This document provides an overview of marketing concepts including: - Definitions of marketing and the marketing mix of the 4 Ps - How marketing creates value for customers through exchange and utility - Marketing management philosophies including production, selling, and marketing concepts - The importance of adopting the marketing concept to satisfy customer needs

1. What is Marketing?
Type of Organizations that use Marketing.
Origins of Marketing.
Exchange and Utility.
Marketing Management Philosophies.
Importance of the Marketing Concept.
Test your knowledge
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What is marketing?
Definition of marketing
Marketing is the process of planning and executing the conception, pricing,
promotion, and distribution (4 Ps) of ideas, goods and services to create exchanges
(with customers) that satisfy individual and organizational objectives.
Satisfying customer needs (creating utility) through the exchange process.
Create a Marketing Mix (4ps):
Product. Chapter 11, Chapter 12
Price. Chapt 13 & 14
Promotion. Chapter 18, Chapter 19, Chapter 20
Distribution (Place). Chapter 17
To satisfy Target Market(s) (customers)Chapter 9
Handout...Taco Bell
Taco Bell was used as an example...
Marketing Mix:
Product...Border Lights, a new menu of "light foods"
Price.....Value Pricing as with their other menu items
Promotion...Various media and methods, a commercial that appeared during
the 1995 Superbowl to announce the arrival.
Distribution...Taco Bell has increased its points of access (where you can by
its products) by a factor of 4 over the last couple of years...including gas
stations etc.
Target Market(s):

2. Current fast food customers (typically male, 14 -34 year olds) and/or
Health conscious who do not currently purchase fast food??
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Type of organizations that use marketing.
All!!
Corporations: ie Pepsi, Coke, GM etc.
Government: promoting the health plan, politicians during elections
Hospitals: A Philadelphia hospital, competing for maternity patients, offered
a steak and champagne dinner (sales promotion) with candlelight for new
parents. Other hospitals, in an effort to attract physicians, have installed
services such as saunas, chauffeurs, and private tennis courts.
Schools: University of Delaware MBA program
Churches: Many churches are redesigning their service offering to better
meet the needs of their target audience so as to keep members and financial
support.
US Army: A marketing plan to attract recruits.
Postal Service:1993 launch of the Elvis Presley stamp was a major media
event. Fans in Nashville lined up at midnight, postmasters warned that sales
were "first come first served, no limit", and one post office postmarked
envelopes with the no longer used :Return to Sender--Address Unknown"
message
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Origins of Marketing.
When did marketing first evolve?
Division of labor.
Specialization. Led to the Exchange of goods etc.
Exchange is key to marketing, without an exchange, there is no need to
market.
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Exchange and Utility
The criteria needed for an exchange to occur:
Must have something of value to exchange
Need to be able to communicate
Must be able to exchange (under 21 drinking)

3. Must want to exchange
At least 2 people needed for an exchange to occur
The exchange process creates Utility.
Utility is the satisfaction, value, or usefulness a user receives from a good or a
service.
When you purchase an automobile, you give up less (in $s) than the value of the
car (to you)...the ability to get you from A to B, safely, in a timely manner etc.
There are four types of utility:
Form--production of the good, driven by the marketing function.
EXAMPLE?? Baskin Robbins turns cream, sugar and milk into icecream.
Place--make product available where customers will buy the product.
EXAMPLE?? Food truck at a construction site.
Time--make product available when customers want to buy the product.
EXAMPLE?? Pathmark, open 24 hours a day, 365 days a year, has time
utility compared to Landhope Farms etc.
Possession--once you own the product, do what you want with it, ie. eat it
An example of a service that offers all types of utility:
24 Hour pizza delivery service.
Marketing performs the exchange functions that makes the total utility of the product a reality to consumers.
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The Marketing Management Philosophies
Marketing management can be described as carrying out the tasks that achieve
desired exchanges, between the corporation, and its customers.
There are a number a different philosophies that guide a marketing effort.
Production Concept Demand for a product is greater than supply.
o To increase profit, focus on production efficiencies knowing all
output can be sold. Also useful concept when increasing production
raises economies of scale etc. to reduce price. Henry Ford, "Doesn't
matter what color car you want, as long as it is black."...A typical
quote during the production era.
o Dominant era: From mid C19th to early C20th, industrial revolution
etc.

4. Selling Concept Demand for a product is equal to supply.
o Emphasis is needed to sell the product to increase profits. Focus
on advertising.
o Useful for unsought goods, i.e., encyclopedias, funeral plots. Political
candidates, selling important, not post consumer satisfaction.
o Dominant era: 1920's to Mid 1930's WWII to early 1950's
Marketing Concept Supply for a product is greater than demand, creating
intense competition among suppliers.
o Company first determines what the consumer wants, then produces
what the consumer wants, then sells the consumer what it wants.
o Dominant era: 1930's to WWII 1950's to present.
LL Bean 1912, founded on the marketing concept, in his first circular:
"I do not consider a sale complete until goods are worn out and the customer
still satisfied. We will thank anyone to return goods that are not perfectly
satisfactory...Above all things we wish to avoid having a dissatisfied
customer."
To illustrate the marketing era/concept Peter Drucker, in 1954 said:
"if we want to know what business is we must first start with its
purpose...There is only one valid definition of business purpose: to create a
customer. What business thinks it produces is not of first importance-
especially not to the future of the business or to its success. What the
customer thinks he/she is buying, what he/she considers "value" is decisive-
it determines what a business is, what it produces, and whether it will
prosper."
-Peter Drucker, The Practice of Management, 1954, P.37
John B McKitterick, President of General Electric, 1957, addressing the
AMA said:
"It is customer oriented, integrated, profit oriented philosophy of business."
Still need to make a profit "meeting needs profitably"
Handout...`Do Call Us': More companies...
Example of using the marketing concept...1-800 #s listen to your customers,
test product ideas on them etc.
Improvements in technology have enabled marketers to become more
consumer oriented, helping develop Relationship marketing 1:1 marketing
For the launch of Windows 95, Microsoft has contracted five additional
companies (including Unisys and DEC) to handle the anticipated overlaod
in demand for the 1-800 #. They had the capacity available to handle 40,000

5. phone calls in the first day (twice their usual capacity), but still left
customers waiting for service.
Societal Marketing Concept: Focus on other stakeholders, as well as the
business and its customers. Need to balance 3 items
o Company profits
o Customer wants
o Society's interests
The difference between short term consumer wants and long term consumer
welfare.
An example of a company adopting the Societal concept:
Starkist...Dolphin Safe Tuna Actually more expensive than regular tuna, but
is more appealing due to society's concerns.
Handout...Hooters Tries to Do Good Work..
An example of the societal marketing concept...although the ethics of
accepting monies from Hooters may be questioned (i.e. exploitation of
women??)
For another example of Societal Marketing Concept...Visit the Body Shop
and pick up some of their leaflets.
What era are we in now?
We are still essentially in the marketing era, since that is the dominant concept, but
increasing pressure is being put on to companies to adopt the societal concept.
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Importance of the marketing concept.
According to the Customer Service Institute, it costs as much as five times
as much to acquire a new customer than it does to service an existing one.
Customers tell twice as many people about a bad experience over a good
one.
According to the American Marketing Association (AMA), for an average
company, 65% of its business comes from its presently satisfied customers.
Introduction
Strategic Market Planning
SWOT Analysis
Mission Statement
Organizational Goals
Corporate Strategy

6. Marketing Planning
Marketing Management
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Introduction
It is necessary to discuss strategic market planning and marketing early in the
course. A strategic market plan gives direction to a firm's efforts and better
enables it to understand the dimensions of marketing research, consumer
analysis, and product, distribution, promotion, and price planning, which will be
discussed in later classes.
We will look at an overview of the strategic marketing process including the
development of:
SWOT Analysis
Mission Statement
Organizational Goals
Corporate Strategy
Marketing strategy
The strategic market plan is not a marketing plan, it is a plan of all aspects of an
organizations strategy in the market place.
The process of strategic market planning yeilds a marketing strategy(s) that is the
framework and the development of the marketing plan.
Developing a marketing plan is your group project assignment. A marketing plan
deals primarily with implementing the market strategy as it relates to target
market(s) and the marketing mix.
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Strategic Market Planning
A Strategic marketing plan is an outline of the methods and resources required to
achieve organizational goals within a specific target market(s).

7. "Describes the direction [an organization] will pursue within its chosen
environment and guides the allocation of resources and effort" - Peter Bennett,
Dictionary of Marketing Terms, AMA 1988
Strategic planning requires a general marketing orientation rather than a narrow
functional orientation.
All functional areas must include marketing and must be coordinated to reach
organizational goals. It is a heirarchal process, from company wide to marketing
specific. (Marketing concept, implemented from top down.)
Company wide, SBU specific
A firm can be broken down into several strategic business units. Each SBU is a
division, product line, or other profit center within the parent company.
An SBU has its own strategic plan and can be considered a seperate business entity
competing with other SBU's for corporate resources.
For example Pepsico Companies SBUs include:
KFC
Taco Bell
Pizza Hut
Mountain Dew
Lipton Tea Brands
Frito Lay
IE The College of Business and Economics is an SBU of the University of Delaware.
A strategic plan gives:
Direction and better enables the company to understand mkt. function
dimensions
Makes sure that each division has clear integrated goals
Different functional areas are encouraged to coordinate
Assesses SW & OT
Assesses alternative actions
It is a basis for allocating company resources
A procedure to assess company performance
The strategic planning process may include the following, although this differs
from one organization to another:

8. Develop a SWOT analysis
Develop Mission Statement that evolves from the SWOT analysis
Develop Corporate Objectives that are consistent with the organization's
mission statement.
Develop corporate strategy to achieve the organization's objectives. [if the
organization is made up of more than one SBU, then follow loop again for
each SBU, then proceed]
Marketing (and other functional objectives) must be designed to achieve
the corporate objectives
Marketing Strategy, designed to achieve the marketing objectives.
The strategic market planning process is based on the establishment of
organizational goals and it must stay within the broader limits of the organizations
mission, that is developed taking into consideration the environmental
opportunities and threats and the companies resources and distinct
competancies.
A firm can then assess its opportunities and develop a corporate strategy.
Marketing objectives must be designed so that they can be accomplished through
efficient use of the firms resources.
Corporate strategy is concerned with issues such as diversification, competition,
differentiation, interrelationships between business units and environmental issues.
It attempts to match the resources of the organization with the opportunities and
risks of the environment (SWOT). Corporate strategy is also concerned with
defining the scope and roles of the SBU's of the firm so that they are coordinated to
reach the ends desired.
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SWOT Analysis
A SWOT Analysis examines the companies:
Strengths...Internal
Weaknesses...Internal
Opportunites...External
Threats...External
By developing a SWOT analysis, a company can determine what its distinctive
competancies are. This will help determine what the organization should be in

9. business for, what its mission should be.
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Mission Statement
Handout Visioning Missions becomes...
Reason to be? Invisible hand etc.
Product Terms...outdated
Technology Terms...outdated
Market Terms...keep in touch with consumer's needs
i.e. AT&T is in the communications business not the telephone business.
Visa...allows customers to exchange values...not credit cards
3M solves problems by putting innovation to work.
Should not be too narrow...or...too broad
Should be based on distinctive competancies of the corporation, determined from
the SWOT analysis
The following are example mission statements
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Organizational goals
Organizational goals are derived from the mission, corporate strategy is derived
from the organizational goals.
Goals must specify the end results that are desired, that are measurable and within
a particular time frame.
SMAC
Specific
Measurable
Achieveable
Consistent
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Corporate Strategy
Issues include:

10. Scope of Business-----What Business you are in??
Resource deployment----How you are going to use your resources??
Competitive advantage----What are your competitive advantages??
Coordination of Production, Marketing, Personnel etc.----
Coordination process??
Tools for strategic market planning
The following are some of the many tools that are used in developing corporate
strategy, they are supplements not substitutes for management's own
judgement:
BCG Product Portfolio Management
o Star
o Cash Cow
o Problem Child (Question Marks)
o Dog
SWOT analysis
Product Life Cycle Concept
A separate strategy is needed for each SBU
Intense Growth-mkt penetration/development, product development in
related markets.
o Market Penetration...more products to the same market
o Market Development...same product to new markets
o Product Development...new products to same market
Diversified Growth-new products new markets Horizontal (unrelated
products to current markets)/Concentric (NPNM)
Integrated growth Forward/Backward/Horizontal Disney's Purchase of
Capital Citys/ABC, a content provider purchasing distribution
Handout Mattel Toy....
Handout Ben & Jerry's New CEO...
What should B&J do?
Develop SWOT Analysis
Propose Mission
Goals
Strategy:
Market Penetration

11. Market Development
Product Development
Diversification
Ben & Jerry's Homepage
Ben & Jerry's SWOT Analysis Return to Contents List
Marketing Planning.
Marketing plans vary by:
Duration
Scope
Method of Development, bottom up/top down
Objective is to create a Marketing plan. A plan for each marketing strategy
developed.
Marketing strategy encompasses selecting and analysing the target market(s) and
creating and maintaining an appropriate marketing mix that satisfies the target
market and company. A Marketing strategy articulates a plan for the best use of the
organizations resources and tactics to meet its objectives. Do not pursue projects
that are outside the companies objectives or that stretch the companies resources.
Plan includes:
Executive summary
Situation Analysis
Opportunity and Threat Analysis
Environmental Analysis
Company Resources
Marketing Objectives
Marketing Strategies to include:
o Target market (Intended) A target market is group of
persons/companies for whom a firm creates and maintains a
Marketing Mix that specifically fits the needs and preferences of that
group. Does the company have the resources to create the
appropriate MM and does it meet the company's objectives.
o Develop a marketing mix-how to reach the target market. The
marketing mix is designed around the buying motive-emphasizing
the marketing concept. The marketing environment effects the
marketing mix, which is only controllable to a certain extent (the

12. MM). Before developing the MM, need to determine the needs of
the target market.
Financial Projections
Controls and Evaluations
Marketing control process consists of establishing performance standards,
evaluating the actual performance by comparing it with the actual standards, and
reducing the difference between the desired and actual performance.
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Marketing Management.
The planning, Organizing, Implementing and Controlling the marketing activities
to facilitate and expidite exchanges effectively (NEED TO ACHIEVE
ORGANIZATIONAL OBJECTIVES) and efficiently (MINIMIZING ORGANIZATIONAL
RESOURCES). Therefore to facilitate highly desirable exchanges and to minimize
the cost of doing so. Effective planning reduces/eliminates daily crises.