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CHAPTER

OVERVIEW OF MARKETING

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McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

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LEARNING OBJECTIVES

Overview of Marketing

LO1 Define the role of marketing in organizations.

LO2 List the elements of the marketing mix.

LO3 Describe how marketers create value for a product or service.

LO4 Understand why marketing is important both within and outside the firm.

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Apple

How does this company provide value?

How does this company provide value?

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What is Marketing?

Marketing is an organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

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What is Marketing?

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Marketing is about Satisfying Customer Needs and Wants

• What group is Crest targeting with this ad?

• What other benefits of toothpaste might Crest advertise?

• What groups might these benefits appeal to? ©Procter & Gamble

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Marketing Entails an Exchange

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Marketing Requires Product, Price, Place, and Promotion

Decisions

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Product: Creating Value

• The fundamental purpose of Marketing is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs.

Royalty-Free/Corbis

Roz Wodward/Getty Images

Flying Colours Ltd./Getty Images

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Price: Capturing Value

• Price is everything a buyer gives up (money, time, energy) in exchange for the product

• The key to determining prices is to figure out how much customers are willing to pay and assess whether a profit can be made at that point

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Place: Delivering the Value Proposition

• Place, or supply chain management, describes all activities necessary to get the product to the right customer when the customer wants it

• Where would you find this product in the store? Courtesy Horizon Organic Dairy

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Superior Service: AT&T?

Courtesy AT&T; Agency: BBDO/Atlanta; Artist: Guido Daniele; Photographer: Andric

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Luxury Hotels

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Promotion: Communicating Value

• Promotion is communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response

Photo by Paul Hawthorne/Getty Images

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Marketing Can be Performed by Individuals and Organizations

ETSY Website

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Marketing Impacts Stakeholders

Courtesy National Fluid Milk Processor Promotion Board; Agency: Lowe Worldwide, Inc.

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Marketing Helps Create Value

1. H.Armstrong Roberts/Retrofile/Getty Images 2. Jamie Grill/Iconica/Getty Images 3. ©Ted Dayton Photography/Beateworks/Corbis4. Ciaran Griffin/Stockbyte/Getty Images 5. ©Colin Anderson/Blend Images/Corbis

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Value-Based Marketing

“Pure Dark Chocolate

Light Exquisite Cookie”

“Pure Dark Chocolate

Light Exquisite Cookie”

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Check Yourself

1. What is the definition of marketing?

2. Marketing is about satisfying ______ and ______ .

3. What are the four components of the marketing mix?

4. Who can perform marketing?

5. What are the various eras of marketing?

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Value Driven Companies

• Share information across their organization

• Balance customer’s benefits and costs

• Build relationships with customers

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Companies that Put the Customer First

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Value Based Marketing

Photo by Christopher Peterson/BuzzFoto/FilmMagic/Getty Images

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Target is Value Driven

Target Commercial

©Lars A. Niki

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Check Yourself

1. Does providing a good value mean selling at a low price?

2. What type of relationship is best for providing value to customers?

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Why Is Marketing Important?

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Marketing and SocietyFocusing on many factors

©M. Hruby

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Marketing Enriches Society

Oprah's Angel Network

Photo by Thomas Cooper/Getty Images

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Marketing Can Be Entrepreneurial

Ben & Jerry’s Website

Ben & Jerry’s Commercial

Ben & Jerry’s Product MissionTo make, distribute, and sell the finest quality all natural ice cream and euphoric concoctions with a continued commitment to incorporating wholesome natural ingredients and promoting business practices that respect the Earth and the Environment

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Check Yourself

1. List five factors that emphasize the importance of marketing.

2. A firm doing the right thing emphasizes the importance of marketing to society