Chapter 1 Marketing: The Art and Science of Satisfying Customers

1. Chapter 1Marketing: The Art and Science of Satisfying Customers

2. Objectives • Define marketing, explain how it creates utility, and describe its role in the marketplace. • Contrast marketing activities during the four eras in the history of marketing. • Explain the importance of avoiding marketing myopia. • Describe the characteristics of not-for-profit marketing.

3. Objectives • Identify and briefly explain each of the five types of nontraditional marketing. • Explain the shift from transaction-based marketing to relationship and social marketing. • Identify the universal functions of marketing. • Demonstrate the relationship between ethical business practices, social responsibility, and marketplace success.

4. What is Marketing? • Organizations must create utility to survive

5. Table 1.1 - Four Types of Utility

6. A Definition of Marketing • Marketing - An organizational function and a set of processes for: • Creating, communicating, and delivering value to customers • Managing customer relationships in ways that benefit the organization and its stakeholders

7. Today’s Global Marketplace • Factors that have extended economic views • Increase in international trade agreements • Growth of electronic business • Interdependence of the world’s economies

8. Figure 1.1 - Five Eras of Marketing History

9. Characteristics of the Five Eras

10. Converting Needs to Wants • Consumers acquire goods and services on a continuing basis to fill certain needs • To convert needs into wants, marketers: • Focus on the benefits of goods and services

11. Avoiding Marketing Myopia • Marketing myopia - Management’s failure to recognize the scope of its business • Focusing on customer need satisfaction can overcome myopia

12. Not-for-Profit Marketing • Marketing in not-for-profit organizations • Marketing strategy is adopted to meet service objectives • Not-for-profit organizations form alliances with business firms for mutual benefit • Characteristics of not-for-profit marketing • Does not focus on bottom line • Markets to multiple audiences

13. Table 1.3 - Categories of Nontraditional Marketing

14. From Transaction-Based Marketingto Relationship Marketing • Transaction-based marketing - Buyer and seller exchanges characterized by limited communications and little or no ongoing relationships between the parties • Marketers realize that consumers are becoming more and more sophisticated

15. Using Social Marketing to Build Relationships • Focus is on moving the customers up the loyalty ladder to increase their lifetime value • Interactive marketing - Buyer–seller communications in which the customer controls the amount and type of information received from a marketer • It is increasingly taking place on social mediasites like Facebook, Twitter, and blogs

16. Figure 1.2 - Converting New Customers to Advocates

17. Developing Partnerships and Strategic Alliances • Strategic alliances -Partnerships in which companies combine resources and capital to create competitive advantages in the market • Forms of alliances • Product development partnerships • Vertical alliances • Not-for-profit organizations often raise awareness and funds through strategic partnerships

18. Figure 1.3 - Eight Universal Marketing Functions

19. Ethics and Social Responsibility • Companies that promote ethics and socialresponsibility produce increased employee loyalty and customer growth • Social responsibility programs are meant to enhance a society’s welfare • Help in improving public image of the firm • Sustainable products and practices are goals of socially responsible firms

20. Strategic Implications of Marketing in the 21st Century • Advances and innovations in electronic commerce and computer technologies have allowed organizations to: • Reach new markets • Reduce selling and marketing costs • Enhance their relationships with customers and suppliers