Chapter 2:

Marketings Role within the Firm or Nonprofit Organization

For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Chapter 2 Objectives
When you finish this chapter, you should
1. Know what the marketing concept isand how it should affect strategy planning in a firm or nonprofit organization. 2. Understand what customer value is and why it is important to customer satisfaction. 3. Understand what a marketing manager does. 4. Know what marketing strategy planning isand why it is the focus of the book.
2-2

5. Understand target marketing. 6. Be familiar with the four Ps in a marketing mix. 7. Know the difference between a marketing strategy, a marketing plan, and a marketing program. 8. Understand the important new terms.

For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Marketings Changing Role

Simple Trade Era
Focus:

Sell Surplus
Focus:

Production Era

Increase Supply
Focus:

Sales Era

Beat Competition
Focus :

Marketing Department Era

Coordinate and Control

Focus :

Marketing Company Era

2-3

Long-Run Customer Satisfaction

For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

The Marketing Concept

Customer Satisfaction Total Company Effort

The Marketing Concept

Profit
Exhibit 2-1
2-4
For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Marketing Orientation Sounds Easy,Isnt Even the best firms sometimes backslide into a production orientation In todays highly competitive markets it is often difficult to
keep up with changing customer needs beat aggressive competitors to the punch

find the right focus -- one that matches the firms

objectives and resources to market opportunities offer customers superior value

2-5

For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Customer Value Reflects Benefits and Costs

Customer value concerns the difference between the benefits a customer sees from a firms market offering and the costs of obtaining those benefits

Costs

Benefits

2-6

The customers view of costs and benefits is not just limited to economic (or even rational) considerations--and a low price may NOT result in superior value...

For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Customer Value

Costs

Benefits

One customers view of the benefits and costs of a firms market offering may vary from another customers view, so firm may not be able to satisfy everybody with the same offering. Customer value concept takes the customers point of view, but customers may not explicitly weigh costs and benefits and even if they do their view may not match some objective reality.

2-7

For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Nonprofits Need Marketing, Too

NonCustomer Support Characteristics of Nonprofit Organizations

NonEconomic Measures

Poorly Organized for Marketing

2-8
For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

The Marketing Management Process

Whole-Company Strategic Management Planning
Adjust Plans As Needed

Marketing Planning

Control Marketing Plan(s) and Program

Exhibit 2-4
2-9

Implement Marketing Plan(s) and Program

For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Marketing Strategy Planning

The Marketing Mix

C
Exhibit 2-5
2-10
For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

The Four Ps of the Marketing Mix

Product

Place

C
Price Promotion

Exhibit 2-7
2-11
For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Strategy Decision Areas Organized by the Four Ps

Product
Physical Goods Service Features Quality Level Accessories Installation Instructions Warranty Product Lines Packaging Branding

Place
Objectives Channel Type Market Exposure Kinds of Middleman Kinds and Locations of Stores How to Handle Transporting and Storing Service Levels Recruiting Middlemen Managing Channels

Promotion
Objectives Blend Salespeople Kind Number Selection Training Motivation Advertising Targets Kinds of Ads Media Type Copy Thrust Who Prepares? Sales Promotion Publicity

Price
Objectives Flexibility Level over PLC Geographic Terms Discounts Allowances

Exhibit 2-8
2-12
For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Four Examples of Basic Channels of Distribution for Consumer Products

Manufacturer or producer
Citibank Nissan Del Monte Procter & Gamble

Wholesaler

Wholesaler

Wholesaler

Retailer

Retailer

Retailer

Consumer
Exhibit 2-9
2-13
For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Elements of the Marketing Program

Target Market

+
Marketing Mix

Marketing Strategy

+
Time-Related Details

Marketing Plan

+
Other Marketing Plans

A Firms Marketing Program

Exhibit 2-11
2-14
For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Distribution of Different Firms Based on Performance

Death-wish marketing Best-practices marketing

(Below average) (Well below average)

68% (Average Marketing Program)

(Above average) (Well above average)

2% Total Failure

14% Poor

Fair

14% Good

2% Exceptional

Exhibit 2-12
2-15
For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill

Key Terms
Simple Trade Era Production Era Sales Era Marketing Department Era Marketing Company Era Marketing Concept Production Orientation Marketing Orientation Customer Value Nonprofit Organizations Social Responsibility Marketing Management Process Strategic (Management) Planning Marketing Strategy Target Market Marketing Mix Target Marketing Mass Marketing Channel of Distribution Personal Selling Mass Selling Advertising Publicity Sales Promotion Marketing Plan Implementation Operational Decisions Marketing Program

2-16

For use only with Perreault and McCarthy texts. The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill