Chapter 1 - The World of Marketing: Creating & Sharing Value
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Chapter 1 - The World of Marketing: Creating & Sharing Value

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  • Marketing is all about delivering value to everyone who is affected by a transaction.\n\nThe definition of marketing demonstrates the importance of the 4P’s in marketing practice.\n\n
  • Marketing is all about delivering value to everyone who is affected by a transaction.\n\nThe definition of marketing demonstrates the importance of the 4P’s in marketing practice.\n\n
  • Marketing is all about delivering value to everyone who is affected by a transaction.\n\nThe definition of marketing demonstrates the importance of the 4P’s in marketing practice.\n\n
  • Marketing is all about delivering value to everyone who is affected by a transaction.\n\nThe definition of marketing demonstrates the importance of the 4P’s in marketing practice.\n\n
  • Marketing is all around us. Indeed, some might say we live in a branded world. Value refers to the benefits a customer receives from buying a good or service. You have “market value” as a person—you have qualities that set you apart from others and abilities other people want and need. So, the principles of marketing apply to people, just as they apply to coffee, convertibles, and computer processors. Sure, there are differences in how we go about marketing each of these, but the general idea remains the same: Marketing is a fundamental part of our lives both as consumers and as players in the business world.\n\n
  • Marketing is all around us. Indeed, some might say we live in a branded world. Value refers to the benefits a customer receives from buying a good or service. You have “market value” as a person—you have qualities that set you apart from others and abilities other people want and need. So, the principles of marketing apply to people, just as they apply to coffee, convertibles, and computer processors. Sure, there are differences in how we go about marketing each of these, but the general idea remains the same: Marketing is a fundamental part of our lives both as consumers and as players in the business world.\n\n
  • Marketing is all around us. Indeed, some might say we live in a branded world. Value refers to the benefits a customer receives from buying a good or service. You have “market value” as a person—you have qualities that set you apart from others and abilities other people want and need. So, the principles of marketing apply to people, just as they apply to coffee, convertibles, and computer processors. Sure, there are differences in how we go about marketing each of these, but the general idea remains the same: Marketing is a fundamental part of our lives both as consumers and as players in the business world.\n\n
  • Marketing is all around us. Indeed, some might say we live in a branded world. Value refers to the benefits a customer receives from buying a good or service. You have “market value” as a person—you have qualities that set you apart from others and abilities other people want and need. So, the principles of marketing apply to people, just as they apply to coffee, convertibles, and computer processors. Sure, there are differences in how we go about marketing each of these, but the general idea remains the same: Marketing is a fundamental part of our lives both as consumers and as players in the business world.\n\n
  • Marketing is all around us. Indeed, some might say we live in a branded world. Value refers to the benefits a customer receives from buying a good or service. You have “market value” as a person—you have qualities that set you apart from others and abilities other people want and need. So, the principles of marketing apply to people, just as they apply to coffee, convertibles, and computer processors. Sure, there are differences in how we go about marketing each of these, but the general idea remains the same: Marketing is a fundamental part of our lives both as consumers and as players in the business world.\n\n
  • Marketing is defined as 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.\n\nMarketing is all about delivering value to everyone who is affected by a transaction.\n\nMarketing Is About Meeting Needs\nOne important part of our definition of marketing is that it is about meeting the needs of diverse stakeholders. The term stakeholders here refers to buyers, sellers, investors in a company, community residents, and even citizens of the nations where goods and services are made or sold—in other words, any person or organization that has a “stake” in the outcome. Thus, marketing is about satisfying everyone involved in the marketing process.\n\nOne important stakeholder is you. A consumer is the ultimate user of a good or service. Consumers can be individuals or organizations, whether a company, government, sorority, or charity.\n\nMost successful firms today practice the marketing concept—that is, marketers first identify consumer needs and then provide products that satisfy those needs, ensuring the firm’s long-term profitability. A need is the difference between a consumer’s actual state and some ideal or desired state. When the difference is big enough, the consumer is motivated to take action to satisfy the need. Needs relate to physical functions (such as eating) or to psychological ones (such as wanting to look good). The specific way a person satisfies a need depends on his or her unique history, learning experiences, and cultural environment.\n\nA want is a desire for a particular product we use to satisfy a need in specific ways that are culturally and socially influenced.\n\nA product delivers a benefit when it satisfies a need or want. For marketers to be successful, they must develop products that provide one or more benefits that are important to consumers.\n\n\n
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  • When you couple desire with the buying power or resources to satisfy a want, the result is demand.\n\nA market consists of all the consumers who share a common need that can be satisfied by a specific product and who have the resources, willingness, and authority to make the purchase.\n\nA marketplace used to be a location where buying and selling occurs face to face. In today’s “wired” world, however, buyers and sellers might not even see each other. The modern marketplace may take the form of a glitzy shopping mall, a mail-order catalog, a television shopping network, an eBay auction, or an e-commerce Web site.\n
  • When you couple desire with the buying power or resources to satisfy a want, the result is demand.\n\nA market consists of all the consumers who share a common need that can be satisfied by a specific product and who have the resources, willingness, and authority to make the purchase.\n\nA marketplace used to be a location where buying and selling occurs face to face. In today’s “wired” world, however, buyers and sellers might not even see each other. The modern marketplace may take the form of a glitzy shopping mall, a mail-order catalog, a television shopping network, an eBay auction, or an e-commerce Web site.\n
  • When you couple desire with the buying power or resources to satisfy a want, the result is demand.\n\nA market consists of all the consumers who share a common need that can be satisfied by a specific product and who have the resources, willingness, and authority to make the purchase.\n\nA marketplace used to be a location where buying and selling occurs face to face. In today’s “wired” world, however, buyers and sellers might not even see each other. The modern marketplace may take the form of a glitzy shopping mall, a mail-order catalog, a television shopping network, an eBay auction, or an e-commerce Web site.\n
  • When you couple desire with the buying power or resources to satisfy a want, the result is demand.\n\nA market consists of all the consumers who share a common need that can be satisfied by a specific product and who have the resources, willingness, and authority to make the purchase.\n\nA marketplace used to be a location where buying and selling occurs face to face. In today’s “wired” world, however, buyers and sellers might not even see each other. The modern marketplace may take the form of a glitzy shopping mall, a mail-order catalog, a television shopping network, an eBay auction, or an e-commerce Web site.\n
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  • When did Marketing Begin? The Evolution of a Concept\nThe Production Era\nA production orientation works best in a seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce and distribute products. Essentially, consumers have to take whatever is available. Under these conditions, marketing plays a relatively insignificant role—the goods literally sell themselves because people have no other choices. Firms that focus on a production orientation tend to view the market as a homogeneous group that will be satisfied with the basic function of a product.\n\nThe Sales Era\nWhen product availability exceeds demand in a buyer’s market, businesses may engage in the “hard sell” in which salespeople aggressively push their wares. Selling orientation means that management views marketing as a sales function, or a way to move products out of warehouses so that inventories don’t pile up. The selling orientation gained in popularity after World War II. The selling orientation prevailed well into the 1950s. But consumers as a rule don’t like to be pushed, and the hard sell gave marketing a bad image. Companies that still follow a selling orientation tend to be more successful at making one-time sales rather than at building repeat business. We are most likely to find this focus among companies that sell unsought goods—products that people don’t tend to buy without some prodding.\n\nThe Relationship Era\nA consumer orientation that satisfies customers’ needs and wants. But with inflation, firms had to do more than meet consumers’ needs—they had to do this better than the competition and do it repeatedly. They increasingly concentrated on improving the quality of their products. By the early 1990s, many in the marketing community followed an approach termed Total Quality Management (TQM). The TQM perspective takes many forms, but essentially it’s a management philosophy that involves all employees from the assembly line onward in continuous product quality improvement.\n\nTechnology is creating a new class of business person that we call an instapreneur. All you need is a design; even amateurs can produce jewelry, T-shirts, furniture, and indeed almost anything we can imagine. They don’t have to pay to store their inventory in huge warehouses and they don’t need any money down.\n
  • When did Marketing Begin? The Evolution of a Concept\nThe Production Era\nA production orientation works best in a seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce and distribute products. Essentially, consumers have to take whatever is available. Under these conditions, marketing plays a relatively insignificant role—the goods literally sell themselves because people have no other choices. Firms that focus on a production orientation tend to view the market as a homogeneous group that will be satisfied with the basic function of a product.\n\nThe Sales Era\nWhen product availability exceeds demand in a buyer’s market, businesses may engage in the “hard sell” in which salespeople aggressively push their wares. Selling orientation means that management views marketing as a sales function, or a way to move products out of warehouses so that inventories don’t pile up. The selling orientation gained in popularity after World War II. The selling orientation prevailed well into the 1950s. But consumers as a rule don’t like to be pushed, and the hard sell gave marketing a bad image. Companies that still follow a selling orientation tend to be more successful at making one-time sales rather than at building repeat business. We are most likely to find this focus among companies that sell unsought goods—products that people don’t tend to buy without some prodding.\n\nThe Relationship Era\nA consumer orientation that satisfies customers’ needs and wants. But with inflation, firms had to do more than meet consumers’ needs—they had to do this better than the competition and do it repeatedly. They increasingly concentrated on improving the quality of their products. By the early 1990s, many in the marketing community followed an approach termed Total Quality Management (TQM). The TQM perspective takes many forms, but essentially it’s a management philosophy that involves all employees from the assembly line onward in continuous product quality improvement.\n\nTechnology is creating a new class of business person that we call an instapreneur. All you need is a design; even amateurs can produce jewelry, T-shirts, furniture, and indeed almost anything we can imagine. They don’t have to pay to store their inventory in huge warehouses and they don’t need any money down.\n
  • When did Marketing Begin? The Evolution of a Concept\nThe Production Era\nA production orientation works best in a seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce and distribute products. Essentially, consumers have to take whatever is available. Under these conditions, marketing plays a relatively insignificant role—the goods literally sell themselves because people have no other choices. Firms that focus on a production orientation tend to view the market as a homogeneous group that will be satisfied with the basic function of a product.\n\nThe Sales Era\nWhen product availability exceeds demand in a buyer’s market, businesses may engage in the “hard sell” in which salespeople aggressively push their wares. Selling orientation means that management views marketing as a sales function, or a way to move products out of warehouses so that inventories don’t pile up. The selling orientation gained in popularity after World War II. The selling orientation prevailed well into the 1950s. But consumers as a rule don’t like to be pushed, and the hard sell gave marketing a bad image. Companies that still follow a selling orientation tend to be more successful at making one-time sales rather than at building repeat business. We are most likely to find this focus among companies that sell unsought goods—products that people don’t tend to buy without some prodding.\n\nThe Relationship Era\nA consumer orientation that satisfies customers’ needs and wants. But with inflation, firms had to do more than meet consumers’ needs—they had to do this better than the competition and do it repeatedly. They increasingly concentrated on improving the quality of their products. By the early 1990s, many in the marketing community followed an approach termed Total Quality Management (TQM). The TQM perspective takes many forms, but essentially it’s a management philosophy that involves all employees from the assembly line onward in continuous product quality improvement.\n\nTechnology is creating a new class of business person that we call an instapreneur. All you need is a design; even amateurs can produce jewelry, T-shirts, furniture, and indeed almost anything we can imagine. They don’t have to pay to store their inventory in huge warehouses and they don’t need any money down.\n
  • When did Marketing Begin? The Evolution of a Concept\nThe Production Era\nA production orientation works best in a seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce and distribute products. Essentially, consumers have to take whatever is available. Under these conditions, marketing plays a relatively insignificant role—the goods literally sell themselves because people have no other choices. Firms that focus on a production orientation tend to view the market as a homogeneous group that will be satisfied with the basic function of a product.\n\nThe Sales Era\nWhen product availability exceeds demand in a buyer’s market, businesses may engage in the “hard sell” in which salespeople aggressively push their wares. Selling orientation means that management views marketing as a sales function, or a way to move products out of warehouses so that inventories don’t pile up. The selling orientation gained in popularity after World War II. The selling orientation prevailed well into the 1950s. But consumers as a rule don’t like to be pushed, and the hard sell gave marketing a bad image. Companies that still follow a selling orientation tend to be more successful at making one-time sales rather than at building repeat business. We are most likely to find this focus among companies that sell unsought goods—products that people don’t tend to buy without some prodding.\n\nThe Relationship Era\nA consumer orientation that satisfies customers’ needs and wants. But with inflation, firms had to do more than meet consumers’ needs—they had to do this better than the competition and do it repeatedly. They increasingly concentrated on improving the quality of their products. By the early 1990s, many in the marketing community followed an approach termed Total Quality Management (TQM). The TQM perspective takes many forms, but essentially it’s a management philosophy that involves all employees from the assembly line onward in continuous product quality improvement.\n\nTechnology is creating a new class of business person that we call an instapreneur. All you need is a design; even amateurs can produce jewelry, T-shirts, furniture, and indeed almost anything we can imagine. They don’t have to pay to store their inventory in huge warehouses and they don’t need any money down.\n
  • When did Marketing Begin? The Evolution of a Concept\nThe Production Era\nA production orientation works best in a seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce and distribute products. Essentially, consumers have to take whatever is available. Under these conditions, marketing plays a relatively insignificant role—the goods literally sell themselves because people have no other choices. Firms that focus on a production orientation tend to view the market as a homogeneous group that will be satisfied with the basic function of a product.\n\nThe Sales Era\nWhen product availability exceeds demand in a buyer’s market, businesses may engage in the “hard sell” in which salespeople aggressively push their wares. Selling orientation means that management views marketing as a sales function, or a way to move products out of warehouses so that inventories don’t pile up. The selling orientation gained in popularity after World War II. The selling orientation prevailed well into the 1950s. But consumers as a rule don’t like to be pushed, and the hard sell gave marketing a bad image. Companies that still follow a selling orientation tend to be more successful at making one-time sales rather than at building repeat business. We are most likely to find this focus among companies that sell unsought goods—products that people don’t tend to buy without some prodding.\n\nThe Relationship Era\nA consumer orientation that satisfies customers’ needs and wants. But with inflation, firms had to do more than meet consumers’ needs—they had to do this better than the competition and do it repeatedly. They increasingly concentrated on improving the quality of their products. By the early 1990s, many in the marketing community followed an approach termed Total Quality Management (TQM). The TQM perspective takes many forms, but essentially it’s a management philosophy that involves all employees from the assembly line onward in continuous product quality improvement.\n\nTechnology is creating a new class of business person that we call an instapreneur. All you need is a design; even amateurs can produce jewelry, T-shirts, furniture, and indeed almost anything we can imagine. They don’t have to pay to store their inventory in huge warehouses and they don’t need any money down.\n
  • When did Marketing Begin? The Evolution of a Concept\nThe Production Era\nA production orientation works best in a seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce and distribute products. Essentially, consumers have to take whatever is available. Under these conditions, marketing plays a relatively insignificant role—the goods literally sell themselves because people have no other choices. Firms that focus on a production orientation tend to view the market as a homogeneous group that will be satisfied with the basic function of a product.\n\nThe Sales Era\nWhen product availability exceeds demand in a buyer’s market, businesses may engage in the “hard sell” in which salespeople aggressively push their wares. Selling orientation means that management views marketing as a sales function, or a way to move products out of warehouses so that inventories don’t pile up. The selling orientation gained in popularity after World War II. The selling orientation prevailed well into the 1950s. But consumers as a rule don’t like to be pushed, and the hard sell gave marketing a bad image. Companies that still follow a selling orientation tend to be more successful at making one-time sales rather than at building repeat business. We are most likely to find this focus among companies that sell unsought goods—products that people don’t tend to buy without some prodding.\n\nThe Relationship Era\nA consumer orientation that satisfies customers’ needs and wants. But with inflation, firms had to do more than meet consumers’ needs—they had to do this better than the competition and do it repeatedly. They increasingly concentrated on improving the quality of their products. By the early 1990s, many in the marketing community followed an approach termed Total Quality Management (TQM). The TQM perspective takes many forms, but essentially it’s a management philosophy that involves all employees from the assembly line onward in continuous product quality improvement.\n\nTechnology is creating a new class of business person that we call an instapreneur. All you need is a design; even amateurs can produce jewelry, T-shirts, furniture, and indeed almost anything we can imagine. They don’t have to pay to store their inventory in huge warehouses and they don’t need any money down.\n
  • When did Marketing Begin? The Evolution of a Concept\nThe Production Era\nA production orientation works best in a seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce and distribute products. Essentially, consumers have to take whatever is available. Under these conditions, marketing plays a relatively insignificant role—the goods literally sell themselves because people have no other choices. Firms that focus on a production orientation tend to view the market as a homogeneous group that will be satisfied with the basic function of a product.\n\nThe Sales Era\nWhen product availability exceeds demand in a buyer’s market, businesses may engage in the “hard sell” in which salespeople aggressively push their wares. Selling orientation means that management views marketing as a sales function, or a way to move products out of warehouses so that inventories don’t pile up. The selling orientation gained in popularity after World War II. The selling orientation prevailed well into the 1950s. But consumers as a rule don’t like to be pushed, and the hard sell gave marketing a bad image. Companies that still follow a selling orientation tend to be more successful at making one-time sales rather than at building repeat business. We are most likely to find this focus among companies that sell unsought goods—products that people don’t tend to buy without some prodding.\n\nThe Relationship Era\nA consumer orientation that satisfies customers’ needs and wants. But with inflation, firms had to do more than meet consumers’ needs—they had to do this better than the competition and do it repeatedly. They increasingly concentrated on improving the quality of their products. By the early 1990s, many in the marketing community followed an approach termed Total Quality Management (TQM). The TQM perspective takes many forms, but essentially it’s a management philosophy that involves all employees from the assembly line onward in continuous product quality improvement.\n\nTechnology is creating a new class of business person that we call an instapreneur. All you need is a design; even amateurs can produce jewelry, T-shirts, furniture, and indeed almost anything we can imagine. They don’t have to pay to store their inventory in huge warehouses and they don’t need any money down.\n
  • When did Marketing Begin? The Evolution of a Concept\nThe Production Era\nA production orientation works best in a seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce and distribute products. Essentially, consumers have to take whatever is available. Under these conditions, marketing plays a relatively insignificant role—the goods literally sell themselves because people have no other choices. Firms that focus on a production orientation tend to view the market as a homogeneous group that will be satisfied with the basic function of a product.\n\nThe Sales Era\nWhen product availability exceeds demand in a buyer’s market, businesses may engage in the “hard sell” in which salespeople aggressively push their wares. Selling orientation means that management views marketing as a sales function, or a way to move products out of warehouses so that inventories don’t pile up. The selling orientation gained in popularity after World War II. The selling orientation prevailed well into the 1950s. But consumers as a rule don’t like to be pushed, and the hard sell gave marketing a bad image. Companies that still follow a selling orientation tend to be more successful at making one-time sales rather than at building repeat business. We are most likely to find this focus among companies that sell unsought goods—products that people don’t tend to buy without some prodding.\n\nThe Relationship Era\nA consumer orientation that satisfies customers’ needs and wants. But with inflation, firms had to do more than meet consumers’ needs—they had to do this better than the competition and do it repeatedly. They increasingly concentrated on improving the quality of their products. By the early 1990s, many in the marketing community followed an approach termed Total Quality Management (TQM). The TQM perspective takes many forms, but essentially it’s a management philosophy that involves all employees from the assembly line onward in continuous product quality improvement.\n\nTechnology is creating a new class of business person that we call an instapreneur. All you need is a design; even amateurs can produce jewelry, T-shirts, furniture, and indeed almost anything we can imagine. They don’t have to pay to store their inventory in huge warehouses and they don’t need any money down.\n
  • When did Marketing Begin? The Evolution of a Concept\nThe Production Era\nA production orientation works best in a seller’s market when demand is greater than supply because it focuses on the most efficient ways to produce and distribute products. Essentially, consumers have to take whatever is available. Under these conditions, marketing plays a relatively insignificant role—the goods literally sell themselves because people have no other choices. Firms that focus on a production orientation tend to view the market as a homogeneous group that will be satisfied with the basic function of a product.\n\nThe Sales Era\nWhen product availability exceeds demand in a buyer’s market, businesses may engage in the “hard sell” in which salespeople aggressively push their wares. Selling orientation means that management views marketing as a sales function, or a way to move products out of warehouses so that inventories don’t pile up. The selling orientation gained in popularity after World War II. The selling orientation prevailed well into the 1950s. But consumers as a rule don’t like to be pushed, and the hard sell gave marketing a bad image. Companies that still follow a selling orientation tend to be more successful at making one-time sales rather than at building repeat business. We are most likely to find this focus among companies that sell unsought goods—products that people don’t tend to buy without some prodding.\n\nThe Relationship Era\nA consumer orientation that satisfies customers’ needs and wants. But with inflation, firms had to do more than meet consumers’ needs—they had to do this better than the competition and do it repeatedly. They increasingly concentrated on improving the quality of their products. By the early 1990s, many in the marketing community followed an approach termed Total Quality Management (TQM). The TQM perspective takes many forms, but essentially it’s a management philosophy that involves all employees from the assembly line onward in continuous product quality improvement.\n\nTechnology is creating a new class of business person that we call an instapreneur. All you need is a design; even amateurs can produce jewelry, T-shirts, furniture, and indeed almost anything we can imagine. They don’t have to pay to store their inventory in huge warehouses and they don’t need any money down.\n
  • Marketing Is About Creating Utility\nMarketing activities play a major role in creating utility, which refers to the sum of the benefits we receive when we use a good or service.\n\nMarketing processes create several different kinds of utility to provide value to consumers:\n\n•Form utility is the benefit marketing provides by transforming raw materials into finished products.\n•Place utility is the benefit marketing provides by making products available where customers want them.\n•Time utility is the benefit marketing provides by storing products until they are needed.\nPossession utility is the benefit marketing provides by allowing the consumer to own, use, and enjoy the product.\n
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  • Marketing Is About Exchange Relationships\nAt the heart of every marketing act—big or small—is something we refer to as an “exchange relationship.” An exchange occurs when a person gives something and gets something else in return. The buyer receives an object, service, or idea that satisfies a need and the seller receives something she feels is of equivalent value.\n\nFor an exchange to occur, at least two people or organizations must be willing to make a trade, and each must have something the other wants. Both parties must agree on the value of the exchange and how it will be carried out. Each party also must be free to accept or reject the other’s terms for the exchange.\n
  • What Can Be Marketed?\nPopular culture consists of the music, movies, sports, books, celebrities, and other forms of entertainment that the mass market consumes.\n\nMarketing messages often communicate myths; stories containing symbolic elements that express the shared emotions and ideals of a culture.\nConsumer Goods and Services\nConsumer goods are the tangible products that individual consumers purchase for personal or family use. Services are intangible products that we pay for and use but never own. In both cases, though, keep in mind that the consumer looks to obtain some underlying value, such as convenience, security, or status, from a marketing exchange.\n\nBusiness-to-Business Goods and Services\nBusiness-to-business marketing is the marketing of goods and services from one organization to another. Although we usually relate marketing to the thousands of consumer goods begging for our dollars every day, the reality is that businesses and other organizations buy a lot more goods than consumers do. They purchase these industrial goods for further processing or to use in their own business operations.\n\nNot-for-Profit Marketing\nOrganizations with charitable, educational, community, and other public service goals that buy goods and services to support their functions and to attract and serve their members.\n\nE-commerce is the buying and selling of products on the Internet.\nNot-for-Profit Marketing\nOrganizations with charitable, educational, community, and other public service goals that buy goods and services to support their functions and to attract and serve their members.\n
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  • Marketing of Value\nValue refers to the benefits a customer receives from buying a good or service. Marketing then communicates these benefits to the customer in the form of a value proposition, a marketplace offering that fairly and accurately sums up the value that the customer will realize if he purchases the product. The challenge to the marketer is to create an attractive value proposition. A big part of this challenge is convincing customers that this value proposition is superior to others they might choose from competitors.\n\nValue from the Customer’s Perspective\nThe value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself.\n\nValue from the Seller’s Perspective\nValue from a seller’s perspective can take many forms such as prestige or pride in their competitive advantage. \n\n
  • Marketing of Value\nValue refers to the benefits a customer receives from buying a good or service. Marketing then communicates these benefits to the customer in the form of a value proposition, a marketplace offering that fairly and accurately sums up the value that the customer will realize if he purchases the product. The challenge to the marketer is to create an attractive value proposition. A big part of this challenge is convincing customers that this value proposition is superior to others they might choose from competitors.\n\nValue from the Customer’s Perspective\nThe value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself.\n\nValue from the Seller’s Perspective\nValue from a seller’s perspective can take many forms such as prestige or pride in their competitive advantage. \n\n
  • Building Value Through Customers\nSmart companies today understand that making money from a single transaction doesn’t provide the kind of value they desire. Instead, their goal is to satisfy the customer over and over again so that they can build a longterm relationship rather than just having a “one-night stand.”\n\nCompanies that calculate the lifetime value of a customer look at how much profit they expect to make from a particular customer, including each and every purchase she will make from them now and in the future. To calculate lifetime value, companies estimate the amount the person will spend and then subtract what it will cost to maintain this relationship.\n
  • Building Value Through Customers\nSmart companies today understand that making money from a single transaction doesn’t provide the kind of value they desire. Instead, their goal is to satisfy the customer over and over again so that they can build a longterm relationship rather than just having a “one-night stand.”\n\nCompanies that calculate the lifetime value of a customer look at how much profit they expect to make from a particular customer, including each and every purchase she will make from them now and in the future. To calculate lifetime value, companies estimate the amount the person will spend and then subtract what it will cost to maintain this relationship.\n
  • Building Value Through Customers\nSmart companies today understand that making money from a single transaction doesn’t provide the kind of value they desire. Instead, their goal is to satisfy the customer over and over again so that they can build a longterm relationship rather than just having a “one-night stand.”\n\nCompanies that calculate the lifetime value of a customer look at how much profit they expect to make from a particular customer, including each and every purchase she will make from them now and in the future. To calculate lifetime value, companies estimate the amount the person will spend and then subtract what it will cost to maintain this relationship.\n
  • Building Value Through Customers\nSmart companies today understand that making money from a single transaction doesn’t provide the kind of value they desire. Instead, their goal is to satisfy the customer over and over again so that they can build a longterm relationship rather than just having a “one-night stand.”\n\nCompanies that calculate the lifetime value of a customer look at how much profit they expect to make from a particular customer, including each and every purchase she will make from them now and in the future. To calculate lifetime value, companies estimate the amount the person will spend and then subtract what it will cost to maintain this relationship.\n
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  • Value from Society’s Perspective\nEvery company’s activities influence the world around it, in ways both good and bad. We must consider how marketing transactions add or subtract value from society. Companies usually find that stressing ethics and social responsibility also is good business, at least in the long run.\nIs Marketing Evil?\nThe marketing field sometimes gets attacked for a number of reasons. Here are some primary ones:\n•Criticism: Marketing corrupts society. A Response: A need is a basic biological motive; a want represents one way that society has taught us to satisfy the need.\n•Criticism: Advertising and marketing are unnecessary. A Response: Products are designed to meet existing needs, and advertising only helps to communicate their availability.\n•Criticism: Marketers promise miracles and manipulate consumers. A Response: Advertisers simply do not know enough about people to manipulate them.\n6.4.2The Dark Side of Marketing\nWhether intentionally or not, some marketers do violate their bond of trust with consumers. Despite the best efforts of researchers, government regulators, and concerned industry people, sometimes consumers’ worst enemies are themselves—our desires, choices, and actions often result in negative consequences to ourselves and the society in which we live.\n\nSome dimensions of “the dark side” of consumer behavior include:\n•Terrorism\n•Addictive consumption: Consumer addiction is a physiological or psychological dependency on goods or services.\n•Exploited people: Sometimes people are used or exploited, willingly or not, for commercial gain in the marketplace.\n•Illegal activities: The cost of crimes consumers commit against business has been estimated at more than $40 billion per year.\n•Shrinkage: A retail theft is committed every five seconds.\nAnticonsumption: Some types of destructive consumer behavior are anticonsumption— events in which people deliberately deface products.\n
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  • Marketing as a Process\nWhen it’s done right, marketing is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal.\nMarketing Planning\nThe first phase of marketing planning is to analyze the marketing environment. This means understanding the firm’s current strengths and weaknesses by assessing factors that might help or hinder the development and marketing of products. The analysis must also take into account the opportunities and threats the firm will encounter in the marketplace, such as the actions of competitors, cultural and technological changes, and the economy.\nFirms (or individuals) that engage in marketing planning ask questions like these:\n•What product benefits will our customers look for in three to five years?\n•What capabilities does our firm have that set it apart from the competition?\n•What additional customer groups might provide important market segments for us in the future?\n•How will changes in technology affect our production process, our communication strategy, and our distribution strategy?\n•What changes in social and cultural values are occurring now that will impact our market in the next few years?\n•How will customers’ awareness of environmental issues affect their attitudes toward our manufacturing facilities?\n•What legal and regulatory issues may affect our business in both domestic and global markets?\n\nAnswers to these and other questions provide the foundation for developing an organization’s marketing plan. This is a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy.\n\nSome firms choose to reach as many customers as possible so they offer their goods or services to a mass market that consists of all possible customers in a market regardless of the differences in their specific needs and wants.\n\nAlthough this approach can be cost-effective, the firm risks losing potential customers to competitors whose marketing plans instead try to meet the needs of specific groups within the market. A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. Depending on its goals and resources, a firm may choose to focus on one segment. A product’s market position is how the target market perceives the product in comparison to competitor’s brands.\n\nMarketing’s Tools: The Marketing Mix\nThe marketer’s strategic toolbox is the marketing mix, which consists of the tools the organization uses to create a desired response among a set of predefined consumers. We commonly refer to the elements of the marketing mix as the Four Ps: product, price, promotion, and place.\n\nProduct\nThe product is a good, a service, an idea, a place, a person—whatever is offered for sale in the exchange. This aspect of the marketing mix includes the design and packaging of a good, as well as its physical features and any associated services, such as free delivery.\nPrice\nPrice is the assignment of value, or the amount the consumer must exchange to receive the offering. Marketers often turn to price to increase consumers’ interest in a product.\nPromotion\nPromotion includes all the activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products.\nPlace\nPlace refers to the availability of the product to the customer at the desired time and location. This P relates to a supply chain—the set of firms that work together to get a product from a producer to a consumer.\n\nTo achieve a competitive advantage over rivals in the minds of consumers, the marketer carefully blends the four Ps of the marketing mix—that is, the organization develops product, price, place, and promotion strategies to meet the needs of its target market.\n\n\n\n\n\n\n
  • Marketing as a Process\nWhen it’s done right, marketing is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal.\nMarketing Planning\nThe first phase of marketing planning is to analyze the marketing environment. This means understanding the firm’s current strengths and weaknesses by assessing factors that might help or hinder the development and marketing of products. The analysis must also take into account the opportunities and threats the firm will encounter in the marketplace, such as the actions of competitors, cultural and technological changes, and the economy.\nFirms (or individuals) that engage in marketing planning ask questions like these:\n•What product benefits will our customers look for in three to five years?\n•What capabilities does our firm have that set it apart from the competition?\n•What additional customer groups might provide important market segments for us in the future?\n•How will changes in technology affect our production process, our communication strategy, and our distribution strategy?\n•What changes in social and cultural values are occurring now that will impact our market in the next few years?\n•How will customers’ awareness of environmental issues affect their attitudes toward our manufacturing facilities?\n•What legal and regulatory issues may affect our business in both domestic and global markets?\n\nAnswers to these and other questions provide the foundation for developing an organization’s marketing plan. This is a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy.\n\nSome firms choose to reach as many customers as possible so they offer their goods or services to a mass market that consists of all possible customers in a market regardless of the differences in their specific needs and wants.\n\nAlthough this approach can be cost-effective, the firm risks losing potential customers to competitors whose marketing plans instead try to meet the needs of specific groups within the market. A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. Depending on its goals and resources, a firm may choose to focus on one segment. A product’s market position is how the target market perceives the product in comparison to competitor’s brands.\n\nMarketing’s Tools: The Marketing Mix\nThe marketer’s strategic toolbox is the marketing mix, which consists of the tools the organization uses to create a desired response among a set of predefined consumers. We commonly refer to the elements of the marketing mix as the Four Ps: product, price, promotion, and place.\n\nProduct\nThe product is a good, a service, an idea, a place, a person—whatever is offered for sale in the exchange. This aspect of the marketing mix includes the design and packaging of a good, as well as its physical features and any associated services, such as free delivery.\nPrice\nPrice is the assignment of value, or the amount the consumer must exchange to receive the offering. Marketers often turn to price to increase consumers’ interest in a product.\nPromotion\nPromotion includes all the activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products.\nPlace\nPlace refers to the availability of the product to the customer at the desired time and location. This P relates to a supply chain—the set of firms that work together to get a product from a producer to a consumer.\n\nTo achieve a competitive advantage over rivals in the minds of consumers, the marketer carefully blends the four Ps of the marketing mix—that is, the organization develops product, price, place, and promotion strategies to meet the needs of its target market.\n\n\n\n\n\n\n
  • Marketing as a Process\nWhen it’s done right, marketing is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal.\nMarketing Planning\nThe first phase of marketing planning is to analyze the marketing environment. This means understanding the firm’s current strengths and weaknesses by assessing factors that might help or hinder the development and marketing of products. The analysis must also take into account the opportunities and threats the firm will encounter in the marketplace, such as the actions of competitors, cultural and technological changes, and the economy.\nFirms (or individuals) that engage in marketing planning ask questions like these:\n•What product benefits will our customers look for in three to five years?\n•What capabilities does our firm have that set it apart from the competition?\n•What additional customer groups might provide important market segments for us in the future?\n•How will changes in technology affect our production process, our communication strategy, and our distribution strategy?\n•What changes in social and cultural values are occurring now that will impact our market in the next few years?\n•How will customers’ awareness of environmental issues affect their attitudes toward our manufacturing facilities?\n•What legal and regulatory issues may affect our business in both domestic and global markets?\n\nAnswers to these and other questions provide the foundation for developing an organization’s marketing plan. This is a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy.\n\nSome firms choose to reach as many customers as possible so they offer their goods or services to a mass market that consists of all possible customers in a market regardless of the differences in their specific needs and wants.\n\nAlthough this approach can be cost-effective, the firm risks losing potential customers to competitors whose marketing plans instead try to meet the needs of specific groups within the market. A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. Depending on its goals and resources, a firm may choose to focus on one segment. A product’s market position is how the target market perceives the product in comparison to competitor’s brands.\n\nMarketing’s Tools: The Marketing Mix\nThe marketer’s strategic toolbox is the marketing mix, which consists of the tools the organization uses to create a desired response among a set of predefined consumers. We commonly refer to the elements of the marketing mix as the Four Ps: product, price, promotion, and place.\n\nProduct\nThe product is a good, a service, an idea, a place, a person—whatever is offered for sale in the exchange. This aspect of the marketing mix includes the design and packaging of a good, as well as its physical features and any associated services, such as free delivery.\nPrice\nPrice is the assignment of value, or the amount the consumer must exchange to receive the offering. Marketers often turn to price to increase consumers’ interest in a product.\nPromotion\nPromotion includes all the activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products.\nPlace\nPlace refers to the availability of the product to the customer at the desired time and location. This P relates to a supply chain—the set of firms that work together to get a product from a producer to a consumer.\n\nTo achieve a competitive advantage over rivals in the minds of consumers, the marketer carefully blends the four Ps of the marketing mix—that is, the organization develops product, price, place, and promotion strategies to meet the needs of its target market.\n\n\n\n\n\n\n
  • Marketing as a Process\nWhen it’s done right, marketing is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal.\nMarketing Planning\nThe first phase of marketing planning is to analyze the marketing environment. This means understanding the firm’s current strengths and weaknesses by assessing factors that might help or hinder the development and marketing of products. The analysis must also take into account the opportunities and threats the firm will encounter in the marketplace, such as the actions of competitors, cultural and technological changes, and the economy.\nFirms (or individuals) that engage in marketing planning ask questions like these:\n•What product benefits will our customers look for in three to five years?\n•What capabilities does our firm have that set it apart from the competition?\n•What additional customer groups might provide important market segments for us in the future?\n•How will changes in technology affect our production process, our communication strategy, and our distribution strategy?\n•What changes in social and cultural values are occurring now that will impact our market in the next few years?\n•How will customers’ awareness of environmental issues affect their attitudes toward our manufacturing facilities?\n•What legal and regulatory issues may affect our business in both domestic and global markets?\n\nAnswers to these and other questions provide the foundation for developing an organization’s marketing plan. This is a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy.\n\nSome firms choose to reach as many customers as possible so they offer their goods or services to a mass market that consists of all possible customers in a market regardless of the differences in their specific needs and wants.\n\nAlthough this approach can be cost-effective, the firm risks losing potential customers to competitors whose marketing plans instead try to meet the needs of specific groups within the market. A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. Depending on its goals and resources, a firm may choose to focus on one segment. A product’s market position is how the target market perceives the product in comparison to competitor’s brands.\n\nMarketing’s Tools: The Marketing Mix\nThe marketer’s strategic toolbox is the marketing mix, which consists of the tools the organization uses to create a desired response among a set of predefined consumers. We commonly refer to the elements of the marketing mix as the Four Ps: product, price, promotion, and place.\n\nProduct\nThe product is a good, a service, an idea, a place, a person—whatever is offered for sale in the exchange. This aspect of the marketing mix includes the design and packaging of a good, as well as its physical features and any associated services, such as free delivery.\nPrice\nPrice is the assignment of value, or the amount the consumer must exchange to receive the offering. Marketers often turn to price to increase consumers’ interest in a product.\nPromotion\nPromotion includes all the activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products.\nPlace\nPlace refers to the availability of the product to the customer at the desired time and location. This P relates to a supply chain—the set of firms that work together to get a product from a producer to a consumer.\n\nTo achieve a competitive advantage over rivals in the minds of consumers, the marketer carefully blends the four Ps of the marketing mix—that is, the organization develops product, price, place, and promotion strategies to meet the needs of its target market.\n\n\n\n\n\n\n
  • Marketing as a Process\nWhen it’s done right, marketing is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal.\nMarketing Planning\nThe first phase of marketing planning is to analyze the marketing environment. This means understanding the firm’s current strengths and weaknesses by assessing factors that might help or hinder the development and marketing of products. The analysis must also take into account the opportunities and threats the firm will encounter in the marketplace, such as the actions of competitors, cultural and technological changes, and the economy.\nFirms (or individuals) that engage in marketing planning ask questions like these:\n•What product benefits will our customers look for in three to five years?\n•What capabilities does our firm have that set it apart from the competition?\n•What additional customer groups might provide important market segments for us in the future?\n•How will changes in technology affect our production process, our communication strategy, and our distribution strategy?\n•What changes in social and cultural values are occurring now that will impact our market in the next few years?\n•How will customers’ awareness of environmental issues affect their attitudes toward our manufacturing facilities?\n•What legal and regulatory issues may affect our business in both domestic and global markets?\n\nAnswers to these and other questions provide the foundation for developing an organization’s marketing plan. This is a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy.\n\nSome firms choose to reach as many customers as possible so they offer their goods or services to a mass market that consists of all possible customers in a market regardless of the differences in their specific needs and wants.\n\nAlthough this approach can be cost-effective, the firm risks losing potential customers to competitors whose marketing plans instead try to meet the needs of specific groups within the market. A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. Depending on its goals and resources, a firm may choose to focus on one segment. A product’s market position is how the target market perceives the product in comparison to competitor’s brands.\n\nMarketing’s Tools: The Marketing Mix\nThe marketer’s strategic toolbox is the marketing mix, which consists of the tools the organization uses to create a desired response among a set of predefined consumers. We commonly refer to the elements of the marketing mix as the Four Ps: product, price, promotion, and place.\n\nProduct\nThe product is a good, a service, an idea, a place, a person—whatever is offered for sale in the exchange. This aspect of the marketing mix includes the design and packaging of a good, as well as its physical features and any associated services, such as free delivery.\nPrice\nPrice is the assignment of value, or the amount the consumer must exchange to receive the offering. Marketers often turn to price to increase consumers’ interest in a product.\nPromotion\nPromotion includes all the activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products.\nPlace\nPlace refers to the availability of the product to the customer at the desired time and location. This P relates to a supply chain—the set of firms that work together to get a product from a producer to a consumer.\n\nTo achieve a competitive advantage over rivals in the minds of consumers, the marketer carefully blends the four Ps of the marketing mix—that is, the organization develops product, price, place, and promotion strategies to meet the needs of its target market.\n\n\n\n\n\n\n
  • Marketing as a Process\nWhen it’s done right, marketing is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal.\nMarketing Planning\nThe first phase of marketing planning is to analyze the marketing environment. This means understanding the firm’s current strengths and weaknesses by assessing factors that might help or hinder the development and marketing of products. The analysis must also take into account the opportunities and threats the firm will encounter in the marketplace, such as the actions of competitors, cultural and technological changes, and the economy.\nFirms (or individuals) that engage in marketing planning ask questions like these:\n•What product benefits will our customers look for in three to five years?\n•What capabilities does our firm have that set it apart from the competition?\n•What additional customer groups might provide important market segments for us in the future?\n•How will changes in technology affect our production process, our communication strategy, and our distribution strategy?\n•What changes in social and cultural values are occurring now that will impact our market in the next few years?\n•How will customers’ awareness of environmental issues affect their attitudes toward our manufacturing facilities?\n•What legal and regulatory issues may affect our business in both domestic and global markets?\n\nAnswers to these and other questions provide the foundation for developing an organization’s marketing plan. This is a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy.\n\nSome firms choose to reach as many customers as possible so they offer their goods or services to a mass market that consists of all possible customers in a market regardless of the differences in their specific needs and wants.\n\nAlthough this approach can be cost-effective, the firm risks losing potential customers to competitors whose marketing plans instead try to meet the needs of specific groups within the market. A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. Depending on its goals and resources, a firm may choose to focus on one segment. A product’s market position is how the target market perceives the product in comparison to competitor’s brands.\n\nMarketing’s Tools: The Marketing Mix\nThe marketer’s strategic toolbox is the marketing mix, which consists of the tools the organization uses to create a desired response among a set of predefined consumers. We commonly refer to the elements of the marketing mix as the Four Ps: product, price, promotion, and place.\n\nProduct\nThe product is a good, a service, an idea, a place, a person—whatever is offered for sale in the exchange. This aspect of the marketing mix includes the design and packaging of a good, as well as its physical features and any associated services, such as free delivery.\nPrice\nPrice is the assignment of value, or the amount the consumer must exchange to receive the offering. Marketers often turn to price to increase consumers’ interest in a product.\nPromotion\nPromotion includes all the activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products.\nPlace\nPlace refers to the availability of the product to the customer at the desired time and location. This P relates to a supply chain—the set of firms that work together to get a product from a producer to a consumer.\n\nTo achieve a competitive advantage over rivals in the minds of consumers, the marketer carefully blends the four Ps of the marketing mix—that is, the organization develops product, price, place, and promotion strategies to meet the needs of its target market.\n\n\n\n\n\n\n
  • Marketing as a Process\nWhen it’s done right, marketing is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal.\nMarketing Planning\nThe first phase of marketing planning is to analyze the marketing environment. This means understanding the firm’s current strengths and weaknesses by assessing factors that might help or hinder the development and marketing of products. The analysis must also take into account the opportunities and threats the firm will encounter in the marketplace, such as the actions of competitors, cultural and technological changes, and the economy.\nFirms (or individuals) that engage in marketing planning ask questions like these:\n•What product benefits will our customers look for in three to five years?\n•What capabilities does our firm have that set it apart from the competition?\n•What additional customer groups might provide important market segments for us in the future?\n•How will changes in technology affect our production process, our communication strategy, and our distribution strategy?\n•What changes in social and cultural values are occurring now that will impact our market in the next few years?\n•How will customers’ awareness of environmental issues affect their attitudes toward our manufacturing facilities?\n•What legal and regulatory issues may affect our business in both domestic and global markets?\n\nAnswers to these and other questions provide the foundation for developing an organization’s marketing plan. This is a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy.\n\nSome firms choose to reach as many customers as possible so they offer their goods or services to a mass market that consists of all possible customers in a market regardless of the differences in their specific needs and wants.\n\nAlthough this approach can be cost-effective, the firm risks losing potential customers to competitors whose marketing plans instead try to meet the needs of specific groups within the market. A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. Depending on its goals and resources, a firm may choose to focus on one segment. A product’s market position is how the target market perceives the product in comparison to competitor’s brands.\n\nMarketing’s Tools: The Marketing Mix\nThe marketer’s strategic toolbox is the marketing mix, which consists of the tools the organization uses to create a desired response among a set of predefined consumers. We commonly refer to the elements of the marketing mix as the Four Ps: product, price, promotion, and place.\n\nProduct\nThe product is a good, a service, an idea, a place, a person—whatever is offered for sale in the exchange. This aspect of the marketing mix includes the design and packaging of a good, as well as its physical features and any associated services, such as free delivery.\nPrice\nPrice is the assignment of value, or the amount the consumer must exchange to receive the offering. Marketers often turn to price to increase consumers’ interest in a product.\nPromotion\nPromotion includes all the activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products.\nPlace\nPlace refers to the availability of the product to the customer at the desired time and location. This P relates to a supply chain—the set of firms that work together to get a product from a producer to a consumer.\n\nTo achieve a competitive advantage over rivals in the minds of consumers, the marketer carefully blends the four Ps of the marketing mix—that is, the organization develops product, price, place, and promotion strategies to meet the needs of its target market.\n\n\n\n\n\n\n
  • Marketing as a Process\nWhen it’s done right, marketing is a decision process in which marketing managers determine the strategies that will help the firm meet its long-term objectives and then execute those strategies using the tools they have at their disposal.\nMarketing Planning\nThe first phase of marketing planning is to analyze the marketing environment. This means understanding the firm’s current strengths and weaknesses by assessing factors that might help or hinder the development and marketing of products. The analysis must also take into account the opportunities and threats the firm will encounter in the marketplace, such as the actions of competitors, cultural and technological changes, and the economy.\nFirms (or individuals) that engage in marketing planning ask questions like these:\n•What product benefits will our customers look for in three to five years?\n•What capabilities does our firm have that set it apart from the competition?\n•What additional customer groups might provide important market segments for us in the future?\n•How will changes in technology affect our production process, our communication strategy, and our distribution strategy?\n•What changes in social and cultural values are occurring now that will impact our market in the next few years?\n•How will customers’ awareness of environmental issues affect their attitudes toward our manufacturing facilities?\n•What legal and regulatory issues may affect our business in both domestic and global markets?\n\nAnswers to these and other questions provide the foundation for developing an organization’s marketing plan. This is a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy.\n\nSome firms choose to reach as many customers as possible so they offer their goods or services to a mass market that consists of all possible customers in a market regardless of the differences in their specific needs and wants.\n\nAlthough this approach can be cost-effective, the firm risks losing potential customers to competitors whose marketing plans instead try to meet the needs of specific groups within the market. A market segment is a distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market. Depending on its goals and resources, a firm may choose to focus on one segment. A product’s market position is how the target market perceives the product in comparison to competitor’s brands.\n\nMarketing’s Tools: The Marketing Mix\nThe marketer’s strategic toolbox is the marketing mix, which consists of the tools the organization uses to create a desired response among a set of predefined consumers. We commonly refer to the elements of the marketing mix as the Four Ps: product, price, promotion, and place.\n\nProduct\nThe product is a good, a service, an idea, a place, a person—whatever is offered for sale in the exchange. This aspect of the marketing mix includes the design and packaging of a good, as well as its physical features and any associated services, such as free delivery.\nPrice\nPrice is the assignment of value, or the amount the consumer must exchange to receive the offering. Marketers often turn to price to increase consumers’ interest in a product.\nPromotion\nPromotion includes all the activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products.\nPlace\nPlace refers to the availability of the product to the customer at the desired time and location. This P relates to a supply chain—the set of firms that work together to get a product from a producer to a consumer.\n\nTo achieve a competitive advantage over rivals in the minds of consumers, the marketer carefully blends the four Ps of the marketing mix—that is, the organization develops product, price, place, and promotion strategies to meet the needs of its target market.\n\n\n\n\n\n\n
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Chapter 1 - The World of Marketing: Creating & Sharing Value Chapter 1 - The World of Marketing: Creating & Sharing Value Presentation Transcript

  • Chapter 1The World of Marketing. Creating and Delivering Value. 1
  • Course Map Part 1 Make Marketing Value Decisions Part 2 Understand Customers’ Value Needs Part 3 Create the Value Proposition Part 4 Communicate the Value Proposition Part 5 Deliver the Value Proposition
  • ObjectivesExplain
what
marketing
is
and
how
it
provides
value
 to
everyone
involved
in
the
marketing
processExplain
the
evolution
of
the
marketing
conceptUnderstand
the
range
of
services
and
goods
that
 organizations
marketUnderstand
value
from
the
perspectives
of
customers,
 producers,
and
societyExplain
the
basics
of
marketing
planning
and
the
 marketing
mix
tools
we
use
in
the
marketing
process
 3 View slide
  • ExerciseTake a Moment to write down the first thing that comes to yourmind after you are prompted with some words. Each word will appear onthe screen, followed by 10 seconds for you to write something down. Remember,write down the FIRST thing that comes to mind.Ready?: 4 View slide
  • ExerciseTake a Moment to write down the first thing that comes to yourmind after you are prompted with some words. Each word will appear onthe screen, followed by 10 seconds for you to write something down. Remember,write down the FIRST thing that comes to mind.Ready?: School 4
  • ExerciseTake a Moment to write down the first thing that comes to yourmind after you are prompted with some words. Each word will appear onthe screen, followed by 10 seconds for you to write something down. Remember,write down the FIRST thing that comes to mind.Ready?: School Soup 4
  • ExerciseTake a Moment to write down the first thing that comes to yourmind after you are prompted with some words. Each word will appear onthe screen, followed by 10 seconds for you to write something down. Remember,write down the FIRST thing that comes to mind.Ready?: School Soup Jeans 4
  • ExerciseTake a Moment to write down the first thing that comes to yourmind after you are prompted with some words. Each word will appear onthe screen, followed by 10 seconds for you to write something down. Remember,write down the FIRST thing that comes to mind.Ready?: School Marketing Soup Jeans 4
  • ExerciseTake a Moment to write down the first thing that comes to yourmind after you are prompted with some words. Each word will appear onthe screen, followed by 10 seconds for you to write something down. Remember,write down the FIRST thing that comes to mind.Ready?: School Marketing Soup Salesperson Jeans 4
  • ExerciseTake a Moment to write down the first thing that comes to yourmind after you are prompted with some words. Each word will appear onthe screen, followed by 10 seconds for you to write something down. Remember,write down the FIRST thing that comes to mind.Ready?: School Marketing Soup Salesperson Jeans Sneakers 4
  • ExerciseTake a Moment to write down the first thing that comes to yourmind after you are prompted with some words. Each word will appear onthe screen, followed by 10 seconds for you to write something down. Remember,write down the FIRST thing that comes to mind.Ready?: School Marketing Soup Salesperson Jeans Sneakers Marketers hope to achieve Top of Mind Awareness (TOMA). Did you say “Campbells” for Soup? Did you say “advertising” for Marketing? 4
  • Marketing is the activity for creating,communicating, delivering, andexchanging offerings that benefit theorganization, its stakeholders,and society at large. 5
  • Product/service developmentMarketing is the activity for creating,communicating, delivering, andexchanging offerings that benefit theorganization, its stakeholders,and society at large. 5
  • Product/service Promotion developmentMarketing is the activity for creating,communicating, delivering, andexchanging offerings that benefit theorganization, its stakeholders,and society at large. 5
  • Product/service Promotion Place developmentMarketing is the activity for creating,communicating, delivering, andexchanging offerings that benefit theorganization, its stakeholders,and society at large. 5
  • Product/service Promotion Place developmentMarketing is the activity for creating,communicating, delivering, andexchanging offerings that benefit theorganization, its stakeholders,and society at large. Price 5
  • What does Marketing do? 6
  • What does Marketing do?Marketing: What marketers are really doing (creating value) 6
  • What does Marketing do?Marketing: What marketers are really doing (creating value)• Marketers try to identify and understand people’s needs and wants (thirst, transportation) 6
  • What does Marketing do?Marketing: What marketers are really doing (creating value)• Marketers try to identify and understand people’s needs and wants (thirst, transportation)• Marketers then deliver products with benefits that make people believe that they satisfy their needs and wants (SmartWater, Aston Martin) 6
  • What does Marketing do?Marketing: What marketers are really doing (creating value)• Marketers try to identify and understand people’s needs and wants (thirst, transportation)• Marketers then deliver products with benefits that make people believe that they satisfy their needs and wants (SmartWater, Aston Martin)• Marketers deliver these benefits to the consumer in ways that also benefit the firm and society (building relationships with consumers and communities) 6
  • What does Marketing do?Marketing: What marketers are really doing (creating value)• Marketers try to identify and understand people’s needs and wants (thirst, transportation)• Marketers then deliver products with benefits that make people believe that they An outcome sought that satisfy their needs and wants (SmartWater, Aston Martin) motivates buying behavior• Marketers deliver these benefits to the consumer in ways that also benefit the firm and society (building relationships with consumers and communities) 6
  • Wants/NeedsMarketing: Needs and wants as its key ingredients• Need is a difference between a consumer’s actual state (thirsty) and some ideal or desired state (not thirsty). Basic needs are physiologically- driven.• Want is a desire to satisfy needs in specific ways that are culturally and socially influenced (SmartWater with good deeds, Jennifer Anniston, and electrolytes)• Do you BELIEVE products can satisfy your wants and needs? the Marketing Concept 7
  • Wants/Needs Did you need or want toMarketing: Needs and wants as its key ingredients see this movie?• Need is a difference between a consumer’s actual state (thirsty) and some ideal or desired state (not thirsty). Basic needs are physiologically- driven.• Want is a desire to satisfy needs in specific ways that are culturally and socially influenced (SmartWater with good deeds, Jennifer Anniston, and electrolytes)• Do you BELIEVE products can satisfy your wants and needs? the Marketing Concept 7
  • Case in point...Mother needs Junior to drink juice... And wants.... 8
  • Case in point...Mother needs Junior to drink juice... And wants.... But not with too much sugar! 8
  • Case in point...Mother needs Junior to drink juice... And wants.... But not with too much sugar! 8
  • Case in point...Mother needs Junior to drink juice... And wants.... But not with too much sugar! 8
  • Case in point...Mother needs Junior to drink juice... And wants.... But not with too much sugar! 8
  • Case in point...Mother needs Junior to drink juice... And wants.... But not with too much sugar! 8
  • Case in point...Mother needs Junior to drink juice... the consumer? BTW: Who is And wants.... But not with too much sugar! 8
  • BeliefsMarketing: Creating beliefs creates needs• Our pre-existing beliefs about products affect what we need and want• Marketers can create these beliefs• Beliefs are important because they make you desire more than just any car, water, or movie - they can create needs by creating mismatch between your actual and desired states! 9
  • BeliefsMarketing: Creating beliefs creates needs• Our pre-existing beliefs about products affect what we need and want• Marketers can create these beliefs• Beliefs are important because they make you desire more than just any car, water, or movie - they can create needs by creating mismatch between your actual and desired states! 9
  • BeliefsMarketing: Creating beliefs creates needs• Our pre-existing beliefs about products affect what we need and want• Marketers can create these beliefs• Beliefs are important because they make you desire more than just any car, water, or movie - they can create needs by creating mismatch between your actual and desired states! What do these products do for you? 9
  • For example: 10
  • For example: 10
  • What Women Want? Don Draper Sales Pitch 11
  • Discussion Topic• Look through a magazine or newspaper this week.• Identify the need/want the marketer is trying to make you realize: How do you think this was discovered? Or was the need created by the marketer?• What is the benefit sought by consumers?• How does the marketer make us see this? Post a comment to the discussion board on your findings. Post a copy of your ad if you can, or describe it. 12
  • What have you bought today? 13
  • How did it satisfy your want/need? What have you bought today? 13
  • End Module 1 14
  • Chapter 1Module 2 15
  • Marketers didn’t always use the“marketing concept” ideology... 16
  • The marketing evolution 17
  • Production Era 18
  • Look What We Made You!!Production Era Focus on production efficiencies to drive costs down. Demand is higher than supply; choices are few. Considers all customers to be the same. 18
  • Sales Era Look What We Made You!!Production Era Focus on production efficiencies to drive costs down. Demand is higher than supply; choices are few. Considers all customers to be the same. 18
  • Sales Era We Have Products, You Should Buy Them. Focus on reducing inventories; supply exceeds demand. Look What We Made You!!Production Era Focus on production efficiencies to drive costs down. Demand is higher than supply; choices are few. Considers all customers to be the same. 18
  • Relationship Era Sales Era We Have Products, You Should Buy Them. Focus on reducing inventories; supply exceeds demand. Look What We Made You!!Production Era Focus on production efficiencies to drive costs down. Demand is higher than supply; choices are few. Considers all customers to be the same. 18
  • Let Us Help You. Focus on determining and solving customer Relationship Era problems and meeting needs. Quality and understanding is key. Customer-orientation & TQM Sales Era We Have Products, You Should Buy Them. Focus on reducing inventories; supply exceeds demand. Look What We Made You!!Production Era Focus on production efficiencies to drive costs down. Demand is higher than supply; choices are few. Considers all customers to be the same. 18
  • Push Strategy Let Us Help You. Focus on determining and solving customer Relationship Era problems and meeting needs. Quality and understanding is key. Customer-orientation & TQM Sales Era We Have Products, You Should Buy Them. Focus on reducing inventories; supply exceeds demand. Look What We Made You!!Production Era Focus on production efficiencies to drive costs down. Demand is higher than supply; choices are few. Considers all customers to be the same. 18
  • Pull StrategyPush Strategy Let Us Help You. Focus on determining and solving customer Relationship Era problems and meeting needs. Quality and understanding is key. Customer-orientation & TQM Sales Era We Have Products, You Should Buy Them. Focus on reducing inventories; supply exceeds demand. Look What We Made You!!Production Era Focus on production efficiencies to drive costs down. Demand is higher than supply; choices are few. Considers all customers to be the same. 18
  • Creating Utility Form P lace T ime Poss essionTurn raw materials Products are available Products are stored Customers can own,into finished goods where consumers can until needed, or made use, and enjoy a buy them when needed product or service 19
  • So, What’s an Offering? 20
  • Requirements for Marketing1. Parties with Unsatisfied Needs (or wants?)2. A desire & ability to be satisfied3. A way for parties to communicate4. Something to exchange - i.e. Transfer value What do we exchange?? 21
  • Marketing: Creating beliefs about all things• Goods - tangible products that individual consumers purchase for personal or family use (iPod, bottle of Heineken, jar of Nutella, Starbucks’ coffee)• Services - intangible products that are exchanged directly between the producer and the customer (AT&T service, Starbucks, MKT 305)• Experience - intangible products that comes in a form of an event or occurrence that leaves an impression on the consumer (U2 concert, Bengals’ game, MKT 305)• Ideas - intangible product that represents a thought or course of action, often marketed by non-profit organizations (fight against AIDS and poverty, cancer)• ...and everything else: places like NKU or USA or people like you, Bono, or 50- Cent. 22
  • Marketing: Creating beliefs about all things• Goods - tangible products that individual consumers purchase for personal or family use (iPod, bottle of Heineken, jar of Nutella, Starbucks’ coffee)• Services - intangible products that are exchanged directly between the producer and the customer (AT&T service, Starbucks, MKT 305)• Experience - intangible products that comes in a form of an event or occurrence that leaves an impression on the consumer (U2 concert, Bengals’ game, MKT 305)• Ideas - intangible product that represents a thought or course of action, often marketed by non-profit organizations (fight against AIDS and poverty, cancer)• ...and everything else: places like NKU or USA or people like you, Bono, or 50- Cent. Every offering must have some kind of “value proposition” that tells consumers what they will receive if they buy it, adopt it... 22
  • • DeBeers Ad 23
  • Recycling Commercial 24
  • Market vs. Marketing Marketing is about meeting people’s needs AND wants. Creating beliefs about how offerings can satisfy wants and needs. Did those ads successfully do this?Marketing = set of activities carried out by anorganization who has something of value to offer...A Market = potential customers who share a need,desire, willingness and means to buy a product/service,or adopt an idea. 25
  • End Module 2 26
  • Chapter 1Module 3 27
  • Customer Value & Relationships What do customers value? Relationships with brands? Excellent Service? Superior Quality? Low Prices? smosurvey.orgFrom the ads you saw, what do those customers value? 28
  • Customer Value & Relationships Value Proposition: What do customers value? Relationships ..sums up the with brands? value that will be realized if the Excellent good/service is Service? purchased. Superior Quality? Low Prices? smosurvey.orgFrom the ads you saw, what do those customers value? 28
  • Customer Value & Relationships Value Proposition: What do customers value? Relationships ..sums up the with brands? value that will be realized if the Excellent good/service is Service? purchased. Superior Quality? Low Prices? According to a survey of Senior Marketing Officers, customers’ top priority over the next one year will be LOW PRICES (28%) smosurvey.orgFrom the ads you saw, what do those customers value? 28
  • Customer Value & Relationships What do firms value? Loyal Customers smosurvey.org 29
  • Customer Value & Relationships What do firms value? Customer Lifetime Value: Loyal The profit a firm can make from one Customers customer over their lifetime... Revenue less retention cost = profit smosurvey.org 29
  • Customer Value & Relationships What do firms value? Customer Lifetime Value: Loyal The profit a firm can make from one Customers customer over their lifetime... Revenue less retention cost = profit Monthly Verizon bill = $160 X 12 months = $1,920 X 30 years = $57,000 smosurvey.org 29
  • Customer Value & Relationships What do firms value? Customer Lifetime Value: Loyal The profit a firm can make from one Customers customer over their lifetime... Revenue less retention cost = profit Monthly Verizon bill = $160 X 12 months = $1,920 X 30 years = $57,000 smosurvey.org 29
  • Marketing & ethical practices? 30
  • Is marketing ethical? 31
  • Is ARE YOU ETHICAL??? marketing ethical? 31
  • Marketing as a Process 32
  • Marketing as a Process MarketPlanNING 33
  • Marketing as a Process Market MarketingPlanNING mix 33
  • Marketing as a Process Market Marketing PositionPlanNING mix 33
  • Marketing as a Process Market Marketing Position PlanNING mix ng Plan: A-M arketi utlining ent odocum etingLT mark s obj ective ess of c -T he pro strategies ng de velopi standing er an d und internal ’s th e firm nal r an d exte nt e env ironm 33
  • Marketing as a Process Market Marketing Position PlanNING mix ng Plan: A-M arketi utlining 4 p’s ent o - Th edocum etingLT mark s obj ective ess of c -T he pro strategies ng de velopi standing er an d und internal ’s th e firm nal r an d exte nt e env ironm 33
  • Marketing as a Process Market Marketing Position PlanNING mix ng Plan: A-M arketi utlining 4 p’s ent o - Th edocum etingLT mark s obj ective ess of c -T he pro strategies ng de velopi standing er an d und internal ’s th e firm nal r an d exte nt e env ironm 33
  • Marketing as a Process Market Marketing Position PlanNING mix ng Plan: A-M arketi utlining 4 p’s ent o - Th edocum eting target heLT mark -h ow the ceives t obj s ective ess of mark et per ct c he pro strategies / produ -T ng brand ed to de velopi standing c r ompa ors er t mpeti we doing? an d und internal co ’s re th e firm nal - how a r an d exte nt e env ironm 33
  • Marketing as a Process Market Marketing Position PlanNING mix ng Plan: A-M arketi utlining 4 p’s ent o - Th edocum eting target heLT mark -h ow the ceives t obj s ective ess of mark et per ct c he pro strategies / produ -T ng brand ed to de velopi standing c r ompa ors er t mpeti we doing? an d und internal co ’s re th e firm nal - how a r an d exte nt e env ironm 33
  • In Summary: Marketing is a process that seeks to understand and meet customer needs and wants.Marketers who adopt the marketing concept first have a solid understanding of what customers want and need, then develop offerings to satisfy those needs through the creation of value.The four main elements of the marketing mix, which is practical application of marketing, is Product, Price, Promotion, and Place. 34
  • End Chapter 1 35