Chapter
2
Objectives
When you finish this chapter, you should
1. Know what the marketing
concept is—and how it should
affect strategy planning in a
firm or nonprofit organization.
2. Understand what customer
value is and why it is
important to customer
satisfaction.
3. Understand what a marketing
manager does.
4. Know what marketing
strategy planning is—and why
it is the focus of the book.
2-2
5. Understand target marketing.
6. Be familiar with the four Ps in
a marketing mix.
7. Know the difference between
a marketing strategy, a
marketing plan, and a
marketing program.
8. Understand the important
new terms.
Marketing’s Changing Role
Simple Trade Era
Production Era
Sales Era
Focus:
Sell Surplus
Focus:
Increase Supply
Focus:
Beat Competition
Marketing Department
Era
Focus :
Coordinate and Control
Marketing Company
Era
Focus
:
Long-Run
Customer Satisfaction
2-3
The Marketing Concept
Customer
Satisfaction
Total Company
Effort
The
Marketing
Concept
Profit
Exhibit 2-1
2-4
Marketing Orientation Sounds Easy,Isn’t


Even the “best” firms sometimes backslide into a
production orientation
In today’s highly competitive markets it is often
difficult to
keep up with changing customer needs
 beat aggressive competitors to the punch
 find the right focus -- one that matches the firm’s
objectives and resources to market opportunities
 offer customers superior value

2-5
Customer Value Reflects Benefits and Costs
Customer value concerns the difference between the benefits a
customer sees from a firm’s market offering and the costs of
obtaining those benefits
Costs
2-6
Benefits
The customer’s view of costs and benefits is not just limited to
economic (or even rational) considerations--and a low price
may NOT result in superior value...
Customer Value
Costs
Benefits
• One customer’s view of the benefits and costs of a firm’s
market offering may vary from another customer’s view, so
firm may not be able to satisfy everybody with the same
offering.
2-7
• Customer value concept takes the customers point of view,
but customers may not explicitly weigh costs and benefits and
even if they do their view may not match some “objective”
reality.
Nonprofits Need Marketing, Too
NonCustomer
Support
NonEconomic
Measures
Characteristics
of Nonprofit
Organizations
Poorly
Organized
for Marketing
2-8
The Marketing Management Process
Whole-Company
Strategic
Management
Planning
Adjust Plans
As Needed
Control Marketing
Plan(s) and Program
Exhibit 2-4
2-9
Marketing
Planning
Implement Marketing
Plan(s) and Program
Marketing Strategy Planning
The
Marketing
Mix
C
Exhibit 2-5
2-10
The Four Ps of the Marketing Mix
Product
Place
C
Price
Exhibit 2-7
2-11
Promotion
Strategy Decision Areas
Organized by the Four Ps
Product
Place
Promotion
Price
Physical Goods
Service
Features
Quality Level
Accessories
Installation
Instructions
Warranty
Product Lines
Packaging
Branding
Objectives
Channel Type
Market Exposure
Kinds of Middleman
Kinds and
Locations of Stores
How to Handle
Transporting and
Storing
Service Levels
Recruiting Middlemen
Managing Channels
Objectives
Blend
Salespeople
Kind
Number
Selection
Training
Motivation
Advertising
Targets
Kinds of Ads
Media Type
Copy Thrust
Who Prepares?
Sales Promotion
Publicity
Objectives
Flexibility
Level over PLC
Geographic Terms
Discounts
Allowances
Exhibit 2-8
2-12
Four Examples of Basic Channels of Distribution for
Consumer Products
Manufacturer or producer
Citibank
Nissan
Del
Monte
Procter &
Gamble
Wholesaler
Wholesaler
Wholesaler
Retailer
Consumer
Exhibit 2-9
2-13
Retailer
Retailer
Elements of the Marketing
Program
Target
Market
+
Marketing
Mix
=
Marketing
Strategy
+
Time-Related
Details
=
Marketing
Plan
+
Other
Marketing
Plans
Exhibit 2-11
2-
=
A Firm’s
Marketing
Program
Distribution of Different Firms
Based on Performance
Death-wish
marketing
Best-practices
marketing
(Below
average)
(Well below
average)
2%
Total
Failure
Exhibit 2-12
2-
14%
Poor
68%
(Average
Marketing
Program)
Fair
(Above
average)
(Well above
average)
14%
Good
2%
Exceptional
Key Terms
Simple Trade Era
Production Era
Sales Era
Marketing
Department Era
Marketing
Company Era
Marketing Concept
Production
Orientation
Marketing
Orientation
Customer Value
2-
Nonprofit
Organizations
Social Responsibility
Marketing
Management Process
Strategic (Management)
Planning
Marketing Strategy
Target Market
Marketing Mix
Target Marketing
Mass Marketing
Channel of Distribution
Personal Selling
Mass Selling
Advertising
Publicity
Sales Promotion
Marketing Plan
Implementation
Operational
Decisions
Marketing
Program