CHAPTER

Overview of
Marketing

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2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
McGraw-Hill/Irwin
2014
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on aCopyright
website, in whole
or part.by the McGraw-Hill Companies,

Inc. All rights reserved.

Overview of Marketing
LEARNING OBJECTIVES
LO1

LO2

LO3

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.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

What is Marketing?

Marketing
Marketingisisan
anorganizational
organizationalfunction
functionand
and
aaset
setof
ofprocesses
processesfor
forcreating,
creating,capturing,
capturing,
communicating,
communicating,and
anddelivering
delivering value
valueto
to
customers
customersand
andfor
formanaging
managingcustomer
customer
relationships
relationshipsin
inways
waysthat
thatbenefit
benefitthe
the
organization
organizationand
andits
itsstakeholders.
stakeholders.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

What is Marketing?
Marketing helps create
value.
Marketing is about
satisfying customer
needs and wants.

Marketing occurs in
many settings.
Marketing
Marketing can be
performed by both
individuals and
organizations.

Marketing entails an
exchange.
Marketing requires
product, price, place,
and promotion
decisions.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Marketing Entails an Exchange

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Marketing Requires Product,

Price, Place, and Promotion Decisions
Product

Price

Creating value

Capturing value
Digital Vision Ltd.

PRNewsFoto/PepsiCo;
AP Photo.

Communication
value

Promotion

Stockbyte/PunchStock.

Delivering value

Place

BrandX/JupiterImages/Getty Images.

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

1-7

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
Royalty-Free/Corbis

Services
Flying Colours Ltd./Getty Images

Ideas
Roz Wodward/Getty Images

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Superior Service: AT&T?

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

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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Luxury Hotels

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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Marketing Can be Performed

by Individuals and Organizations

Retailer
(Sells PCs &
monitors)

B2B
Manufacturer
(Makes monitors)

Consumer B

B2C

C2C

Consumer A

ETSY Website
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

1-14

Marketing Impacts Various Stakeholders

Society

Customers

Employees

Supply
Chain

Courtesy National Fluid Milk Processor Promotion Board;

Agency: Lowe Worldwide, Inc.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Marketing Helps Create Value

Production

1.

Sales
2.
3.

Marketing

4.
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

5.

Value based marketing

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Marketing & Sales

Concept Contrasted
Starting
Point

Focus

Factory

Existing
Products

Market

Customer
Needs

Means

Ends

Selling
and
Promoting

Profits
through
Volume

The
The Selling
Selling Concept
Concept
Integrated
Marketing

Profits
through
Satisfaction

The
The Marketing
Marketing Concept
Concept
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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

The Societal Marketing Concept

Society
Society
(Human
(Human Welfare)
Welfare)

Societal
Societal
Marketing
Marketing
Concept
Concept
Consumers
Consumers
(Satisfaction)
(Satisfaction)

Company
Company
(Profits)
(Profits)

2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

1-18

Value-Based Marketing

Pure Dark Chocolate

Light Exquisite Cookie

Courtesy Pepperidge Farm.

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

CHECK YOURSELF

1.
2.

3.

What is the definition of marketing?

Marketing is about satisfying ______ and
______.
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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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Value Based Marketing

Photo by Christopher Peterson/BuzzFoto

/FilmMagic /Getty Images

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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Companies that Put the Customer First

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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

How Do Firms Become

Value Driven?
Sharing Information

Balancing Benefits with Costs

Building Relationships with Customers

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Connecting With Customers

Using Social & Mobile Marketing
46 % of Internet users
worldwide interact
with social media on a
daily basis.
77 % of the worlds
population subscribes
to mobile services.

Photo by Spencer Platt/Getty Images.

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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Target is Value Driven

Lars A. Niki

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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

CHECK YOURSELF

1.

2.

3.

Does providing a good value mean selling at

a low price?
What are the benefits of long-term
relationships with customers?
How are marketers connecting with
customers using social and mobile media?

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Jason Reed/Getty Images

Andrew Ward/Life File/Getty

Images

Roy McMahon/Corbis

Edward Rozzo/Corbis

BananaStock/JupiterImages

Digital Vision/Getty Images

Why Is Marketing Important?

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Marketing Is Pervasive across

Marketing Channel Members

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This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Marketing Enriches Society

Product

Marketing
practices

Communities

Environment

M. Hruby

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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Why Should You Learn Marketing?

Many exciting and rewarding Career
opportunities
As part of cross-functional teams, you would
be working with marketing people.
Even if you are not planning a business
career, marketing concepts and techniques
will apply to non-profit organizations too.
Marketing affects all aspects of daily life - you
are a consumer dealing with marketing for the
rest of your life.
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2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Check Yourself

1.

2.

List five factors that emphasize the

importance of marketing.
A firm doing the right thing emphasizes the
importance of marketing to _________.

1-31
2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.