CHAPTER 1
OVERVIEW OF
MARKETING
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
1-1
Overview of Marketing
LEARNING OBJECTIVES
LO1
LO2
LO3
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.
1-2
Starbucks
©Bill Hogan/Chicago Tribune/MCT via Getty Images
1-3
How are they communicating value?
©TaurusPhotography/Alamy
©PRNewsFoto/PR NEWSWIRE/PepsiCo via AP
Images
1-4
What is Marketing?
Marketing the activity, set of institutions, and
processes for creating, capturing,
communicating, delivering, and exchanging
offerings that have value for customers, clients,
partners, and society at large
1-5
Core Aspects of Marketing
Marketing helps
create value.
Marketing is
about satisfying
customer needs
and wants.
Marketing
occurs in many
settings.
Marketing
Marketing can
be performed
by both
individuals and
organizations.
Marketing
entails an
exchange.
Marketing
requires
product, price,
place, and
promotion
decisions.
1-6
Marketing is about Satisfying Customer
Needs and Wants
 What group is Lexus targeting with this ad?
 What benefits of cars might Lexus advertise?
©Ian Langsdon/EPA/Newscom
1-7
Marketing Entails an Exchange
1-8
Marketing Requires Product,
Price, Place, and Promotion Decisions
Product
Price
Creating value
Capturing value
©Digital Vision Ltd.
PRNewsFoto/PepsiCo;
AP Photo.
Communication
value
Promotion
©Stockbyte/PunchStock.
Delivering value
Place
©BrandX/JupiterImages/Getty Images.
1-9
Product: Creating Value
 The fundamental
purpose of Marketing
is to create value by
developing a variety
of offerings, including
goods, services, and
ideas, to satisfy
customer needs.
Goods
Royalty-Free/Corbis
Services
Flying Colours Ltd./Getty Images
Ideas
Roz Wodward/Getty Images
1-10
Price: Capturing Value
 Price 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?
©Matthias Hangst/Getty Images Sport/Getty Images
1-11
Place: Delivering the Value Proposition
 Place, 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
1-12
Promotion: Communicating Value
 Promotion 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
1-13
What Element of Marketing is This?
1-14
Marketing Can be Performed
by Individuals and Organizations
Retailer
(Sells PCs &
monitors)
Consumer B
B2C
B2B
Manufacturer
(Makes monitors)
C2C
Consumer A
ETSY Website
1-15
Marketing Impacts Various Stakeholders
Society
Customers
Employees
Supply
Chain
Courtesy National Fluid Milk Processor Promotion Board;
Agency: Lowe Worldwide, Inc.
1-16
Marketing Helps Create Value
Production
1.
Sales
2.
3.
Marketing
4.
5.
1. 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/Corbis
Value based marketing
1-17
Value-Based Marketing
“Pure Dark Chocolate
Light Exquisite Cookie”
Courtesy Pepperidge Farm.
1-18
CHECK YOURSELF
1. What is the definition of marketing?
2. Marketing is about satisfying ______ and
______.
3. What are the four components of the marketing
mix?
4. Who can perform marketing?
5. What are the various eras of marketing?
1-19
Value Based Marketing
Photo by Christopher Peterson/BuzzFoto
/FilmMagic /Getty Images
1-20
Companies that Put the Customer First
1-21
How Do Firms
Become Value Driven?
Sharing Information
Balancing Benefits with Costs
Building Relationships with Customers
Connecting with Customers Using
Social and Mobile Media
1-22
Connecting With Customers
Using Social & Mobile Marketing
 93% of marketers use
social media tools for
their businesses.
 4.2 billion people link
to some social media
sites through their
mobile devices.
Photo by Spencer Platt/Getty Images.
1-23
CHECK YOURSELF
1. Does providing a good value mean selling at a
low price?
2. How are marketers connecting with customers
using social and mobile media?
1-24
Why Is Marketing Important?
1-25
Marketing Is Pervasive across
Marketing Channel Members
1-26
Marketing Enriches Society
Product
Marketing
practices
Communities
Environment
©M. Hruby
1-27
Marketing Can Be Entrepreneurial
©Chris Pizzello/AP Images
Oprah's Angel Network
1-28
CHECK YOURSELF
1. List five factors that emphasize the importance
of marketing.
2. A firm doing the right thing emphasizes the
importance of marketing to _________.
1-29