Topic 1

TOPIC 1
INTRODUCTION TO MARKETING
Boone & Kurtz, Contemporary Marketing, Nineteenth Edition. © 2022 Cengage. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
1.1 Summarize how marketing creates value through the four types of utility.
1.2 Describe the four variables of the marketing mix.
1.3 Contrast the focus of marketing activities during the five eras of marketing
history.
1.4 Explain how relationship marketing can move customers up the loyalty
ladder.
1.5 Differentiate the six categories of marketing.
1.6 Identify the eight functions of marketing physical goods.
Icebreaker
1. What are some words that come to mind when you think of Marketing?
2. Can you think of a time when you have been affected by Marketing?
1-1
What is Marketing?
Boone
Boone&&Kurtz,
Kurtz,Contemporary
ContemporaryMarketing,
Marketing,Nineteenth
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1-1 What is Marketing? (1 of 2)
• Utility is the power of a good or service to satisfy the wants of consumers.
• Four types of utility:
• Form
• Time
• Place
• Ownership (Possession)
Exhibit 1.1 Four Types of Utility
Type Description Examples How this brings value
Form Conversion of raw materials Dinner at Applebee’s Satisfies hunger
into finished goods and Samsung Galaxy phone Allows for easier
services Levi jeans communication
Provides clothing
Time Availability of goods and Dental appointment Allows customers to satisfy
services when consumers Digital photographs their wants and needs
want them 1-800-PetMeds guarantee without waiting
UPS Next Day Air delivery
Place Availability of goods and Technicians available at an Provides convenience
services at convenient auto repair facility Allows customers to satisfy
locations Onsite day care their needs and wants
Banks in grocery stores without continued searching
Ownership Ability to transfer title to Retail sales (in exchange Allows customer control over
(Possession) products from marketer to for currency, credit, or debit their purchase
buyer card payment) Provides pride of ownership
1-1 What is Marketing? (2 of 2)
• Marketing is the process for creating, communicating, and delivering value

to customers.
• It’s that value customers are paying for.
1-2
Elements of Marketing Strategy
Boone
Boone&&Kurtz,
Kurtz,Contemporary
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1-2 Elements of Marketing Strategy (1 of 6)
• Two basic elements:
• The target market
• The marketing mix variables of product, price, distribution, and promotion that combine
to satisfy the needs of the target market
• Target market is the group of people toward whom the firm aims its
marketing efforts and ultimately its merchandise.
• Example: Some companies exclusively target household consumers.
Exhibit 1.2 Four Variables of the Marketing Mix
Marketing mix: product, price,

distribution, and promotion
The four variables of the

marketing mix are often called
the 4 P’s of marketing:
product, price, place, and
promotion.
• Product refers to a good, service, or idea.

• Product is also a broader concept that encompasses other aspects of the
consumer’s purchase—customer service; package design; brand names;
trademarks, patents, and warranties.
Examples of products:
• Starbucks’ superior customer service through its baristas, who are specially trained to create a
personalized buying experience
• Procter & Gamble’s introduction of Tide Pods, an innovative single-use package that
combined detergent, stain remover, and brightener
• Price strategy is the method of setting profitable and justifiable prices.

• Conditions in the external marketing environment can cause difficulties in pricing
strategies.
• Examples:
• Political unrest overseas
• Soaring price of fuel
• A freeze that destroys crops
• In a booming economy, consumers generally have more confidence and are

willing to shop more frequently and pay more for goods.
• When the economy slows, consumers look for bargains, wanting high quality at
low prices.
• Distribution is the decision involving modes of transportation,

warehousing, inventory control, order processing, and selection of
marketing channels.
• Distribution is also called “place.”
• Retailers and wholesalers are intermediaries that may be involved in a product’s
movement from producer to final consumer.
• Marketers develop distribution strategies to ensure that consumers find their

products in the proper quantities at the right times and places.
• Technology continually opens new channels of distribution in many
industries.
• Promotion is broadly defined as communication to a firm’s buyers about

their products.
• Organizations use various methods to send messages about their goods,
services, and ideas—directly through salespeople or indirectly through
advertisements.
• Sales promotion entails offering incentives like a reduced price for a limited
time or a brand-consistent giveaway.
• Many companies use an approach called integrated marketing
communications (IMC) to coordinate all promotional activities so that the
consumer receives a unified, consistent message.
1-3
Five Eras of Marketing History
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Exhibit 1.3 Five Eras of Marketing History
1-3 Five Eras of Marketing History (1 of 5)
1. Production Orientation (prior to 1920s)
• In a production orientation, manufacturers stressed on production of quality products

and then looked for people to purchase them.
• Production orientation reached its peak during the early part of the twentieth century,
when production shortages and intense consumer demand ruled.
2. Sales Orientation (prior to 1950s)
• The sales orientation is a belief that creative advertising and personal selling will
persuade consumers to buy.
• Rapid production no longer guaranteed profitability.
• It was a more competitive era.
3. Marketing Era (since 1950s)
• A seller’s market is when there are more buyers for fewer products.
• A buyer’s market is when there are more products than people willing to buy them.
• Consumer orientation is where the focus is on satisfying the needs and wants of
consumers rather than simply producing and selling products.
• What was once a seller’s market became a buyer’s market. Companies needed a
consumer orientation with the objective of achieving long-term success.
4. Relationship Era (since 1990s)

• Builds on the marketing era’s customer orientation by developing long-term, value-
added relationships with customers and suppliers
5. Social Era (since 2000s)

• Builds on the relationship era using the Internet and social media to connect with
customers
• A marketing concept is a companywide consumer orientation with the

objective of achieving long-term success.
• All facets of the organization must contribute first to assessing and then to
satisfying customer wants and needs.
• From marketing manager to accountant to product designer, every

employee plays a role in reaching potential customers.
1-4
From Transaction-Based Marketing to
Relationship Marketing
Boone
Boone&&Kurtz,
Kurtz,Contemporary
NineteenthEdition.
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2022Cengage.
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1-4 From Transaction-Based Marketing to
Relationship Marketing (1 of 2)
• Transaction-based marketing: traditional view of marketing as a simple

exchange process
• Relationship marketing: refers to the development, growth, and

maintenance of long-term, cost-effective relationships with individual
customers, suppliers, employees, and other partners for mutual benefit
1-4 From Transaction-Based Marketing to
Relationship Marketing (2 of 2)
• Transaction-based marketing focus on attracting customers and closing

deals.
• Relationship marketing gives a company new opportunities to gain a

competitive edge by moving customers up a loyalty ladder:
• From new customers to regular purchasers
• Then to loyal supporters of the firm and its goods and services
• Finally to advocates who buy its products as well as recommend them to others
Exhibit 1.4 Converting New Customers to
Advocates
• Mobile marketing: marketing
messages sent to wireless devices,
such as phones and tablets
• Examples: e-mail marketing, apps
• Social marketing: the use of online

social media as a communications
channel for marketing messages
• Examples: Facebook, Twitter, Pinterest
1-5
Categories of Marketing
Boone
Boone&&Kurtz,
Kurtz,Contemporary
NineteenthEdition.
Edition.©©2022
2022Cengage.
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1-5 Categories of Marketing
• Product marketing involves efforts designed to communicate the benefits

of a good or service.
• There are six categories of marketing.
Exhibit 1.5 Six Categories of Marketing
Type Objectives Examples
Product Marketing efforts designed to communicate the Subaru: “Love. It’s what makes a Subaru a Subaru.”
Marketing benefits of good or service and persuade target Geico: “15 minutes will save you 15% on car insurance.”
consumers to buy
Nike: “Just do it.”
Person Marketing Marketing efforts designed to cultivate the Russell Wilson,

attention and preference of a target market Seattle Seahawks quarterback
toward a person celebrity Blake Shelton, country singer
Place Marketing Marketing efforts designed to attract visitors to a California: “Find Yourself Here.”
particular area; improve consumer images of a Tennessee: “We’re Playing Your Song.”
city, state, or nation; and/or attract new business
West Virginia: “Wild and Wonderful.”
Cause Marketing Identification and marketing of a social issue, “Click it or Ticket.”
cause, or idea to selected target markets “Refill, not landfill.”
Event Marketing Marketing of sporting, cultural, and charitable Paris 2024 Summer Olympics
activities to selected target markets American Diabetes Association’s Tour de Cure
Organization Marketing efforts of mutual-benefit American Red Cross: “Together, we can save a life.”
Marketing organizations, service organizations, and March of Dimes: “Working together for stronger, healthier babies.”
government organizations that seek to influence
others to accept their goals, receive their St. Jude Children’s Research Hospital: “Finding Cures. Saving
services, or contribute to them in some way Children.”
Product Marketing
Person Marketing
Place Marketing
Cause Marketing
Event Marketing
Organization Marketing
Exhibit 1.6 Overlap Between Marketing Categories
at Staples
The six categories of marketing can often overlap.

1-6
Eight Functions of Marketing Physical Goods
Boone
Boone&&Kurtz,
Kurtz,Contemporary
NineteenthEdition.
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2022Cengage.
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1-6 Eight Functions of Marketing Physical Goods
• On average, half of the costs involved in a tangible product can be traced

directly to marketing.
• Firms must spend money to create time, place, and ownership utilities.
These expenditures go toward the performance of the eight universal
marketing functions:
1. Buying
2. Transporting
3. Standardizing and Grading
4. Risk Taking
5. Selling
6. Storing
7. Financing
8. Securing Market Information
Exhibit 1.7 The Eight Universal Functions
of Marketing (1 of 2)
Function What is it? Why is it important? Example
Buying Ensuring that product offerings Marketers must be able to A bakery must have enough
are available in sufficient satisfy consumers’ wants and flour on hand to give
quantities to meet customer needs promptly and ahead of customers a reliable supply
demands. consumption. of bread.
Selling Using advertising, personal Marketers must communicate A consumer planning a day
selling, and sales promotion to with consumers about how their at the beach wants to know
match products to customer products create value. what sunscreens are most
needs. effective.
Transporting Moving products from their Marketers create place utility by One of Amazon’s biggest
point of production to locations making goods and services competitive strengths is its
convenient for purchasers. available where people want to ability to transport virtually
buy them. any goods anywhere.
Storing Warehousing products until Marketers must have a place to Walmart has limited shelf
needed for sale. keep unsold products organized, space and can’t stock
safe, and ready to be everything they carry all at
transported to store as needed. once.
Exhibit 1.7 The Eight Universal Functions
of Marketing (2 of 2)
Function What is it? Why is it important? Example
Standardizing Ensuring that product offerings Marketers must meet consumers’ A tire dealer must offer tires in
and Grading meet quality and quantity controls expectations of product size, weight, standard sizes that consumers
of size, weight, and other variables. and so on. know will fit their cars.
Financing Providing credit for channel Wholesalers and retailers often need At holiday time when they make
members (wholesalers and access to funds to finance product many purchases, consumers
retailers) and consumers. inventory prior to sale. Consumers prefer using credit cards instead
often need the option of using credit of carrying large amounts of
cards to buy. cash.
Risk Taking Dealing with uncertainty about When manufacturers create products Toy makers like Mattel offer
future customer purchases. based on research, they believe innovative toys each year based
consumers need those products. on their forecast of likely trends
Companies accommodate these in children’s play.
uncertainties about future demand
when they bring goods to market.
Securing Collecting information about Analysis of marketing information Many hotels ask customers to
Marketing consumers, competitors, and helps marketers understand why complete a satisfaction survey
Information channel members for use in consumers purchase some goods after their stays so that the hotel
decision-making. and not others. This also helps will know if their rooms and
determine what consumers want and service meet the needs of
need, and how to satisfy those wants travelers.
and needs.

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• Utility is the power of a good or service to satisfy the wants of consumers.

• Four types of utility:

• Marketing is the process for creating, communicating, and delivering value

• Two basic elements:

• The target market

Marketing mix: product, price,

The four variables of the

• Product refers to a good, service, or idea.

• Price strategy is the method of setting profitable and justifiable prices.

• In a booming economy, consumers generally have more confidence and are

• Distribution is the decision involving modes of transportation,

• Marketers develop distribution strategies to ensure that consumers find their

• Promotion is broadly defined as communication to a firm’s buyers about

1. Production Orientation (prior to 1920s)

• In a production orientation, manufacturers stressed on production of quality products

2. Sales Orientation (prior to 1950s)

• Rapid production no longer guaranteed profitability.

• It was a more competitive era.

3. Marketing Era (since 1950s)

4. Relationship Era (since 1990s)

5. Social Era (since 2000s)

• A marketing concept is a companywide consumer orientation with the

• From marketing manager to accountant to product designer, every

• Transaction-based marketing: traditional view of marketing as a simple

• Relationship marketing: refers to the development, growth, and

• Transaction-based marketing focus on attracting customers and closing

• Relationship marketing gives a company new opportunities to gain a

• Social marketing: the use of online

• Product marketing involves efforts designed to communicate the benefits

• There are six categories of marketing.

Person Marketing Marketing efforts designed to cultivate the Russell Wilson,

The six categories of marketing can often overlap.

• On average, half of the costs involved in a tangible product can be traced

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