When you finish this chapter, you should

2-2

Chapter 2 Objectives 1. Know what the

marketing concept is—and how it should affect strategy planning in a firm or nonprofit organization.

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

3. Understand what a marketing manager does.

4. Know what marketing strategy planning is—and why it is the focus of the book.

5. Understand target marketing.

6. Be familiar with the four Ps in a marketing mix.

7. Know the difference between a marketing strategy, a marketing plan, and a marketing program.

8. Understand the important new terms.

Simple Trade EraSimple Trade Era

Production EraProduction Era

Sales EraSales Era

Marketing DepartmentEra

Marketing DepartmentEra

Marketing CompanyEra

Marketing CompanyEra

Sell SurplusSell Surplus

Increase SupplyIncrease Supply

Beat CompetitionBeat Competition

Coordinate and ControlCoordinate and Control

Long-RunCustomer Satisfaction

Long-RunCustomer Satisfaction

Focus:

Focus:

Focus:

Focus :

Focus :

Marketing’s Changing Role

2-3

The Marketing Concept

Exhibit 2-1ProfitProfit

CustomerSatisfaction

CustomerSatisfaction

Total CompanyEffort

Total CompanyEffort

TheMarketingConcept

2-4

Marketing Orientation Sounds Easy,Isn’t

Even the “best” firms sometimes backslide into a production orientation

In today’s highly competitive markets it is often difficult to keep up with changing customer needs beat aggressive competitors to the punch find the right focus -- one that matches the

firm’s objectives and resources to market opportunities

offer customers superior value

2-5

Customer Value Reflects Benefits and Costs

Costs Benefits

Customer value concerns the difference between the benefits a customer sees from a firm’s market offering and the costs of obtaining those benefits

The customer’s view of costs and benefits is not just limited to economic (or even rational) considerations--and a low price may NOT result in superior value...

2-6

Customer Value

Costs Benefits

• One customer’s view of the benefits and costs of a firm’s market offering may vary from another customer’s view, so firm may not be able to satisfy everybody with the same offering.

• Customer value concept takes the customers point of view, but customers may not explicitly weigh costs and benefits and even if they do their view may not match some “objective” reality.

2-7

Nonprofits Need Marketing, Too

PoorlyOrganizedfor Marketing

PoorlyOrganizedfor Marketing

Non-CustomerSupport

Non-CustomerSupport

Non-EconomicMeasures

Non-EconomicMeasures

Characteristicsof NonprofitOrganizations

2-8

Exhibit 2-4

The Marketing Management Process

2-9

Whole-CompanyStrategicManagementPlanning

Whole-CompanyStrategicManagementPlanning

MarketingPlanning

MarketingPlanning

Implement MarketingPlan(s) and Program

Implement MarketingPlan(s) and Program

Control MarketingPlan(s) and Program

Control MarketingPlan(s) and Program

Adjust PlansAs Needed

Exhibit 2-52-10

Marketing Strategy PlanningTheMarketingMix

TheMarketingMix

C

2-11

The Four Ps of the Marketing Mix

Exhibit 2-7

Product Place

Price Promotion

C

ProductPhysical GoodsServiceFeaturesQuality LevelAccessoriesInstallationInstructionsWarrantyProduct LinesPackagingBranding

PlaceObjectivesChannel TypeMarket ExposureKinds of

MiddlemanKinds and

Locations of Stores

How to Handle Transporting and Storing

Service LevelsRecruiting

MiddlemenManaging

Channels

PromotionObjectivesBlendSalespeople Kind Number Selection Training MotivationAdvertising Targets Kinds of Ads Media Type Copy Thrust Who Prepares?Sales PromotionPublicity

PriceObjectivesFlexibilityLevel over PLCGeographic

TermsDiscountsAllowances

2-12

Exhibit 2-8

Strategy Decision Areas Organized by the Four Ps

Manufacturer or producer

Consumer

Procter &Gamble

DelMonte

NissanCitibank

Wholesaler

Wholesaler

Retailer

Wholesaler

RetailerRetailer

2-13

Exhibit 2-9

Four Examples of Basic Channels of Distribution for Consumer Products

Elements of the Marketing ProgramTargetMarket

MarketingMix

MarketingStrategy

Time-RelatedDetails

MarketingPlan

OtherMarketingPlans

A Firm’sMarketingProgram

+

+

+

=

=

=

2-14

Exhibit 2-11

Distribution of Different Firms Based on Performance

2-15

Exhibit 2-12

2% 2%14% 14%

TotalFailure

Poor Fair Good Exceptional

(Well belowaverage)

(Belowaverage)

(Well aboveaverage)

(Aboveaverage)

68%(AverageMarketingProgram)

Death-wishmarketing

Best-practicesmarketing

Nonprofit OrganizationsSocial ResponsibilityMarketing Management ProcessStrategic (Management) PlanningMarketing Strategy Target Market Marketing MixTarget MarketingMass MarketingChannel of Distribution

Simple Trade EraProduction EraSales EraMarketing

Department EraMarketing

Company EraMarketing ConceptProduction OrientationMarketing OrientationCustomer Value

Personal SellingMass Selling Advertising PublicitySales PromotionMarketing PlanImplementation Operational DecisionsMarketing

Program

Key Terms

2-16