Principles of Marketing

Chapter 1

What is marketing?
Lets start with what it isnt.

Has anyone seen this movie?

Should have been a clue

Ladies and gentlemen. The Burger is dead. The growth of

brands has spiraled out of control. Never before in history
has it been this difficult to record growth because there is
simply not enough room in the minds of consumers to hold
new desires for new products. What happened in the case
of fast food has fundamentally altered the market forever. A
crippling anxiety has seized consumers. They're terrified the
products can hurt them. A unique opportunity now stands
before you. The time has come to clear a free space in the
minds of consumers, where your products can live on.
Today, in order to get consumers to continue to desire
computers, you have to first make them lose interest in
cellphones. What you need, is to convince them that the
competition's brands are deadly dangerous. Destroy the
market for cellphones, and eradicate the competition. For
your brands to grow, they need to learn how to attack. And I
know how to teach your brands to attack.

A definition
American Marketing Association (AMA)
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. (Approved July 2013)

A definition
American Marketing Association (AMA)
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. (Approved July 2013)

Breakdown
Creating- generation of offerings with value
(more on value later)

Breakdown
Communicating- describing offerings

Breakdown
Delivering- Getting offerings to consumers in
ways that optimize value.

Breakdown
Exchange- Trading value for offerings
It includes more than just price. Changing
ownership is a key element to an exchange*.

Breakdown
Components in traditional terms
4Ps

Product- creating offerings

Promotion- communicate offerings
Place- getting product to a place to purchase
Price- Exchange

Value
Not exactly a straightforward concept
Value is the benefit buyers receive that meet
their needs.
Often this is understood in the terms of the
personal value equation:
Value= benefits received (price + hassle)

Why personal is key

Marketing Concept
The ideas behind marketing and value creation
havent been the same as they are today.
Firms initially were product oriented. Think:
pre-1920.
Products were the most optimal way to
compete.
The Model A being able to be made cheap and
efficiently lead to their vast expansion.

Marketing Concept
The next stage was selling oriented. Think
1920s-late 1940s
Products could now easily be made, so the
differentiation had to be based on advertising
and selling.
Now other cars were being made, so different
features, designs, etc. became concerns.

Marketing Concept
Marketing era- Now a vast assortment of
products could be created and advertised, so
now new ways were created to gain customer
attention.
Think 1950 1990 (though arguably still
today)
A couple key ideas from this era are cocreation
of value and service-dominant logic

Service Dominant Logic

Consumers want value no matter if it is a
product, service, or a combination.

Who does marketing?

For-profit- Wally World
*Nonprofits- American Cancer Society
Individuals- You when you send off a resume.

*Nonprofit doesnt mean there isnt a profit made

Why study marketing?

Your book goes over a few things, but really,
its because we own the world.
Dont believe me?

Choice

$20

$60

Choice

$20

$60

$250

Some Changes in the Landscape

Social Responsibility and Ethics
Sustainability
Metrics
Globalization