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Chapter 1
An Overview of
Contemporary Marketing
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McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Marketing
“The process of planning and executing
the conception, pricing, promotion, and
distribution of ideas, goods, and
services to create exchanges that
satisfy individual and organization
goals.”
American Marketing Association
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The Importance of Marketing
Marketing is Valuable to a
Variety of Organizations:
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Corporate For-Profit
Nonprofit
The Military
Religious & Ethnic Groups
Small Firms
Individual Marketers
Marketing as an Organizational
Philosophy
Can be Stated Formally
as a Mission Statement
Can be Established Informally through
The Communications and Actions
of Top Management
Indicates the Types of Activities
the Organization Values
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Three Marketing Philosophies
1. Production Philosophy
2. Selling Philosophy
3. Marketing Philosophy
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The Marketing Concept
• The purpose of an
organization is to satisfy
customer needs.
• Satisfying needs requires
integrated and coordinated
efforts through out the
organization.
• Organizations should focus
on long-term success.
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Building Customer Equity
Customer Equity is the Financial
Value of a Firm’s Customer
Relationships and Consists Of:
1. Profits from first-time customers,
and,
2. Expected profits from all future
sales.
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Three Ways to Increase Customer Equity
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1.
Decrease the cost of
acquiring new customers.
2.
Retain more customers
longer.
3.
Increase profits from retained
customers by selling them
more at higher margins and
with lower marketing
expenses.
Building Customer Equity Integrates:
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Short-term
Orientations
New
Customers
Long-term
Orientations
Existing
Customers
3 Keys to Building Customer Equity
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High loyalty levels lead to
increased sales growth, higher
profitability & higher customer
equity.
2.
Completely delighted & satisfied
customers are best for earning
customer loyalty.
3.
Exceptional value is needed to
delight & completely satisfy
customers.
Customer Value
The Calculation:
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The revenue stream from repeat
purchases
The revenue stream from referrals
The Lifetime Value of a Loyal Customer
Marketing as a Societal Process
• Defined as “a process that facilitates the flow
of goods and services from producers to
consumers in a society.”
Producers of
Goods & Services
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Consumers of
Goods & Services
Marketing as a Societal Process
• Issues to Consider:
– What institutions are involved in the system?
– What activities do these institutions perform?
– How effective is the system at satisfying
customer needs?
– How efficiently can the system provides desired
goods and services?
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Marketing as a Societal Process
• A society’s marketing system is closely related to
its political and economic systems.
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Marketing Concerns in Eastern Europe
How to:
1. Become more market-oriented and consumerresponsive?
2. Improve product quality?
3. Change product design, assortment, finishing &
packaging?
4. How to increase communications efforts?
5. Increase merchandising efforts?
6. Use competitive pricing?
7. Institute promotional pricing & price discounts
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Marketing is a Process
Consisting Of:
Marketing Exchanges
Marketing Strategies
Marketing Activities
Marketing Positions
Marketing Institutions
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Marketing Exchanges
• EXCHANGE is the
“transfer of something
tangible or intangible,
actual or symbolic
between 2 or more
social actors.”
Marketer’s Goods
Or Services
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• Transactions in
marketing exchanges
can use:
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Money
Barter
Time & Money
Votes
Buyer’s
Exchange
Marketing Strategies
Select a
Target Market
Develop a
Marketing Mix
To Satisfy
Market Needs
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Marketing Mix Decisions
Product Decisions
Integrated Marketing
Communications Decisions
Marketing
Mix
Distribution Decisions
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Price Decisions
Marketing Activities
Buying
Selling
Transporting
Storing
Producers
End Users
Financing
Risk Taking
Standardizing &
Grading
Obtaining Marketing
Information
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Marketing Positions
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Marketing Manager
Product Manager
Advertising Manager
Distribution Manager
Purchasing Manager
Marketing Research Manager
Public Relations Manager
Customer Service Manager
Sales Manager
Marketing Institutions
• Retailers
• Wholesalers
• Marketing Research
Firms
• Advertising Agencies
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A Contemporary Marketing
Framework
Marketing
Environment
Entrepreneurship
Global
Ethics
Marketing
Productivity
Customer
Value
Relationship
Technology
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