MARKETING

ADVERTISING

DEMAND &
SUPPLY GAP

BRAND RECOGNITION

COMPETITION
WHAT IS MARKETING?
WHAT IS MARKETING?
 WHAT IS MARKETING?

Satisfying
Making a sale
customer needs

Traditional Marketing Modern Marketing

 WHAT IS MARKETING?

• Marketing is managing profitable customer

relationships
 WHAT IS MARKETING?
• “The aim of marketing is to make selling unnecessary.” -
Peter Drucker

Obtain
need & want
individuals Organizations
Creating &
exchanging
value
 Marketing - the process by which companies create
value for customers and build strong customer
relationships in order to capture value from customers in
return.
Basic Marketing
A Global
Managerial
Approach

William D. Perreault Jr.

E. Jerome McCarthy

For use only with Perreault and McCarthy texts. © 2005 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin
 CHAPTER ONE

Marketing’s Value
to Consumers,
Firms, and Society

For use only with

Perreault and McCarthy
texts.
© 2005 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin
When we finish this lecture you should

1. Know what marketing is and why you should learn

about it.
2. Understand the difference between micro-marketing
and macro-marketing.
3. Know the marketing functions and why marketing
specialists—including intermediaries and
facilitators—develop to perform them.
4. Understand what a market-driven economy is and
how it adjusts the macro-marketing system.
5. Know what the marketing concept is—and how it
should guide a firm or nonprofit organization.
When we finish this lecture you should

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.
Marketing—What’s It All About?

More than Selling and Advertising

All Those
More than Selling and Advertising
Bicycles!
Things a Firm Should Do in Producing a Bike

Analyze Needs

Predict Wants
Estimate Demand

Predict When

Determine Where

Estimate Price

Decide Promotion
Estimate Competition

Provide Service
Production vs. Marketing

Marketing
Makes sure right goods &
services are produced

Production
• Making Goods
• Performing Services

Creates Customer Satisfaction

 Exhibit 1-1
Types of Utility and How They Are Provided

Provided by production with Provided by marketing

guidance of marketing
Time
Form

Utility
Value that comes Place
from satisfying
human needs

Task
Possession
Interactive Exercise: Utility
Marketing Is Important to You!

Important to every consumer!

Important to your job!

Affects economic growth and

standard of living!
Marketing Stimulates New Ideas

+
Affects Economic Growth
What Is Marketing?

Micro Macro

• Set of activities • Social process

OR
• Performed by • Matches supply
organizations with demand
Micro-Marketing

Profit and More than

Nonprofit Persuasion

Focus of Begins with

Your Text Key Needs
Characteristics

Builds Doesn’t Go
Relationships It Alone
Involves
Exchanges
Building Customer Relationships

+
Macro-Marketing

Emphasis on Every Economy

Whole System Needs It

Key
Characteristics

Matches
Producers and
Consumers
Can Mass Production Satisfy a Society’s
Consumption Needs?

Economies of Scale Lower Cost

Cost
$

Output
Marketing Bridges the Gap!

Producers Marketing Consumers

Functions
Overcoming Spatial Separation

+
The Universal Functions of Marketing

Buying Selling

Market
Information Transporting
Marketing
Functions
Risk Taking Storing

Standardization
Financing
& Grading
Who Performs Marketing Functions?

Producers Wholesalers Other

Specialists

Transport
Firms Retailers
Ad Agencies
ISP's

Product
Testing Research
Firms Firms Consumers
How Decisions Are Made in an Economic System

Planned Economic Market-Directed

System System

• Government • Adjusts itself

planners decide • Price is value
• Can work well if: OR measure

• Simple • Freedom of choice

economy • Government’s role
• Adverse limited
Conditions
Marketing’s Role Has Changed Over Time

Focus:
Simple Trade Era
Sell Surplus

Focus:
Production Era
Increase Supply

Focus:
Sales Era
Beat Competition

Marketing Department Focus:

Era Coordinate and Control

Focus: Long-Run
Marketing Company Era
Customer Satisfaction
Exhibit 1-4
The Marketing Concept

Customer Total Company

Satisfaction Effort

The
Marketing
Concept

Profit
Creating Customer Satisfaction

+
Adoption of the Marketing Concept

+
The Marketing Concept and Customer Value

Take Customer’s
Point of View

Customer May
Not Dwell On
Value

Costs Benefits Where Does

Competition Fit?

Customer Value
Builds
Relationships
Interactive Exercise: Customer Value
Putting It All Together

Superior
Customer Value
Total Company
Customer
Effort to Satisfy
Acquisition
Customers

Profitable
Customer
Relationships with
Satisfaction
Customers

Customer
Retention
 The Marketing Concept Applies in
Nonprofit Organizations

Support and
Newcomers to
“Satisfied
Marketing
Customers”

Characteristics
of Nonprofit
Marketing Organizations The Bottom
Concept
Line
Provides Focus
May Not Be
Organized for
Marketing
Government Marketing

+
Marketing Concept Use by Nonprofit Services
The Marketing Concept, Social
Responsibility, and Marketing Ethics

Micro-Macro
Group Needs Individual Needs
Dilemma

Should All
Social What if Profits
Needs Be
Responsibility Suffer?
Satisfied?

The Marketing Concept Guides Ethics

Key Terms
• Production • Pure subsistence economy
• Customer satisfaction • Macro-marketing
• Utility • Economies of scale
• Form utility • Universal functions of
marketing
• Task utility
• Time utility • Buying
• Place utility • Selling
• Possession utility • Transporting
• Innovation • Storing
• Micro-marketing • Standardization and
grading
Key Terms
• Financing • Market-directed economic
system
• Risk-taking
• Market information • Simple trade era
• Intermediary • Production era
• Sales era
• Middleman
• Marketing department era
• Facilitators • Marketing company era
• E-commerce • Marketing concept
• Economic system • Production orientation
• Planned economic • Marketing orientation
system • Customer value
Key Terms
• Micro-macro dilemma
• Social responsibility
• Marketing ethics