solomon revised ch1

Principles of Marketing

BUSI-141WV Wesleyan College

Professor Conrad

Chapter Objectives

• Explain what marketing is, including the marketing mix, what can be marketed, and the value of marketing

• Explain the evolution of the marketing concept

• Understand value from the perspectives of customers, producers, and society

• Explain the basics of market planning

Copyright © 2016 Pearson Education, Inc. 1--2

Marketing: What is it?

• As consumers, you all know a lot about it!

• Marketing is first and foremost about satisfying customer needs in a profitable manner

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AMA Definition of Marketing

• Marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large.


Marketing Defined: Activities, Institutions, Processes

• Marketing includes many different activities

• More than just sales and advertising• Involves interactions with non-marketers:

Finance, HR, MIS, Operations, Accounting, NPD …

• Marketing is also a decision process



Marketing Defined: Create,

Communicate, Deliver Value

Marketing Facilitates Exchange

• Exchange occurs when one party gives up something and in return for receiving something else

• Conditions for Exchange• At least two people or organizations must be

willing to make a trade.• Have something the other party wants• Agree on value of exchange and terms• Each party free to accept or reject exchange


Marketing Defined: What is Marketed?

• Product: any good, service, or idea Consumer goods/services Business-to-business

goods/services Not-for-profit marketing Idea, place, and

people marketing Copyright © 2016 Pearson Education, Inc. 1-8

Needs, Wants, and Benefits

• Needs• Difference between actual and desired state• Can by physiological or psychological

• Wants• Desire to satisfy a need in a particular way• Influenced by history, past experience, and culture

• Benefits• Consumer received benefit when need satisfied

• Demand• Customers’ desires for products coupled with the resources

needed to obtain themCopyright © 2016 Pearson Education, Inc. 1-9

Features and Benefits

Markets and Marketplaces

• A market consists of all consumers who share a common need that can be satisfied by a specific product, and who have resources, willingness and authority to purchase.

• A marketplace is any location or medium used to facilitate an exchange.


Evolution of the Marketing Concept

• Production era• Selling era• Relationship era• Triple bottom-line era


Production Era

• Marketing dominated by a production orientation

• A management philosophy that emphasizes the most efficient ways to produce and distribute products

• Marketing promotions played a minor role• Henry Ford’s Model T and Ivory soap are

examples of products that were created under a production orientation


Sales Era

• Dominated by selling orientation • A managerial view of marketing as a sales

function, or a way to move products out of warehouses to reduce inventory

• Emphasis on aggressive promotional activities• Post WWII, production capacity exceeded

demand• Led businesses to focus on one-time sales of

goods rather than repeat business


Relationship Era

• Focused upon a consumer orientation• A management philosophy that emphasizes

satisfying customers’ needs and wants

• Marketing plays a more central role• Emergence of the marketing concept• Total Quality Management (TQM) and other

quality initiatives gains wide acceptance


Triple Bottom-Line Era

• Management seeks to maximize financial, environmental, and social bottom lines.• Emergence of societal

marketing concept• Emphasis on ROI

measurement across all three areas


Sustainability

• Sustainability is about creating products that meet present needs while ensuring future generations can have their needs met

• Green marketing is one type of sustainable business practice


The Value of Marketing and the Marketing of Value• Value is benefits received by the

consumer from a product relative to total costs

• Marketing activities lead to value creation through innovations that enhance customer benefits and reduce costs

• Marketing promotional activities communicate the value proposition


Value from the Customer’s Perspective

• Customer perspective:• Value is the ratio of perceived benefits to

perceived costs• Value proposition includes the whole bundle

of benefits the firm promises to deliver, not just the benefits of the product itself



Value Creation

Marketing is a Process

• Marketing planning is a major portion of the process and involves:

• Analyzing the marketing environment• Developing the marketing plan• Deciding on a market segment• Choosing the marketing mix – product, price,

promotion place



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