SLAYTLAR

Principles of Marketing
Seventeenth Edition
Chapter 1
Marketing:
Creating Customer Value and Engagement
Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Learning Objectives
1-1 Define marketing and outline the steps in the marketing process.
1-2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace
concepts.
1-3 Identify the key elements of a customer-driven marketing strategy and discuss the marketing management
orientations that guide marketing strategy.
1-4 Discuss customer relationship management and identify strategies for creating value for customers and
capturing value from customers in return.
1-5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships.

Learning Objective 1
Define marketing and outline the steps in the marketing process.

What is Marketing?
Marketing is a process by which companies create value for customers
and build strong customer relationships in order to capture value from
customers in return.

What is Marketing?

Explain the importance of understanding the marketplace and customers
and identify the five core marketplace concepts.

Understanding the Marketplace and Customer Needs
Needs are states of felt deprivation.
Wants are the form human needs take
as they are shaped by culture and
individual personality.
Demands are human wants that are
backed by buying power.

Market offerings are some combination

of products, services, information, or
experiences offered to a market to satisfy
a need or want.
Marketing myopia is focusing only on

existing wants and losing sight of
underlying consumer needs.

Exchange is the act of obtaining a desired object from someone by
offering something in return.
Marketing actions try to create, maintain, and grow desirable exchange
relationships.

A market is set of actual and potential buyers.

Consumers market when they:
• search for products
• interact with companies to obtain information
• make purchases

Understanding the Marketplace and
Customer Needs

Identify the key elements of a customer-driven marketing strategy and discuss the
marketing management orientations that guide marketing strategy.

Designing a Customer Value-Driven Marketing Strategy
Marketing management is the art and science of choosing target markets
and building profitable relationships with them.
• What customers will we serve (target market)?
• How can we best serve these customers (value proposition)?

A brand’s value proposition is the set of
benefits or values it promises to deliver to
customers to satisfy their needs.

Societal
Production Product Selling Marketing
Marketing
concept concept concept concept
concept

Designing a Customer Value-Driven
Marketing Strategy

Designing a Customer Value-Driven
Marketing Strategy
Societal marketing:
The company’s marketing
decisions should consider
consumers’ wants, the
company’s requirements,
consumers’ long-run
interests, and society’s
long-run interests.

The marketing mix is comprised of a set of tools known a
the four Ps:
• product
• price
• promotion
• place
Integrated marketing program—a comprehensive plan that communicates and
delivers intended value

Discuss customer relationship management and identify strategies for
creating value for customers and capturing value from customers in return.

Managing Customer Relationships and Capturing
Customer Value
Customer relationship management—the overall process of building and
maintaining profitable customer relationships by delivering superior
customer value and satisfaction.

Managing Customer Relationships and
Capturing Customer Value
Relationship Building Blocks
Customer- Customer
perceived value satisfaction
• The difference • The extent to

between total which perceived
customer performance
perceived matches a
benefits and buyer’s
customer cost expectations

Customer Value
Customer-Engagement Marketing
fosters direct and continuous customer
involvement in shaping brand
conversations, experiences, and
community.

Consumer-Generated Marketing
Brand exchanges created by consumers

themselves.
Consumers are playing an increasing

role in shaping brand experiences.

Partner relationship management involves working closely with partners
in other company departments and outside the company to jointly bring
greater value to customers.

Customer lifetime value is the value of the
entire stream of purchases that the
customer would make over a lifetime of
patronage.

Customer Value
Share of customer is the portion of the customer’s purchasing that a
company gets in its product categories.

Managing Customer Relationships and Capturing Customer Value
Customer equity is the total combined customer

lifetime values of all of the company’s customers.

Managing Customer Relationships
and Capturing Customer Value

Describe the major trends and forces that are changing the marketing
landscape in this age of relationships.

The Changing Marketing Landscape
Digital and social media marketing involves using digital marketing tools
such as web sites, social media, mobile ads and apps, online videos, e-mail,
and blogs that engage consumers anywhere, at any time, via their digital
devices.

The Changing Marketing Landscape
• Not-for-profit marketing growth
• Rapid globalization
• Sustainable marketing

So, What Is Marketing? Pulling It All Together

Seventeenth Edition
Chapter 2
Partnering to Build Customer

Engagement, Value, and
Relationships

Learning Objectives
2-1 Explain company-wide strategic planning and its four steps.
2-2 Discuss how to design business portfolios and develop growth strategies.
2-3 Explain marketing’s role in strategic planning and how marketing works with
its partners to create and deliver customer value.
2-4 Describe the elements of a customer value-driven marketing strategy and
mix, and the forces that influence it.
2-5 List the marketing management functions, including the elements of a
marketing plan, and discuss the importance of measuring and managing
marketing return on investment.

Explain company-wide strategic planning and its four steps.

Company-Wide Strategic Planning (1 of 3)
Strategic planning is the process of developing and maintaining a
strategic fit between the organization’s goals and capabilities, and its
changing marketing opportunities.

Company-Wide Strategic Planning

The mission statement is the organization’s
purpose; what it wants to accomplish in the
larger environment.

Setting Company Objectives and Goals
Business Marketing
objectives objectives
• Build profitable • Increase
customer market share
relationships • Create local
• Invest in partnerships
research • Increase
• Improve profits promotion

Discuss how to design business portfolios and develop growth strategies.

Designing The Business Portfolio
The business portfolio is the collection
of businesses and products that make
up the company.
Portfolio analysis is a major activity in
strategic planning whereby management
evaluates the products and businesses
that make up the company.

Strategic business units can be a
• Company division
• Product line within a division
• Single product or brand

Analyzing The Current Business Portfolio
Identify strategic business units

(SBUs)
Assess the attractiveness of its

various SBUs
Decide how much support each

SBU deserves


Problems with Matrix Approaches
• Difficulty in defining SBUs and measuring market share
and growth
• Time consuming
• Expensive
• Focus on current businesses, not future planning


Developing Strategies for Growth and Downsizing

Developing Strategies for Growth and Downsizing
Downsizing is when a company must prune, harvest, or divest businesses
that are unprofitable or that no longer fit the strategy.

Explain marketing’s role in strategic planning and how marketing works with its
partners to create and deliver customer value.

Planning Marketing: Partnering to Build
Customer Relationships (1 of 3)
Partnering with Other Company Departments
Value chain is a series of departments that carry out value creating activities
to design, produce, market, deliver, and support a firm’s products.

Planning Marketing: Partnering to Build
Customer Relationships (2 of 3)
Partnering with Other Company Departments

Planning Marketing: Partnering to Build Customer
Relationships (3 of 3)
Partnering with Others in the Marketing System
Value delivery network is made up of the company, suppliers, distributors,
and ultimately customers who partner with each other to improve
performance of the entire system.

Describe the elements of a customer value-driven marketing strategy and mix,
and the forces that influence it.

Marketing Strategy and the Marketing Mix

Customer Value-Driven Marketing Strategy
Marketing strategy is the marketing logic by which the company hopes to
create customer value and achieve profitable customer relationships.

Market segmentation is the division of a market into distinct groups of

buyers who have different needs, characteristics, or behaviors and who might
require separate products or marketing mixes.
Market segment is a group of consumers who respond in a similar way to a

given set of marketing efforts.

Market targeting is the process of evaluating each market segment’s
attractiveness and selecting one or more segments to enter.
Market positioning is the arranging for a product to occupy a clear, distinctive,
and desirable place relative to competing products in the minds of target
consumers.
Differentiation begins the positioning process.

Positioning: The L’Oréal group serves major

segments of the beauty market, and within each
segment it caters to many sub segments. L’Oréal
targets the larger segments through its major
divisions; further within these major divisions,
L’Oréal markets various brands that cater to
customers of different ages, incomes, and lifestyles.

Developing an Integrated Marketing Mix
Marketing mix is the set of controllable, tactical marketing tools—product,

price, place, and promotion—that the firm blends to produce the response it
wants in the target market.


List the marketing management functions, including the elements of a
marketing plan, and discuss the importance of measuring and managing
marketing return on investment.

Managing the Marketing Effort
Figure 2.6 Analysis, Planning, Implementation, and Control

Figure 2.7 Marketing Analysis: SWOT Analysis

Market Planning—Parts of a Marketing Plan
Executive Marketing Threats and

summary situation opportunities
Objectives and Marketing Action

issues strategy programs
Budgets Controls

Marketing Implementation
• Turning marketing strategies and plans into marketing actions to
accomplish strategic marketing objectives
• Addresses who, where, when, and how

Measuring and Managing Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)

• Net return from a marketing investment divided by the costs of the
marketing investment
• Measurement of the profits generated by investments in marketing
activities

Measuring and Managing Return on Marketing Investment

Seventeenth Edition
Chapter 3
Analyzing the Marketing
Environment

Learning Objectives
3-1 Describe the environmental forces that affect the company’s ability to
serve its customers.
3-2 Explain how changes in the demographic and economic environments
affect marketing decisions.
3-3 Identify the major trends in the firm’s natural and technological
environments.
3-4 Explain the key changes in the political and cultural environments.
3-5 Discuss how companies can react to the marketing environment.

Describe the environmental forces that affect the company’s ability
to serve its customers.

A Company’s Marketing Environment
The marketing environment includes the actors and forces outside marketing
that affect marketing management’s ability to build and maintain successful
relationships with target customers.

Microenvironment consists of the actors close to the company that affect its
ability to serve its customers—the company, suppliers, marketing
intermediaries, customer markets, competitors, and publics.

Macroenvironment consists of the larger societal forces that affect the

microenvironment—demographic, economic, natural, technological, political,
and cultural forces.

The Microenvironment

The Company
In designing marketing plans, marketing management takes other
company groups into account.
• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting

Suppliers
• Provide the resources to produce goods and services
• Treat as partners to provide customer value

Marketing Intermediaries
Marketing intermediaries are firms that

help the company to promote, sell, and
distribute its goods to final buyers.

Marketing Intermediaries
Physical
Resellers distribution
firms
Marketing
Financial
services
intermediaries
agencies

Competitors
Firms must gain strategic advantage by positioning their

offerings strongly against competitors’ offerings in the minds of
consumers.

Publics
Any group that has an actual or potential interest in or impact on an
organization’s ability to achieve its objectives:
• Financial publics
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics

Customers
• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets

Explain how changes in the demographic and economic
environments affect marketing decisions.

The Macro environment

The Macroenvironment
Demographic Environment
• Demography is the study of human populations—size, density, location,
age, gender, race, occupation, and other statistics.
• Demographic environment involves people, and people make up
markets.
• Demographic trends include changing age and family structures,
geographic population shifts, educational characteristics, and population
diversity.

• Baby Boomers – born 1946 to 1964
• Generation X – born between 1965 and 1976
• Millennials – born between 1977 and 2000
• Generation Z – born after 2000

Generational marketing is important in segmenting people by
lifestyle or life stage instead of age.

• Changing American family

• Changes in the workforce

Geographic Shifts in Population
• Growth in U.S. West and South and decline in
Midwest and Northeast
• Change in where people work
 Telecommuting
 Home office

Markets are becoming more diverse.
• International
• National
• Ethnicity
• Gay and lesbian
• Disabled

Economic Environment

Changes in Consumer Spending
Value marketing involves offering financially cautious buyers
greater value—the right combination of quality and service at a
fair price.

Income Distribution
Over the past several decades, the rich have grown richer, the
middle class has shrunk, and the poor have remained poor.

Identify the major trends in the firm’s natural and technological

environments.

The Natural Environment
The natural environment is the physical environment and the natural
resources that are needed as inputs by marketers or that are affected by
marketing activities.

The Natural Environment
Trends in the Natural Environment
• Growing shortages of raw materials
• Increased pollution
• Increased government intervention
• Developing strategies that support environmental sustainability

Natural Environment
Environmental sustainability involves
developing strategies and practices that
create a world economy that the planet
can support indefinitely.

Technological Environment
• Most dramatic force in changing the
marketplace
• New products, opportunities
• Concern for the safety of new products

Explain the key changes in the political and cultural environments.

Political and Social Environment
Legislation regulating business is intended to protect
• companies from each other
• consumers from unfair business practices
• the interests of society against unrestrained business behavior

Political and Social Environment
• Increased emphasis on ethics
• Socially responsible behavior
• Cause-related marketing

Cultural Environment
The cultural environment consists of institutions and other forces
that affect a society’s basic values, perceptions, and behaviors.

Cultural Environment
Core beliefs and values are persistent and are passed on from parents to
children and are reinforced by schools, churches, businesses, and
government.
Secondary beliefs and values are more open to change and include
people’s views of themselves, others, organizations, society, nature, and the
universe.

Discuss how companies can react to the marketing environment.

Responding to the Marketing Environment
Views on Responding
Uncontrollable Proactive Reactive
• React and • Take • Watch and

adapt to aggressive react to
forces in the actions to forces in the
environment affect forces environment
in the
environment

Seventeenth Edition
Chapter 5
Consumer Markets and

Buyer Behavior

Learning Objectives
5-1 Define the consumer market and construct a simple model of
consumer buyer behavior.
5-2 Name the four major factors that influence consumer buyer
behavior.
5-3 List and define the major types of buying decision behavior and
the stages in the buyer decision process.
5-4 Describe the adoption and diffusion process for new products.

Define the consumer market and construct a simple model of consumer buyer
behavior.

Consumer Markets and Buyer Behavior
Consumer buyer behavior is the buying behavior of final consumers—
individuals and households that buy goods and services for personal
consumption.
Consumer markets are made up of all the individuals and households that
buy or acquire goods and services for personal consumption.

Consumer Markets and Buyer Behavior

Name the four major factors that influence consumer buyer behavior.

Characteristics Affecting Consumer Behavior

Cultural Factors
Culture is the set of basic values, perceptions, wants, and behaviors
learned by a member of society from family and other important institutions.

Cultural Factors
Subcultures are groups of people within
a culture with shared value systems
based on common life experiences and
situations.

Cultural Factors
Social classes are society’s relatively permanent and ordered divisions
whose members share similar values, interests, and behaviors.
Measured as a combination of occupation, income, education, wealth, and
other variables

Cultural Factors
Major American Social Classes
• Upper Class
• Middle Class
• Working Class
• Lower Class

Social Factors
Groups and Social Networks
Membership Aspirational Reference

Groups Groups Groups
• Groups with • Groups an • Groups that
direct individual form a
influence wishes to comparison
and to belong to or reference
which a in forming
person attitudes or
belongs behavior

Groups and Social Networks
• Online social networks
• Buzz marketing
• Social media sites
• Virtual worlds
• Word of mouth
• Opinion leaders

Social Factors
• Family is the most important consumer-buying organization in society.

• Role and status can be defined by a person’s position in a group.

Personal Factors
• Age and life-cycle stage
• PRIZM Lifestage Groups system
 66 segments
 11 life-stage groups

Personal Factors
Occupation affects the goods and services bought by consumers.
Economic situations include trends in:
Personal Interest
Spending Savings
income rates

Personal Factors
Lifestyle is a person’s pattern of
living as expressed in his or her
psychographics.

Characteristics Affecting
Consumer Behavior
Personal Factors
Personality refers to the unique psychological
characteristics that distinguish a person or group.

Brand Personality Traits
Sincerity Excitement Competence
Sophistication Ruggedness

Developing Marketing Information
Psychological Factors
Motivation
Perception
Learning
Beliefs and attitudes

A motive (or drive) is a need that is sufficiently pressing to direct the person to
seek satisfaction of the need.
Motivation research refers to qualitative research designed to probe
consumers’ hidden, subconscious motivations.

Developing Marketing Information

Perception is the process by which people select, organize, and interpret information to
form a meaningful picture of the world.
Perceptual Processes
Selective Selective Selective

attention distortion retention

Selective attention is the tendency for people to screen out most of the
information to which they are exposed.
Selective distortion is the tendency for people to interpret information in a
way that will support what they already believe.
Selective retention is the tendency to remember good points made about a
brand they

Learning is the change in an individual’s behavior arising from experience
and occurs through the interplay of:
Drives Stimuli Cues
Responses Reinforcement

A belief is a descriptive thought that a person has about something based on:
• knowledge
• opinion
• faith
An attitude describes a person’s relatively consistent evaluations, feelings,
and tendencies toward an object or idea.

List and define the major types of buying decision behavior and the stages in
the buyer decision process.

Types of Buying Decision Behavior
Complex buying behavior
Dissonance-reducing buying behavior
Habitual buying behavior
Variety-seeking buying behavior

Types of Buying Decision Behavior

Figure 5.5 The Buyer Decision Process

The Buyer Decision Process
Need Recognition
Need recognition is the first stage of the buyer decision process, in which
the consumer recognizes a problem or need triggered by:
• Internal stimuli
• External stimuli

Information Search
Information search is the stage of the buyer decision process in which the
consumer is motivated to search for more information.
Sources of information:
• Personal sources
• Commercial sources
• Public sources
• Experiential sources

Evaluation of Alternatives
Alternative evaluation is the stage of the buyer decision process in which
the consumer uses information to evaluate alternative brands in the choice
set.

Purchase Decision
Purchase decision is the buyer’s decision about which brand to
purchase.
The purchase intention may not be the purchase decision due to:
• Attitudes of others
• Unexpected situational factors

Postpurchase Behavior
Postpurchase behavior is the stage of the buyer decision process in which
consumers take further action after purchase, based on their satisfaction or
dissatisfaction.

Postpurchase Behavior
Cognitive dissonance is buyer

discomfort caused by postpurchase
conflict.

Describe the adoption and diffusion process for new products.

The Buyer Decision Process for New Products
The adoption process is the mental process an individual goes
through from first learning about an innovation to final regular use.
• Stages in the adoption process include:
Awareness Interest Evaluation Trial Adoption

Individual Differences in Innovativeness
• Innovators
• Early Adopters
• Early Mainstream
• Late Mainstream
• Lagging Adopters


Analyzing and Using Marketing Information
Influence of Product Characteristics on Rate of Adoption
Relative
Compatibility Complexity
advantage
Divisibility Communicability

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Principles of Marketing

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Define marketing and outline the steps in the marketing process.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Market offerings are some combination

Marketing myopia is focusing only on

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

A market is set of actual and potential buyers.

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Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

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Relationship Building Blocks

• The difference • The extent to

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Brand exchanges created by consumers

Consumers are playing an increasing

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Customer equity is the total combined customer

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Partnering to Build Customer

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Identify strategic business units

Assess the attractiveness of its

Decide how much support each

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