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Marketing
Creating Value for Customers
Irwin/McGraw-Hill
Gilbert A. Churchill, Jr.
© The McGraw-Hill
J. Paul
Peter Companies, Inc., 1998
Marketing
Chapter 1
Marketing:
Creating Value for Customers
Gilbert A. Churchill, Jr.
J. Paul Peter
Slide
1-1
What is Marketing
1948 AMA
1985 AMA
• Marketing is the
• Marketing is the
process of planning
performance of
and executing the
business activities
conception, pricing,
directed towards, and
promotion, and
incident to, the flow of
distribution of ideas,
goods, and services
goods and services
to create exchanges
from the producer to
that satisfy individual
consumer or user.
and organizational
goals.
Slide
1-2
Necessary Conditions for Exchange
At Least Two
Parties
Ability to
Communicate
Offer
Exchange
Process
Freedom to
Accept or
Reject
Desire to Deal
With Other
Party
The interchange of something of value between parties
Slide
1-3
Importance of Marketing
Distribution
Packaging
Research and
Development
Selling
Expense
Communications
Raw Materials and
Production
Entry level salaries
range between
$30,000 to $50,000
Slide
1-4
Table
1.1
Major Types of Marketing
TYPE
DESCRIPTION
EXAMPLE
Product
Marketing designed to create
exchange for tangible products
Strategies to sell Gateway
computers
Service
Marketing designed to create
exchanges for intangible products
Strategies by Hertz to rent cars
to travelers
Person
Marketing designed to create
favorable actions toward persons
Strategies to get votes for Bill
Clinton
Place
Marketing designed to attract
people to places
Strategies to get people to
vacation in Puerto Rico
Cause
Marketing designed to create
support for ideas or issues or
to get people to change socially
undesirable behaviors
Strategies to get people to
stop using illicit drugs
Organization Marketing designed to attract
donors, members, participants
or volunteers
Strategies to increase
membership in the National
Rifle Association
Slide
1-5
Levels of Marketing Analysis
Macromarketing
Micromarketing
• The study of marketing
processes, activities,
institutions, and results at a
societal level.
• The study of marketing
processes and activities at
organizational, product, or
brand levels.
– Social responsibility
– Business ethics
– Product development
– Product distribution
– Product pricing
Slide
1-6
Table
1.1
Marketing Management Philosophies
TYPE
DESCRIPTION
EXAMPLE
Production
Focus on efficiency of internal
operations (not wants and
needs)
Make the best black car you
can and people will buy it
Sales
Focus on aggressive selling
techniques for overcoming
customer resistance
You don’t like the black car?
I’ll throw in a free radio
Marketing
Focus on satisfying customer
needs and wants, long-term
profitability, and integrating all
organizational functions while
achieving organizational
objectives.
What type of car do you want?
Value
Focus on developing and
delivering superior value to
customers as a way to achieve
organizational objectives.
You will get a 5 year 100,000
mile warranty. This car is
better than the one made 3
years ago.
Slide
1-7
Figure
1.1
Stakeholders in Marketing Activities
at
Organizational
Activities
Govt.
Agencies
Marketing
Activities
Slide
1-8
Figure
1.3
Creating Value for Customers
Slide
1-9
Figure
1.4
The Consequences of Superior
Customer Value
Superior
Customer
Value
Customer
Satisfaction
and Delight
Customer
Loyalty
Long Term
Profitable
Relationships
Slide
1-10
Transactional vs Relationship Marketing
Transactional Marketing
Relationship Marketing
• Strategy that focus on
attracting new customers
• Strategy that entails
forging long-term
partnerships with
customers
– individual isolated exchanges
– making the sale
– offering value
– providing satisfaction
Slide
1-11
Figure
1-5
Marketing Management
Develop
Marketing Plan
and Strategies
Understanding
Customers
and Markets
Developing
Marketing
Mix
Implement
and control
Marketing
Activities
The process of setting marketing goals for an organization and
planning, implementing, and controlling strategies to meet them.
Slide
1-12
Marketing Plan
•
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•
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•
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Executive Summary
Introduction
Situation Analysis
Competitive Analysis
Marketing Planning
Implementation and Control
Summary
Appendix
References
Slide
1-13
Target Market
Target
Market
The portion of a market that an organization attempts to serve
with its marketing mix. The group most likely to buy a firm’s product
Slide
1-14
Marketing Mix
Product
Price
Four
P’s
Placement
Promotion
The strategic tools a firm uses to create value for customers
and achieve organizational objectives. Elements created by
management to satisfy mutually satisfying exchanges.
Slide
1-15
Marketing Mix - Product
Product
Price
Target
Market
Placement
Promotion
Something offered by marketers to customers for
exchange. It may be a good, service, or an idea.
Slide
1-16
Marketing Mix - Price
Product
Price
Target
Market
Placement
Promotion
The amount of money or other resources required to exchange
for goods and services. Sometimes called rent, fee, tuition, toll,
etc.
Slide
1-17
Marketing Mix - Placement
Product
Price
Target
Market
Placement
Promotion
The channels of distribution used to get products and services
to market. Including wholesalers and retailers.
Slide
1-18
Marketing Mix - Promotion
Product
Price
Target
Market
Placement
Promotion
The personal and impersonal means used to inform, persuade,
and remind customers about products and services. This
includes advertising, sales promotion, publicity, and personal selling.