1 Lamb, Hair, McDaniel CHAPTER 1 An Overview of Marketing 2010-2011.

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Lamb, Hair, McDaniel

CHAPTER 1

An Overview of Marketing

2010-2011

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LO 1 Define the term marketing

LO 2 Describe four marketing management philosophies

LO 3 Discuss the differences between sales and market orientations

LO 4 Describe several reasons for studying marketing

Learning OutcomesLearning Outcomes

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Define the term marketing

What Is Marketing?What Is Marketing?

LO1

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Marketing…Marketing…

•Stresses Customer Satisfaction

•A Philosophy

•An Attitude

•A Management Orientation

•A Set of Activities

•Products

•Promotion

•PricingLO1

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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.

What Is Marketing?

American Marketing Association Definition

LO1

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What Is Marketing?

Greater effort

Higher quality

Repeat business

Growth andprofits

Stockholder

satisfaction

More investment

Employee satisfaction

LO1

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Exchange

At Least Two PartiesAt Least Two Parties

Something of ValueSomething of Value

Communication and DeliveryCommunication and Delivery

Freedom to Accept or RejectFreedom to Accept or Reject

Desire to Deal with Other Party

Desire to Deal with Other Party

Conditions for Exchange

Conditions for Exchange

LO1

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Exchange

• Exchange may not take place even if conditions are met

• An agreement must be reached

• Marketing occurs even if exchange does not take place

LO1

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Product

Price

Place

Promotio

n

ExchangeExchangeA BA B

DeliveringValue Communicating

Value

CreatingValueCustomer value

and beneficial relationships

Customer valueand beneficial relationships

LO1

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Describe four marketing

management philosophies

Marketing Management Marketing Management PhilosophiesPhilosophies

LO2

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Sales

Market

Societal

Production internal capabilities of the firm

satisfying customer needs and wants while meeting objectives

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

aggressive sales techniques and belief that high sales result in high profits

Orientation Focus is on…

The Four Marketing Management Philosophies

LO2

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Production Orientation

• Field of Dreams orientation– “If you build it, they will come.”– Doesn’t consider if what is produced meets

market needs

LO2

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Sales Orientation

• Selling = Collecting Money– Disregards market needs and consumer

demand.– Failing to recognize what the customer

wants leads to business failures• Dot-com busts in late 1990’s

LO2

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Market OrientationMarket Orientation Focusing on customer wants and needs to distinguish

products from competitors’ offerings

Integrating all the organization’s activities to satisfy these wants

Achieving the organization’s long-term goals by satisfying customer wants and needs legally and responsibly

Marketing Concept

LO2

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Achieving a Marketing Achieving a Marketing OrientationOrientation

Obtain information about customers, competitors, and markets

Examine the information from a total business perspective

Determine how to deliver superior customer value

Implement actions to provide value to customers

LO2

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Societal Marketing Orientation

An organization exists not only to satisfy customer wants but also to preserve or enhance individuals’ and society’s long-term best interests.

• Less toxic products• More durable products• Products with reusable or recyclable materials

LO2

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ProductionProduction

SalesSales

MarketingMarketing

SocietalSocietal

What can we make or do best?What can we make or do best?

How can we sell more aggressively?

How can we sell more aggressively?

What do customerswant and need?

What do customerswant and need?

What do customers want/need, and how can we benefit society?

What do customers want/need, and how can we benefit society?

Orientation Focus

Questions That Help Determine Marketing Philosophy

LO2

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Listen to your customers...

Tom Kelley with Jonathan Littman, The Ten Faces of Innovation: IDEO's Strategies for Defeating the Devil's Advocate and Driving Creativity Throughout Your Organization, Currency/Doubleday, 2005

… but look to the future, as well.

"If I had asked my customers what they wanted," Henry Ford once remarked, "they would have said a faster horse."

LO2

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Discuss the differences

between sales and market orientations

Sales and Marketing Sales and Marketing OrientationsOrientations

LO3

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Comparing the Sales and Market Orientations

Compare through 5 categories:• Organization’s focus• Firm’s business• Those to whom the product is directed• Firm’s primary goal• The tools used to achieve those goals

LO3

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Offer products that perform Earn trust

Avoid unrealistic pricing

Give the buyer facts

Offer organization-wide commitment in service and after-sales support

Co-creation with customers

Customer Value Requirements

LO3

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Building Relationships

Customer-oriented personnel

Employee training programs

Empowered employees

Teamwork

LO3

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Relationship Marketing

Successful strategies need:• Customer-Oriented Personnel• Effective Training Programs• Empowered Employees• Teamwork

LO3

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Building From Within

SOURCE: The Corporate Learning Factbook® 2008: Statistics, Benchmarks and Analysis of the U.S. Corporate Training Market, Bersin & Associates / Karen O’Leonard, January 2008.

Today's companies must build their management teams from within, putting more emphasis (and money) on rapidly training younger employees for greater responsibilities.

“War for new talent” or training from within

Challenging economy

+ Lack of middle managers

+ Aging workforce

LO3

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http://www.britannica.com

Defining a Firm’s Business

Use “Use “benefitsbenefits” instead of ” instead of ““goods/servicesgoods/services””

Ensures a customer focus

Encourages innovation and creativity

Stimulates an awareness of changes in customer preferences

LO3

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Sales vs. Market Orientations

Sales Orientation

Market Orientation

Organization’sFocus

Firm’sBusiness

ForWhom?

Primary Profit Goal?

Tools to Achieve

Selling goods and services

Everybody Maximum sales volume

Primarily promotion

Inward

Outward Coordinated use of all marketing activities

Customer satisfaction

Specific groups of people

Satisfying wants and needs

LO3

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Describe several reasons for studying

marketing

Why Study MarketingWhy Study Marketing

LO4

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Reasons for Studying Marketing

Why Study Marketing?Why Study Marketing?

Importantto

Society

Importantto

Society

Importantto

Business

Importantto

Business

GoodCareer

Opportunities

GoodCareer

Opportunities

+Marketing affects you every day!LO

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Why Study Marketing?

Vital Marketing ActivitiesVital Marketing Activities

Assess the wants and satisfaction of customersAssess the wants and satisfaction of customers

Design and manage product offeringsDesign and manage product offerings

Determine prices and pricing policiesDetermine prices and pricing policies

Develop distribution strategiesDevelop distribution strategies

Communicate with present and potential customersCommunicate with present and potential customers

LO4

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Marketing Trends

YouTube “Celebrity” endorsements– Popular channel stars get money for using or

hyping products or companies– Videos release to coincide with school release

times• Popular in Tween markets

– “Fred” is the second most popular channel on YouTube http://www.youtube.com/fred

Source: “Playing the Web Card: YouTube Breakout Stars New Faves of Marketers,” wwd.com, August 18, 2009; Albrecht, Chris. “’Fred’ Cranks up the YouTube Views and Ad Dollars,” BusinessWeek, November 18, 2008, online at http://www.businessweek.com/technology/content/nov2008/tc20081118_508970.htm

LO4