This document is the first chapter of a marketing textbook. It provides objectives for the chapter, which include understanding marketing's role in organizations, the concept of marketing, and how marketing provides value. It also discusses scenarios for companies like Pandora and First Flavor to illustrate marketing concepts. The chapter covers topics like the evolution of marketing approaches, what can be marketed, and perspectives on how marketing creates value for customers, producers and society.

1. Welcome to the World
of Marketing:
Create and Deliver Value
Chapter One
© 2012 Pearson Education, Inc. publishing as Prentice-Hall.

2. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-2
Chapter Objectives
 Understand who marketers are, where they
work, and marketing’s role in the firm
 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 market planning and the
marketing mix tools we use in the marketing
process

3. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-3
Real People, Real Choices:
Decision Time at Pandora.
 Which option should be pursued?
• Option 1: Launch an ad campaign on
radio stations, in music magazines, and
at record stores
• Option 2: Build buzz about Pandora
through word of mouth
• Option 3: Sell the service to a large
chain of record stores, a music
magazine, or even a record label

4. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-4
Welcome to “Brand You”
 You are a product and have “market
value” as a person
 You “position” yourself for a job
interview in a number of ways

5. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-5
The Who and Where of
Marketing
 Marketers:
• Come from many different
backgrounds
• Work in a variety of locations
• Maintain cross-functional relationships
within the firm
• Enjoy exciting, diverse careers

6. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-6
The Value of Marketing
 Definition of Marketing (AMA, 2007)
• Marketing is the activity, set of
institutions, and processes for creating,
communicating, delivering and
exchanging offerings that have value
for customers, clients, partners, and
society at large

7. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-7
Marketing Meets Needs
 Marketing meets the needs of diverse
stakeholders
 Successful firms practice the marketing
concept
 Needs, wants, and benefits
 Demands and markets
 The modern marketplace

8. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-8
Marketing is about Creating Utility
 Utility:
The sum of the benefits we receive
from using a product/service
• Form utility
• Place utility
• Time utility
• Possession utility

9. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-9
Marketing is about
Exchange Relationships
 An exchange occurs when something
is obtained for something else in
return—like cash for goods or services
• Buyer receives a product (an object,
service, or idea that satisfies a need)
• Seller receives something of equivalent
value

10. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-10
The Evolution of Marketing
 The Production Era
• Production orientation
 The Sales Era
• Selling orientation
 The Relationship Era
• Consumer orientation
• Total quality management
 The Triple Bottom Line Era

11. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-11
The Production Era
 Dominated by production orientation
• A management philosophy that
emphasizes the most efficient ways to
produce and distribute products
 Marketing played an insignificant role
 Henry Ford’s Model T and Ivory soap
are examples of products that were
created under a production orientation

12. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-12
The Sales Era
When product availability exceeds
demand, businesses may focus
on a one-time sale of goods rather
than repeat business
Dominated by selling orientation
•Managerial view of marketing is
as a sales function, or a way to
move products out of warehouses
to reduce inventory

13. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-13
The Relationship Era
 Focused on a customer orientation
• A management philosophy that
emphasizes satisfying customers’
needs and wants
 Marketing becomes more important in
the firm
 Total Quality Management (TQM) is
widely followed in the marketing
community

14. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-14
The Triple Bottom Line Era: Make
Money and a Contribution
 Focuses on building long-term bonds with
customers
• Triple orientation seeks to maximize the
financial, social, and environmental
bottom lines
• Marketing uses customer relationship
management (CRM) to build bonds with
consumers

15. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-15
The Triple Bottom Line Era: Make
Money and a Contribution
 Social marketing concept :
• Management philosophy that marketers
must satisfy customers’ needs in ways
that also benefit society and deliver
value to the firm
• Sustainability is a key trend that applies
to many aspects of business
 Triple bottom line firms place a greater
focus on accountability

16. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-16
What Can Be Marketed?
 From “serious” goods to fun things
• Products mirror changes in popular culture
• Marketing messages often communicate
myths
 Product: any good, service, or idea
• Consumer goods/services
• Business-to-business goods/services
• Not-for-profit marketing
• Idea, place, and people marketing

17. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-17
The Marketing of Value
 Marketing creates and communicates
the value proposition as:
• A marketplace offering that fairly and
accurately sums up the value that the
customer will realize if the consumer
purchases a product or service
 Perspectives of value differ between
customers, sellers, and society

18. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-18
Value from
the Customer’s Perspective
 Customer perspective
• Value is the ratio of costs (price) to
benefits (utilities)
• Value proposition includes the whole
bundle of benefits the firm promises to
deliver, not just the benefits of the
product

19. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-19
Value from
the Seller’s Perspective
 Value for the seller takes many forms
 Seller’s should build value by
marketing with customers, not to them
• Partnering with customers via
brandfests
 Customers have value – it is more
expensive to attract new customers
than to retain current ones

20. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-20
 Lifetime value of a customer
• Calculate the projected profit from a
particular customer to allow a firm to
decide which customers are “worth
keeping” vs. which should be “fired”
 Creating a competitive advantage
• Identify a distinctive competency
• Turn distinctive competencies into
differential benefits
Value from
the Seller’s Perspective

21. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-21
Adding Value Through
the Value Chain
 Value chain:
A series of activities involved in
designing, producing, marketing,
delivering, and supporting any product
 Steps in the value chain
 Measuring value
• Marketing scorecards
• Marketing metrics

22. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-22
Consumer-Generated Value:
From Audience to Community
 Everyday people are generating value
instead of just buying it
• Marketers need to think of consumers
as communities
• Amafessionals gain physic income
 Social networking continues to grow
• Web 2.0, folksonomy, and the wisdom
of crowds
 Open source business models

23. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-23
Value from Society’s Perspective
 Marketing transactions add or subtract
value from society:
• Stressing socially responsible and
ethical decisions is good business
• Marketing is often criticized
• Marketing’s dark side
Some marketing activities have
detrimental effects on society

24. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-24
Marketing Is a Process
 Marketing planning is a major portion
of the process and it involves the
following:
• Analyzing the marketing environment
• Developing a marketing plan
• Deciding on a market segment
• Choosing the marketing mix—
product, price, promotion, and place

25. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-25
Real People, Real Choices:
Decision Made at Pandora
 Joe chose option 2
• Why do you think that Joe chose personal
communication and social networking to
build awareness?

26. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-26
Keeping It Real: Fast-Forward to Next
Class Decision Time at First Flavor
 Meet Jay of First Flavor
 First Flavor markets edible film strips
that allow users to taste flavors. Other
potential uses of film strips beyond
sampling are being investigated
 The decision to be made includes
whether or not to diversify into new
product categories

27. © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-27
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