CHAPTER ONE
Basic Marketing
Marketing’s Value to
Consumers, Firms, and
Society
A Marketing
Strategy
Planning
Approach
William D. Perreault Jr.
Joseph P. Cannon
E. Jerome McCarthy
For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts.
For use only with
Perreault/Cannon/McCarthy
or Perreault/McCarthy texts.
© 2008 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
When we finish this lecture you should
1.
2.
3.
4.
www.mhhe.com/fourps
© 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
When we finish this lecture you should
5.
Know what marketing is and why you should
learn about it.
Understand the difference between marketing
and macro-marketing.
Know the marketing functions and why
marketing specialists—including middlemen
intermediaries and marketing collaborators—
develop to perform them.
Understand what a market-driven economy is
and how it adjusts the macro-marketing
system.
Marketing—What’s It All About?
6.
7.
Know what the marketing concept is—and
how it should guide a firm or nonprofit
organization.
Understand what customer value is and why it
is important to customer satisfaction.
Know how social responsibility and marketing
ethics relate to the marketing concept.
Things a Firm Should Do in Producing a Bike
More than Selling or Advertising
Analyze Needs
Predict Wants
Estimate Demand
All Those
More than Selling
and Advertising
Bicycles!
Predict When
Determine Where
Estimate Price
Decide Promotion
Estimate Competition
Provide Service
Basic Marketing – Chapter 1
Handout 1-1
Marketing Is Important to You!
Production vs. Marketing
Marketing
Makes sure right goods &
services are produced
Important to every consumer!
Production
• Making Goods
Important to your job!
• Performing Services
Affects innovation and
standard of living!
Creates Customer Satisfaction
Marketing Stimulates New Ideas
Affects Innovation
© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
What Is Marketing?
Marketing
Micro View
• Set of activities
• Performed by
individual
organizations
Profit and
Nonprofit
Macro View
and
• Social process
• Matches supply
with demand
Focus of
Your Text
Builds
Relationships
Basic Marketing – Chapter 1
Handout 1-2
More than
Persuasion
Key
Characteristics
Involves
Exchanges
Begins with
Needs
Doesn’t Go
It Alone
Macro-Marketing
Building Customer Relationships
Emphasis on
Whole System
Every Economy
Needs It
Key
Characteristics
Matches
Producers and
Consumers
Can Mass Production Satisfy a Society’s
Consumption Needs?
Overcoming Spatial Separation
Economies of Scale Lower Cost
Cost
$
Output
Marketing Bridges the Gap!
Marketing
Functions
Producers
Consumers
Universal Functions of Marketing
Buying
Market
Information
Who Performs Marketing Functions?
Producers
Selling
Transporting
Marketing
Functions
Risk Taking
Financing
Transport
Firms
Product
Testing
Firms
Basic Marketing – Chapter 1
Handout 1-3
Other
Specialists
Retailers
Ad Agencies
ISP's
Storing
Standardization
& Grading
Wholesalers
Research
Firms
Consumers
How Decisions are Made in an Economic System
Command
Economy
• Government
officials decide
• May work well if:
• Simple
economy
• Little Variety
• Adverse
Conditions
Market-Directed
Economy
• Adjusts itself
OR
• Price is value
measure
Marketing’s Role Has Changed Over Time
Simple Trade Era
Production Era
Focus:
Increase Supply
Sales Era
Focus:
Beat Competition
• Freedom of
choice
• Government’s
role limited
The Marketing Concept (Exhibit 1-3)
Customer
Satisfaction
Focus:
Sell Surplus
Marketing Department
Era
Focus:
Coordinate and Control
Marketing Company Era
Focus: Long-Run
Customer Satisfaction
Creating
Title
here Customer Satisfaction
Total Company
Effort
The
Marketing
Concept
Profit
Adopting the Concept of Marketing
Checking your knowledge
A store that is popular with newlyweds runs a wedding gift registry.
Five minutes before closing time on a Sunday, a young couple enters
the store and wants to register—a process that usually takes 30
minutes or more. A sales associate advises the couple to come back
when they have more time, even though a recent memo from the
store’s regional manager specifically instructed store personnel to stay
after closing time to help such customers. Which key element of the
marketing concept is the main problem area in this situation?
A. Customer need
B. Total company effort
C. Customer satisfaction
D. Marketing orientation
E. Product orientation
Basic Marketing – Chapter 1
Handout 1-4
The Marketing Concept and Customer Value
Interactive Exercise: Customer Value
Take Customer’s
Point of View
Customer May
Not Dwell On
Value
Costs
Benefits
Where Does
Competition Fit?
Customer Value
Builds
Relationships
© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Checking your knowledge
Checking your knowledge
Which of the following statements, made by marketing managers,
illustrates an understanding of the concept of customer value?
A. “It’s more important to acquire new customers than to retain
old ones.”
B. “The only time it’s really necessary to demonstrate superior
customer value is right before the actual sale.”
C. “My main concern is with meeting this month’s sales
quota—I’ll worry about relationship building later.”
D. “I might think my product is a good value, but what really
counts is if the customer thinks it’s a good value.”
E. “Customer value really boils down to which product is the
least expensive.”
A. Reduce price.
B. Increase technical support for customers.
C. Increase warranty coverage.
D. Offer free shipping.
E. Any of the above, depending on the needs of the target market.
The Marketing Concept Applies in Nonprofit
Organizations
Putting It All Together (Exhibit 1-6)
Offer Superior
Customer Value
Total Company
Effort to Satisfy
Customers
A computer manufacturer is attempting to increase the customer value
associated with purchases of its products. Which of the following might
be a way to achieve this increase in value?
Attract New
Customers
Build Profitable
Customer
Relationships
Support and
“Satisfied
Customers”
Newcomers to
Marketing
Satisfy
Customers
Marketing
Concept
Provides Focus
Retain
Customers
Basic Marketing – Chapter 1
Handout 1-5
Characteristics
of Nonprofit
Organizations
May Not Be
Organized for
Marketing
The Bottom
Line?
Government Marketing
Marketing Concept Use by Nonprofit Services
© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
The Marketing Concept, Social Responsibility, and
Marketing Ethics
Group Needs
Micro - Macro
Dilemma
Individual Needs
Should All
Needs Be
Satisfied?
Social
Responsibility
Thehere
Micro-Macro Dilemma
Title
What if Profits
Suffer?
The Marketing Concept Guides Ethics
Social Responsibility
You now
1.
2.
3.
4.
© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Basic Marketing – Chapter 1
Handout 1-6
Know what marketing is and why you should
learn about it.
Understand the difference between marketing
and macro-marketing.
Know the marketing functions and why
marketing specialists—including middlemen
intermediaries and marketing collaborators—
develop to perform them.
Understand what a market-driven economy is
and how it adjusts the macro-marketing
system.
You now
Key Terms
5.
6.
7.
Know what the marketing concept is—and
how it should guide a firm or nonprofit
organization.
Understand what customer value is and why it
is important to customer satisfaction.
Know how social responsibility and marketing
ethics relate to the marketing concept.
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Key Terms
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Collaborators
E-commerce
Economic system
Command
economy
Market-directed
economy
Simple trade era
Production era
Sales era
Marketing
department era
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Marketing company era
Marketing concept
Production orientation
Marketing orientation
Customer value
Micro-macro dilemma
Social responsibility
Marketing ethics
Basic Marketing – Chapter 1
Handout 1-7
Production
Customer
satisfaction
Innovation
Marketing
Pure subsistence
economy
Macro-marketing
Economies of
scale
Universal functions
of marketing
•
•
•
•
•
•
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•
•
Buying
Selling
Transporting
Storing
Standardization and
grading
Financing
Risk-taking
Market information
Intermediary (or
middleman)