© 2002 Pearson Education Canada Inc.

1-1

principles of MARKETING

Chapter 1Chapter 1

Marketing in a Changing World:

Creating Customer Value and

Satisfaction

© 2002 Pearson Education Canada Inc.

1-2

Chapter Objectives

• Define marketing and discuss core concepts• Explain customer value, satisfaction, and

quality• Discuss and understand marketing management• Compare the five marketing management

philosophies• Analyze major future challenges

© 2002 Pearson Education Canada Inc.

1-3

What is Marketing?

• A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others

© 2002 Pearson Education Canada Inc.

1-4

Marketing Defined:Core Marketing Concepts

• Needs• Wants• Demands

© 2002 Pearson Education Canada Inc.

1-5

Marketing Defined:Core Marketing Concepts

Needs, wants,demands

Products andServices

Value, satisfaction,and quality

Exchange, transactions,relationships

Markets

© 2002 Pearson Education Canada Inc.

1-6

Marketing Defined:Core Marketing Concepts

• Products

• Services

© 2002 Pearson Education Canada Inc.

1-7

Marketing Defined:Core Marketing Concepts

• Value• Satisfaction• Quality

© 2002 Pearson Education Canada Inc.

1-8

Marketing Defined:Core Marketing Concepts

• Exchange• Transactions• Relationships• Markets

– Buyers• Actual

• Potential

© 2002 Pearson Education Canada Inc.

1-9

Marketing Defined:Core Marketing Concepts

Market:a collection of

buyers

Market:a collection of

buyers

Industry:a collection of

sellers

Industry:a collection of

sellers

Communication

Products/Services

Money

Information

© 2002 Pearson Education Canada Inc.

1-10

Marketing Defined:Core Marketing Concepts

SuppliersSuppliers

CompetitorsCompetitors

Marketingintermediaries

Marketingintermediaries

End usermarket

End usermarket

Company(marketer)

Company(marketer)

© 2002 Pearson Education Canada Inc.

1-11

Marketing Management Defined

• The analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives

© 2002 Pearson Education Canada Inc.

1-12

Marketing Management

• Demand Management– Level of demand– Timing of demand– Nature of demand

• Demarketing

© 2002 Pearson Education Canada Inc.

1-13

Marketing Management

• Building Profitable Customer Relationships– Attract them– Create transactions– Retaining them– Building lasting relationships– Customer lifetime value

© 2002 Pearson Education Canada Inc.

1-14

Marketing Management

Entrepreneurial Marketing

Formulated Marketing

Intrapreneurial Marketing

© 2002 Pearson Education Canada Inc.

1-15

Marketing Management Philosophies

• The Production Concept– Management focus on production and

distribution efficiency– Consumers favour

• Readily available products

• Affordable products

© 2002 Pearson Education Canada Inc.

1-16

Marketing Management Philosophies

• The Product Concept– Consumers favour products offering

• Highest quality

• Best performance

• Most innovative features

© 2002 Pearson Education Canada Inc.

1-17

Marketing Management Philosophies

• The Selling Concept– Sell what you make– Typically for unsought goods– Focus on sales transactions – Driven by excess capacity– Assumes hard sell customers are satisfied

© 2002 Pearson Education Canada Inc.

1-18

Marketing Management Philosophies

• The Marketing Concept– Focus on customer wants and needs– Delivering satisfaction

• More effectively than competition

• More efficiently than competition

© 2002 Pearson Education Canada Inc.

1-19

Marketing Management Philosophies

• The Marketing Concept– Marketing Orientation

• Kohli and Jaworski– Intelligence generation

– Intelligence dissemination

– Responsiveness

• Narver and Slater– Customer orientation

– Competitor orientation

– Interfunctional coordination

© 2002 Pearson Education Canada Inc.

1-20

Marketing Management Philosophies

FactoryExistingproducts

Selling and promoting

Profits throughsales volume

Market

Customerneeds

Integratedmarketing

Profits throughsatisfaction

Startingpoint

Focus Means Ends

The selling concept

The marketing concept

© 2002 Pearson Education Canada Inc.

1-21

Marketing Management Philosophies

• The Societal Marketing Concept– Maintain or improve well-being of consumers

and society• Focus on customer wants and needs

– Delivering satisfaction• More effectively than competition• More efficiently than competition

– Maintains or improves consumers’ and society’s well-being

© 2002 Pearson Education Canada Inc.

1-22

Marketing Management Philosophies

Society (human welfare)

Consumers (want satisfaction)

Company (profits)

Societalmarketing concept

© 2002 Pearson Education Canada Inc.

1-23

Future Marketing Challenges

• Technology

• The Internet

• With Customers– Selectiveness– Lasting Relationships– Direct

Connectedness

© 2002 Pearson Education Canada Inc.

1-24

Future Marketing Challenges

• With Marketing Partners– Internal– External

• Supply Chains

• Strategic Alliances

• With the World– Global Connections

• With Values and Social Responsibilities

Connectedness

© 2002 Pearson Education Canada Inc.

1-25

Future Marketing Challenges

• Application to Different Kinds of Organizations– Non-profit– Public Sector

© 2002 Pearson Education Canada Inc.

1-26

Chapter Review

• What is marketing and its core concepts?

• What is customer value, satisfaction, and quality?

• Discuss marketing management

• Identify and compare the five marketing management philosophies

• What are the major future challenges?