Chapter 01 - Overview of Marketing

Chapter 1
Overview of Marketing
CHAPTER OVERVIEW (SMMI!" P#$
What is the role of marketing in organizations?
In definition form, Marketing is an organizational function and a set of processes for
creating, communicating, and delivering value to customers and for managing customer
relationships in was that !enefit the organization and its stakeholders"# Marketing
strives to create value in man was" If marketers are to succeed, their customers must
!elieve that the firm$s products and services are valua!le% that is, the are worth more to
the customers than the cost"
Marketers also enhance the value of products and services through various forms of
communication, such as advertising and personal selling" &hrough communications,
marketers educate and inform customers a!out the !enefits of their products and services
and there! increase their perceived value" Marketers facilitate the deliver of value !
making sure the right products and services are availa!le when, where, and in the
'uantities their customers want" (etter marketers are not concerned a!out )ust one
transaction with their customers% the recognize the value of loal customers and strive to
develop long-term relationships with them"
How do marketers create value for a product or service?
*alue represents the relationship of !enefits to costs" +irms can improve their value !
increasing !enefits, reducing costs, or !oth" &he !est firms integrate a value orientation
into everthing the do" If a move doesn$t increase !enefits or reduce costs, it pro!a!l
shouldn$t occur" Marketers also have found that providing good value is one of the !est
was to maintain a sustaina!le advantage over their competitors" +irms !ecome value
driven ! finding out as much as the can a!out their customers and those customers$
needs and wants" &he share this information with their partners, !oth up and down the
suppl chain, so the entire chain collectivel can focus on the customer" &he ke to true
value-!ased marketing is the a!ilit to design products and services that achieve the right
!alance !etween !enefits and costs,not too little, not too much" +inall, value-!ased
marketers aren$t necessaril worried a!out how much mone the will make on the ne-t
sale" Instead, the are concerned with developing a lasting relationship with their
customers so those customers return again and again"
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Chapter 01 - Overview of Marketing
Why is marketing important both within and outside the firm?
&he marketing function is important !oth within and outside the firm" Man !rands and
stores now appear in multiple countries, which complicates the challenge for marketers"
.uccessful firms integrate marketing throughout their organizations so that marketing
activities coordinate with other functional areas such as product design, production,
logistics, and human resources" Marketing also helps facilitate the smooth flow of goods
through the suppl chain, all the wa from raw materials to the consumer" +rom a
personal perspective, the marketing function facilitates our !uing process, and
knowledge of marketing will help ou in virtuall an career ou ma decide to pursue"
Marketing also can !e important for societ through its em!race of solid, ethical !usiness
practices" +or instance, a firm clearl has done the right thing# when it sponsors
charita!le events, !ut that effort also helps endear customers to the firm" +inall,
marketing is a core cornerstone of entrepreneurialism" /n entrepreneurial spirit pervades
the marketing decisions of firms of all sizes"
I% WHAT IS MAR&ETI!"' (PPT S(I)E 1*+,-,.$
/" &he /merican Marketing /ssociation states that Marketing is the activit, set of
institutions, and processes for creating, capturing, communicating, delivering, and
e-changing offerings that have value for customers, clients, partners, and societ at
large"#
1" 0ood marketing re'uires careful planning with an emphasis on ethical
implications"
+irms develop a marketing plan that specifies the marketing activities for a
specific period of time"
1" 2-hi!it 1"1 illustrates the core aspects of marketing"
(" Marketing is a!out satisfing customer needs and wants"
1" (roadl, the marketplace refers to the world of trade !ut it can !e divided into
segments"
1" Marketers carefull seek out potential customers who have !oth an interest in
the product and an a!ilit to !u it"
2ach part to the e-change gives up something of value3 &he customer usuall gives
up mone% however, sometimes the also give up time and information" &he firm
gives up the good or service" &he e-change in the end is mutuall !eneficial"
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Chapter 01 - Overview of Marketing
C" Marketing entails an e-change"
1" Marketing is a!out an e-change 4 a trade of things of value !etween the !uer
and the seller so that each is !etter off as a result"
1" 2-hi!it 1"1 depicts how sellers provide products, communicate and facilitate
deliver and !uers complete the e-change ! giving mone and information
to the seller"
&his is an overview of the 56$s
7" Marketing re'uires product, price, place, and promotion decisions"
1" Marketing traditionall has !een divided into a set of four interrelated
decisions known as the marketing mi- or four 6s" 2-hi!it 1"8 defines the four
6s"
6roduct
6rice
6lace
6romotion
1" 6roducts create value ! providing goods, services, and ideas to satisf
customer needs"
0oods are items ou can phsicall touch"
.ervices are intangi!le customer !enefits that are produced ! people or
machines and cannot !e separated from the producer"
.uperior .ervice 1"13 9itz-Carlton makes customer service an art" &his
superior service feature highlights 9itz-Carlton, a compan that
consistentl provides outstanding customer service" It successfull
achieves this level of service 'ualit ! training its emploees on
corporate valuesIdeas include thoughts, opinions, and philosophies and
intellectual concepts such as these can also !e marketed"
/ good e-ample of how price e-presses value is the variations in price
associated with air travel" &he prices can var !ased on demand for the flight,
timing, and destinations"
8" 6rice ena!les marketers to capture value" 6rice is everthing that the !uer
gives up including mone, time, and energ in e-change for the product"
.ome marketer$s list their distri!utors if the have limited distri!ution" It
might !e difficult to see !ut on this ad Odwalla tells customers to find this
product in the produce section in the circled area"
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Chapter 01 - Overview of Marketing
5" 6lace ena!les marketers to deliver the value proposition" 6lace delivers the
product to the customers
6lace, also known as suppl chain management, descri!es all activities
necessar to get the product to the right customer when that customer
wants it"
.uppl chain management refers to a set of approaches and techni'ues that
firms emplo to efficientl and effectivel integrate their suppliers,
manufacturers, warehouses, stores, and other firms involved in the
transaction, such as transportation companies, into a seamless value chain
in which merchandise is produced and distri!uted in the right 'uantities, to
the right locations, and at the right time as well as to minimize sstem
wide costs while satisfing the service levels re'uired ! their customers"
:1; Internet Marketing 1"1 e-amines how <appos$ efficient suppl chain
made it a mega shoe store servicing the world"
=" 6romotion ena!les marketers to communicate the value proposition" +eatures
the lu-ur hotel of .t" 9egent$s >ew ?ork" Marketing high end travel"
+ocuses on selling an e-perience in the service industr"
2" .uppl chain partners include manufacturers, agents, wholesalers, retailers, and so on"
Companies market to emploees with emploment marketing, also known as internal
marketing, to recruit and retain the !est emploees"
Marketing can !e performed ! !oth individuals and organizations" Marketers
affect man stakeholders" Customers represent one stakeholder group !ut others
include all those in the suppl chain, emploees, and societ at large"
1" &he process ! which !usinesses sell to consumers is called (1C :!usiness-to-
consumer; marketing"
1" &he process of selling merchandise or services from one !usiness to another is
called (1( :!usiness-to-!usiness; marketing"
8" /uction sites like e(a have spawned a new categor, C1C :consumer-to-
consumer; marketing"
5" 2-hi!it 1"5 illustrates these marketing transaction tpes"
+" Marketing impacts various stakeholders"
1" Marketing affects other stakeholders including suppl chain partners,
emploees, and societ at large"
1" 2mploment marketing programs use marketing techni'ues to attract and
retain the !est emploees"
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Chapter 01 - Overview of Marketing
0" Marketing helps create value"
1" 2-hi!it 1"= illustrates marketing$s histor"
1" &he production-oriented era emphasized efficienc in production"
8" &he sales-oriented era !enefitted from advanced production and distri!ution
techni'ues and manufacturers had capacit to produce more than consumers
wanted" +irms responded ! !ecoming sales-oriented"
5" &he market-oriented era came into !eing as !uers made purchasing decisions
on the !asis of factors such as 'ualit, convenience, and price"
=" &he value-!ased marketing era is marketing$s current era with the recognition
that marketers should strive to give customers greater value than the
competition"
*alue reflects the relationship of !enefits to costs"
Customers seek a fair return for their mone and want products that meet
specific needs and wants at competitive prices"
Check Yourself:
What is the definition of marketing?
/nswer3 Marketing is the activit, set of institutions, and processes for creating,
capturing, communicating, delivering, and e-changing offerings that have value
for customers, clients, partners, and societ at large
Marketing is about satisfying _____ and _____.
/nswer3 Marketing is a!out satisfing needs and wants"
What are the four components of the marketing mix?
/nswer3 &he four components of the marketing mi- are product, place, price, and
promotion"
Who can perform marketing?
/nswer3 (oth individuals and organizations can perform marketing as marketing
can entail (1C, (1(, and C1C"
What are the various eras of marketing?
/nswer3 &he eras of marketing include the production era, sales era, market era,
and value-!ased era"
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Chapter 01 - Overview of Marketing
II% WHAT IS VA(E*/ASE) MAR&ETI!"'
/" 2-hi!it 1"@ illustrates how marketing firms find a !alance !etween providing !enefits to
customers and keeping costs down"
+irms compete on the !asis of value" &his !rings up the point that man good
marketing companies have cross functional teams" &he finance, I. and operations
departments work together to !ring value to the end consumer"
(" Aow do firms !ecome value drivenB
1" 2-hi!it 1"C shows how firms !ecome value driven ! focusing on three
activities"
1" &he share information a!out customers and competitors which has !een
collected and integrated throughout the firm$s departments"
8" &he strive to !alance !enefits and costs"
5" &he concentrate on !uilding relationships with customers"
/ transactional orientation regards the !uer-seller relationship as a series of
individual transactions"
/ relational orientation is !ased on the philosoph that !uers and sellers
should develop a long-term relationship"
+irms that practice value-!ased marketing ma also use a process known as
customer relationship management :C9M; which is a !usiness philosoph
and set of strategies, programs and sstems that focus on identifing and
!uilding loalt among the firm$s most valued customers"
Check Yourself:
What are two methods for increasing value?
/nswer3 Marketers increase value ! providing !enefits to customers and keeping
costs down"
How can a firm become value driven?
/nswer3 +irms !ecome value driven ! focusing on sharing information, striving
to !alance customer !enefits and costs, and !uilding customer relationships"
III% WH0 IS MAR&ETI!" IMPORTA!T'
/" 2-hi!it 1"D illustrates the ma)or !usiness functions that interact with marketing"
(" Marketing e-pands firm$s glo!al presence"
C" Marketing is pervasive across the organization"
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Chapter 01 - Overview of Marketing
7" Marketing is pervasive across the suppl chain"
1" 2-hi!it 1"E illustrates the suppl chain functions"
1" 2ffectivel managing the suppl chain relationships have a marked impact on
a firm$s a!ilit to satisf customers and increase profita!ilit"
2" Marketing makes life easier and provides emploment opportunities"
+" Marketing enriches societ"
1" +irms recognize that a strong social orientation makes good !usiness sense"
1" 2thical and .ocietal 7ilemma 1"1 e-amines how fast food companies are
enriching societ ! !ecoming more sociall responsi!le in their marketing to
children"
0" Marketing can !e entrepreneurial"
1" Marketing is at the center of entrepreneurial successes launched to satisf
unfulfilled needs"
1" .ome ma)or companies were once entrepreneurial ventures" 6i-ar .tudios is
one e-ample"
Oprah is ver entrepreneurial and an e-cellent marketer" Aer organizations also
!enefit societ under the um!rella of the Oprah Finfre +oundation"
Check Yourself
List five factors that emphasie the importance of marketing.
/nswer3 2-hi!it 1"D reveals the factors related to the importance of marketing"
&hese include e-panding glo!al presence, stretching throughout the organization,
working throughout the suppl chain, making life easier, and enriching societ"
! firm doing the right thing emphasies the importance of marketing to _____.
/nswer3 / firm doing the right thing emphasizes the importance of marketing to
societ"
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