CHAPTER 1Welcome to the

World of Marketing: Creating and

Delivering Value

M A R K E T I N GReal People, Real Choices

Fourth Edition

Michael R. Solomon Greg W. Marshall Elnora W. Stuart

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The Value of Marketing

Marketing is the adaptive process, in society and organizations, of collaborating to communicate, create, provide, and sustain value for customers through exchange relationships while meeting the needs of diverse stakeholders.

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Marketers do it to satisfy needs…

• Most successful firms practice the marketing concept– first identify consumer needs and then

provide products that satisfy those needs• A need is the difference between a consumer’s

actual state and some ideal or desired state– physical needs– psychological needs

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Aveeno

Aveeno satisfies a need by providing blemish-free skin

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Needs versus Wants

• A need is the difference between the actual and ideal states of being

• A want is a desire for a particular product used to satisfy that need

– wants are culturally and socially influenced

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Crest Whitestrips

Crest Whitestrips provide a benefit many consumers want today: whiter teeth

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A marketplace can take many forms

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Marketing Creates Utility

Time

Form Place

Possession

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What Can Be Marketed?

• Consumer Goods and Services

• Business-to-Business Goods and Services

• Not-for-Profit Marketing

• Idea, Place, and People Marketing

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Oregon Zoo

Non-profit organizations like zoos need to market themselves too!

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Providing Value to Stakeholders

• Competitive Advantage

• Distinctive Competency

• Value Chain

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Figure 1.1: A Value Chain for HP

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Value from Society’s Perspective

Some feel that marketers manipulate consumers, while others feel people should be responsible for their own choices.

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Marketing as a Process

• Marketing planning– What product benefits will our customers

be looking for in 3-5 years?– What capabilities does our firm have that

set it apart from the competition?– What additional customer groups might

provide important segments for us in the future?

– What legal issues may affect our business?

– Technology/Environment?

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Target Markets• Mass Market - all possible customers

regardless of differences in their specific needs and wants– developing a basic product and a single

strategy for everyone• Market segments - distinct groups of

customers within a larger market • A target market - an organization’s chosen

segment• Plan how the target market should perceive the

product in comparison to competitors’ brands - the market position

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Figure 1.3: The Marketing Mix

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Marketing Mix Decisions• Product

– What new products should we introduce?– What are our objectives with each product?– Which products should we phase out?– What type of service do our customers expect?

• Place– Where do our customers shop?– Should we sell directly to our customers?– How should we ship the product?

• Promotion– What are our promotion objectives?– What medium should we use?

• Price– What message does our price send?– Is our price consistent with our value?– Should we change our price?– How will our price affect demand?

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The Evolution of Marketing

Production Era

Selling Era

Consumer Orientation

New Era Orientation

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Ford

This 1949 Ford adillustrates the choicesawaiting people afterWorld War II.

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New Era Orientation

• Customer relationship management

• Social benefits

• Accountability

– Marketing metrics

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Oris

Oris gives back to the community by donating money to disabled people who want to learn how to fly an airplane

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Issues for Discussion_1

• Have you ever pirated software? How about music? Is it ethical to give or receive instead of paying for it?

• As a typical student, how does marketing satisfy your needs? What areas of your life are affected by marketing?

• Can you think of firms that still operate with a production orientation? A selling orientation? What changes would you recommend for these firms?