CHAPT 01 ER Marketing in Today’s Global Business Milieu

McGraw-Hill/Irwin

Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.

LEARNING OBJECTIVES
 Identify

typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. what marketing and marketing management really are and how they contribute to firm success. how marketing has evolved from its early roots to be practiced as it is today. the impact of key change drivers on the future of marketing. the global experience learning curve.

 Define

 Appreciate

 Recognize

 Explain

1-2

and society at large. clients. communicating.marketingpower. and processes for creating. set of institutions.com. www. and exchanging offerings that have value for customers. American Marketing Association. partners. accessed May 17. 2008.WELCOME TO MARKETING MANAGEMENT Marketing is the activity. 1-3 . delivering.

 Marketing  Marketing 1-4 .MARKETING MISCONCEPTIONS  Catchy  Pushy and entertaining advertisements salespeople brands and their celebrity spokespeople  Famous  Product claims that turn out to be overstated or just plain false departments “own” marketing initiative is just another cost of doing business.

2. 4. Marketing is just another cost center in a firm. Marketing is all about the sizzle. . 1-5 5. 3.MARKETING MISCONCEPTIONS 1. Marketing is inherently unethical and harmful to society. Marketing is all about selling. 6. Only marketers market. Marketing is all about advertising.

BEHIND THE MISCONCEPTIONS Marketing Marketing is Highly Visible by Nature is More Than Buzzwords 1-6 .

TOWARD THE REALITY OF MODERN MARKETING Marketing is a central function and set of processes essential to any enterprise. and managing the facets of marketing is a core business activity. Leading 1-7 .

” Peter Drucker. circa 1954 “There is only one valid definition of business purpose: to create a customer.. circa 1973 “Marketing is so basic that it cannot be considered a separate function (i.e.. a separate skill or work) within the business.DEFINING MARKETING Peter Drucker.” 1-8 ..

set of institutions. and processes for creating.DEFINING MARKETING American Marketing Association defines marketing as the activity. communicating. and society at large. and exchanging offerings that have value for customers. partners. clients. delivering. 1-9 .

◦ Marketing as an activity. and processes. ◦ Value. 1-10 . set of institutions.DEFINING MARKETING Areas of focus: ◦ The more strategic aspects of marketing.

DEFINING MARKETING Marketing’s Societal Stakeholders Marketing Sustainability 1-11 .

CORE MARKETING CONCEPTS Value is the ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits. Exchange 1-12 . occurs when a person gives up something of value to them for something else they desire to have.

2. Each party believes it is appropriate or desirable to deal with the other party. Each party is capable of communication and delivery. Each party is free to accept or reject the exchange offer. 5. Each party has something that might be of value to the other party.FOR EXCHANGE TO TAKE PLACE 1. There must be at least two parties. . 4. 1-13 3.

MARKETING’S ROOTS AND EVOLUTION 1-14 .

BEYOND THE MARKETING CONCEPT 1-15 .

CHANGE DRIVERS IMPACTING THE FUTURE OF MARKETING Shift Shift to product glut and customer shortage in information power from marketer to customer in generational values and preferences Shift Shift to demanding return on marketing investment to Marketing (“Big M”) and marketing (“little m”) Shift 1-16 .

but also in today’s market it is a necessity for survival Not 1-17 . both in B2C and B2B markets. only is a customer orientation desirable.SHIFT TO PRODUCT GLUT AND CUSTOMER SHORTAGE The balance of power is shifting between marketers and their customers.

NEW MARKET REALITIES 1-18 .

Firms The 1-19 . are more open about their businesses and products.SHIFT IN INFORMATION POWER FROM MARKETER TO CUSTOMER Customers have nearly limitless access to information. trend toward more information in the hands of the customer is not going to diminish.

Impacts Generational 1-20 . marketing in terms of human resources. changes are nothing new.SHIFT IN GENERATIONAL VALUES AND PREFERENCES Impacts the firm’s message and the method by which that message is communicated.

means a long-term. 1-21 . firm-level commitment to investing in marketing – supported at the highest organization level – for the purpose of enhancing organizational performance.SHIFT TO DISTINGUISHING MARKETING (“BIG M”) AND MARKETING (“LITTLE M”) Marketing (Big M) ◦ Strategic marketing. which serves the firm and its stakeholders at a functional or operational level. marketing (little m) ◦ Tactical marketing.

SHIFT TO JUSTIFYING THE RELEVANCE AND PAYBACK OF THE MARKETING INVESTMENT Marketing metrics 1-22 .

Global 1-23 . marketing mistakes are expensive.MARKETING IS NOT LIMITED BY BORDERS Business is no longer confined to a company’s local market.

THE GLOBAL EXPERIENCE LEARNING CURVE An understanding of marketing beyond home markets develops over time as a company gets more international business experience. 1-24 .

DISTINCT STAGES 1-25 .

Company Expansion 29 20 Walmart (est. 1979) Gap (est.Tyson establishes a partnership with a Mexican poultry company.International delivery begins with service to Canada.Pepsi enters Japan and Eastern Europe. 1962) Hewlett-Packard (est.The first Gap store outside the United States opens in London on George Street. Switzerland. 1950 – Caterpillar Tractor Co. 1987 . and a manufacturing plant in Germany. 1966 . 1965) 1-26 . S. 1989 . to create an international partnership. 1910 . 1998 – Home Depot enters the Puerto Rican market followed by Argentina. 1969) Goodyear (est. 1898) FedEx (est.6 Examples of Expansion into Global Markets First Expansion Years to U.Walmart opens two units in Mexico City. in Great Britain is founded.EXHIBIT 1. 1925) Home Depot (est. 1939) Tyson Foods (est. Ltd. 1981 . 26 25 19 18 12 10 1 Caterpillar (est. 1963) 1991 . 1959 – HP sets up a European marketing organization in Geneva. 1971) PepsiCo (est.Goodyear’s Canadian plant opens.