global strategic marketing introduction

Chapter 1Marketing’s Value to Consumers, Firms, and Society

At the end of this presentation, you should be able to:

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

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

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

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

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At the end of this presentation, you should be able to:

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

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.

8. Understand the important new terms.

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More than Selling or AdvertisingMore than Selling or Advertising

All Those All Those Bicycles!Bicycles!

The Management Job in Marketing

More than Selling and AdvertisingMore than Selling and Advertising

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Things a Firm Should Do in Producing a Bike

Themarketing mix

Themarketing mix

Predict WantsPredict Wants

Estimate DemandEstimate Demand

Predict WhenPredict When

Determine WhereDetermine Where

Estimate PriceEstimate Price

Decide PromotionDecide Promotion

Estimate CompetitionEstimate Competition

Provide ServiceProvide Service

Analyze NeedsAnalyze Needs

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Production vs. Marketing

Creates Customer SatisfactionCreates Customer Satisfaction

Marketing

Makes sure right goods & services are produced

Production

• Making Goods

• Performing Services

Production

• Making Goods

• Performing Services

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Marketing Is Important to You!

Important to every consumer!Important to every consumer!

Important to your job!Important to your job!

Affects innovation and standard of living

Affects innovation and standard of living

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Marketing Stimulates New Ideas

Courtesy of The Procter & Gamble Company.

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Marketing Affects Innovation

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What Is Marketing?

and

Macro ViewMacro View

• Social process

• Matches supply with demand

Micro ViewMicro View

• Set of activities

• Performed by individual organizations

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Marketing

KeyCharacteristics

KeyCharacteristics

Profit and NonprofitProfit and Nonprofit

More than PersuasionMore than Persuasion

Begins with Needs

Begins with Needs

Doesn’t Go It Alone

Doesn’t Go It Alone

Involves ExchangesInvolves

Exchanges

Builds Relationships

Builds Relationships

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Building Customer Relationships

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Macro-Marketing

KeyCharacteristics

KeyCharacteristics

Matches Producers and

Consumers

Matches Producers and

Consumers

Emphasis is on Whole System

Emphasis is on Whole System

Every Economy Needs It

Every Economy Needs It

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Can Mass Production Satisfy a Society’s Consumption Needs?

Economies of Scale - Lower Unit CostEconomies of Scale - Lower Unit Cost

UnitCost

$

ProducersProducers ConsumersConsumersMarketingFunctionsMarketingFunctions

Marketing Bridges the Gap!Marketing Bridges the Gap!Output

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Overcoming Spatial Separation

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Marketing Facilitates Production and Consumption (Exhibit 1-1)

Production Sector

Marketing needed to overcome

discrepancies and separations

Discrepancies of Quantity

Discrepancies of Assortment

Spatial Separation

Separation in Time

Separation of Information

Separation in Values

Separation of Ownership

Consumption Sector 1–16

Universal Functions of Marketing

MarketingFunctions

BuyingBuying SellingSelling

TransportingTransporting

StoringStoring

Standardization& Grading

Standardization& GradingFinancingFinancing

Risk TakingRisk Taking

MarketInformation

MarketInformation

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Who Performs Marketing Functions?

TransportFirms

ISP's

ProductTestingFirms

Ad Agencies

ResearchFirms

Wholesalers OtherSpecialists

Retailers

Consumers

Producers

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How Decisions are Made in an Economic System

OR

CommandEconomy

CommandEconomy

• Government officials decide

• May work well if:• Simple

economy• Little Variety• Adverse

Conditions

Market-Directed Economy

Market-Directed Economy

• Adjusts itself

• Price is value measure

• Freedom of choice

• Government’s role limited

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Model of a Market-Directed Macro-Marketing System (Exhibit 1-2)

Monitoring by government(s)and public interest groups

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Marketing’s Role Has Changed Over Time

Focus: Sell Surplus

Focus: Sell Surplus

Long-RunCustomer Satisfaction

Long-RunCustomer Satisfaction

Focus:

Focus: Increase Supply

Focus: Increase Supply

Focus: Beat Competition

Focus: Beat Competition

Focus: Coordinate and ControlFocus:

Coordinate and Control

Simple Trade EraSimple Trade Era

Production EraProduction Era

Sales EraSales Era

Marketing Department Era

Marketing Department Era

Marketing Company EraMarketing Company Era

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The Marketing Concept (Exhibit 1-3)

Profit (or another measure of long-term success) as

an objective

Total company

effort

Customer satisfaction

The MarketingConcept

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Creating Customer Satisfaction

Prestige Brands Holdings, Inc. 1–23

Checking Your Knowledge

A store that is popular with newlyweds runs a wedding gift registry. Five minutes before closing time on a Sunday, a young couple enters the store and wants to register—a process that usually takes 30 minutes or more. A sales associate advises the couple to come back when they have more time, even though a recent memo from the store’s regional manager specifically instructed store personnel to stay after closing time to help such customers. Which key element of the marketing concept is the main problem area in this situation?

A. Customer need

B. Total company effort

C. Customer satisfaction

D. Marketing orientation

E. Product orientation1–24

Adopting the Marketing Concept

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The Marketing Concept and Customer Value

Costs Benefits

Take Customer’s Point of View

Take Customer’s Point of View

Customer May Not Dwell on Value

Customer May Not Dwell on Value

Where Does Competition Fit?

Where Does Competition Fit?

Customer Value Builds Relationships

Customer Value Builds Relationships

Customer Value Reflects

Benefits and Costs

Customer Value Reflects

Benefits and Costs

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Costs, Benefits, and Customer Value(Exhibit 1-5)

Perceivedsuperior

value

Perceivedinferiorvalue

High

HighLow

Low

Costs target customer sees to obtain benefits

Benefits targetcustomer sees

in a firm’s goods and services

Custo

mer

’s pe

rceiv

ed fa

ir va

lue lin

e

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Interactive Exercise: Customer Value

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Which of the following statements, made by marketing managers, illustrates an understanding of the concept of customer value?

A. “It’s more important to acquire new customers than to retain old ones.”

B. “The only time it’s really necessary to demonstrate superior customer value is right before the actual sale.”

C. “My main concern is with meeting this month’s sales quota—I’ll worry about relationship building later.”

D. “I might think my product is a good value, but what really counts is if the customer thinks it’s a good value.”

E. “Customer value really boils down to which product is the least expensive.”

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A computer manufacturer is attempting to increase the customer value associated with purchases of its products. Which of the following might be a way to achieve this increase in value?

A. Reduce price.

B. Increase technical support for customers.

C. Increase warranty coverage.

D. Offer free shipping.

E. Any of the above, depending on the needs of the target market.

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Total Company Effort to Satisfy

Customers


Customers


Customers


Customers

Putting It All Together (Exhibit 1-6)

Build Profitable Customer

Relationships

Build Profitable Customer

Relationships

AttractCustomers

AttractCustomers

Offer Superior Customer ValueOffer Superior

Customer Value

SatisfyCustomers

SatisfyCustomersRetain CustomersRetain Customers

Increase Sales to Customers

Increase Sales to Customers

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The Marketing Concept Applies in Nonprofit Organizations

Newcomers to MarketingNewcomers to Marketing

Will “Satisfied Customers”

Offer Support?

Will “Satisfied Customers”

Offer Support?

The Bottom Line?

The Bottom Line?

May Not Be Organized for

Marketing

May Not Be Organized for

Marketing

Characteristics of Nonprofit

Organizations

Characteristics of Nonprofit

Organizations

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Government Marketing

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Marketing Concept Used by Nonprofit Services

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Social Responsibility


The Marketing Concept, Social Responsibility, and Marketing Ethics

Should All Consumer Needs Be Satisfied?

Should All Consumer Needs Be Satisfied?

What if Profits Suffer?

What if Profits Suffer?

Micro - MacroMicro - MacroDilemmaDilemma

The Marketing Concept Guides EthicsThe Marketing Concept Guides Ethics

Group Needs Individual Needs

Do All Marketers Act Responsibly?

Do All Marketers Act Responsibly?

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The Micro-Macro Dilemma

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You should now be able to:

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

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

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

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

1–38

You should now be able to:

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

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.

8. Understand the important new terms.

1–39

Key Terms

Production

Customer satisfaction

Innovation

Marketing

Pure subsistence economy

Macro-marketing

Economies of scale

Universal functions of marketing

Buying function

Selling function

Transporting function

Storing function

Standardization and grading

Financing

Risk-taking

Market information function

Intermediary

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Key Terms

Collaborators

E-commerce

Economic system

Command economy

Market-directed economy

Simple trade era

Production era

Sales era

Marketing department era

Marketing company era

Marketing concept

Production orientation

Marketing orientation

Customer value

Micro-macro dilemma

Social responsibility

Marketing ethics

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