Exhibit 1-1: Marketing Facilitates Production

and Consumption
1-1
Exhibit 1-2: Model of a Market-Directed Macro-
Marketing System
1-2
Exhibit 1-3: Organizations with a Marketing
Orientation Carry out the Marketing Concept
1-3
Exhibit 1-4: Some Differences in Outlook between Adopters of
the Marketing Concept and the Typical Production-Oriented
Managers
1-4
Exhibit 1-5: Customer Value and Competition
1-5
Exhibit 1-6: Satisfying Customers with Superior
Customer Value to Build Profitable Relationships
1-6
Exhibit 1-7: Summary of American Marketing
Association Statement of Ethics
1-7
Exhibit 1-8: Sample Criticism of Marketing
1-8
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 may lead to increasing
expectations
Disappointing experiences may reduce expectations
Expectations may be realistic or unrealistic
Customer Satisfaction
1-9
Types of Utility and How They Are Provided
1-10
MARKETING:
the performance of activities that seek to accomplish an
organization's objectives by anticipating customer or client
needs and directing a flow of need-satisfying goods and
services from producers to customer or client
MACRO-MARKETING:
a social process that directs an economy's flow of goods and
services from producers to consumers in a way that
effectively matches supply and demand and accomplishes
the objectives of society
(New) AMA COMMITTEE DEFINITION:
marketing is an organizational function and a set of
processes for creating, communicating, and delivering value
to customers and for managing customer relationships in
ways that benefit the organization and its stakeholders
What Is Marketing?
1-11
Economies of Scale: as a company produces
larger numbers of a particular product, the cost
for each of these products goes down.
Facilitated by mass production
Facilitated by mass distribution
Not always possible (for example, in labor
intensive services)
Flexible production--to meet varying or
changing needs--may be more important than
economies of scale in creating real customer
value
Economies of Scale
1-12
Universal Functions of Marketing
1-13
A. Ten exchanges required when a central market is not used,
and B. Only five exchanges are required when a middleman
(intermediary) in a central market is used
1-14
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
1-15
E-commerce refers to exchanges between
individuals or organizationsand activities that
facilitate those exchangesbased on
applications of information technology.
Innovations in e-commerce are making many
firms and markets more effective (work better)
and/or more efficient (less costly)
Examples:
Websites the facilitate promotion, buying and selling
Shared databases that allow buyers and sellers do a
better job in planning inventory requirements
Online Auction sites to match supply and demand
E-Commerce
1-16
Consumer choices are
the invisible hand that
guides the economy
Government officials
decide what consumers
should get
Command
Economy
Market-Directed
Economy
Economic Systems
1-17
Marketing department era
Marketing company era
Sales era
Production era
Simple trade era
Stages of Marketing Evolution
1-18
Trying to carry out the marketing concept
Maintaining a customer orientation
All departments work together guided by customer
needs
Focus on profit objective (or other overall objective)
NOT just trying to unload what the firm has produced
Marketing Orientation
1-19
Marketing Orientation Focuses Departments
1-20
Customer value concerns the difference
between the benefits a customer sees from a
market offering and the costs of obtaining
those benefits
Customer value takes the customers point of
view
But customer may not explicitly think in terms of
costs and benefits
Costs and benefits are not just limited to
economic considerations
Examples: Convenience in purchasing
Emotional reactions (status needs, etc.)
In a competitive market, the firm that offers
superior value is likely to win business and get
repeat customers
The Marketing Concept and Customer Value
1-21
Both public and private nonprofit organizations
are turning to marketing concepts
Some nonprofits differ from business in
important ways:
those who get benefits may not provide the support
may be difficult to agree on basic objective
each volunteer tends to do what he or she wants to
do!
Nonprofit Organizations and the Marketing
Concept
1-22
Micro-macro dilemma: what is good for some
producers and consumers may not be good for society
as a whole.
Examples:
some consumers want handguns, but guns can be
dangerous
all terrain vehicles are fun for some people, but may
result in injuries or damage to wilderness areas
non-returnable soft drink bottles are convenient, but
sometimes result in litter and dangerous broken
glass along highways.
repairing an old air-conditioning system might save
the owner money, but might require continued use
of ozone depleting fluorocarbons (used as coolant)
Micro-Macro Dilemma
1-23
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
Social Responsibility and Marketing Ethics
1-24