Chapter 1: Overview of Marketing Learning Objective 1: Define the role of marketing in organizations What is Marketing?

Marketing- an organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders Marketing requires thoughtful planning with an emphasis on the ethical implications of any of those decisions on society in general Marketing Plan- written document composed of analysis of current marketing situation, opportunities and threats, marketing objectives, and strategy, action programs, and projected incomes Exchange- trade of things of value between buyer and seller, so that each is better off as a result Marketing Mix- the controllable set of activities that a firm uses to respond to the of its target markets The Four Ps- comprise the marketing mix Product, price, place and promotion Product Goods- items that you can physically touch Services- intangible customer benefits that are produced by people or machines and cannot be separated from the producer Ideas- intellectual conceptsthoughts, opinions, and philosophies Price- Overall sacrifice a consumer is willing to makemoney, time, energyto acquire a specific product or service Place- All the activities necessary to get the product to the right customer when that customer wants it Supply Chain Management- Focuses on delivering the value proposition which includes all the activities necessary to get the right product to the right customer when that customer wants it Promotion- Communications by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response wants

B2C (business-to-consumer) marketing- Selling merchandise or services from businesses to consumers B2B (business-to-business) marketing- Selling merchandise or services from one business to another C2C (consumer-to-consumer) marketing- Process in which consumers well to other consumers (ex: eBay) Production-oriented era- Around the turn of the 20th century Manufacturers were concerned with product innovation, not with satisfying the needs of individual consumers, and retail stores typically were considered places to hold the merchandise until a consumer wanted it Sales-oriented era- Between 1920 and 1950 Manufacturers had the capacity to produce more than customers really wanted to buy. Firms found an answer to their overproduction in becoming sales oriented; they depended on heavy doses of personal selling and advertising Market-oriented era- After WWII When consumers again had choices, they were able to make purchasing decisions on the basis of factors such as quality, convenience, and price. Manufacturers and retailers thus began to focus on what consumers wanted and needed before they designed, made or attempter to sell their products and services. Firms discovered marketing Value-based marketing era- Generally have transcended a production or selling orientation and attempt to discover and satisfy their customers needs and wants Most successful firms today are market oriented Value- Relationship of benefits to costs, or what the consumer gets for what he or she gives Learning Objective 2: Determine how marketers create value for a product or service What is Value-Based Marketing? -Customers naturally seek options that provide the greatest benefits at the lowest costs. Marketing firms attempt to find the most desirable balance between providing benefits to customers and keeping their costs down Value-based Marketing- creating strong products and services Should be at the core of every firms functions

How Firms Become Value Driven

1. They share information about their customers and competitors across their own organization and with other firms that might be involved in getting the product or service to the marketplace, such as manufacturers and transportation companies 2. They strive to balance their customers benefits and costs 3. The concentrate on building relationships with customers Building Relationships with Customers Transactional Orientation- Regards buyerseller relationship as a series of individual transactions; events before or after the transaction have little importance Relational Orientation- Method of customer relationship building based on the philosophy that buyers and sellers should develop long-term relationships Customer Relationship Management (CRM)- Business Philosophy and strategies focused on identifying and building loyalty among the firms most valued customers Learning Objective 3: Recognize the importance of marketing both within and outside the firm Why is Marketing Important? Supply Chain- The group of firms that make and deliver a given set of goods and services Raw Material Manufacturer Retailer Consumer