Lamb, Hair, McDaniel
2010-2011
CHAPTER 1
An Overview of Marketing
1
Learning Outcomes
LO 1 Define the term marketing
LO 2 Describe four marketing management
philosophies
LO 3 Discuss the differences between sales and
market orientations
LO 4 Describe several reasons for studying
marketing
2
What Is Marketing?
Define the term
marketing
LO1
3
Marketing…
•Stresses Customer Satisfaction
•A Philosophy
•An Attitude
•A Management Orientation
•A Set of Activities
•Products
•Promotion
LO1
•Pricing
4
What Is Marketing?
American Marketing Association Definition
Marketing is the activity, set of
institutions, and processes for creating,
communicating, delivering, and
exchanging offerings that have value for
customers, clients, partners, and
society at large.
LO1
5
What Is Marketing?
More
investment
Stockholder
satisfaction
Growth and
profits
Repeat
business
Employee
satisfaction
LO1
Higher
quality
Greater
effort
6
Exchange
At Least Two Parties
Something of Value
Conditions for
Exchange
Communication and Delivery
Freedom to Accept or Reject
Desire to Deal with Other
Party
LO1
7
Exchange
• Exchange may not take place even
if conditions are met
• An agreement must be reached
• Marketing occurs even if
exchange does not take place
LO1
8
Customer value
and beneficial
relationships
Creating
Value
Exchange
A
B
Delivering
Value
LO1
Communicating
Value
9
Marketing Management
Philosophies
Describe four
marketing
management
philosophies
LO2
10
The Four Marketing
Management Philosophies
Orientation
Focus is on…
Production internal capabilities of the firm
Sales
aggressive sales techniques and belief
that high sales result in high profits
Market
satisfying customer needs and wants
while meeting objectives
Societal
satisfying customer needs and
wants while enhancing individual and
societal well-being
LO2
11
LO2
Production Orientation
• Field of Dreams orientation
– “If you build it, they will come.”
– Doesn’t consider if what is produced meets
market needs
12
Sales Orientation
• Selling = Collecting Money
– Disregards market needs and consumer
demand.
– Failing to recognize what the customer
wants leads to business failures
• Dot-com busts in late 1990’s
LO2
13
Market Orientation
Marketing Concept

Focusing on customer wants and needs to distinguish
products from competitors’ offerings

Integrating all the organization’s activities to satisfy these
wants

Achieving the organization’s long-term goals by satisfying
customer wants and needs legally and responsibly
LO2
14
Achieving a Marketing
Orientation

Obtain information about customers,
competitors, and markets

Examine the information from a total
business perspective

Determine how to deliver superior
customer value

Implement actions to provide value
to customers
LO2
15
Societal Marketing
Orientation
An organization exists not only to satisfy
customer wants but also to preserve or enhance
individuals’ and society’s long-term best
interests.
• Less toxic products
• More durable products
• Products with reusable or recyclable
materials
LO2
16
Questions That Help Determine
Marketing Philosophy
Orientation
LO2
Focus
Production
What can we make or do best?
Sales
How can we sell more
aggressively?
Marketing
What do customers
want and need?
Societal
What do customers want/need,
and how can we benefit society?
17
Listen to your customers...
… but look to the future, as well.
"If I had asked my customers what
they wanted," Henry Ford once
remarked, "they would have said a
faster horse."
Tom Kelley with Jonathan Littman, The Ten Faces of Innovation: IDEO's Strategies for Defeating the Devil's Advocate and
Driving Creativity Throughout Your Organization, Currency/Doubleday, 2005
LO2
18
Sales and Marketing
Orientations
Discuss the
differences
between sales
and market
orientations
LO3
19
Comparing the Sales and
Market Orientations
Compare through 5 categories:
• Organization’s focus
• Firm’s business
• Those to whom the product is directed
• Firm’s primary goal
• The tools used to achieve those goals
LO3
20
Customer Value
Requirements
 Offer products that perform
 Earn trust
 Avoid unrealistic pricing
 Give the buyer facts
 Offer organization-wide commitment
in service and after-sales support
 Co-creation with customers
LO3
21
Building Relationships

Customer-oriented personnel

Employee training programs

Empowered employees

Teamwork
LO3
22
Relationship Marketing
Successful strategies need:
• Customer-Oriented Personnel
• Effective Training Programs
• Empowered Employees
• Teamwork
LO3
23
Building From Within
Challenging economy
Today's companies must build
their management teams from
within, putting more emphasis
(and money) on rapidly
training younger employees
for greater responsibilities.
LO3
+
Lack of middle
managers
+
Aging workforce
“War for new talent”
or training from within
SOURCE: The Corporate Learning Factbook® 2008: Statistics, Benchmarks and Analysis of the U.S. Corporate Training
Market, Bersin & Associates / Karen O’Leonard, January 2008.
24
Defining a Firm’s Business
Use “benefits” instead of
“goods/services”
 Ensures a customer focus
 Encourages innovation and
creativity
 Stimulates an awareness of
changes in customer
preferences
http://www.britannica.com
LO3
25
Sales vs. Market
Orientations
Organization’s
Focus
Firm’s
Business
For
Whom?
Primary
Profit
Goal?
Tools to
Achieve
Sales
Orientation
Inward
Selling
goods and
services
Everybody
Maximum
sales
volume
Market
Orientation
Outward
Satisfying
wants and
needs
Specific
groups of
people
Customer
Coordinated
satisfaction use of all
marketing
activities
LO3
Primarily
promotion
26
Why Study Marketing
Describe several
reasons for studying
marketing
LO4
27
Reasons for Studying Marketing
Why Study Marketing?
Important
to
Society
Important
to
Business
Good
Career
Opportunities
+
LO4
Marketing affects you every day!
28
Why Study Marketing?
Vital Marketing Activities
Assess the wants and satisfaction of customers
Design and manage product offerings
Determine prices and pricing policies
Develop distribution strategies
Communicate with present and potential customers
LO4
29
Marketing Trends
YouTube “Celebrity” endorsements
– Popular channel stars get money for using or
hyping products or companies
– Videos release to coincide with school release
times
• Popular in Tween markets
– “Fred” is the second most popular channel on YouTube
http://www.youtube.com/fred
Source: “Playing the Web Card: YouTube Breakout Stars New Faves of Marketers,” wwd.com, August 18,
2009; Albrecht, Chris. “’Fred’ Cranks up the YouTube Views and Ad Dollars,” BusinessWeek, November 18,
2008, online at http://www.businessweek.com/technology/content/nov2008/tc20081118_508970.htm
LO4
30