Ch01web

Slide 1-1Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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Define marketing and identify the requirements for marketing to occur.LO1

Explain how marketing discovers and satisfies consumer needs.

Distinguish between marketing mix elements 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 oriented to production and selling.

LO4

LO5

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:

Explain how marketing creates utilities for consumers.LO6

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HOW DO COLLEGE STUDENTS STUDY?A NEW PRODUCT CHALLENGE FOR 3M!

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HOW DO COLLEGE STUDENTS STUDY?DISCOVERING STUDENT STUDYING NEEDS

3M Post-it® Notes or Post-it® Flags

+Felt Tip Highlighters

=3M product that

will combinePost-it® Notes or

Post-it® Flags andHighlighters

Click Sound Icon to Play

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HOW DO COLLEGE STUDENTS STUDY?SATISFYING STUDENT STUDYING NEEDS

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Marketing

• Is NOT Easy

• Affects ALL Individuals, Organizations,Industries, and Countries

WHAT IS MARKETING ?LO1

You Are a Marketing Expert Already

• Involved in 1,000s ofBuying Decisions

• Some Involved in Selling Decisions

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1. True

2. (c) 30%

3. True

4. (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!!!!

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Marketing Seeks to:

Exchange

• Discover Needs and Wants of Customers

• Satisfy Them

WHAT IS MARKETING?DELIVERING BENEFITS

LO1

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WHAT IS MARKETING?DIVERSE FACTORS INFLUENCE MARKETING ACTIVITIES

LO1

Organization Itself

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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Parties With Unsatisfied Needs

WHAT IS MARKETING?REQUIREMENTS FOR IT TO OCCUR

LO1

A Desire & Ability to be Satisfied

A Way for the Parties to Communicate

Something to Exchange

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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”?

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

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iRobot Scooba Robotic Floor WasherWhat “benefits” and what “showstoppers”?

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Coca Cola C2What “benefits” and what “showstoppers”?

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Need

Want

Does Marketing Persuade People to Buy the “Wrong” Things?

Market

HOW MARKETINGDISCOVERS CONSUMER NEEDS

NEEDS VS. WANTS

LO2

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MAKING RESPONSIBLE DECISIONSStudent Credit Cards—What is the Real Price?

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

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HOW MARKETING SATISFIESCONSUMER NEEDS

LO3

• Promotion

• Place

Target Market

The 4 P’s: Controllable Marketing Mix Factors

• Product

• Price $399

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HOW MARKETING SATISFIESCONSUMER NEEDS

LO3

• Technological

• Regulatory

Uncontrollable Environmental Forces

• Social

• Economic

• Competitive

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MARKETING PROGRAMCUSTOMER VALUE AND RELATIONSHIPS

LO4

• Best Price

• Best Service

Customer Value

• Best Product

Value Strategies

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Costco and StarbucksWhat customer value strategy?

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MARKETING PROGRAMRELATIONSHIP MARKETING

LO4

• Easy to Understand

Relationship Marketing

• Hard to Do

Marketing Program

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3M PRODUCT & MARKETING PROGRAMHELPING STUDENTS STUDY

LO4

Move from Ideas to a Marketable Highlighter Product

Extend the Product Line

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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HOW MARKETING BECAME IMPORTANTEVOLUTION OF THE MARKET ORIENTATION

LO5

Production Era

Sales Era

Marketing Concept Era

Customer Relationship Era

• Market Orientation

• Customer Relationship Management (CRM)

• Customer Experience

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FIGURE 1-5FIGURE 1-5 Four different market orientations in the history of American business

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HOW MARKETING BECAME IMPORTANTETHICS AND SOCIAL RESPONSIBILITY

LO5

Ethics

Social Responsibility

• Societal Marketing Concept

• Macromarketing

• Micromarketing

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HOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETING

LO6

Who Markets?

What Is Marketed?

• Goods • Services • Ideas

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HOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETING

LO6

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

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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 products?

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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 in 2004?


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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?


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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?


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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?


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DO MARKETERS PERSUADE CUSTOMERS TO BUY THE

“WRONG” PRODUCTS?

SUPPLEMENTALLECTURE NOTE 1-1

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DESIGNING A CANDY BAR

IN-CLASS ACTIVITY 1-1

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Ghirardelli Milk Chocolate SquaresWhat Candy Have You Recently Bought and Why?

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WHAT MAKES ABETTER MOUSETRAP?

IN-CLASS ACTIVITY 1-2

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If a man (woman) makes a better

mousetrap,the world will beat a path to

his (her) door.”~ Ralph Waldo

Emerson

A Victorious Mouse

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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 product.

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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 marketing manager’s controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem.

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Environmental Forces

Environmental forces consist of the uncontrollable factors in a marketing decision involving social, economic, technological, competitive, and regulatory forces.

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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 aspecific price.

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Relationship Marketing

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

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Marketing Program

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

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Marketing Concept

A marketing concept is theidea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.

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Market Orientation

A market orientation in an organization focuses its effortson (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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Customer RelationshipManagement (CRM)

Customer relationship management (CRM) is the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace.

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Customer Experience

Customer experience is the internal response that customers have to all aspects of an organization and its offerings.

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Societal Marketing Concept

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

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Ultimate Consumers

Ultimate consumers consist of the people who use the goodsand 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 goods 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.