s12 18e all chap001
TRANSCRIPT
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Chapter 01
Marketings Value toConsumers, Firms,
and Society
McGraw-Hill/I rwin Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
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Management 3500, 10 & 11, Course Objectives
An understanding of marketing terminology and marketing
concepts.
Knowledge to facilitate practical application of marketing
principles.
Knowledge in the following specific areas of marketing: The role of marketing in the macro and micro environments.
Buyer needs and behavior, and the use of such information.
Marketing Research and Competitive Intelligence.
The Marketing Mix (4 Ps): Product, Place, Promotion, and Price.
An understanding of how the marketing manager uses knowledgeabout the Customer, Company, Competitors, and Context (4 Cs)
as the foundation for creation of a marketing strategy, the
marketing mix that best serves the needs of the target market
at a profit.
Verbal skills in communicating marketing concepts.
Upon successful completion of the course, the student will have developed:
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At the end of this presentation, you should
be able to:
1. Know what marketing is and why you should learnabout it.
2. Understand the difference between marketing and
macro-marketing.
3. Know the marketing functions and why marketing
specialistsincluding intermediaries and
collaboratorsdevelop to perform them.
4. Understand what a market-driven economy is and howit adjusts the macro-marketing system.
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At the end of this presentation, you should
be able to:
5. Know what the marketing concept isand how itshould guide a firm or nonprofit organization.
6. Understand what customer value is and why it is
important to customer satisfaction.
7. Know how social responsibility and marketing ethics
relate to the marketing concept.
8. Understand the important new terms.
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More than Selling or Advertising
All ThoseBicycles!
The Management Job in Marketing
More than Selling and Advertising
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Things a Firm Should Do in Producing a
Bike
Themarketingmix
The
Predict Wants
Estimate Demand
Predict When
Determine Where
Estimate PriceDecide Promotion
Estimate Competition
Provide Service
Analyze Needs
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Production vs. Marketing
Creates Customer Satisfaction
Marketing
Makes sure right goods &
services are produced
Production
Making Goods
Performing Services
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Customer Satisfaction Customer satisfaction is the extent to
which a firm fulfills a consumers needs,desires, and expectations
As some needs are met, others may
become more important Expectations may change based on
experiences
Satisfying experiences increase
expectations
Disappointing experiences reduce
expectations
Realistic or Unrealistic Expectations
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Marketing Is Important to You!
Important to every consumer!
Important to your job!
Affects innovation and
standard of living
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Marketing
Stimulates
New Ideas
Courtesy of The Procter & Gamble Company.
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What Is Marketing?
and
Macro View
Social process
Matches supply
with demand
Micro View
Set of activities
Performed by
individual
organizations
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Th
e
The performance of activities that
seek to accomplish an
organizations objectives byanticipating customer or client
needs and directing a flow of need-
satisfying goods and services fromproducer to customer or client.
Micro-Marketing
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Marketing
Key
Characteristics
Profit andNonprofit
More thanPersuasion
Begins with
Needs
Doesnt Go It
Alone
Involves
Exchanges
Builds
Relationships
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Building
Customer
Relationships
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Macro-Marketing
A social process that directs an
economys flow of goods and
services from producers toconsumers in a way that effectively
matches supply and demand and
accomplishes the objectives ofsociety.
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Macro-Marketing
Key
Characteristics
MatchesProducers and
Consumers
Emphasis is on
Whole System
EveryEconomy
Needs It
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AMA Definition
Marketing is the process of planning
and executing the conception, pricing,
promotion, and distribution of ideas,goods, and services to create
exchanges that satisfy individual and
organizational objectives.
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Marketing Facilitates Production and
Consumption (Exhibit 1-1) P. 9
Production Sector
Marketing
needed to
overcome
discrepancies
and
separations
Discrepancies ofQuantity
Discrepancies of
Assortment
Spatial Separation
Separation in Time
Separation of
Information
Separation in
Values
Separation of
Ownership
Consumption Sector
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Universal Functions of Marketing
MarketingFunctions
Buying Selling
Transporting
Storing
Standardization
& GradingFinancing
Risk Taking
Market
Information
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E-commerce refers to exchanges betweenindividuals or organizationsand activities thatfacilitate those exchangesbased on applicationsof information technology.
Innovations in e-commerce are making many firmsand markets more effective (work better) and/ormore efficient (less costly)
Examples:
Websites the facilitate promotion, buying andselling
Shared databases that allow buyers and sellers do abetter job in planning inventory requirements
Online Auction sites to match supply and demand
E-Commerce
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Advertising agencies
Marketing research firms
Independent product-testing laboratories
Internet service providers
Public warehouses
Transporting firms
Communications companies
Financial institutions (including banks)
Collaborators Facilitate Marketing Functions
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How Decisions are Made in an Economic
System
OR
CommandEconomy
Governmentofficials decide
May work well if:
Simpleeconomy
Little Variety Adverse
Conditions
Market-DirectedEconomy
Adjusts itself
Price is value
measure
Freedom of
choice
Governments
role limited
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Model of a Market-Directed Macro-Marketing
System (Exhibit 1-2) P. 14
Many Individual Producers(heterogeneous supply)
Intermediaries Collaborators
Perform universal marketing functions
To overcome discrepancies and
separation of producers and consumers
To create value and direct flow of
need-satisfying goods and services
Many Individual Consumers
(heterogeneous demand)
Monitoring by government(s)
and public interest groups
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Marketings Role Has Changed Over Time
Focus:Sell Surplus
Long-Run
Customer Satisfaction
Focus:
Focus:
Increase Supply
Focus:
Beat Competition
Focus:Coordinate and Control
Simple Trade Era
Production Era
Sales Era
Marketing DepartmentEra
Marketing Company Era
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The Marketing Concept (Exhibit 1-3) P. 16
Profit (or another measure
of long-term success) as
an objective
Total
company
effort
Customer
satisfaction
The
Marketing
Concept
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Exhibit 1-4: Some Differences in Outlook between Adopters of the
Marketing Concept and the Typical Production-Oriented Managers.
(p.18)
M k ti C t & C t V l
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Marketing Concept & Customer Value
Customer value concerns the difference between thebenefits a customer sees from a market offering andthe costs of obtaining those benefits
Customer value takes the customers point of view
But customer may not explicitly think in terms ofcosts and benefits
Costs and benefits are not just limited to economicconsiderations
Examples: Convenience in purchasing
Emotional reactions (status needs, etc.)
In a competitive market, the firm that offers superiorvalue is likely to win business and get repeatcustomers
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Creating
Customer
Satisfaction
Prestige Brands Holdings, Inc.
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Checking Your Knowledge
A store that is popular with newlyweds runs a wedding gift registry.Five minutes before closing time on a Sunday, a young couple enters
the store and wants to registera process that usually takes 30
minutes or more. A sales associate advises the couple to come back
when they have more time, even though a recent memo from the
stores regional manager specifically instructed store personnel tostay after closing time to help such customers. Which key element
of the marketing concept is the main problem area in this situation?
A. Customer need
B. Total company effort
C. Customer satisfaction
D. Marketing orientation
E. Product orientation
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The Marketing Concept and Customer Value
Costs Benefits
Take Customers Pointof View
Customer May Not
Dwell On Value
Where DoesCompetition Fit?
Customer Value
Builds Relationships
Customer value
reflects
benefits and costs
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Checking Your Knowledge
Which of the following statements, made by marketing managers,illustrates an understanding of the concept of customer value?
A. Its more important to acquire new customers than to retain
old ones.
B. The only time its really necessary to demonstrate
superior customer value is right before the actual sale.
C. My main concern is with meeting this months sales
quotaIll worry about relationship building later.
D. I might think my product is a good value, but what reallycounts is if the customer thinks its a good value.
E. Customer value really boils down to which product is the
least expensive.
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Checking Your Knowledge
A computer manufacturer is attempting to increase thecustomer value associated with purchases of its products.Which of the following might be a way to achieve thisincrease in value?
A. Reduce price.B. Increase technical support for customers.
C. Increase warranty coverage.
D. Offer free shipping.
E. Any of the above, depending on the needs of thetarget market.
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Total CompanyEffort to Satisfy
Customers
Total CompanyEffort to Satisfy
Customers
Putting It All Together (Exhibit 1-6) P. 21
Build Profitable
CustomerRelationships
Attract
Customers
Offer Superior
Customer Value
Satisfy
Customers
Retain Customers
Increase Sales to
Customers
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Government
Marketing
Th M k ti C t S i l1-35
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Social
Responsibility
The Marketing Concept, Social
Responsibility, and Marketing Ethics
Should All
Needs Be
Satisfied?
What if Profits
Suffer?
Micro - MacroDilemma
The Marketing Concept Guides Ethics
Group Needs Individual Needs
Do All
Marketers Act
Responsibly?
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Social responsibility concerns a firm's obligation to
improve its positive effects on society and reduce
its negative effects
Marketing ethics are the moral standards that
guide marketing decisions and actions
Since the Marketing Concept involves the total
organization, the ethics practices of theindividuals impact the total organization
Red Face Test/Newspaper Test
Social Responsibility and Marketing Ethics
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The Micro-
Macro
Dilemma
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You should now be able to:
1. Know what marketing is and why you should learnabout it.
2. Understand the difference between marketing and
macro-marketing.
3. Know the marketing functions and why marketing
specialistsincluding intermediaries and
collaboratorsdevelop to perform them.
4. Understand what a market-driven economy is and howit adjusts the macro-marketing system.
1-39
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You should now be able to:
5. Know what the marketing concept isand how itshould guide a firm or nonprofit organization.
6. Understand what customer value is and why it is
important to customer satisfaction.
7. Know how social responsibility and marketing ethics
relate to the marketing concept.
8. Understand the important new terms.
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Key Terms
Production
Customer satisfaction
Innovation
Marketing
Pure subsistence economy
Macro-marketing
Economies of scale
Universal functions ofmarketing
Buying function
Selling function
Transporting function
Storing function
Standardization and grading
Financing
Risk-taking
Market information function Intermediary
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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