Lamb, Hair, McDaniel

CHAPTER 1

An Overview of Marketing

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 Learning Outcomes

1 Define the core concepts of marketing and the

term marketing and marketing management
2
Describe six marketing management
philosophies
3
Discuss the differences between sales and
market orientations
4
Describe several reasons for studying marketing
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 Old vs New Economy

OLD ECONOMY NEW ECONOMY

Based on Industrial Based on Digital
Revolution Revolution
Standardized Focus is on
products Information
Replication of Technology
procedures & policies Products are
Management in customized
Hierarchy mode More complex
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 4 Eras in the History of Marketing

I. Production Era (Prior to 1920s)

Prevailing Attitude: A good product will sell itself

II. Sales Era (1920 1950s)

Prevailing Attitude: Creative advertising and selling will

overcome consumers resistance and convince them to
buy

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 4 Eras in the History of Marketing

III. Marketing Era (1950 1990s)

Prevailing Attitude: The Consumer rules! Find a need
and Fill it

IV. Relationship Marketing (1990 Present)

Prevailing Attitude: How to maintain long-term

relationship with your customers and other stakeholders in
the economy

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 New Consumer
Capabilities

A substantial increase in buying power

A greater variety of available goods and
services
A great amount of information about practically
anything
Greater ease in interacting and placing and
receiving orders
An ability to compare notes on products and
services
An amplified voice to influence public opinion.
Stephen Ginns 6aug08
 New Business
Capabilities

A great amount of information about practically

anything (statistics, population, inflation, etc.)
Greater ease in hiring, training of employees
An ability to promote a product anywhere
An ability to improve purchasing and inventory
control management

Stephen Ginns 6aug08

 Scope of Marketing

Is the task of creating, promoting, and

delivering goods and services to consumers
and businesses.

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 What are the major Objectives of
Marketing

1. Maximize Choice
2. Maximize Life Quality
3. Maximize Consumption
4. Maximize Satisfaction

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 Core Concepts of Marketing

1. Need Basic requirement for survival

2. Wants Directed to a specific object that
might satisfy a need
3. Demands ability and willingness of the
consumer to buy an object he/she desires
at a particular price

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Maslows Hierarchy of
Needs

4-11
 Core Concepts of Marketing

4. Products Anything that can be offered to

a market for attention, acquisition, use, or
consumption that might satisfy a need or a
want.

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 What is Marketed?
Goods
Services
Events & Experiences
Persons
Places & Properties
Organizations
Information
Ideas

Stephen Ginns 6aug08

 Core Concepts of Marketing

5. Exchange Is the process of obtaining a

desired product from someone by offering
something in return

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 Exchange
At Least Two Parties

Something of Value

Conditions for
Communication and Delivery
Exchange

Freedom to Accept or Reject

Desire to Deal with Other

Party

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 Core Concepts of Marketing

6. Transaction Takes place when an

agreement is reached between parties
concerned. Trade of values between 2 or
more parties.
7. Market Is the set of actual and potential
buyers of a product

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 Core Concepts of Marketing

8. Value and Cost

Value The worth of a product or the Fair
market price
Cost Represents the equivalent amount
to obtain the product
9. Relationship Marketing Building long-
term relationship with valued target markets,
and other important stakeholders.
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 What Is Marketing?

Define the term

marketing

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 American Marketing Association
Definition of Marketing

Marketing is the activity, set of

institutions, and processes for creating,
communicating, delivering, and
exchanging offerings that have value
for customers, clients, partners, and
society at large.
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 Marketing is

1. A philosophy, an attitude, a
perspective, or a management
orientation that stresses customer
satisfaction.
2. An organizational activity, set of
institutions, and processes.

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 entails processes that
focus on delivering value
Marketing and benefits to customers,
not just selling goods and
services.

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 What is Marketing Management?

Marketing Management is the

art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value to achieve
organizational objectives.

Stephen Ginns 6aug08

 What is Marketing Management?

Marketing Management (Kotler)

Is the analysis, planning, implementation,
and control of programs designed to create,
build, and maintain beneficial exchanges
with target buyers for the purpose of
achieving organizational objectives.

Stephen Ginns 6aug08

 Marketing Management Tasks
Develop market strategies and plans
Capture marketing insights
Discover new segments
Build strong brands
Shape market offerings
Deliver value
Connect with customers
Communicate value
Create long-term growth
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Structure of Flows in a Modern Exchange Economy

Stephen Ginns 6aug08

 Figure 1.2 A Simple Marketing System

Stephen Ginns 6aug08

 Marketing Management
Philosophies

Describe six
marketing
management
philosophies

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 Management Philosophies
Is the philosophy adopted by a company's
executives outlining how they believe a business
should be directed, particularly with regard to the
treatment of fellow workers and employees.

For marketing management philosophies, its how

management believes they should treat their
customers and their needs.

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 Company Orientations

Production Product

Selling Marketing

Stephen Ginns 6aug08

 Company Orientations

Customer Societal Marketing

Stephen Ginns 6aug08

 The Six Marketing
Management Philosophies

Orientation Focus is on

Production internal capabilities of the firm. Widely

Available and inexpensive products
aggressive sales techniques and
Sales belief that a well planned promotions
will result in higher profits

Market satisfying customer needs and wants

while meeting objectives
satisfying customer needs and
Societal wants while enhancing individual and
societal well-being

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 The Six Marketing
Management Philosophies

Orientation Focus is on

Product Quality, performance, and innovative

Features will result to profits
Customers are different from each
Customer other and requires a more personal
type of servicing.

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 Production Orientation

Field of Dreams orientation

If you build it, they will come.
Doesnt consider if what is produced
meets market needs
As long as they are available and
inexpensive

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 Sales Orientation

Marketing = Selling Things &

Collecting Money
Disregards market needs and consumer
demand.
Despite the quality of sales force, often
cannot convince people to buy what is
neither wanted nor needed.

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 Market Orientation

Marketing Concept
u Focusing on customer wants and needs to
distinguish products from competitors offerings

u Integrating all the organizations activities to

satisfy these wants

u Achieving the organizations long-term goals by

satisfying customer wants and needs legally and
responsibly

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 Achieving a Marketing
Orientation
u Obtain information about customers,
competitors, and markets

u Examine the information from a total

business perspective

u Determine how to deliver superior

customer value

u Implement actions to provide value

to customers
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 Societal Marketing Orientation

An organization exists not only to satisfy

customer wants but also to preserve or
enhance individuals and societys long-term
best interests.

For example:
Less toxic products
More durable products
Products with reusable or recyclable
materials
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 Product Orientation

A customer will favor those products that

offers them the most quality, performance, or
innovative features. Managers focus on
developing superior products and improving
over time.

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 Customer Orientation

It addresses the individual needs of specific

customers and aims to build customer
loyalty and life-time value.

For example: Doctors as target

Doctor 1 plays golf
Doctor 2 always eat outside
Doctor 3 wants to travel with
family

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 Questions That Help Determine
Marketing Philosophy
Orientation Focus

Production What can we make or do best?

How can we sell more

Sales
aggressively?

Marketing What do customers

want and need?

Societal What do customers want/need,

and how can we benefit society?

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 Questions That Help Determine
Marketing Philosophy
Orientation Focus
How can we make our products
Product better or the best?

What are the characteristics of our

Customer
customers?

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 The Four Ps

Stephen Ginns 6aug08

 Marketing Mix

Four Ps
Product
Price
Place
Promotion

Physical Evidence
People
Process
 Customer Value Requirements

u Offer products that perform

u Earn trust
u Avoid unrealistic pricing
u Give the buyer facts
u Offer organization-wide commitment
in service and after-sales support
u Co-creation with customers
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 Customer Satisfaction is
the customers evaluation of
a good or service in terms of
whether that good or service
has met their needs and
expectations.

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 Relationship Marketing is
a strategy that focuses on keeping and
improving relationships with customers.

Successful strategies need:

Customer-Oriented Personnel
Effective Training Programs
Empowered Employees
Teamwork

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 Building Relationships
u Customer-oriented personnel
u Every employee represents the firm in the eyes of
the customer.
u Employee training programs
u Empowered employees
u Employees are given more authority to solve
customer problems on the spot.
u Teamwork
u Emphasizing cooperation over competition
while helping a customer.
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 Why Study Marketing

Describe several
reasons for studying
marketing

4
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 Why Study Marketing?

Important
to Society

Important to Good Career

Business Opportunities

Marketing affects
you every day!

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