PowerPoint

to accompany
Chapter 1
Welcome to the
World of
Marketing
Creating and Delivering Value

Q
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
• Chapter 1: Introduction
• Chapter 2: Planning
• Chapter 3: Marketing Research
• Chapter 4: B2C and B2B
• Chapter 5: Target Marketing/Segmentation
• Chapter 6: Product
• Chapter 7: Price
• Chapter 8: Advertising and Sales Prom
• Chapter 9: PR and Personal Selling
• Chapter 10: Distribution
• Chapter 11: Services Marketing
• Chapter 12: Global Marketing

Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Role of Marketing
Integrated
Marketing
Integrated
Marketing
Some companies take a broader
view.

Others take a more limited
view.
Advertising Sales
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
What is Marketing?
Official definition of Marketing
(American Marketing Association)
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 is about delivering value to
everyone who is affected by a transaction.
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Meeting the Needs of
Stakeholders
Stakeholders
Sellers
Investors
Community
residents
Citizens
of other
nations
Buyers
Any person or organisation that has a ‘stake’ in the
outcome.
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Consumers:
Needs and Wants
The Consumer

The ultimate user of goods,
ideas and services.

Needs

The recognition of a difference
between a consumer’s actual
state, and some ideal or desired
state.


Wants

The desire to satisfy needs
in specific ways that are
culturally and socially
influenced.

Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Marketing Concept
Identify
consumer
needs
Provide
products to
satisfy those
needs
Long term
profitability
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Benefits Create Demand
Benefit

Outcome =
Satisfaction
Demand

Must have
Desire +
Resources

Customers’ desire for
products coupled with
the resources to
obtain them.

The outcome sought
by a customer that
motivates buying
behaviour.

Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
What is a Market?
The Market (for a product):

All current and potential customers
who share a common need that can
be satisfied by a specific product, who
have the resources to exchange for it,
who are willing to make the exchange
and who have the authority to make
the exchange.
Marketplace = Any location or medium used
to conduct an exchange Q
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Marketing Creates Utility
Utility
The usefulness
consumers
receive from
buying, owning
or consuming a
product.
Form
utility
Time
utility
Possession
Utility
Place
utility
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Exchange
Exchange
The process by which some
transfer of value occurs between
a buyer and a seller.
An exchange occurs when
something is obtained for
something else in return.
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Exchange Relationship
Buyer
Receives an object, a
service or an idea that
satisfies a need
Seller
Receives something
(usually money) of
equivalent value
At least 2
people
Agreed value
of exchange
Willing to
trade
Free to
accept or
reject deal
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
What can be marketed?
“Products”
Product
A tangible good, service, idea or
some combination of these that
satisfies consumer needs
through the exchange process;
a bundle of attributes including
features, functions, benefits and
uses.
Goods Services Ideas
These are all products – products do
not need to take a physical form
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Types of Products
Consumer goods
The (tangible) goods purchased
by individual consumers for
personal or family use.
Services
Intangible products that are
exchanged directly from the producer
to the customer.
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
More Types of Products
Business-to-business
From one organisation to another
Industrial goods are bought for use in business operations
Not-for-
profit
Includes charities,
zoos, churches,
museums
Also includes
governments
Q

Ideas, places and
people
Ideas include community behaviour
(e.g. Don’t drink and drive)
Places includes tourist locations and
attractions
People includes musicians, models,
athletes and other celebrities
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Not-for-Profit Marketing
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
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edition
The Marketing of Value
Value
The tangible and intangible
benefits a customer receives
from buying a product or service
Value
proposition
A marketplace offering
(product) that fairly and
accurately sums up the value
that will be received if the
product or service is
purchased
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Value of a Customer
(to the business)
Shift in focus – to see
customers as “partners”
Some
companies
calculate
the lifetime
value of a
customer
This is the profit
they expect to
make from a
customer in the
future
Q
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Focus on Customer
Relationships
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Competitive Advantage
Differential Benefit
(for consumer)
Properties of products that set
them apart from competitors’
products by providing unique
benefits
Competitive Advantage
A company’s ability to outperform the competition, thereby
providing customers with a benefit the competition cannot
provide
Distinctive
Competency
(for the business)
A company’s superior
capability in comparison to
its direct competitors
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Value Chain
Inbound
logistics
Outbound
logistics
Marketing
and sales
Service
Operations
A series of activities involved in
designing, producing, marketing,
delivering and supporting any products
Each link in the chain has
the potential to add or
remove value from the
product
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Marketing Planning
What other customer
groups might become
market segments for
us in the future?
What capabilities
does our company
have?
What product
benefits will our
customers be looking
for in the future?
How will changes in
technology affect us?
How will changes in
social values affect
us in future years?
= SWOT Analysis
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Marketing Plan
A document that describes:
• The marketing environment
• The marketing objectives
• The marketing strategy

And identifies who is responsible for each
part.
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Market Segments
Mass Market
All possible customers in a market, regardless of
the differences in their specific needs and wants.
Market Segment
A distinct group of customers within a larger
market who are similar to each other in some
way and whose needs differ from other
customers in the larger market.
Target Market
The market segments upon which an
organisation focuses its marketing plan and
towards which it directs its marketing efforts.
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Marketing Mix Variables
(the 4 Ps)
The
Marketing
Mix
Product
strategies
Pricing
strategies
Place
(distribution)
strategies
Promotion
strategies
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Variables – 1. Product
Augmented
Actual
Core

The product – the item being offered
for exchange.

It includes:

•The design and
packaging

•Physical features

•Any associated
services
Q
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Variables – 2. Price
The price –
the value the customer gives up or
exchanges in order to obtain the
desired product.
Can be used to:
•Increase interest in a product
•Indicate quality
Non-monetary elements:
•Time cost
•Social cost
•Lifestyle cost
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Variables – 3. Place
(distribution)
Place – the availability of the product
to the customer at the desired time
and location.
Related to the channel of
distribution – the set of
companies working together to
get a product from a producer to
a consumer.
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Variables – 4. Promotion
Promotion – all the activities
marketers undertake to inform
customers about their products and
to encourage potential consumers
to but those products.
Promotion includes:
•Personal selling

•Advertising

•Sales promotion

•Public relations
•Direct marketing

•Online marketing

•Sponsorship

•Word-of-mouth
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Evolution of Marketing
1900-
1930s
Production
era
Goal to be most efficient producer in a mass
market:
Focus was on company, not customer:
Demand greater than supply – seller’s
market:
Customers take whatever is available
Marketing plays insignificant role.
1930s-
1960s
Selling era Where marketing is primarily viewed as a
sales function:
Supply greater than demand – buyer’s
market:
Focus on one-off sales rather than building
repeat business
1960s Consumer
era
A philosophy focused on satisfying
customers’ needs and wants.
Greater focus on marketing
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Evolution of Marketing
1970s-
1990s
New era Improving products so that they meet needs
better than competitors.
Also sought better ways to segment and
target markets.
Mid
1990s
onwards
New
millennium
Building long-term bond with customers.
Customers exchange two things of value:
money and information = database = CRM

CRM - customer relationship marketing
Societal Marketing
Greater focus on accountability –
measuring how much value is created by
marketing activities (marketing metrics)