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Chapter 2:

Marketings Role
within the Firm
or Nonprofit Organization

For use only with Perreault and McCarthy texts.


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Irwin/McGraw-Hill

Chapter 2 Objectives
When you finish this chapter, you should
1. Know what the marketing
concept isand how it
should affect strategy
planning in a firm or
nonprofit organization.
2. Understand what customer
value is and why it is
important to customer
satisfaction.
3. Understand what a marketing
manager does.
4. Know what marketing
strategy planning isand
why it is the focus of the
book.
2-2

5. Understand target marketing.


6. Be familiar with the four Ps
in a marketing mix.
7. Know the difference between
a marketing strategy, a
marketing plan, and a
marketing program.
8. Understand the important
new terms.

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Marketings Changing Role


Simple
Simple Trade
Trade Era
Era

Production
Production Era
Era

Sales
Sales Era
Era

2-3

Focus:

Sell
Sell Surplus
Surplus
Focus:

Increase
Increase Supply
Supply
Focus:

Beat
Beat Competition
Competition

Marketing
Marketing Department
Department
Era
Era

Focus :

Marketing
Marketing Company
Company
Era
Era

Focus :

Coordinate
Coordinate and
and Control
Control
Long-Run
Long-Run
Customer
Customer Satisfaction
Satisfaction
For use only with Perreault and McCarthy texts.
The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

The Marketing Concept


Customer
Customer
Satisfaction
Satisfaction

Total
Total Company
Company
Effort
Effort

The
Marketing
Concept

Profit
Profit
Exhibit 2-1
2-4

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Marketing Orientation Sounds Easy,Isnt


Even the best firms sometimes backslide into a
production orientation
In todays highly competitive markets it is often
difficult to
keep up with changing customer needs
beat aggressive competitors to the punch
find the right focus -- one that matches the firms

objectives and resources to market opportunities


offer customers superior value

2-5

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Customer Value Reflects Benefits and Costs


Customer value concerns the difference between the benefits a
customer sees from a firms market offering and the costs of
obtaining those benefits

Costs

2-6

Benefits

The customers view of costs and benefits is not just limited


to economic (or even rational) considerations--and a low
price may NOT result in superior value...

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Customer Value

Costs

Benefits

One customers view of the benefits and costs of a firms


market offering may vary from another customers view, so
firm may not be able to satisfy everybody with the same
offering.

2-7

Customer value concept takes the customers point of view,


but customers may not explicitly weigh costs and benefits and
even if they do their view may not match some objective
reality.

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Nonprofits Need Marketing, Too

NonNonCustomer
Customer
Support
Support

NonNonEconomic
Economic
Measures
Measures
Characteristics
of Nonprofit
Organizations

Poorly
Poorly
Organized
Organized
for
forMarketing
Marketing
2-8

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
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The Marketing Management Process


Whole-Company
Whole-Company
Strategic
Strategic
Management
Management
Planning
Planning
Adjust Plans
As Needed

Control
ControlMarketing
Marketing
Plan(s)
Plan(s) and
andProgram
Program

Marketing
Marketing
Planning
Planning

Implement
ImplementMarketing
Marketing
Plan(s)
Plan(s) and
andProgram
Program

Exhibit 2-4
2-9

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Marketing Strategy Planning


The
Marketing
Mix

C
Exhibit 2-5
2-10

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

The Four Ps of the Marketing Mix

Product

Place

C
Price

Promotion

Exhibit 2-7
2-11

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Strategy Decision Areas


Organized by the Four Ps
Product

Place

Promotion

Price

Physical Goods
Service
Features
Quality Level
Accessories
Installation
Instructions
Warranty
Product Lines
Packaging
Branding

Objectives
Channel Type
Market Exposure
Kinds of
Middleman
Kinds and
Locations of
Stores
How to Handle
Transporting
and Storing
Service Levels
Recruiting
Middlemen
Managing
Channels

Objectives
Blend
Salespeople
Kind
Number
Selection
Training
Motivation
Advertising
Targets
Kinds of Ads
Media Type
Copy Thrust
Who Prepares?
Sales Promotion
Publicity

Objectives
Flexibility
Level over PLC
Geographic
Terms
Discounts
Allowances

Exhibit 2-8
2-12

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Four Examples of Basic Channels of


Distribution for Consumer Products
Manufacturer or producer
Citibank

Del
Monte

Procter &
Gamble

Wholesaler

Wholesaler

Nissan

Wholesaler
Retailer

Retailer

Retailer

Consumer
Exhibit 2-9
2-13

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Elements of the Marketing Program


Target
Market

+
Marketing
Mix

Marketing
Strategy

+
Time-Related
Details

Marketing
Plan

+
Other
Marketing
Plans

A Firms
Marketing
Program

Exhibit 2-11
2-14

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Distribution of Different Firms


Based on Performance
Death-wish
marketing

Best-practices
marketing

(Below
average)
(Well below
average)

2%
Total
Failure

14%
Poor

68%
(Average
Marketing
Program)

Fair

(Above
average)
(Well above
average)

14%
Good

2%
Exceptional

Exhibit 2-12
2-15

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill

Key Terms
Simple Trade Era
Production Era
Sales Era
Marketing
Department Era
Marketing
Company Era
Marketing Concept
Production
Orientation
Marketing
Orientation
Customer Value

2-16

Nonprofit
Organizations
Social Responsibility
Marketing
Management Process
Strategic (Management)
Planning
Marketing Strategy
Target Market
Marketing Mix
Target Marketing
Mass Marketing
Channel of Distribution

Personal Selling
Mass Selling
Advertising
Publicity
Sales Promotion
Marketing Plan
Implementation
Operational
Decisions
Marketing
Program

For use only with Perreault and McCarthy texts.


The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill