Download fundamentals of marketing

Introduction to
Marketing
chapter 1
Harcourt, Inc.
Objectives
 To
develop an appreciation for
the historical perspective of how
markets have evolved
 To appreciate both views of the
evolution of marketing.
 To introduce marketing as an
exchange process
Dr. Rosebloom
Objectives
 To
understand the societal
implications of marketing
 To comprehend marketing as an
organizational process
 To introduce the fundamentals
of marketing strategy
Dr. Rosebloom
Spontaneous Economic Combustion
 Labor
Specialization
 Consumption Satiation
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The Evolution of Marketing
Production Era
Sales Era
Marketing Era
Dr. Rosebloom
Relationship
Marketing Era
The Evolution of Marketing
Production Era
Orientation:
Dominant
time period:

Business philosophy
focusing on
manufacturing
efficiency; demand
exceeds supply =
seller’s market
 Prior
1920s
Dr. Rosebloom
to the
The Evolution of Marketing
Sales Era
Orientation:
Dominant
time period:

Business philosophy
focusing on selling
existing products;
supply exceeds
demand = buyer’s
market
 Prior
1950s
Dr. Rosebloom
to the
The Evolution of Marketing
Marketing Era
Orientation:
Dominant
time period:

Business philosophy
focusing on
consumer wants and
needs; any
supply/demand
situation
 Last
half of 20th
century
Dr. Rosebloom
The Evolution of Marketing
Relationship Marketing Era
Orientation:
Dominant
time period:

Business philosophy
focusing on
reinforcing the
customer-oriented
focus of the
marketing era
 Last
decade of
20th century
Dr. Rosebloom
AMA Definition of Marketing
 Marketing
is the process of
planning and executing the
conception, pricing, promotion,
and distribution of ideas, goods,
and services to create exchanges
that will satisfy individual
and organizational
objectives
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Broader Definition of Marketing
The definition of
marketing
includes the nonprofit sector of
society (homeless
shelter)
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Broader Definition of Marketing
Oakland Museum
Dr. Rosebloom
Hal Riney and
Partners
Broader Definition of Marketing
The definition of
marketing
includes the nonprofit sector of
society (U.S.
Army)
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Broader Definition of Marketing
Drug Free America
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The Martin Agency
Broader Definition of Marketing
The definition of
marketing
includes the nonprofit sector of
society (societal
cause)
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Broader Definition of Marketing
The definition of
marketing
includes the nonprofit sector of
society (forest
protection)
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Exchange Process
Process by which one or more
parties give something of
value to each other to satisfy
perceived needs
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Exchanges
Learning Environment
Tuition
Promised Action
Votes
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Exchanges
Fee
Consulting
Products/services
Money
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Exchanges
Producer
Wholesaler
Retailer
Consumer
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Activities of Marketing
Dr. Rosebloom
Activities of Marketing
Exchange
 Buying
- seeking and
evaluating alternatives
 Selling - promotion of
alternatives to consumers
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Activities of Marketing
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Activities of Marketing
Logistical
 Transporting
- movement
of goods and services
 Storing - holding of goods
and services
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Activities of Marketing
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Activities of Marketing
Facilitating
Financing - facilitating exchange
 Risk-taking - holding title
 Providing information understanding markets (consumer
and industrial)
 Standardizing and grading - sorting
by size and quality

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The Marketing Concept
Customer orientation
 Coordinated effort by all departments
of the firm to satisfy customers
 Emphasis on long term profit

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Strategic Marketing Concept
Corporate mission is to seek
 Sustainable
competitive
advantage
 Meet customer needs
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Societal Marketing Concept
Adoption of Marketing Concept
 Considering the needs of society as a
whole




Environment
Health
Safety
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Marketing Myopia
 Short
sightedness by business
firms causing management to
define their business too
narrowly
Dr. Rosebloom
Marketing Myopia Examples
Myopic Broad
Description: Description:
 Railroad
 Transportation
company
 Electricity
company
 Television
network
company
 Power
company
 Entertainment
provider
Dr. Rosebloom
The Marketing Mix Variables
Product
Distribution
Target
Market
Price
Promotion
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The Marketing Mix Variables
Target Market
Group(s) of potential
customers toward which
a firm directs its
marketing mix(es)
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The Marketing Mix Variables
Product Strategy
Identifying consumer needs and
wants
 New product development
 Designing the product
 Branding
 Packaging

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The Marketing Mix Variables
Distribution Strategy
 Physical
distribution
 Channel management
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The Marketing Mix Variables
Pricing Strategy
 Pricing
objectives
 Price determination
 Pricing policies
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The Marketing Mix Variables
Promotion Strategy
 Advertising
 Personal
selling
 Sales promotion
 POP, sponsorships, PR
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The Marketing Environment
 Microenvironment
 Objectives
and resources
 Macroenvironment
 Competitive
environment
 Legal/political environment
 Socio-cultural environment
 Economic environment
 Technological environment
Dr. Rosebloom
Environmental Scanning
 Identification
of important
trends
 Analysis of impact on the
firm
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Separations Between Producers and Consumers
Separations naturally exist between
producers and consumers, buyers
and sellers, and any other parties
who enter into exchanges
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Separations Between Producers and Consumers
Spatial Separation
 Producers
and
consumers are
generally separated by
space or geography
Dr. Rosebloom
Functions Of Advertising
Henry Weinhard
Dr. Rosebloom
Hal Riney and
Partners
Separations Between Producers and Consumers
Temporal Separation

Producers and consumers want to produce and
consume at different times. Sales of skis
generally occur during the winter but
producers want to manufacture them all year
Dr. Rosebloom
Separations Between Producers and Consumers
Perceptual Separation

Producers may lack
information about
the whereabouts of
consumers and
consumers may lack
information about
the producer’s
offerings
Dr. Rosebloom
Separations Between Producers and Consumers
Ownership Separation

There is a
separation between
producers and
consumers in
reference to title.
Producers pass
(exchange) title of
product/services for
title to the money
the consumer holds
Dr. Rosebloom
Separations Between Producers and Consumers
Values Separation

There is a
separation between
producers and
consumers because
producers value the
costs and prices of
their products while
consumers value the
utility of the product
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Four Types of Utility
Utility
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Four Types of Utility
Form Utility
 Transformation
of
raw materials
and/or labor into
a finished good
and/or service
that the consumer
desires
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Four Types of Utility
Form Utility
Ping
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The Martin Agency
Four Types of Utility
Form Utility
 Transformation
of
raw materials
and/or labor into
a finished good
and/or service
that the consumer
desires
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Four Types of Utility
Utility
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Four Types of Utility
Place Utility
 Availability
of a
good and/or
service where the
consumer wants
or needs it
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Four Types of Utility
Place Utility
 Availability
of a good and/or service
where the consumer wants or needs it
Dr. Rosebloom
Four Types of Utility
Place Utility
 Availability
of a
good and/or
service where the
consumer wants
or needs it
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Four Types of Utility
Utility
Dr. Rosebloom
Four Types of Utility
Ownership Utility
 Transferring
title
of a good and/or
service from
producer to
consumer
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Four Types of Utility
Utility
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Four Types of Utility
Time Utility
 Availability
of a
good and/or
service when
consumer
wants/needs it
Dr. Rosebloom
Four Types of Utility
Time Utility
 Availability
of a
good and/or
service when
consumer
wants/needs it
Dr. Rosebloom
Separations/Functions/Utility
Separations Functions of Marketing Utility
Spatial
Transporting
Storing
Place
Temporal
Storing
Transporting
Financing
Risk-Taking
Time
Perceptual
Selling
Providing Information
Form, plus
facilitates
all others
Dr. Rosebloom
Separations/Functions/Utility
Separations Functions of Marketing Utility
Ownership
Buying
Selling
Risk-Taking
Financing
Ownership
Values
Buying
Selling
Standardizing and Grading
Providing Information
Ownership
Form
Dr. Rosebloom