Chap 001

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

Define marketing and identify the diverse factors influencing marketing activities.

LO1

Explain how marketing discovers and satisfies consumer needs.

Distinguish between marketing mix factors and environmental forces.LO3

LO2

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:

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Explain how organizations build strong customer relationships and customer value through marketing.

Describe how today’s customer relationship era differs from prior eras.

LO4

LO5

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:

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RESEARCHING HOW COLLEGE STUDENTS STUDY TO LAUNCH A NEW PRODUCT AT 3M

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INNOVATION AND MARKETING AT 3M DISCOVERING & SATISFYING STUDENT STUDY NEEDS

+Felt Tip Highlighters

=3M product that

will combinePost-it® Notes or

Post-it® Flags andHighlighters

3M Post-it® Notes or Post-it® Flags

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Marketing is NOT Easy

WHAT IS MARKETING ?LO1

You Are a Marketing Expert Already

• Involved in 1,000s of Buying Decisions

• May Be Involved in Selling Decisions

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1. True 2. True 3. (c) plastic bottles

FIGURE 1-1FIGURE 1-1 The see-if-you’re-really-a-marketing-expert test

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MARKETING MATTERSPayoff for the Joys (!) and Sleepless Nights (?)

of Starting Your Own Small Business: YouTube!!!!

LO1

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Marketing Seeks to:

Exchange

• Discover Needs and Wants of Customers

• Satisfy Them

WHAT IS MARKETING?DELIVERING BENEFITS

LO1

AMA Definition of Marketing

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WHAT IS MARKETING?DIVERSE FACTORS INFLUENCE MARKETING ACTIVITIES

LO1

The Organization Itself and Its Departments

Society

Environmental Forces

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FIGURE 1-2FIGURE 1-2 A marketing department relates to many people, organizations, and environmental forces

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HOW MARKETINGDISCOVERS CONSUMER NEEDS

THE CHALLENGE: NEW PRODUCTS

LO2

Consumers May Not Know or Cannot Describe What They Need or Want

Most New Products Fail

• “Focus on the Consumer Benefit”

• “Learn From the Past”

The Challenge:

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Dr. Care Vanilla-Mint Aerosol ToothpasteWhat “benefits” and what “showstoppers?”

LO2

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Hot Pockets Sideshots Microwaveable SnacksWhat “benefits” and what “showstoppers?”

LO2

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AT&T CruiseCastWhat “benefits” and what “showstoppers?”

LO2

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Pepsi MaxWhat “benefits” and what “showstoppers?”

LO2

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Need Want

Does Marketing PersuadePeople to Buy the“Wrong” Things?

Market

HOW MARKETINGDISCOVERS CONSUMER NEEDS

NEEDS VS. WANTS

LO2

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FIGURE 1-3FIGURE 1-3 Marketing seeks to discover consumer needs through research and then satisfy them with a marketing program

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HOW MARKETINGSATISFIES CONSUMER NEEDS

LO3

• Promotion

• Place

Target Market

The 4 P’s: Controllable Marketing Mix Factors

• Product

• Price $199

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HOW MARKETINGSATISFIES CONSUMER NEEDS

LO3

• Technological

• Regulatory

Uncontrollable Environmental Forces

• Social

• Economic

• Competitive

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THE MARKETING PROGRAMCUSTOMER VALUE AND RELATIONSHIPS

LO4

• Best Price

• Best Service

Customer Value

• Best Product

Value Strategies

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Southwest Airlines, Starbucks, and Home DepotWhat customer value strategy?

LO4

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THE MARKETING PROGRAMRELATIONSHIP MARKETING

LO4

• Easy to Understand

Relationship Marketing

• Hard to Do

Marketing Program

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3M’S STRATEGY & MARKETING PROGRAMHELPING STUDENTS STUDY

LO4

Move from Ideas toa Marketable Highlighter Product

Add the Post-it®

Flag Pen

Develop a Marketing Program for thePost-it® Flag Highlighter and Pen

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FIGURE 1-4FIGURE 1-4 Marketing programs for two new 3M Post-it® brand products targeted at two distinct customer segments: college students and office workers

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3M STRATEGY & MARKETING PROGRAMMARKETPLACE SUCCESS?

LO4

Developed SecondGeneration Post-it®

Flag Highlighter

Appeared onThe Oprah Winfrey Show

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FIGURE 1-AFIGURE 1-A Four different orientations in the history of American business

Production Era

Sales Era

Marketing Concept Era

Customer Relationship Era

• Market Orientation

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HOW MARKETING BECAME IMPORTANTEVOLUTION OF THE MARKET ORIENTATION

LO5

Customer RelationshipManagement (CRM)

Customer Experience

• Direct Contact from Buying the Service

• Indirect Contact via Unplanned “Touches”

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HOW MARKETING BECAME IMPORTANTETHICS AND SOCIAL RESPONSIBILITY

LO5

Ethics

Social Responsibility

• Societal Marketing Concept

• Social Entrepreneurship

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HOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETING

LO5

Who Markets?

What Is Marketed?

• Goods • Services • Ideas 1-30

HOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETING

LO5

Who Benefits?

Who Buys & Uses What Is Marketed?

• Ultimate Consumers

• Organizational Buyers

How Do Consumers Benefit?: Utility

• Form Utility

• Place Utility

• Time Utility

• Possession Utility 1-31

3M’S POST-IT® FLAG HIGHLIGHTER: EXTENDING THE CONCEPT!

VIDEO CASE 1

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VIDEO CASE 13M’s Post-it® Flag Highlighter

1. (a) How did 3M’s David Windorski get ideas from college students to help him in designing the final commercial version of the Post-it® Flag Highlighter?(b) How were these ideas important to the success of the product?

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2. What (a) special advantages and (b) potential problems did 3M have in introducing a new highlighter-with-flags product for college students?

VIDEO CASE 13M’s Post-it® Flag Highlighter

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3. Visit your college bookstore before you answer. (a) Where would you display the Post-it® Flag Highlighter in a college bookstore, and (b) How can the display increase student awareness of the product?

VIDEO CASE 13M’s Post-it® Flag Highlighter

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4. In what ways might 3M try to promote its Post-it® Flag Highlighter and make students more aware of the product?

VIDEO CASE 13M’s Post-it® Flag Highlighter

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5. What are (a) the special opportunities and (b) potential challenges for 3M in taking its Post-it® Flag Highlighter into international markets? (c) On which countries should 3M focus its marketing efforts?

VIDEO CASE 13M’s Post-it® Flag Highlighter

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Marketing

Marketing is the activity for creating, communicating, delivering, and exchanging offerings that benefit the organization, its stakeholders,and society at large.

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Exchange

Exchange is the trade of thingsof value between buyer and seller so that each is better off after the trade.

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Market

A market consists of people with both the desire and the ability to buy a specific offering.

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Target Market

A target market consists ofone or more specific groups of potential consumers towardwhich an organization directs its marketing program.

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Marketing Mix

The marketing mix consists of the controllable factors—product, price, promotion, and place—that can be used by the marketing manager to solve a marketing problem.

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Environmental Forces

Environmental forces consistof the uncontrollable social, economic, technological, competitive, and regulatoryforces that affect the results ofa marketing decision.

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Customer Value

Customer value is the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-saleand after-sale service at aspecified price.

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Relationship Marketing

Relationship marketing linksthe organization to its individual customers, employees, suppliers, and other partners for theirmutual long-term benefit.

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Marketing Program

A marketing program is a plan that integrates the marketing mix to provide a product, service, or idea to prospective buyers.

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Marketing Concept

A marketing concept is theidea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization’s goals.

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Market Orientation

A market orientation occurs when an organization focuses its efforts on (1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and (3) using it to create customer value.

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Societal Marketing Concept

Societal marketing concept is the view that organizations should discover and satisfy the needs of its consumers in a way that also provides for society’s well-being.

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Ultimate Consumers

Ultimate consumers consist of the people who use the productsand services purchased for a household. Also called consumers, buyers, or customers.

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Organizational Buyers

Organizational buyers arethose manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or for resale.

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Utility

Utility consists of the benefits or customer value received by users of the product.

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