McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Define marketing and identify the

diverse factors influencing marketing
activities.
Explain how marketing discovers and
satisfies consumer needs.
Distinguish between marketing mix
factors and environmental forces.
LO3
LO2
LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:
LO1
1-2
Explain how organizations build strong
customer relationships and customer
value through marketing.
Describe how todays customer
relationship era differs from prior eras.
LO4
LO5
LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:
1-3
DISCOVERING HOW COLLEGE STUDENTS STUDY
HELPS LAUNCH A NEW PRODUCT AT 3M
Satisfying
Student
Study Needs
Discovering
Student Study
Needs
1-4
Marketing is NOT Easy
WHAT IS MARKETING?
LO1
You Are a Marketing Expert Already
Involved in 1,000s of Buying Decisions
May Be Involved in Selling Decisions
1-5
1. True 2. True 3. (c) plastic bottles
FIGURE 1-1 The see-if-youre-really-a-
marketing-expert test
1-6
Marketing Seeks to:
Exchange
Discover Needs and Wants of Customers
Satisfy Them
WHAT IS MARKETING?
DELIVERING BENEFITS
LO1
AMA Definition of Marketing
1-7
WHAT IS MARKETING?
DIVERSE FACTORS INFLUENCE MARKETING ACTIVITIES
LO1
The Organization Itself and
Its Departments
Society
Environmental Forces
1-8
FIGURE 1-2 A marketing department relates
to many people, organizations, and
environmental forces
1-9
WHAT IS MARKETING?
REQUIREMENTS FOR MARKETING TO OCCUR
LO1
Two + Parties with
Unsatisfied Needs
A Desire and Ability
to be Satisfied
A Way for the Parties
to Communicate
Something
to Exchange
1-10
HOW MARKETING
DISCOVERS CONSUMER NEEDS
THE CHALLENGE: NEW PRODUCTS
LO2
Consumers May Not Know or Cannot
Describe What They Need or Want
Most New Products Fail
Focus on the Consumer Benefit
Learn From the Past
The Challenge:
1-11
Dr. Care Vanilla-Mint Aerosol Toothpaste
What benefits and what showstoppers?
LO2
1-12
Terrafugia Transition
What benefits and what showstoppers?
LO2
1-13
Pepsi Next
What benefits and what showstoppers?
LO2
1-14
Need Want
Does Marketing Persuade
People to Buy the
Wrong Things?
Market
HOW MARKETING
DISCOVERS CONSUMER NEEDS
NEEDS VS. WANTS
LO2
1-15
FIGURE 1-3 Marketing seeks to discover
consumer needs through research and then
satisfy them with a marketing program
1-16
HOW MARKETING
SATISFIES CONSUMER NEEDS
LO3
Promotion
Place
Target Market
The 4 Ps: Controllable
Marketing Mix Factors
Product
Price
$499
1-17
HOW MARKETING
SATISFIES CONSUMER NEEDS
LO3
Technological
Regulatory
Uncontrollable Environmental Forces
Social
Economic
Competitive
Customer Value Proposition
1-18
THE MARKETING PROGRAM
CUSTOMER VALUE AND RELATIONSHIPS
LO4
Best Price Best Service
Customer Value
Best Product
Value Strategies
1-19
Southwest Airlines, Starbucks, and Home Depot
What customer value strategy?
LO4
1-20
THE MARKETING PROGRAM
RELATIONSHIP MARKETING
LO4
Easy to Understand
Relationship Marketing
Hard to Do
Marketing Program
1-21
3MS STRATEGY & MARKETING PROGRAM
HELPING STUDENTS STUDY
LO4
Move from Ideas to
a Marketable
Highlighter Product
Add the Post-it

Flag Pen
Develop a Marketing
Program for the
Post-it

Flag
Highlighter and Pen
1-22
FIGURE 1-4 Marketing programs for two
new 3M Post-it

brand products targeted at

two distinct customer segments: college
students and office workers
1-23
3M STRATEGY & MARKETING PROGRAM
MARKETPLACE SUCCESS?
LO4
Developed Third
Generation Post-it

Flag Highlighter
Appeared on
The Oprah
Winfrey Show
1-24
FIGURE 1-A Four different orientations in
the history of American business
Production Era
Sales Era
Marketing Concept Era
Customer Relationship Era
Market Orientation
1-25
HOW MARKETING BECAME IMPORTANT
EVOLUTION OF THE MARKET ORIENTATION
LO5
Customer Relationship
Management (CRM)
Customer Experience
Direct Contacts: Buying the Service
Indirect Contacts: Word-of-Mouth
1-26
HOW MARKETING BECAME IMPORTANT
ETHICS AND SOCIAL RESPONSIBILITY
LO5
Ethics
Social Responsibility
Societal Marketing Concept
1-27
HOW MARKETING BECAME IMPORTANT
BREADTH AND DEPTH OF MARKETING
LO5
Who Markets?
What Is Marketed?
Products
(Goods)
Services Ideas
Hermitage
1-28
HOW MARKETING BECAME IMPORTANT
BREADTH AND DEPTH OF MARKETING
LO5
Who Benefits?
Who Buys & Uses What Is Marketed?
Ultimate Consumers
Organizational Buyers
How Do Consumers Benefit?: Utility
Form Utility
Place Utility
Time Utility
Possession Utility
1-29


3MS POST-IT

FLAG HIGHLIGHTER:
EXTENDING THE CONCEPT!
VIDEO CASE 1
1-30
VIDEO CASE 1
3Ms Post-it

Flag Highlighter
1. (a) How did 3Ms David
Windorski get ideas from college
students to help him in designing
the final commercial version of
the Post-it

Flag Highlighter?
(b) How were these ideas
important to the success of the
product?
1-31
2. What (a) special advantages and
(b) potential problems did 3M
have in introducing a new
highlighter-with-flags product for
college students?
VIDEO CASE 1
3Ms Post-it

Flag Highlighter
1-32
3. Visit your college bookstore
before you answer. (a) Where
would you display the Post-it

Flag Highlighter in a college
bookstore and (b) How can the
display increase student
awareness of the product?
VIDEO CASE 1
3Ms Post-it

Flag Highlighter
1-33
VIDEO CASE 1
3Ms Post-it

Flag Highlighter
4. In what ways might 3M try to
promote its Post-it

Flag
Highlighter and make students
more aware of the product?
1-34
5. What are the (a) special
opportunities and (b) potential
challenges for 3M in taking its
Post-it

Flag Highlighter into

international markets? (c) On
which countries should 3M focus
its marketing efforts?
VIDEO CASE 1
3Ms Post-it

Flag Highlighter
1-35
Marketing
Marketing is the activity for
creating, communicating,
delivering, and exchanging
offerings that benefit the
organization, its stakeholders,
and society at large.
1-36
Exchange
Exchange is the trade of things
of value between buyer and seller
so that each is better off after the
trade.
1-37
Market
A market consists of people with
both the desire and the ability to
buy a specific offering.
1-38
Target Market
A target market consists of
one or more specific groups of
potential consumers toward
which an organization directs its
marketing program.
1-39
Marketing Mix
The marketing mix consists of
the marketing managers
controllable factorsproduct,
price, promotion, and placethat
can be used to solve a marketing
problem.
1-40
Customer Value Proposition
Customer value proposition is
the cluster of benefits that an
organization promises customers
to satisfy their needs.
1-41
Environmental Forces
Environmental forces consist of
the uncontrollable forces in a
marketing decision involving
social, economic, technological,
competitive, and regulatory forces.
1-42
Customer Value
Customer value is the unique
combination of benefits received
by targeted buyers that includes
quality, convenience, on-time
delivery, and both before-sale
and after-sale service at a
specific price.
1-43
Relationship Marketing
Relationship marketing links
the organization to its individual
customers, employees, suppliers,
and other partners for their
mutual long-term benefits.
1-44
Marketing Program
A marketing program is a plan
that integrates the marketing mix
to provide a good, service, or idea
to prospective buyers.
1-45
Marketing Concept
A marketing concept is the
idea that an organization should
(1) strive to satisfy the needs of
consumers (2) while also trying to
achieve the organizations goals.
1-46
Market Orientation
A market orientation occurs when
an organization focuses its efforts
on (1) continuously collecting
information about customers needs,
(2) sharing this information across
departments, and (3) using it to
create customer value.
1-47
Societal Marketing Concept
Societal marketing concept is
the view that organizations should
satisfy the needs of consumers in
a way that provides for societys
well-being.
1-48
Product
A product is a good, service, or
idea consisting of a bundle of
tangible and intangible attributes
that satisfies consumers needs
and is received in exchange for
money or something else of value.
1-49
Ultimate Consumers
Ultimate consumers consist of
the people who use the goods
and services purchased for a
household. Also called
consumers, buyers, or customers.
1-50
Organizational Buyers
Organizational buyers are
those manufacturers, wholesalers,
retailers, and government
agencies that buy goods and
services for their own use or for
resale.
1-51
Utility
Utility consists of the benefits or
customer value received by users
of the product.
1-52