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C H A P T E R

Overview of Marketing

1

McGraw-Hill/Irwin Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved.

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L E A R N I N G O B J E C T I V E SL E A R N I N G O B J E C T I V E S

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.

Overview of Marketing

LO1

LO2

LO3

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Red Mango

How does this company provide value?

RED MANGO name, design and related marks are trademarks of Red Mango, Inc. ©2012 Red Mango, Inc. All rights reserved.

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How is Red Mango Communicating Value?

RED MANGO name, design and related marks are trademarks of Red Mango, Inc. ©2012 Red Mango, Inc. All rights reserved.

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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.

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What is Marketing?

Marketing

Marketing helps create

value.

Marketing is about satisfying

customer needs and

wants.

Marketing entails an exchange.

Marketing requires

product, price, place, and promotion decisions.

Marketing can be performed

by both individuals and organizations.

Marketing occurs in many

settings.

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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.

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Marketing Entails an Exchange

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Marketing Requires Product, Price, Place, and Promotion Decisions

Product

Creating value

PRNewsFoto/PepsiCo;AP Photo.

Price

Capturing value

©Digital Vision Ltd.

Place

Delivering value

©BrandX/JupiterImages/Getty Images.

Promotion

Communication value

©Stockbyte/PunchStock.

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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

Services

Ideas

Royalty-Free/Corbis

Roz Wodward/Getty Images

Flying Colours Ltd./Getty Images

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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.

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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

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Superior Service: AT&T?

Courtesy AT&T; Agency: BBDO/Atlanta; Artist: Guido Daniele; Photographer: Andric

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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

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What Element of Marketing is This?

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Marketing Impacts Various Stakeholders

Society Customers

Employees SupplyChain

Courtesy National Fluid Milk Processor Promotion Board; Agency: Lowe Worldwide, Inc.

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Marketing Helps Create Value

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

Production

1.

Sales

2.

Marketing3.

Value based marketing

4.

5.

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Value-Based Marketing

“Pure Dark ChocolateLight Exquisite Cookie”

Courtesy Pepperidge Farm.

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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?

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How Do Firms BecomeValue Driven?

Sharing Information

Balancing Benefits with Costs

Building Relationships with Customers

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Target is Value Driven

©Lars A. Niki

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Why Is Marketing Important?

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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?

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Marketing Is Pervasive across Marketing Channel Members

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Marketing Enriches Society

ProductMarketing practices

Communities Environment

©M. Hruby