Professional Documents
Culture Documents
C H A P T E R
Marketing
sonal selling and advertising. Still
others believe marketing has
something to do with making prod-
What do youthink?
z z z z z z z
ucts available in stores, arranging Marketing is only for really creative people.
displays, and maintaining invento- Strongly Disagree Strongly Agree
ries of products for future sales. 1 2 3 4 5 6 7
Actually, marketing includes all of z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z z
these activities and more.
Marketing has two facets. First, it is a philosophy, an attitude, a perspective, or a
management orientation that stresses customer satisfaction. Second, marketing is an
organization function and a set of processes used to implement this philosophy. This is
the marketing process. The American Marketing Association’s definition encompasses
both perspectives: “Marketing is the activity, set of institutions, and processes for creat-
ing, communicating, delivering, and exchanging offerings that have value for cus-
tomers, clients, partners, and society at large.”1 Marketing involves more than just
activities performed by a group of people in a defined area or department. In the often-
quoted words of David Packard, co-founder of Hewlett-Packard, “marketing is too
important to be left only to the marketing department.”
Marketing is a process that focuses on delivering value and benefits to customers,
not just selling goods, services, and/or ideas. Marketing uses communication, distri-
Learning Outcomes bution, and pricing strategies to provide customers and other stakeholders with the
goods, services, ideas, values, and benefits they desire when and where they want
LO 1 Define the term marketing them. It involves building long-term, mutually rewarding relationships when these
benefit all parties concerned. Marketing also entails an understanding that organiza-
LO 2 Describe four marketing management tions have many connected stakeholder “partners,” including
© AP PHOTO/PAUL SAKUMA
does not occur. In the example
with assessing a firm’s capabil- Reed Hastings used the mar-
just discussed, you would have an exchange does not occur. ities; in fact, such assessments keting concept when he
$700 million in annual revenue
engaged in marketing even if founded Netflix, the online
are major considerations in 60,000 titles
no one bought your used car. movie rental service. Netflix
strategic marketing planning
subscribers chose from multi- 34 distribution centers
(see Chapter 2). A production orientation falls short
ple subscription plans, build
2 because it does not consider whether the goods and 92% of movies delivered within one day of
LO Marketing services that the firm produces most efficiently also
lists of movies they want to see, and
receive DVDs in the mail. Plus,
being ordered
meet the needs of the marketplace. Sometimes what a
Management Philosophies firm can best produce is exactly what the market
Netflix’s proprietary Cinematch software gives suggestions for
movies customers might like based on over half a billion customer-
50 customer service reps support the entire
subscriber base
Four competing philosophies strongly influence wants. For example, the research and development supplied ratings. Less than a decade after being started, Netflix has
an organization’s marketing processes. These department of 3M’s commercial tape division devel- some impressive stats: 1,000,000 customer movie ratings sent to
philosophies are commonly referred to as production, oped and patented the adhesive component of Post-It Netflix each day
sales, market, and societal marketing orientations. Notes a year before a commercial application was zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz
popularity of auction sites such as eBay and Amazon.com and the gains. People tell their friends that a company is doing
oriented focus. A market orientation has helped com- crazy things for its customers, and the words spreads.
customer-bid model used by Priceline and uBid illustrates that online
panies such as Dell, Wegmans, and Southwest Airlines Pretty soon this word of mouth, or viral marketing,
customers are interested in bargain prices. Many are not willing to
outperform their competitors. These companies put pay a premium for the convenience of examining the merchandise lures new people to the store—even people who have
customers at the center of their business in ways most and taking it home with them. no idea what’s inside want to experience what it’s like
companies do poorly or not at all.7 to shop there.12
As with Streamline, a sales orientation has led to • Give the buyer facts: Today’s sophisticated consumer
the demise of many dot-com firms, including the wants informative advertising and knowledgeable salespeople.
Web sites that don’t provide enough information are among the Building Relationships
Digital Entertainment Network and Urban Box Office.
top ten things that irk Internet shoppers most.
As one technology industry analyst put it, “no one Attracting new customers to a business is only the
has ever gone to a Web site because they heard there • Offer organization-wide commitment in service beginning. The best companies view new-customer
was great Java running.”8 and after-sales support: People fly Southwest Airlines attraction as the launching point for developing and
{ }
Sears, have appointed chief customer offi-
cers (CCOs). These customer advocates
Training
provide an executive voice for cus-
tomers and report directly to the CEO.15
Their responsibilities include assuring Luxury-makeup company Kiehl’s spends nearly
that the company maintains a cus- 10% of its compensation budget to send new
tomer-centric culture and that all hires to New York, Miami, or San Francisco
© GETTY IMAGES
for an up to four-week
company employees remain focused
training residency.
on delivering customer value.16
The Art of Service, Fast Company,
October 2005, 55.
The Role of Training Leading marketers
recognize the role of employee train-
“
had collapsed to under 300 repre-
COMMUNICATIONS INC.
as accounting, finance, or Marketing affects your life a year. Marketing makes food
and a worldwide sales force of 7,500 selling full 32-volume sets of sentatives. If Britannica had defined its
”
Encyclopædia Britannica (weight, 120 pounds; length, 4.5 feet of shelf business as providing information instead of management information available when we want it, in
space; cost, $1,500). publishing books, it might not have suffered such a systems) or a nonbusiness every day. desired quantities, at accessi-
ble locations, and in sanitary
Britannica was slow to react to changing technologies, and within 5 precipitous fall. field (such as journalism,
and convenient packages and forms (such as instant
years, the company suffered tremendous losses and its sales force education, or agriculture). There are several impor-
zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz tant reasons to study marketing: Marketing plays and frozen foods).
Marketing Affects
Your Life Every Day
Marketing Is Marketing plays a major role in your everyday life. You
participate in the marketing process as a consumer of
Important to Businesses
goods and services. About
The fundamental objectives of most businesses are half of every dollar
survival, profits, and growth. Marketing contributes you spend pays About half of every dollar you
directly to achieving these objectives. Marketing for marketing
includes the following activities, which are vital to
spend pays for marketing costs.
costs, such as
business organizations: assessing the wants and sat- marketing research,
isfactions of present and potential customers, product development, packaging, trans- MKTG was designed for students just like you—
designing and managing product offerings, deter- portation, storage, advertising, and busy people who want choices, flexibility, and
mining prices and pricing policies, developing distri- sales expenses. By developing a bet- multiple learning options.
bution strategies, and communicating with present ter understanding of marketing,
and potential customers. you will become a better- MKTG delivers concise, focused information in a
All businesspeople, regardless of specialization or informed consumer. You will
© PHOTODISC/GETTY IMAGES
fresh and contemporary format. And . . . MKTG
area of responsibility, need to be familiar with the better understand the buying gives you a variety of online learning materials
terminology and fundamentals of accounting, process and be able to negoti- designed with you in mind.
finance, management, and marketing. People in all ate more effectively with sell-
business areas need to be able to communicate with ers. Moreover, you will be
At 4ltrpress.cengage.com/mktg, you’ll find
specialists in other areas. Furthermore, marketing is better prepared to demand satis-
electronic resources such as video
not just a job done by people in a marketing depart- faction when the goods and ser-
ment. Marketing is a part of the job of everyone in the vices you buy do not meet the
podcasts, audio downloads, and cell
organization. Therefore, a basic understanding of standards promised by the manu- phone quizzes for each chapter. These
marketing is important to all businesspeople. facturer or the marketer. resources will help supplement your
understanding of core
Basic ways
companies can
expand market share >
3 Marketing manage-
ment philosophies
or orientations >
4 Conditions required for exchange;
key characteristics that differentiate
the marketing orientation from the 5
marketing concepts in a format that
fits your busy lifestyle.
Visit 4ltrpress.cengage.com/mktg
to learn more about the multiple
sales orientation >
< Increase in MKTG resources available to