Part One

Marketing and Its Environment

1

An Overview of Strategic Marketing
PowerPoint Presentation by Charlie Cook

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Chapter Learning Objectives
• To be able to define marketing as focused on customers • To identify some important marketing terms, including target market, marketing mix, marketing exchanges, and marketing environment • To become more aware of the marketing concept and marketing orientation • To understand the importance of building customer relationships • To learn about the process of marketing management • To recognize the role of marketing in our society
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Chapter Outline
• Defining Marketing • Understanding the Marketing Concept • Managing Customer Relationships • Value-Driven Marketing • Marketing Management • The Importance of Marketing in Our Global Economy

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1–3

Defining Marketing
• Marketing
– The process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment

• Customers
– The purchasers of organizations’ products; the focal point of all marketing activities

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1–4

Components of Strategic Marketing

FIGURE 1.1
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Marketing Focuses on Customers
• Target Market
– A specific group of customers on whom an organization focuses its marketing efforts
• • • • Large or small customer groups Single or multiple product markets Single or multiple products Local to global markets

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1–6

Marketing Deals with Products, Distribution, Promotion, and Price
• The Marketing Mix
– Four marketing activities—product, distribution, promotion, and pricing—that a firm can control to meet the needs of customers within its target market

Product Distribution Promotion Pricing

Target Market

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1–7

Marketing Mix Variables
Product Distribution Promotion Pricing
Goods, services, or ideas that satisfy customer needs The ready, convenient, and timely availability of products

Activities that inform customers about the organization and its products Decisions and actions that establish pricing objectives and policies and set product prices
1–8

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Marketing Builds Satisfying Exchange Relationships
• Exchange
– The provision or transfer of goods, services, or ideas in return for something of value

FIGURE 1.2
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Marketing Builds Satisfying Exchange Relationships (cont’d)
• Exchange Conditions
– Two or more participants have something of value that the other party desires. – Exchange provides mutual benefit/satisfaction. – Each party has confidence in the exchange value of the other party’s offering. – Each party must meet the expectations of the exchange to become trusted by the other parties.

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Marketing Occurs in a Dynamic Environment
• Marketing Concept
– A philosophy that an organization should try to satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals – Customer satisfaction
• Analysis of customers’ current and long-term needs • Analysis of competitors’ capabilities • Integration of firm’s resources

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Evolution of the Marketing Concept
Product Orientation Sales Orientation Marketing Orientation
Late 19th century: efficient production of goods allowed firms to meet strong customer demand. Mid-1920s–early 1950s: weakened demand required that products would have to be “sold.” (personal selling, advertising, and distribution was the focus) Early 1950s–2000s: adopting a customer focus means a commitment to researching and responding to customer needs.

FIGURE 1.3
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Implementing the Marketing Concept
• Becoming marketing oriented requires
– establishing an information system to discover customers’ needs and using the information to create satisfying products. – coordinating all marketing activities by restructuring the organization. – obtaining the support of all managerial and staff levels in the organization.

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1–13

Managing Customer Relationships
• Relationship Marketing
– Establishing long-term, mutually satisfying buyer-seller relationships allowing for cooperation and mutual dependency
• Increased value of customer (loyalty) over time results in increased profitability.

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1–14

Managing Customer Relationships (cont’d)

• Customer Relationship Management (CRM)
– Using information about customers to create marketing strategies that develop and sustain desirable customer relationships
• Identifying buying-behavior patterns of customers • Using behavioral information to focus on the most profitable customers

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1–15

Value-Driven Marketing
• Value
– A customer’s subjective assessment of benefits relative to the costs in determining the worth of a product
• Customer value = customer benefits – customer costs

– Customer benefits
• Anything desired by the customer that is received in an exchange

– Customer costs
• Anything a customer gives up in an exchange for benefits

–Monetary price of the benefit –Search costs (time and effort) to locate the product –Risks associated with the exchange
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Marketing Management
• Marketing Management
– The process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently – Effectiveness
• The degree to which an exchange helps an organization achieve its objectives

– Efficiency
• The process of minimizing the resources an organization must spend to achieve a specific level of desired exchanges
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Marketing Management (cont’d)
• Planning
– Assessing opportunities and resources – Determining marketing objectives – Developing a marketing strategy and plans for implementation and control
• How, when and by whom are marketing activities performed?

• Organizing
– Developing the internal structure of the marketing unit
• Functions, products, regions, customer types

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Marketing Management (cont’d)
• Implementation
– Coordinating marketing activities – Motivating marketing personnel – Developing effective internal communications within the unit

• Control
– Establishing performance standards – Comparing actual performance to established standards – Reducing the difference between desired and actual performance
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Effective Marketing Control Process
• provides for quick detection of differences in planned and actual performance. • accurately monitors activities and is flexible enough to accommodate changes. • incurs low process costs relative to the costs of a “no-control” situation. • is understandable by both managers and subordinates.

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The Importance of Marketing in Our Global Economy
• Marketing Costs Consume a Sizable Portion of Buyers’ Dollars • Marketing Is Used in Nonprofit Organizations • Marketing Is Important to Business and the Economy • Marketing Fuels Our Global Economy

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1–21

The Importance of Marketing in Our Global Economy (cont’d)
• Marketing Knowledge Enhances Consumer Awareness • Marketing Connects People Through Technology • Socially Responsible Marketing Can Promote the Welfare of Customers and Society • Marketing Offers Many Exciting Career Prospects

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1–22

After reviewing this chapter you should:
• Be able to define marketing as focused on customers. • Know the meaning of important marketing terms, including target market, marketing mix, marketing exchanges, and marketing environment. • Be more aware of the marketing concept and marketing orientation. • Understand the importance of building customer relationships. • Have learned about the process of marketing management. • Recognize the important role of marketing in our society.

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1–23

Chapter 1 Supplemental Slides

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1–24

Key Terms and Concepts
• The following slides (a listing of terms and concepts) are intended for use at the instructor’s discretion. • To rearrange the slide order or alter the content of the presentation
– select “Slide Sorter” under View on the main menu. – left click on an individual slide to select it; hold and drag the slide to a new position in the slide show. – To delete an individual slide, click on the slide to select, and press the Delete key. – Select “Normal” under View on the main menu to return to normal view.
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Important Terms
• Marketing
– The process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment

• Customers
– The purchasers of organizations’ products; the focal point of all marketing activities

• Target Market
– A specific group of customers on whom an organization focuses its marketing efforts
Copyright © Houghton Mifflin Company. All rights reserved. 1–26

Important Terms
• The Marketing Mix
– Four marketing activities—product, distribution, promotion, and pricing—that a firm can control to meet the needs of customers within its target market

• Product
– Goods, services, or ideas that satisfy customer needs

• Distribution
– The ready, convenient, and timely availability of products

• Promotion
– Activities that inform customers about the organization and its products
Copyright © Houghton Mifflin Company. All rights reserved. 1–27

Important Terms
• Pricing
– Decisions and actions that establish pricing objectives and policies and set product prices

• Exchange
– The provision or transfer of goods, services, or ideas in return for something of value

• Marketing Concept
– A philosophy that an organization should try to satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals

Copyright © Houghton Mifflin Company. All rights reserved.

1–28

Important Terms
• Relationship Marketing
– Establishing long-term, mutually satisfying buyer-seller relationships allowing for cooperation and mutual dependency

• Customer Relationship Management (CRM)
– Using information about customers to create marketing strategies that develop and sustain desirable customer relationships

• Value
– A customer’s subjective assessment of benefits relative to the costs in determining the worth of a product
Copyright © Houghton Mifflin Company. All rights reserved. 1–29

Important Terms
• Customer Benefits
– Anything desired by the customer that is received in an exchange

• Customer Costs
– Anything a customer gives up in an exchange for benefits

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

Copyright © Houghton Mifflin Company. All rights reserved.

1–30

Important Terms
• Effectiveness
– The degree to which an exchange helps an organization achieve its objectives

• Efficiency
– The process of minimizing the resources an organization must spend to achieve a specific level of desired exchanges

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1–31

Transparency Figure 1D

Percentage of Sales Online by Retail Segment

Source: Investor’s Business Daily, Wednesday, September 5, 2001, p. A6. Used with Permission.

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1–32

Transparency Figure 1I

Starting Salaries for College Graduates

Source: American Demographics, December 2000, p. 27. Adapted with permission.

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1–33

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