CHAPTER 1: Marketing: The

Art and Science of Satisfying

Customers
2 BASIC OPERATING FUNCTIONS OF
EVERY ORGANIZATION

1. Production of a good, service,

organization, person, or idea

2. Marketing of the good, service,

organization, person or idea
 Utility

want satisfying power of a good or service

 4 TYPES OF UTILITY

1. FORM

created by production
convert raw materials into finished
goods & services
Ex. Metal Shelves, Ford Explorer
 Utility (Cont.)
2. TIME

created by marketing
availability of goods & services when
consumers want to buy them
Ex.: Dominos 30 minute guarantee
Federal Express
 Utility (Cont.)
3. PLACE

created by marketing
availability of goods & services where
consumers want to buy them
Ex.: vending machines, Taco Bell
Express

4. OWNERSHIP

created by marketing
transfer title time of purchase
Ex.: retail outlets (in exchange for $ or credit card payment)
 WHAT IS MARKETING?

American Marketing Assoc. (1985)

"process of planning & executing the
conception, pricing, promotion, & distribution
of ideas, goods, & services to create exchanges
that will satisfy individual & organizational
objectives"
Marketing does not begin at the
end of the loading dock!

Marketing should be involved

from the conception of the
product to the ultimate user.
 4 Eras in Marketing
1. PRODUCTION ERA:
"A good product will sell itself"
Prior to 1920's
production oriented: make product and then
sell it (Henry Ford)
2. SALES ERA:
"Creative advertising & selling will overcome
customer resistance & convince them to buy
between 1925 & early 1950's
selling was main focus of marketing
3. MARKETING ERA:
"The consumer is king! Find a need & fill it!
early 1950's to early 1990s

Emergence of the Marketing Concept

*CONSUMER ORIENTATION
Sellers Market vs. Buyers Market
4. RELATIONSHIP MARKETING ERA
long-term, value added relationships developed over
time with customers and suppliers
1990-Today
Strategic Alliances
Ex. UPS

What era do you think is next??

 AVOIDING MARKETING
MYOPIA

Management failure to recognize scope of

its business
EX. Amtrak
AT&T and TCI

chart on pg 11 gives good examples of

focusing on benefits
 5 Types of Nontraditional
Marketing

1. Person Marketing
to cultivate attention, interest, & preference of
a target market toward a person
Ex.: pro athletes

2. Place Marketing
attract visitors to a particular area
Ex.: Wake Up to Missouri or Pumpkin
License Plate
3. Cause Marketing
identification & marketing of a social issue,
cause, or idea to selected target markets
Ex.: "Save the Whales"
literacy
Milk
4. Event Marketing
mkt of sporting, cultural, & charitable activities to
selected target markets
Ex. Visa & Olympics or TWA Dome

5. Organizational Marketing
seek to influence others to accept the goods of, receive
the services of, or contribute in some way to an
organization
- Ex.: Be All that You Can Be
Ex: An Army of One
 ELEMENTS OF A
MARKETING STRATEGY

1. THE TARGET MARKET

who firm will direct marketing efforts toward
Ex. Baby-boomers, children, women
Ex.: Stouffers Lean Cuisine

2. THE MARKETING MIX VARIABLES (4Ps)

Once target market is chosen, how these variables are
"mixed" determines success of marketing.
 Marketing Mix

A. PRODUCT: package design, branding,

trademarks, warranties, product life cycles
& new product development

B. PRICING: one of most difficult marketing

decisions
C. DISTRIBUTION: ensures that product
arrives in right place, in right quantity at the
right time

D. PROMOTION: communications link

between sellers & buyers
Ex.: advertising, sales people, sales
promotions
3. THE MARKETING ENVIRONMENT
The marketing environment is important
because it provides a framework for all
marketing activity.

5 Forces
1. COMPETITION
2. POLITICAL-LEGAL
3. ECONOMIC
4. TECHNOLOGICAL
5. SOCIAL-CULTURAL
 Strategic Alliances: partnership that
creates competitive advantages
ex. Delta and Disney
UPS and Bradfields
Pepsi and Apples iTunes
Marketing Costs
creating time, place & ownership utility costs $
most estimate that marketing costs are 40 - 60%
of overall product cost
 Internet and Marketing

It was the future and is now the present!

 ETHICS AND SOCIAL
RESPONSIBILITY

Most business people are ethical but there

are a few rotten ones.
Ex. ADM, Enron, Worldcom