chap1-an overview of contemporary marketing

8/12/2019 Chap1-An Overview of Contemporary Marketing

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C H A P T E R

2007 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

An Overv iew of

Contemporary

Market ing

1


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1-2 2007 The McGraw-Hill Companies, Inc. All rights reserved.Bearden Marketing 5thEd

Learn ing Ob ject ives

After studying this chapter, you should be able to: Discuss what marketing is and why it is important to

organizations and individuals.

Distinguish between marketing as an organizational

philosophy and a societal process. Understand the components of a marketing strategy and

the different activities involved in marketing products andservices.

Be aware of the various types of marketing institutions

and the different marketing positions available in theseinstitutions.

Understand the basic elements and relationships in thecontemporary marketing framework.


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Amazon : An Entrepreneur ial Story

Amazon.com represents aninteresting entrepreneurial story.Jeff Bezos started Amazon.com asa book retailer in 1995.

The companys mission was to use

the Internet to transform bookbuying into the fastest, easiest,and most enjoyable shoppingexperience available.

Sales have increased from about$150 million in 1997 to over $7

billion today.


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Amazon and Marketing

The Amazon.com storyillustrates a basic principle ofsuccessful marketing:

Identify market opportunitiesand respond by developing andexecuting marketing strategies

to take advantage of theopportunities better thancompetitors do.


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Marketing - Defin i t ion

What is market ing?

Marketing is an organizational function and aset of processes for creating, communicating,

and delivering value to customers and formanaging customer relationships in ways thatbenefit the organization and its stakeholders.

-American Marketing Association

www.marketingpower.com


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Why is market ing important?

Marketing is important to

many organizations.

For example, the HumaneSociety uses advertising to

promote animal protection.


7/311-7 2007 The McGraw-Hill Companies, Inc. All rights reserved.Bearden Marketing 5thEd

Different Types

of Organizations

SocialEntrepreneurs

Farmers

Nonprofit

Individuals

Small Firms

The Impo rtance of Market ing



Marketing asan Organizational

Philosophy

ProductionPhilosophy

SellingPhilosophy

MarketingPhilosophy

Views o f Market ing



SellingPhilosophy

MarketingPhilosophy

A selling philosophypredominates where the sellingfunction is most valued.

A marketing philosophysuggests that the organizationfocuses on satisfying the needsof customers.

ProductionPhilosophy

A production philosophy existswhen an organization emphasizesthe production function.

Market ing as an Organizat ional Phi losophy



Pract ic ing the Market ing Concept

Marketing as an organizational philosophy hasbeen based on the marketing concept. Thisconcept consists of three interrelated principles:

An organizations basic purpose is to satisfy customerneeds.

Satisfying customer needs requires integrated,coordinated effortsthroughout the organization.

Organizations should focus on long-term success.



Develop ing a Market Orien tat ion

A market orientation consists of creatingnorms and values that encourage customer-oriented behavior throughout the organization,

including:

Generating

MarketIntelligence

Disseminating

MarketIntelligence

Responding to

MarketIntelligence



Customer Equi ty

Customer equity is the financial value of a firms

customer relationships. It consists of profits from first-time customers plus expected profits from future sales tothese and other customers. Customer equity can be

increased in several ways: Acquire more profitable customers at a lower cost.

Retain profitable customers longer.

Win back profitable customers.

Eliminate unprofitable customers.

Sell more to profitable customers.

Reduce service and operational costs.



Customer Equ i ty Relat ionships

MarketingConcept,market

Orientation,

CRM

Providingexceptionalcustomer

value

Achievingcompletely

satisfied

customers

Earning

highcustomer

loyalty

Increasing

sales growthand

profits

Buildingcustomer

equity



Market ing as a Societal Process

Emphasis on:

Institution involvedActivities performed

Effectiveness of system

Efficiency of system

Consumers ofGoods & Services

Producers ofGoods & Services

Defined as a process that facilitates the flow of goodsand services from producers to consumers in a society.



1

2

Identify the most important benefits of thesocietal marketing system in the United States.

What changes would you recommend for this

system to be more beneficial to U.S. society?

3Identify the most negative effects of the societalmarketing system in the United States.

4What changes would you recommend to reducethese negative effects?

Thinking Cri t ical ly



Marketing

Processes

MarketingExchanges

MarketingStrategies

MarketingActivities

MarketingInstitutions

MarketingPositions

Market ing as a Set o f Processes



Marketing Exchanges

Exchange is defined as the transfer of somethingtangible or intangible, actual or symbolic, between two or

more social actors.



Marketing Strateg ies

Marketing strategies consist of selecting a targetmarket and developing a marketing mix tosatisfy that markets needs.

A target market is a defined group of consumers ororganizations with which a firm wants to create marketingexchanges and relationships.

A marketing mix is the overall marketing offer to appeal tothe target market.


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Market ing Mix Decis ions


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Marketing Strateg ies

The cosmetics industry is a good place to lookfor examples of different marketing strategies.


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Market ing Act iv i t ies


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Productmanager

Develops goals, objectives, plans,strategies, marketing mixes for productline or brand

Marketingmanager

Directs all companys marketing

activities, including planning, organizing,staffing, directing, controlling, evaluatingperformance

more

Marketing Pos i tions


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Supply chainmanager

Manages distribution system, includingstorage and transportation for allproducts and services

Advertisingmanager

Devises advertising policy and strategy,selects advertising agencies, developspromotional campaigns, selects media,allocates advertising expenditures

more

Marketing Pos i tions (cont)


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Marketingresearchmanager

Develops research designs for specificproblems; collects, analyzes, interpretsdata; presents results to top

management

Purchasingmanager

Manages all purchasing activities,including buying product ingredients orcomponents, supplies, equipment,needed materials

more



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Publicrelationsmanager

Manages all communications with mediaand company stakeholdersto present favorable public image


Customerservice

manager

Provides customer service, handlescustomer complaints

Salesmanager

Organizes, develops, directs, controls,evaluates sales force


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Market ing Ins t i tut ions

Retailers

Wholesalers

Marketingresearch firms

Advertisingagencies


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Marketing Environment

Exhibit 1-9


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Key Market ing Percept ive

RelationshipBuilding partnerships with firms outside theorganization and encouraging teamworkamong different functions within the

organization to develop long-term customerrelationships.

GlobalViewing the world as the potentialmarketplace to include identifying andresponding both to market opportunitiesaround the world and to different culturalgroups within each market.

more


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Customervalue

Constantly looking for ways to give customersmore for less.

EthicsAddressing the morality of marketingdecisions and practicing socialresponsibility to include ecologicalconsiderations.

more

Key Market ing Percept ive (cont)

ProductivityTrying to get the best return for eachmarketing dollar spent.


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Entrepreneur-ship

Focusing on innovation, on risk taking, andon being proactive in marketing efforts.

TechnologyTranslating new and emerging technologiesinto successful products and services, andusing technology to improve marketingpractice.

Key Market ing Percept ive (cont)


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Summary

After studying this chapter, you should be able to:

Discuss what marketing is and why it is important toorganizations and individuals.

Distinguish between marketing as an organizational

philosophy and a societal process. Understand the components of a marketing strategy

and the different activities involved in marketingproducts and services.

Be aware of the various types of marketinginstitutions and the different marketing positionsavailable in these institutions.

Understand the basic elements and relationships inthe contemporary marketing framework.

chap1-an overview of contemporary marketing

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