LEARNING OBJECTIVES (LO)AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:
Define marketing and identify the diverse factors influencing marketing activities.
Explain how marketing discovers and satisfies consumer needs.
Distinguish between marketing mix factors and environmental forces.
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McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Define marketing and identify the diverse factors influencing marketing activities.Explain how marketing discovers and satisfies consumer needs.Distinguish between marketing mix factors and environmental forces.LO3LO2LEARNING OBJECTIVES (LO)AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:LO1Explain how organizations build strong customer relationships and customer value through marketing.Describe how today’s customer relationship era differs from prior eras.LO4LO5LEARNING OBJECTIVES (LO)AFTER READING CHAPTER 1, YOU SHOULD BE ABLE TO:RESEARCHING HOW COLLEGE STUDENTS STUDY TO LAUNCH A NEW PRODUCT AT 3MSatisfying StudentNeedsDiscovering Student NeedsINNOVATION AND MARKETING AT 3M DISCOVERING & SATISFYING STUDENT STUDY NEEDS+Felt Tip Highlighters=3M product thatwill combinePost-it® Notes or Post-it® Flags andHighlighters3M Post-it® Notes or Post-it® FlagsMarketing is NOT EasyWHAT IS MARKETING ?LO1You Are a Marketing Expert AlreadyInvolved in 1,000s of Buying DecisionsMay Be Involved in Selling DecisionsTrueTrue(c) plastic bottlesFIGURE 1-1 The see-if-you’re-really-a-marketing-expert testMARKETING MATTERSWhen Your College Instructor Says,“You Didn’t Do Very Well,” There’s Still Hope!LO1Marketing Seeks to:ExchangeDiscover Needs and Wants of CustomersSatisfy ThemWHAT IS MARKETING?DELIVERING BENEFITSLO1AMA Definition of MarketingWHAT IS MARKETING?DIVERSE FACTORS INFLUENCE MARKETING ACTIVITIESLO1The Organization Itself and Its DepartmentsSocietyEnvironmental ForcesFIGURE 1-2 A marketing department relates to many people, organizations, and environmental forcesWHAT IS MARKETING?REQUIREMENTS FOR MARKETING TO OCCURLO1Two + Parties withUnsatisfied NeedsA Desire and Abilityto be SatisfiedA Way for the Partiesto CommunicateSomethingto ExchangeHOW MARKETINGDISCOVERS CONSUMER NEEDSTHE CHALLENGE: NEW PRODUCTSLO2Consumers May Not Know or Cannot Describe What They Need or WantMost New Products Fail“Focus on the Consumer Benefit”“Learn From the Past”The Challenge:Dr. Care Vanilla-Mint Aerosol ToothpasteWhat “benefits” and what “showstoppers?”LO2Hot Pockets SnackersWhat “benefits” and what “showstoppers?”LO2Terrafugia TransitionWhat “benefits” and what “showstoppers?”LO2Pepsi MaxWhat “benefits” and what “showstoppers?”LO2NeedWantDoes Marketing PersuadePeople to Buy the“Wrong” Things? MarketHOW MARKETINGDISCOVERS CONSUMER NEEDSNEEDS VS. WANTSLO2FIGURE 1-3 Marketing seeks to discover consumer needs through research and then satisfy them with a marketing program HOW MARKETINGSATISFIES CONSUMER NEEDSLO3PromotionPlaceTarget MarketThe 4 Ps: Controllable Marketing Mix FactorsProductPrice $499HOW MARKETINGSATISFIES CONSUMER NEEDSLO3TechnologicalRegulatoryUncontrollable Environmental ForcesSocialEconomicCompetitiveCustomer Value PropositionTHE MARKETING PROGRAMCUSTOMER VALUE AND RELATIONSHIPSLO4Best PriceBest ServiceCustomer ValueBest ProductValue StrategiesSouthwest Airlines, Starbucks, and Home DepotWhat customer value strategy?LO4THE MARKETING PROGRAMRELATIONSHIP MARKETINGLO4Easy to UnderstandRelationship MarketingHard to DoMarketing Program3M’S STRATEGY & MARKETING PROGRAMHELPING STUDENTS STUDYLO4Move from Ideas toa Marketable Highlighter Product Add the Post-it®Flag PenDevelop a Marketing Program for thePost-it® Flag Highlighter and PenFIGURE 1-4 Marketing programs for two new 3M Post-it® brand products targeted at two distinct customer segments: college students and office workers3M STRATEGY & MARKETING PROGRAMMARKETPLACE SUCCESS?LO4Developed ThirdGeneration Post-it®Flag Highlighter Appeared onThe Oprah Winfrey ShowFIGURE 1-5 Four different orientations in the history of American businessProduction EraSales EraMarketing Concept EraCustomer Relationship EraMarket OrientationHOW MARKETING BECAME IMPORTANTEVOLUTION OF THE MARKET ORIENTATIONLO5Customer RelationshipManagement (CRM)Customer ExperienceWhat Firms Think They Offer CustomersWhat Customers Say They ReceiveHOW MARKETING BECAME IMPORTANTETHICS AND SOCIAL RESPONSIBILITYLO5EthicsSocial ResponsibilitySocietal Marketing ConceptMacromarketingMicromarketingHOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETINGLO5Who Markets?What Is Marketed?Products(Goods)ServicesIdeasHOW MARKETING BECAME IMPORTANTBREADTH AND DEPTH OF MARKETINGLO5Who Benefits?Who Buys & Uses What Is Marketed?Ultimate ConsumersOrganizational BuyersHow Do Consumers Benefit?: UtilityForm UtilityPlace UtilityTime UtilityPossession Utility3M’S POST-IT® FLAG HIGHLIGHTER: EXTENDING THE CONCEPT!VIDEO CASE 1VIDEO CASE 13M’s Post-it® Flag Highlighter1. (a) How did 3M’s David Windorski get ideas from college students to help him in designing the final commercial version of the Post-it® Flag Highlighter?(b) How were these ideas important to the success of the product?2. What (a) special advantages and (b) potential problems did 3M have in introducing a new highlighter-with-flags product for college students?VIDEO CASE 13M’s Post-it® Flag Highlighter3. Visit your college bookstore before you answer. (a) Where would you display the Post-it® Flag Highlighter in a college bookstore and (b) How can the display increase student awareness of the product?VIDEO CASE 13M’s Post-it® Flag Highlighter4. In what ways might 3M try to promote its Post-it® Flag Highlighter and make students more aware of the product?VIDEO CASE 13M’s Post-it® Flag Highlighter5. What are the (a) special opportunities and (b) potential challenges for 3M in taking its Post-it® Flag Highlighter into international markets? (c) On which countries should 3M focus its marketing efforts?VIDEO CASE 13M’s Post-it® Flag HighlighterMarketingMarketing is the activity for creating, communicating, delivering, and exchanging offerings that benefit the organization, its stakeholders,and society at large.ExchangeExchange is the trade of thingsof value between buyer and seller so that each is better off after the trade.MarketA market consists of people with both the desire and the ability to buy a specific offering.Target MarketA target market consists ofone or more specific groups of potential consumers towardwhich an organization directs its marketing program.Marketing MixThe marketing mix consists of the marketing manager’s controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem.Customer Value PropositionCustomer value proposition is the cluster of benefits that an organization promises customers to satisfy their needs.Environmental ForcesEnvironmental forces consist of the uncontrollable forces in a marketing decision involving social, economic, technological, competitive, and regulatory forces.Customer ValueCustomer value is the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-saleand after-sale service at aspecific price.Relationship MarketingRelationship marketing linksthe organization to its individual customers, employees, suppliers, and other partners for theirmutual long-term benefits.Marketing ProgramA marketing program is a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.Marketing ConceptA marketing concept is theidea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.Market OrientationA market orientation occurs when an organization focuses its efforts on (1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and (3) using it to create customer value.Customer Relationship Management (CRM)Customer relationship management (CRM) is the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace.Customer ExperienceCustomer experience is the internal response that customers have to all aspects of an organization and its offering.Societal Marketing ConceptSocietal marketing concept is the view that organizations should satisfy the needs of consumers in a way that provides for society’s well-being.ProductA product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange for money or something else of value.Ultimate ConsumersUltimate consumers consist of the people who use the goodsand services purchased for a household. Also called consumers, buyers, or customers.Organizational BuyersOrganizational buyers arethose manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.UtilityUtility consists of the benefits or customer value received by users of the product.