Chapter 1:

Customer-Driven
Strategic Marketing

Pride/Ferrell
Foundations of Marketing
Fourth Edition

Prepared by Milton Pressley

University of New Orleans

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 Objectives
1. Define marketing
2. Understand several important marketing terms
including target market, marketing mix, marketing
exchanges, and marketing environment
3. Be aware of the marketing concept and marketing
orientation
4. Understand the importance of building customer
relationships
5. Explain the major marketing functions that are a
part of the marketing management process
6. Understand the role of marketing in our society

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Marketing Defined
• Marketing is the process of creating,
distributing, promoting, and pricing goods,
services, and ideas, to facilitate satisfying
exchange relationships with customers and
develop and maintain favorable relationships
with stakeholders in a dynamic environment.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Fig. 1.1 Components of Strategic Marketing

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Discussion Question
1. What do you think is the difference
between “marketing” and “selling”?
2. Why do you think the term “marketing” is
used interchangeably with “selling” by
many (most?) business people?

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Who is the Focus of Marketing?
• Customers
The purchasers of organizations’ products;
the focal point of all marketing activities.
– The Target Market
• Old Navy focuses on its target market to meet their needs
• Who is their target market?

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Target Market
Target Market-is a specific
group of customers on
whom an organization
focuses its marketing
efforts.

Appealing to health-
conscious customers

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Discussion Question
What do you think might be a good target
market for Michelin Tires? After discussing
this, click on the @ symbol below to see the
target markets defined by Michelin.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Marketing Mix Variables
Marketers combine
and balance four
elements when
determining how
to satisfy
customers’ needs
for a product:
• Product
• Price
• Distribution
• Promotion

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 Product Variable
A product can be a:
–Good
–Service
–Idea

Product
Petzl’s ad focuses on the
quality, comfort, and
reliability of its climbing
helmet
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 Price Variable
• Relates to decisions and actions associated with
establishing pricing objectives and policies
• Relates to determining product prices
• Determines the value of the exchange

Price
The Mini Cooper is
promoted as being both
affordable to buy and
economical on fuel

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 Distribution Variable
• Make products available in quantities desired
• Minimize costs:
– Inventory
– Transportation
– Storage
• Select/motivate intermediaries
• Establish/maintain inventory control
• Develop/manage transportation and
storage systems

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 Promotion Variable
• Inform individuals or groups about the
organization and its products/services
– Advertising
– Public relations
– Personal selling
– Promotions
– Street teams
– Viral marketing

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 Discussion Question
Other than those discussed in the
book or by your instructor, give an
example of a:
- good
- service
- idea

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Discussion Question
• Click on the Television below, watch the
commercial, and discuss whether the
promotional message is primarily about a
good, service or an idea.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Relationships with Customers
• Exchange - the provision or transfer of
goods, services, or ideas in return for
something of value

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 Stakeholders
Constituents who have a “stake,” or claim,
in some aspect of a company’s products,
operations, markets, industry,
and outcomes.

The Customer as
a Stakeholder
Yoplait donates to
breast cancer
research.
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 Marketing Environment
• The six types of forces that surround the
customer and affect the marketing mix:
– Economic forces
– Political forces
– Legal and regulatory forces
– Technological forces
– Socio-cultural forces
– Competitive forces
• Unlike marketing-mix variables, an
organization has no control over these
forces

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Discussion Question
Pick a product that you want to market.
Discuss how each of the forces in the
marketing
environment will
effect your
marketing mix.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Marketing Concept
• A managerial philosophy that
an organization should try to
provide products that satisfy
customers’ needs through a
coordinated set of activities
that also allows the
organization to achieve its
goals.

The Marketing Concept

SSI understands the importance
of a customer orientation by
listening to customers and
providing great service

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 The Evolution of the Marketing Concept
The marketing concept has changed over time:

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 Marketing Orientation
An organization-wide commitment to
researching and responding to
customer needs.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Implementing the Marketing Concept
• First, establish an information system to discover customers’ real needs
• Use the information to create satisfying products
• Coordinate all activities

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 Managing Customer Relationships
• Relationship Marketing
– Establishing long term mutually
satisfying, buyer/seller
relationships.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Customer Relationship Marketing (CRM)
• Using information about customers to
create marketing strategies that develop and
sustain desirable customer relationships.

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 Value-Driven Marketing
• Value-a customer’s subjective assessment of
benefits relative to costs in determining the
worth of a product.

Value = Customer
Benefits – Customer
Costs

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 Marketing Management
• The process of planning, organizing,
implementing, and controlling marketing
activities to facilitate exchanges effectively and
efficiently.

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 Why Marketing Plays An Important
Role in Our Global Economy
Consumes Large
Proportion of
Buyers’ Dollars
Creates
Is Used by
Career
Non-Profits
Prospects

Is Important
Promotes Welfare
to Business
of Consumers Marketing and the
and Society
Economy

Connects
Fuels
People
the Global
through
Economy
Technology Enhances
Consumer
Awareness

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 After Reviewing This Chapter
You Should:
1. Be able to define marketing
2. Understand several important marketing terms
including target market, marketing mix, marketing
exchanges, and marketing environment
3. Be aware of the marketing concept and marketing
orientation
4. Understand the importance of building customer
relationships
5. Explain the major marketing functions that are a
part of the marketing management process
6. Understand the role of marketing in our society

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key Concepts
• Marketing • Marketing concept
• Customers • Marketing orientation
• Target market • Relationship marketing
• Marketing mix • Customer relationship
management (CRM)
• Products
• Value
• Exchanges
• Marketing management
• Stakeholders
• Marketing environment

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.