Chapter 1
Marketing’s Value to
Consumers, Firms, and Society
For use only with
Perreault/Cannon/
McCarthy texts, © 2009
McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
www.mhhe.com/fourps
Marketing—What’s It All About?
More than Selling or Advertising
More than Selling
All Those
and Advertising
Bicycles!
Things a Firm Should Do in Producing a Bike
Analyze Needs
Predict Wants
Estimate Demand
Predict When
Determine Where
Estimate Price
Decide Promotion
Estimate Competition
Provide Service
Production vs. Marketing
Marketing
Makes sure right goods &
services are produced
Production
• Making Goods
• Performing Services
Creates Customer Satisfaction
Marketing Is Important to You!
Important to every consumer!
Important to your job!
Affects innovation and
standard of living
What Is Marketing?
Micro View
Macro View
• Set of activities
• Social process
• Performed by
individual
organizations
and
• Matches supply
with demand
Macro-Marketing
Emphasis on
Whole System
Every Economy
Needs It
Key
Characteristics
Matches
Producers and
Consumers
Universal Functions of Marketing
Buying
Market
Information
Selling
Transporting
Marketing
Functions
Risk Taking
Financing
Storing
Standardization
& Grading
Who Performs Marketing Functions?
Producers
Wholesalers
Transport
Firms
Retailers
Ad Agencies
ISP's
Product
Testing
Firms
Other
Specialists
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
• Freedom of
choice
• Government’s
role limited
Marketing’s Role Has Changed Over Time
Simple Trade Era
Focus:
Sell Surplus
Production Era
Focus:
Increase Supply
Sales Era
Focus:
Beat Competition
Marketing Department
Era
Focus:
Coordinate and Control
Marketing Company Era
Focus: Long-Run
Customer Satisfaction
The Marketing Concept (Exhibit 1-3)
Total
company
effort
Customer
satisfaction
The
Marketing
Concept
Profit (or another measure
of long-term success) as
an objective
Creating
Customer
Satisfaction
Adopting The
Marketing
Concept
Now Flying To
More Places In
Europe.
The Marketing Concept and Customer Value
Take Customer’s
Point of View
Customer May
Not Dwell On
Value
Costs
Benefits
Where Does
Competition Fit?
Customer Value
Builds
Relationships
Interactive Exercise: Customer Value
© 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Price
Benefit Rating
Price Index
Benefit Index
Value Index
Dirt Devil
90
58
26.09956501
91.33858268
65.23901767
GE
110
58
31.89946834
91.33858268
59.43911433
Oreck
380
58
110.1981634
91.33858268
-18.85958069
Kenmore
199
66
57.70903818
103.9370079
46.22796969
Hoover
300
75
86.99855002
118.1102362
31.1116862
Kirby
990
66
287.0952151
103.9370079
-183.1582072
344.83
63.5
Average
Putting It All Together (Exhibit 1-6)
Total Company
Effort to Satisfy
Customers
Build Profitable
Customer
Relationships
Offer Superior
Customer Value
Increase Sales to
Customers
Attract
Customers
Retain Customers
Satisfy
Customers
The Marketing Concept Applies in Nonprofit
Organizations
Support and
“Satisfied
Customers”
Newcomers
to Marketing
Marketing
Concept
Provides
Focus
Characteristics
of Nonprofit
Organizations
The Bottom
Line ?
May Not Be
Organized
for
Marketing
Government
Marketing
The Marketing Concept, Social Responsibility,
and Marketing Ethics
Group Needs
Social
Responsibility
Micro - Macro
Dilemma
Should All
Needs Be
Satisfied?
Individual Needs
What if Profits
Suffer?
The Marketing Concept Guides Ethics
You should now be able to:
1.
2.
3.
4.
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
intermediaries and collaborators—develop to
perform them.
Understand what a market-driven economy is
and how it adjusts the macro-marketing
system.
You should now be able to:
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.
Key Terms
•
•
•
•
•
•
•
•
Production
Customer
satisfaction
Innovation
Marketing
Pure subsistence
economy
Macro-marketing
Economies of
scale
Universal functions
of marketing
• Buying
• Selling
• Transporting
• Storing
• Standardization and
•
•
•
•
grading
Financing
Risk-taking
Market information
Intermediary
Key Terms
• Collaborators
• E-commerce
• Economic system
• Command
•
•
•
•
•
economy
Market-directed
economy
Simple trade era
Production era
Sales era
Marketing
department era
• Marketing company era
• Marketing concept
• Production orientation
• Marketing orientation
• Customer value
• Micro-macro dilemma
• Social responsibility
• Marketing ethics