomer May Not Dwell On Value

Where Does Competition Fit?Where Does Competition Fit?Where Does Competition Fit?Where Does Competition Fit?

Customer Value Builds RelationshipsCustomer Value Builds Relationships

The Marketing Concept and Customer Value

Costs Benefits

Interactive Exercise: Customer Value

Superior Customer ValueSuperior Customer Value

Total Company Effort to Satisfy Customers

Total Company Effort to Satisfy Customers

Superior Customer ValueSuperior Customer Value

Total Company Effort to Satisfy Customers

Total Company Effort to Satisfy Customers

Customer AcquisitionCustomer Acquisition

Customer SatisfactionCustomer SatisfactionCustomer SatisfactionCustomer Satisfaction

Customer RetentionCustomer Retention

Customer AcquisitionCustomer Acquisition

Putting It All Together

Customer RetentionCustomer Retention

Profitable Relationships with Customers

Profitable Relationships with Customers

Support and “Satisfied Customers”Support and “Satisfied Customers”Support and “Satisfied Customers”Support and “Satisfied Customers”

May Not Be Organized for Marketing May Not Be Organized for Marketing May Not Be Organized for Marketing May Not Be Organized for Marketing

The Bottom LineThe Bottom LineThe Bottom LineThe Bottom Line

Characteristicsof Nonprofit Organizations

Characteristicsof Nonprofit Organizations

Newcomers to MarketingNewcomers to MarketingNewcomers to MarketingNewcomers to Marketing

The Marketing Concept Applies in Nonprofit Organizations

Marketing Concept Provides FocusMarketing Concept Provides Focus

Government Marketing

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Social ResponsibilitySocial ResponsibilitySocial ResponsibilitySocial Responsibility

Should All Needs Be Satisfied?Should All Needs Be Satisfied?Should All Needs Be Satisfied?Should All Needs Be Satisfied?

What if Profits Suffer?What if Profits Suffer?

Micro-Macro Micro-Macro DilemmaDilemma

The Marketing Concept, Social Responsibility, and Marketing Ethics

The Marketing Concept Guides EthicsThe Marketing Concept Guides Ethics

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Group Needs Individual Needs

• Production

• Customer satisfaction

• Utility

• Form utility

• Task utility

• Time utility

• Place utility

• Possession utility

• Innovation

• Micro-marketing

• Pure subsistence economy

• Macro-marketing

• Economies of scale

• Universal functions of marketing

• Buying

• Selling

• Transporting

• Storing

• Standardization and grading

Key Terms

• Financing

• Risk-taking

• Market information

• Intermediary

• Middleman

• Facilitators

• E-commerce

• Economic system

• Planned economic system

• Market-directed economic system

• Simple trade era

• Production era

• Sales era

• Marketing department era

• Marketing company era

• Marketing concept

• Production orientation

• Marketing orientation

• Customer value

Key Terms

• Micro-macro dilemma

• Social responsibility

• Marketing ethics

Key Terms