chapter
one
overview of
marketing
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LEARNING OBJECTIVES
LO 1-1 Define the role of marketing in organizations.
LO 1-2 Describe how marketers create value for a
product or service.
LO 1-3 Understand why marketing is important,
both within and outside the firm.
1-2
What is Marketing?
Marketing is an organizational function and
a set of processes for creating, capturing,
communicating, and delivering value to
customers and for managing customer
relationships in ways that benefit the
organization and its stakeholders.
1-3
What is 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.
1-4
Marketing is about Satisfying Customer
Needs and Wants
• What group is Pepsi targeting with this ad?
• What other benefits of soft drinks might Pepsi advertise?
• What groups might these benefits appeal to?
PRNewsFoto/PepsiCo; AP Photo.
1-5
Marketing Entails an Exchange
1-6
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.
1-7
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
1-8
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.
AP Photo/The Canadian Press, Jacques Boissinot.
1-9
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
1-10
Superior Service: AT&T?
Courtesy AT&T; Agency: BBDO/Atlanta; Artist: Guido Daniele; Photographer: Andric
1-11
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
1-12
Marketing Can be Performed
by Individuals and Organizations
Retailer
(Sells PCs &
monitors)
Consumer B
B2C
B2B
Manufacturer
(Makes monitors)
C2C
Consumer A
ETSY Website
1-13
Marketing Impacts Various
Stakeholders
Society
Customers
Employees
Supply
Chain
Courtesy National Fluid Milk Processor Promotion Board;
Agency: Lowe Worldwide, Inc.
1-14
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
1-15
Value-Based Marketing
“Pure Dark Chocolate
Light Exquisite Cookie”
Courtesy Pepperidge Farm.
1-16

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?
1-17
Value Based Marketing
Photo by Christopher Peterson/BuzzFoto
/FilmMagic /Getty Images
1-18
How Do Firms Become
Value Driven?
Sharing Information
Balancing Benefits with Costs
Building Relationships with Customers
1-19
Connecting With Customers
Using Social & Mobile Marketing
• 46 % of Internet users
worldwide interact
with social media on a
daily basis.
• 77 % of the world’s
population subscribes
to mobile services.
Photo by Spencer Platt/Getty Images.
1-20

check yourself
1. Does providing a good value mean selling at
a low price?
2. What are the benefits of long-term
relationships with customers?
3. How are marketers connecting with
customers using social and mobile media?
1-21
Andrew Ward/Life File/Getty
Images
©Roy McMahon/Corbis
©Edward Rozzo/Corbis
BananaStock/JupiterImages
Jason Reed/Getty Images
Digital Vision/Getty Images
Why Is Marketing Important?
1-22

check yourself
1. List five functions that illustrate the
importance of marketing.
2. A firm doing the right thing emphasizes the
importance of marketing to _________.
1-23