BUSI 141 Week 1

Chapter One

Welcome to the World of Marketing:

Create and Deliver Value

Marketing: Real People, Real Choices, 8eSolomon, Marshall, and Stuart

Copyright © 2016 Pearson Education, Inc. 1-1

Chapter Objectives• Explain what marketing is, including the

marketing mix, what can be marketed, and the value of marketing

• Explain the evolution of the marketing concept

• Understand value from the perspectives of customers, producers, and society

• Explain the basics of market planning

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Real People, Real Choices: Decision Time at Pandora

• Which option should be pursued?– Option 1: Launch an ad campaign on radio

stations, in music magazines, and at record stores – Option 2: Build buzz about Pandora through word

of mouth– Option 3: Sell the service to a large chain of record

stores, a music magazine, or even a record label


Marketing: What is it?

• As consumers, you all know a lot about it!• Marketing is first and foremost about

satisfying customer needs in a profitable manner


AMA 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.


Marketing Defined: Activities, Institutions, Processes

• Marketing includes many different activities– More than just sales and advertising– Involves interactions with non-marketers:

Finance, HR, MIS, Operations, Accounting, NPD …• Marketing is also a decision process


Marketing Defined: Create, Communicate, Deliver Value


Marketing Facilitates Exchange

• Exchange occurs when one party gives up something and in return for receiving something else

• Conditions for Exchange– At least two people or organizations must be

willing to make a trade.– Have something the other party wants– Agree on value of exchange and terms– Each party free to accept or reject exchange


Marketing Defined: What is Marketed?

• Product: any good, service, or idea Consumer goods/services Business-to-business

goods/services Not-for-profit marketing Idea, place, and

people marketing


What is Marketing?

• Anything from “everyday” goods/services to “fun” experiences and “interesting” people to “serious” social issues


Marketing Defined: Meeting Stakeholder Needs

• Marketing concept– Modern marketers practice the marketing

concept: identifying and satisfying the needs of consumers to ensure profitability.

• Marketing meets the needs of diverse stakeholders Stakeholders include consumers, business buyers,

sellers, investors, and community residents.


Needs, Wants, and Benefits• Needs

– Difference between actual and desired state– Can by physiological or psychological

• Wants– Desire to satisfy a need in a particular way– Influenced by history, past experience, and culture

• Benefits– Consumer received benefit when need satisfied

• Demand– Customers’ desires for products coupled with the resources

needed to obtain them


Markets and Marketplaces

• A market consists of all consumers who share a common need that can be satisfied by a specific product, and who have resources, willingness and authority to purchase.

• A marketplace is any location or medium used to facilitate an exchange.


Collaborative Consumption

• Consumers increasingly would rather rent than purchase the products they use.– Examples?

• Traditional marketers are also looking to take advantage of this trend.


Marketing Defined: Value for Society

• Is it possible to make profits and contribute to society and the planet in a positive way?

• Corporate responsibility at Target– In 2012, Target set goals for all seafood sold in

stores to be sustainable and traceable.– Reusable bag program saves consumers $7 million– 50+% of apparel is labeled “machine wash cold” to

help reduce energy consumption.


Summary: Marketing Defined

• Marketing encompasses activities and process that create, communicate, deliver value-based exchanges.– Benefits to stakeholders beyond just businesses

and consumers

How does the definition of marketing relate to you as a consumer? To your future career?


Evolution of the Marketing Concept

• Production era• Selling era• Relationship era• Triple bottom-line era


Production Era

• Marketing dominated by a production orientation– A management philosophy that emphasizes the

most efficient ways to produce and distribute products

• Marketing promotions played a minor role• Henry Ford’s Model T and Ivory soap are

examples of products that were created under a production orientation


Sales Era

• Dominated by selling orientation – A managerial view of marketing as a sales

function, or a way to move products out of warehouses to reduce inventory

– Emphasis on aggressive promotional activities• Post WWII, production capacity exceeded

demand– Led businesses to focus on one-time sales of

goods rather than repeat business


Relationship Era

• Focused upon a consumer orientation– A management philosophy that emphasizes

satisfying customers’ needs and wants• Marketing plays a more central role

– Emergence of the marketing concept– Total Quality Management (TQM) and other

quality initiatives gains wide acceptance


Triple Bottom-Line Era• Management seeks to

maximize financial, environmental, and social bottom lines.– Emergence of societal

marketing concept– Emphasis on ROI

measurement across all three areas


This ad focuses on the environmental bottom line

Sustainability

• Sustainability is about creating products that meet present needs while ensuring future generations can have their needs met– Green marketing is one type of sustainable

business practice


Visit adsoftheworld.com/ to see examples of Volkswagen’s green marketing and sustainable business practices

http://adsoftheworld.com/media/print/volkswagen_ecofriendly

What’s Next in the Evolution of Marketing?

• The Attention Economy– In the Internet Era, success measured by share of

mind rather than simply share of market.• Big Data

– Ford employs 200+ data scientists to generate insights leading to valuable auto innovations


The Changing World of Marketing

• Marketing has experienced many changes– Production Selling Relationship Triple

Bottom Line• Marketing in the midst of an exciting period of

rapid change right now!

What skills will marketers need to succeed in a “Big Data” era?


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TOMS Shoes

Which best describes the types of goods TOMS shoes sells?A. Consumer goodsB. B2B goodsC. Non-profit goodsD. Industrial goodsE. C2C goods


TOMS Shoes

TOMS Shoes sells canvas shoes to college and high school student for around $40 per pair. The canvas shoes that are sold by this company best describe which element of the Marketing Mix?A. ProductB. DistributionC. PromotionD. PriceE. Place


TOMS Shoes

Which of the following best describes the marketing orientation of TOMS Shoes?A. Bottom-up orientationB. Production orientationC. Triple bottom line orientationD. Total Quality ManagementE. Selling orientation


TOMS Shoes

TOMS Shoes makes a profit from selling its shoes, provides free shoes to children in countries in need, encourages volunteers to be involved in donations of shoes, and creates long-lasting relationships between the company and customers. All of these are examples of how TOMS Shoes creates _________ for its __________.A. Green works, customersB. Need, customersC. Profit, customersD. Value, customersE. Sustainability, shareholders


TOMS Shoes

TOMS Shoes focuses its efforts primarily on selling shoes to college and high school students. This group of people best describe TOMS’ __________.A. Marketing conceptB. Target marketC. Marketing strategyD. PromotionE. Marketing Mix
