McGraw-Hill/Irwin

Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:

LO1

Define marketing and identify the diverse factors influencing marketing activities.

LO2

Explain how marketing discovers and satisfies consumer needs.

Distinguish between marketing mix factors and environmental forces.

LO3

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LEARNING OBJECTIVES (LO)

AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:

LO4

Explain how organizations build strong customer relationships and customer value through marketing. Describe how todays customer relationship era differs from prior eras.

LO5

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RESEARCHING HOW COLLEGE STUDENTS STUDY TO LAUNCH A NEW PRODUCT AT 3M

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INNOVATION AND MARKETING AT 3M

DISCOVERING & SATISFYING STUDENT STUDY NEEDS

+
3M Post-it Notes or Post-it Flags Felt Tip Highlighters

=
3M product that will combine Post-it Notes or Post-it Flags and Highlighters

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LO1

WHAT IS MARKETING ?
You Are a Marketing Expert Already
Involved in 1,000s of Buying Decisions May Be Involved in Selling Decisions

Marketing is NOT Easy

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FIGURE 1-1 The see-if-youre-really-amarketing-expert test

1. True

2. True

3. (c) plastic bottles

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MARKETING MATTERS
LO1

Payoff for the Joys (!) and Sleepless Nights (?) of Starting Your Own Small Business: YouTube!!!!

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LO1

WHAT IS MARKETING?
DELIVERING BENEFITS

Marketing Seeks to:

Discover Needs and Wants of Customers Satisfy Them

Exchange

AMA Definition of Marketing

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LO1

WHAT IS MARKETING?
DIVERSE FACTORS INFLUENCE MARKETING ACTIVITIES

The Organization Itself and Its Departments Society Environmental Forces

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FIGURE 1-2 A marketing department relates to many people, organizations, and environmental forces

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LO2

HOW MARKETING DISCOVERS CONSUMER NEEDS

THE CHALLENGE: NEW PRODUCTS

Consumers May Not Know or Cannot Describe What They Need or Want
Most New Products Fail The Challenge:
Focus on the Consumer Benefit Learn From the Past
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LO2

Dr. Care Vanilla-Mint Aerosol Toothpaste

What benefits and what showstoppers?

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LO2

Hot Pockets Sideshots Microwaveable Snacks

What benefits and what showstoppers?

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LO2

AT&T CruiseCast
What benefits and what showstoppers?

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LO2

Pepsi Max
What benefits and what showstoppers?

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LO2

HOW MARKETING DISCOVERS CONSUMER NEEDS

NEEDS VS. WANTS

Need

Want

Does Marketing Persuade People to Buy the Wrong Things? Market

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FIGURE 1-3 Marketing seeks to discover consumer needs through research and then satisfy them with a marketing program

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LO3

HOW MARKETING SATISFIES CONSUMER NEEDS Target Market

The 4 Ps: Controllable Marketing Mix Factors
Product Promotion
$199

Price

Place
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LO3

HOW MARKETING SATISFIES CONSUMER NEEDS

Uncontrollable Environmental Forces
Social Economic Technological Competitive Regulatory

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LO4

THE MARKETING PROGRAM

CUSTOMER VALUE AND RELATIONSHIPS

Customer Value

Value Strategies
Best Price Best Product Best Service
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LO4

Southwest Airlines, Starbucks, and Home Depot What customer value strategy?

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LO4

THE MARKETING PROGRAM

RELATIONSHIP MARKETING

Relationship Marketing
Easy to Understand Hard to Do

Marketing Program
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LO4

3MS STRATEGY & MARKETING PROGRAM

HELPING STUDENTS STUDY

Move from Ideas to a Marketable Highlighter Product Add the Post-it Flag Pen Develop a Marketing Program for the Post-it Flag Highlighter and Pen
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FIGURE 1-4 Marketing programs for two new 3M Post-it brand products targeted at two distinct customer segments: college students and office workers

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LO4

3M STRATEGY & MARKETING PROGRAM

MARKETPLACE SUCCESS?

Developed Second Generation Post-it Flag Highlighter

Appeared on The Oprah Winfrey Show

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FIGURE 1-A Four different orientations in the history of American business

Production Era Sales Era Marketing Concept Era Customer Relationship Era

Market Orientation

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LO5

HOW MARKETING BECAME IMPORTANT

EVOLUTION OF THE MARKET ORIENTATION

Customer Relationship Management (CRM)

Customer Experience
Direct Contact from Buying the Service Indirect Contact via Unplanned Touches

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LO5

HOW MARKETING BECAME IMPORTANT

ETHICS AND SOCIAL RESPONSIBILITY

Ethics Social Responsibility

Societal Marketing Concept Social Entrepreneurship

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LO5

HOW MARKETING BECAME IMPORTANT

BREADTH AND DEPTH OF MARKETING

Who Markets? What Is Marketed?

Goods

Services

Ideas
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LO5

HOW MARKETING BECAME IMPORTANT

BREADTH AND DEPTH OF MARKETING

Who Buys & Uses What Is Marketed?

Ultimate Consumers Organizational Buyers

Who Benefits? How Do Consumers Benefit?: Utility

Form Utility Place Utility Time Utility

Possession Utility
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VIDEO CASE 1
3MS POST-IT FLAG HIGHLIGHTER: EXTENDING THE CONCEPT!

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VIDEO CASE 1
3Ms Post-it Flag Highlighter

1. (a) How did 3Ms David Windorski get ideas from college students to help him in designing the final commercial version of the Post-it Flag Highlighter? (b) How were these ideas important to the success of the product?
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VIDEO CASE 1
3Ms Post-it Flag Highlighter

2. What (a) special advantages and (b) potential problems did 3M have in introducing a new highlighter-with-flags product for college students?

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VIDEO CASE 1
3Ms Post-it Flag Highlighter

3. Visit your college bookstore before you answer. (a) Where would you display the Post-it Flag Highlighter in a college bookstore, and (b) How can the display increase student awareness of the product?
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VIDEO CASE 1
3Ms Post-it Flag Highlighter

4. In what ways might 3M try to promote its Post-it Flag Highlighter and make students more aware of the product?

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VIDEO CASE 1
3Ms Post-it Flag Highlighter

5. What are (a) the special opportunities and (b) potential challenges for 3M in taking its Post-it Flag Highlighter into international markets? (c) On which countries should 3M focus its marketing efforts?
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Marketing

Marketing is the activity for creating, communicating, delivering, and exchanging offerings that benefit the organization, its stakeholders, and society at large.

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Exchange

Exchange is the trade of things of value between buyer and seller so that each is better off after the trade.

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Market

A market consists of people with both the desire and the ability to buy a specific offering.

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Target Market

A target market consists of one or more specific groups of potential consumers toward which an organization directs its marketing program.

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Marketing Mix

The marketing mix consists of the controllable factorsproduct, price, promotion, and placethat can be used by the marketing manager to solve a marketing problem.

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Environmental Forces

Environmental forces consist of the uncontrollable social, economic, technological, competitive, and regulatory forces that affect the results of a marketing decision.

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Customer Value

Customer value is the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specified price.
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Relationship Marketing

Relationship marketing links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit.

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Marketing Program

A marketing program is a plan that integrates the marketing mix to provide a product, service, or idea to prospective buyers.

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Marketing Concept

A marketing concept is the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organizations goals.

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Market Orientation

A market orientation occurs when an organization focuses its efforts on (1) continuously collecting information about customers needs, (2) sharing this information across departments, and (3) using it to create customer value.

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Societal Marketing Concept

Societal marketing concept is the view that organizations should discover and satisfy the needs of its consumers in a way that also provides for societys well-being.

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Ultimate Consumers

Ultimate consumers consist of the people who use the products and services purchased for a household. Also called consumers, buyers, or customers.

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Organizational Buyers

Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or for resale.

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Utility

Utility consists of the benefits or customer value received by users of the product.

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