This slide relates to the

material on pp. 33-34. See also

Transparency 7.

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This slide illustrates five stages of marketing evolution. In general, the idea of marketing
has moved from a focus on products to a focus on customer needs. An important point to
remember is that some managers have not made it all the way to the final stages.
   
Simple Trade Era. As specialization developed, families traded or sold their output to
local middlemen. Local middlemen, in turn, resold these goods to other consumers or
more distant middlemen. This early role of marketing is still the focus of much of the
marketing activity in the less-developed areas of the world.
Production Era. During the production era, the company focuses on production of a few
specific products. A production focus is more common when few products are available
in a given market.
h



   
 
 
  
  
   


Sales Era. As production rises, competition increases. As more companies move to meet
demand, the focus shifts to selling activities to beat the competition and win customers.
   
 
 
  

      
 

 
     
 

   
   
  
          
 

   
   
    
Marketing Department Era. During this era, all the marketing activities are brought under
the control of one department. When executed well, this improves short-run policy
planning by integrating and coordinating the firm¶s activities.
Marketing Company Era. Here marketing people develop long-range plans in addition to
short-run marketing planning and the whole company effort is guided by the marketing
concept.
 This slide relates to the
material on pp. 34-37.
Instructor¶s Note: This slide
corresponds to Exhibit 2-1 on
p. 34 and Transparency 8. See
also Transparency 9 and
Overheads 10-12.
There are several slides in this
series; see student handout
pages

|

 

This slide and lecture material provide an introduction to the marketing concept.
Additional information contrasts the production and marketing orientations and reviews
the difficulties involved in adopting the marketing concept.
  
Marketing Concept. The marketing concept means that the organization aims all its
efforts at satisfying its customers -- at a profit.
Production Orientation. Specific businesses and their managers may still focus on more
narrow concerns than satisfying customers. A typical example is the focus on a production
orientation -- making whatever products are easy to produce and then trying to sell them.
The Importance of Profit. Profits refer to the difference between a firm¶s revenue and its
total costs. Identifying, developing, and implementing the products and product changes
that consumers demand requires that the company be profitable. Profits provide the
resources to pay for satisfying customers.
Adoption of the Marketing Concept. While consumer product companies adopted the
marketing concept early on, many industrial products companies still have failed to do so.
More surprisingly, many service companies, such as banks, have also been slow to adopt a
philosophy of total commitment to customer satisfaction--but this has changed
dramatically in recent years
Customer¶s point of view. To better understand what it takes to satisfy a customer, it¶s
useful to take the customer¶s point of view.
Customer value reflects benefits and costs. Customer value is the difference between the
benefits a customer sees from a market offering and the costs of obtaining those benefits.
 This slide relates to the
material on pp. 37-40.

There are several slides in this

series; see student handout
pages

|

 

This slide and lecture material cover the customer value concept. The basic
points to be made are on the slides (there is another slide not shown here)

   
Customer Value. Customer value is the difference between the benefits a
customer sees from a marketing offering and the costs of obtaining those
benefits. The customer is likely to be more satisfied with the customer
value is higher--when benefits exceed costs by a larger margin. On the
other hand, a customer who sees the costs as greater than the benefits isn¶t
likely to become a customer.

One complication is that different customers may see the benefits and costs
in different ways. That makes it difficult to satisfy everyone with one
offering.

   
 
Customer¶s point of view. To better understand what it takes to satisfy a
customer, it¶s useful to take the customer¶s point of view. They have
choices about how to meet their needs. So, a firm that offers superior
customer value is likely to win and keep customers. This is especially
important when what different firms have to offer is very similar.

Customer value reflects benefits and costs. Customer value is the difference
between the benefits a customer sees from a market offering and the costs of
obtaining those benefits.
 This slide relates to the
material on pp. 40-43. See also
Overheads 13-15.

|

 

onprofit organizations may have different reasons than traditional businesses for
operating but they still need an understanding of marketing ideas.
       
While the objectives of nonprofit organizations are not strictly economic, they may still be
operated much as for-profit businesses. However, they differ in several ways:
on-Customer Support. onprofits often exist to accomplish a goal unrelated to
traditional ³paying customer´ satisfaction. In fact, many nonprofits specifically raise
money from non-customer groups and then spend it on ³customers´ who define a cause.
on-Economic Measures of Success. They may not have a traditional ³bottom line´
economic measure of success, such as profit or return on investment. While the costs
associated with achieving nonprofit success may be measured, objectives, such as
preserving a wetland, restoring an historical building, or making health-care available to
the poor usually require a measure of success other than profit.
Poorly Organized for Marketing. Partly due to the nature of nonprofit businesses, they
may not be set up to take advantage of and use marketing-related concepts and tools.
Marketing Concept Provides Focus. Each nonprofit organization IS trying to satisfy some
group of consumers in some way.
Objectives Achieved by Satisfying eeds. Marketing thinking helps to identify what is
REALLY needed.
 
Organizations exist in a society and consequently face a social responsibility -- a firm¶s
obligation to improve its positive effects on society and reduce its negative effects.
Because some goals, such as profits or economic efficiency, can diminish other goals,
such as high levels of customer satisfaction or cleaner environments, businesses must
strive to reach acceptable balances between these conflicts. The long-run significance of
ethical behavior in business and in marketing activities will be emphasized throughout the
course.
 This slide relates to the
material on pp. 43-45.
Instructor¶s Note: This slide
corresponds to Exhibit 2-4 on
p. 45 and Transparency 10.

|

 

The marketing management process refers to the planning, implementation, and control of
marketing activities. As indicated on the slide, these activities are continuous and
decisions made in the past in one area can have implications on the other areas as well.
 
!
The ongoing process of marketing management requires attention to three key areas:
Planning. Planning is required because marketing managers must seek attractive new
opportunities. Customers¶ needs and wants change. Marketing managers must anticipate
such changes and plan how the firm will move to meet them with satisfying products. At
the company-wide level, this is called strategic (management) planning -- the managerial
process of developing and maintaining a match between an organization¶s resources and
its market opportunities.
Implementation. Implementation is the process of putting marketing plans into action.
O
 


 
       !  "#$%
Control. Control deals with assessing and evaluating marketing performance. Marketing
managers are responsible for seeing to it that an implemented strategy is working. Goals
and objectives are typically set and one or more measures of progress are taken to assess
performance. When performance falls short of expectations, it is up to the marketing
manager to take corrective action.
 This slide relates to the
material on pp. 45-46.
Instructor¶s Note: This slide
corresponds to Exhibit 2-5 on
p. 46 and Transparency 11.
See also Overhead 16.

|

 

As noted previously, marketing strategic planning is the managerial process of developing

and maintaining a match between an organization¶s resources and its market opportunities.
Marketing strategy planning means finding these opportunities and developing profitable
marketing strategies that the company can use to capitalize on them.
"  |! 
Marketing Strategy. A marketing strategy specifies a target market and a related
marketing mix. This provides the ³big picture´ of what the firm will do in some market.
The two interrelated parts are:
‡ Target Market. A target market is a fairly homogeneous (similar) group of
customers to whom a company wishes to appeal.
‡ Marketing Mix. A marketing mix consists of the controllable variables the
company puts together to satisfy this target group.
The importance of target customers cannot be over-emphasized. On the slide, the
customer (C) is in the center of the controllable variables of the marketing mix. This
arrangement is to remind the marketer that the efforts of the firm should always be aimed
at meeting customer needs.
   
&  
 

  


    
    O


     
 

 


       


 
  

Target Marketing. Target marketing says that the marketing mix is tailored to meet the
needs of a specific group of target customers. A company may need a different marketing
mix for each distinct group of customers.
Mass Marketing. This approach is not target marketing and treats all customers as the
same, offering a single marketing mix combination to everyone.
 This slide relates to the
material on p. 47.
Instructor¶s Note: This slide
corresponds to Exhibit 2-7 on
p. 47 and Transparency 14.

|

 

It is useful to categorize all the variables in the marketing mix into four basic ones of
Product, Place, Promotion, and Price. These ³Four Ps´ are combined in differing ways to
match the offer made by a company to the needs and wants of different target markets.
O
 

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' 
  
  
 
    ## 
    

 This slide relates to the
material on pp. 48-50.
Instructor¶s Note: This slide
corresponds to Exhibit 2-8 on
p. 48 and Transparency 15.
See also Transparency 13 and
Overhead 17.

h  # !

Product. The product is often a tangible good that customers buy, but it can also be an
intangible service, such as tax and legal preparations. Product-area decisions involve the
characteristics of various kinds of products. While exceptions arise, generalizations
about product classes can be learned that help marketers develop different product mixes
quickly.
Place. Place refers to where a product is made available to target market customers. In
addition, place decisions also involve making products available when customers want
them. A channel of distribution refers to the series of firms or persons between the
producer of the product and the final user or consumer.
Promotion. Promotion involves telling the target market about the product. Key tools of
promotion include:
‡ Personal Selling. This involves direct communication between sellers and potential
customers, either face-to-face or over the phone.
‡ Mass Selling. Mass selling communicates with large numbers of customers at the
same time. Advertising, its main form, is any paid form of nonpersonal presentation of
ideas, goods, and services by an identifying sponsor.
‡ Sales Promotion. This refers to the other types of promotion that marketers use to
stimulate interest, trial, or purchase by final consumers or others in the channel.
Price. In setting a price, marketing managers must consider the kind of competition in
the target market as well as possible customer reactions to different price levels.
 This slide relates to the
material on p. 49.
Instructor¶s Note: This slide
corresponds to Exhibit 2-9 on
p. 49 and Transparency 16.

|

 

A channel of distribution refers to any series of firms or persons used to move goods from
producers to final users.
Channel systems can be either very long or very short. They may be relatively simple or
complex. The key for understanding the contribution of the channel to better marketing
effort is the matching of the best kinds and types of channels for the product or service and
the effective management of the channel.
O
 

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 This slide relates to the
material on pp. 53-55.
Instructor¶s Note: This slide
corresponds to Exhibit 2-11 on
p. 55 and Transparency 18.
See also Transparencies 17
and 19 and Overheads 18-19.

|

 

A marketing program blends all of the firm¶s marketing plans into one ³big´ plan. The
marketing program combines strategy and tactics, ideas and actions, and serves as the link
between planning and implementation and control.

 !

Marketing Plan. A marketing plan is a written statement of a marketing strategy and the
time-related details for carrying out the strategy. Marketing plans should make clear the
following:
1. What marketing mix will be offered, to whom, and for how long.
2. What company resources will be needed at what rate.
3. What results are expected (this should also specify some means of control).
Implementation. Implementation involves putting the marketing plan into action. During
implementation, marketing managers make many operational decisions -- short-run, often
³on-the-spot,´ decisions to help implement strategies.
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##      


   
*  
 
 

Control. Control is an ongoing process of analyzing and correcting the actions taken in
implementation. Control jobs provide feedback to managers that leads them to modify
their marketing strategies.
   
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'



  
 , 

             
 , 
 This slide relates to the
material on pp. 55-57.
Instructor¶s Note: This slide
corresponds to Exhibit 2-12 on
p. 57 and Transparency 20.

|

 

Planning is crucial because it sets the course the company will follow in everything else it
does. Good plans implemented poorly might still be profitable. Ill-conceived plans, even
implemented well, can lose money and even threaten the survival of the company itself.
$
 |! 
Creative Strategy. Dramatic shifts in strategy are increasingly the norm is fast-moving
markets. A focus on consumer needs and wants forces strategic planners to recognize that
consumer¶s don¶t care about company problems -- they want products that provide
superior customer value. Creative strategy is more than an interesting approach to
business: It is needed for company survival.
O
 

 
   )
   
     
- .
/  
 
   
 
-       
/
Focus on Best Practices. In too many firms, managers do a poor job of planning and
implementing marketing strategies and programs. This type of ³death-wish´ marketing is
both costly and ineffective. The average marketing program does not produce great
results--and that accounts for the majority of firms. On average, too many new products
fail, customer satisfaction levels are too low, customer retention rates are low, return on
promotional spending is close to 0, and there¶s conflict in channels of distribution. It¶s
important to do better than what¶s typical!