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Overview of Marketing1McGraw-Hill/IrwinCopyright 2014 by the McGraw-Hill Companies, Inc. All rights reserved.

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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

CHAPTER

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.1Chapter 1 Overview of Marketing

Define the role of marketing in organizations.Describe how marketers create value for a product or service.Understand why marketing is important both within and outside the firm.Overview of MarketingLO1LO2LO3

LEARNING OBJECTIVESLEARNING OBJECTIVES

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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What is Marketing?Marketing is an organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.3

What is Marketing?

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.4

Marketing is about Satisfying Customer Needs and WantsWhat group is Pepsi targeting with this ad?What other benefits of soft drinks might Pepsi advertise?What groups might these benefits appeal to?

PRNewsFoto/PepsiCo; AP Photo.

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Marketing Entails an Exchange

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.6

Marketing Requires Product, Price, Place, and Promotion DecisionsProductCreating value

PRNewsFoto/PepsiCo;AP Photo.PriceCapturing value

Digital Vision Ltd.PlaceDelivering value

BrandX/JupiterImages/Getty Images.PromotionCommunication value

Stockbyte/PunchStock.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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Product: Creating ValueThe fundamental purpose of Marketing is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs.

Royalty-Free/CorbisRoz Wodward/Getty ImagesFlying Colours Ltd./Getty Images

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.8

Price: Capturing ValuePrice is everything a buyer gives up (money, time, energy) in exchange for the product.

How much are customers willing to pay and can a profit can be made at that point.

AP Photo/The Canadian Press, Jacques Boissinot.

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Place: Delivering the Value PropositionPlace, or supply chain management, describes all activities necessary to get the product to the right customer when the customer wants it.Where would you find this product in the store?

Courtesy Horizon Organic Dairy

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Superior Service: AT&T?

Courtesy AT&T; Agency: BBDO/Atlanta; Artist: Guido Daniele; Photographer: Andric

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Luxury Hotels

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Promotion: Communicating ValuePromotion is communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response.

Photo by Paul Hawthorne/Getty Images

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Marketing Can be Performed by Individuals and Organizations

ETSY WebsiteC2CConsumer B

B2CConsumer A

B2BRetailer (Sells PCs & monitors)

Manufacturer (Makes monitors)

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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Marketing Impacts Various Stakeholders

Courtesy National Fluid Milk Processor Promotion Board; Agency: Lowe Worldwide, Inc.

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Marketing Helps Create Value1. H.Armstrong Roberts/Retrofile/Getty Images 2. Jamie Grill/Iconica/Getty Images 3. Ted Dayton Photography/Beateworks/Corbis 4. Ciaran Griffin/Stockbyte/Getty Images 5. Colin Anderson/Blend Images/CorbisProduction

1.Sales

2.Marketing

3.

Value based marketing

4.5.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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Marketing & Sales Concept Contrasted

FactoryExistingProductsSellingandPromotingProfitsthroughVolume

MarketCustomerNeedsIntegratedMarketingProfitsthroughSatisfactionThe Selling ConceptThe Marketing ConceptStartingPointFocusMeansEnds

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The Societal Marketing ConceptSociety(Human Welfare)Consumers(Satisfaction)Company(Profits)SocietalMarketingConcept

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Value-Based Marketing

Pure Dark ChocolateLight Exquisite CookieCourtesy Pepperidge Farm.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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CHECK YOURSELFWhat is the definition of marketing?Marketing is about satisfying ______ and ______. What are the four components of the marketing mix?Who can perform marketing?What are the various eras of marketing?

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Value Based Marketing

Photo by Christopher Peterson/BuzzFoto /FilmMagic /Getty Images

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Companies that Put the Customer First

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How Do Firms BecomeValue Driven?

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Connecting With Customers Using Social & Mobile Marketing46 % of Internet users worldwide interact with social media on a daily basis. 77 % of the worlds population subscribes to mobile services.

Photo by Spencer Platt/Getty Images.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.Target is Value Driven

Lars A. Niki

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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CHECK YOURSELFDoes providing a good value mean selling at a low price?What are the benefits of long-term relationships with customers?How are marketers connecting with customers using social and mobile media?

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Why Is Marketing Important?Digital Vision/Getty ImagesJason Reed/Getty ImagesEdward Rozzo/CorbisAndrew Ward/Life File/Getty ImagesRoy McMahon/CorbisBananaStock/JupiterImages

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Marketing Is Pervasive across Marketing Channel Members

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Marketing Enriches Society

M. Hruby

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Why Should You Learn Marketing?Many exciting and rewarding Career opportunitiesAs part of cross-functional teams, you would be working with marketing people.Even if you are not planning a business career, marketing concepts and techniques will apply to non-profit organizations too.Marketing affects all aspects of daily life - you are a consumer dealing with marketing for the rest of your life.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Check YourselfList five factors that emphasize the importance of marketing.A firm doing the right thing emphasizes the importance of marketing to _________.

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Exchange is the trade of things of value between the buyer and the seller so that each is better off as a result.Glossary

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Goods are items that you can physically touch.Glossary

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Services are intangible customer benefits that are produced by people or machines and cannot be separated from the producer.Glossary

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Ideas include thoughts, opinions, and philosophies, and intellectual concepts which can be marketed.Glossary

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

A supply chain is the group of firms that make and deliver a given set of goods and services.Glossary

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Value reflects the relationship of benefits to costs.Glossary

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.