Exhibit 1-1: Marketing Facilitates Production and Consumption

1-1

Exhibit 1-2: Model of a Market-Directed Macro-Marketing System

1-2

Exhibit 1-3: Organizations with a Marketing Orientation Carry out the Marketing Concept

1-3

Exhibit 1-4: Some Differences in Outlook between Adopters of the Marketing Concept and the Typical Production-Oriented Managers

1-4

Exhibit 1-5: Customer Value and Competition

1-5

Exhibit 1-6: Satisfying Customers with Superior Customer Value to Build Profitable Relationships

1-6

Exhibit 1-7: Summary of American Marketing Association Statement of Ethics

1-7

Exhibit 1-8: Sample Criticism of Marketing

1-8

Customer satisfaction is the extent to which a firm fulfills a consumers needs, desires, and expectations As some needs are met, others may become

more important Expectations may change based on

experiences Satisfying experiences may lead to increasing

expectations Disappointing experiences may reduce expectations Expectations may be realistic or unrealistic

Customer Satisfaction

1-9

Types of Utility and How They Are Provided

1-10

MARKETING: the performance of activities that seek to accomplish an

organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producers to customer or client

MACRO-MARKETING: a social process that directs an economy's flow of goods and

services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society

(New) AMA COMMITTEE DEFINITION: marketing is an organizational function and a set of

processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

What Is Marketing?

1-11

Economies of Scale: as a company produces larger numbers of a particular product, the cost for each of these products goes down. Facilitated by mass production Facilitated by mass distribution Not always possible (for example, in labor

intensive services) Flexible production--to meet varying or

changing needs--may be more important than economies of scale in creating real customer value

Economies of Scale

1-12

Universal Functions of Marketing

1-13

A. Ten exchanges required when a central market is not used, and B. Only five exchanges are required when a middleman (intermediary) in a central market is used

1-14

Advertising agencies Marketing research firms Independent product-testing laboratories Internet service providers Public warehouses Transporting firms Communications companies Financial institutions (including banks)

Collaborators Facilitate Marketing Functions

1-15

E-commerce refers to exchanges between individuals or organizationsand activities that facilitate those exchangesbased on applications of information technology. Innovations in e-commerce are making many

firms and markets more effective (work better) and/or more efficient (less costly) Examples:

Websites the facilitate promotion, buying and selling Shared databases that allow buyers and sellers do a

better job in planning inventory requirements Online Auction sites to match supply and demand

E-Commerce

1-16

Consumer choices are the invisible hand that

guides the economy

Government officialsdecide what consumers

should get

CommandEconomy

Market-DirectedEconomy

Economic Systems

1-17

Marketing department era

Marketing company era

Sales era

Production era

Simple trade era

Stages of Marketing Evolution

1-18

Trying to carry out the marketing concept Maintaining a customer orientation

All departments work together guided by customer needs

Focus on profit objective (or other overall objective) NOT just trying to unload what the firm has produced

Marketing Orientation

1-19

Marketing Orientation Focuses Departments

1-20

Customer value concerns the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits Customer value takes the customers point of

view But customer may not explicitly think in terms of

costs and benefits Costs and benefits are not just limited to

economic considerations Examples: Convenience in purchasing Emotional reactions (status needs, etc.)

In a competitive market, the firm that offers superior value is likely to win business and get repeat customers

The Marketing Concept and Customer Value

1-21

Both public and private nonprofit organizations are turning to marketing concepts Some nonprofits differ from business in

important ways: those who get benefits may not provide the support may be difficult to agree on basic objective each volunteer tends to do what he or she wants to

do!

Nonprofit Organizations and the Marketing Concept

1-22

Micro-macro dilemma: what is good for some producers and consumers may not be good for society as a whole.

Examples: some consumers want handguns, but guns can be

dangerous all terrain vehicles are fun for some people, but may

result in injuries or damage to wilderness areas non-returnable soft drink bottles are convenient, but

sometimes result in litter and dangerous broken glass along highways.

repairing an old air-conditioning system might save the owner money, but might require continued use of ozone depleting fluorocarbons (used as coolant)

Micro-Macro Dilemma

1-23

Social responsibility concerns a firm's obligation to improve its positive effects on society and reduce its negative effects

Marketing ethics are the moral standards that guide marketing decisions and actions

Social Responsibility and Marketing Ethics

1-24

Exhibit 1-1: Marketing Facilitates Production and Consumption Exhibit 1-2: Model of a Market-Directed Macro-Marketing SystemExhibit 1-3: Organizations with a Marketing Orientation Carry out the Marketing Concept Exhibit 1-4: Some Differences in Outlook between Adopters of the Marketing Concept and the Typical Production-Oriented ManagersExhibit 1-5: Customer Value and CompetitionExhibit 1-6: Satisfying Customers with Superior Customer Value to Build Profitable RelationshipsExhibit 1-7: Summary of American Marketing Association Statement of Ethics Exhibit 1-8: Sample Criticism of MarketingCustomer SatisfactionTypes of Utility and How They Are ProvidedWhat Is Marketing?Economies of ScaleUniversal Functions of MarketingA. Ten exchanges required when a central market is not used, and B. Only five exchanges are required when a middleman (intermediary) in a central market is usedCollaborators Facilitate Marketing FunctionsE-CommerceEconomic SystemsStages of Marketing EvolutionMarketing Orientation Marketing Orientation Focuses Departments The Marketing Concept and Customer ValueNonprofit Organizations and the Marketing ConceptMicro-Macro DilemmaSocial Responsibility and Marketing Ethics