Chapter 1 Overview of Marketing PDF

Chapter 1 Overview of Marketing © 2023 McGraw Hill Limited 1-1  Chapter 1: Overview of Marketing LEARNING OBJECTIVES LO1 Define the role of marketing and explain its core concepts LO2 Describe how marketers create value for...

Chapter 1 Overview of Marketing © 2023 McGraw Hill Limited 1-1  Chapter 1: Overview of Marketing LEARNING OBJECTIVES LO1 Define the role of marketing and explain its core concepts LO2 Describe how marketers create value for a product or service LO3 Summarize the four orientations of marketing LO4 Understand the importance of marketing both within and outside the firm © 2023 McGraw Hill Limited 1-2 Providing Value ⚫ Build & maintain a loyal customer base ⚫ Make a product that satisfies a variety of consumer demands ⚫ Consumer positioning is important (create a unique image in the client’s mind) ⚫ Good marketing can establish value ⚫ Leveraging influencers to help promote a brand is critical © 2023 McGraw Hill Limited 1-3 What is marketing? Marketing is a set of business practices designed to plan for and present an organization’s products or services in ways that build effective customer relationships. © 2023 McGraw Hill Limited 1-4 Core aspects of marketing © 2023 McGraw Hill Limited 1-5 Satisfying customer needs & wants Need: basic necessities Want: how to fulfill that need Marketers must identify who will buy their products. Hydro Flask products are geared to people who want a sturdy, reusable bottle that keeps their water cold. © 2023 McGraw Hill Limited 1-6  Satisfying customer needs & wants Target Markets customer segment to whom the firm is interested in selling its products and services What type of customer would buy a car valued at over $80,000? © 2023 McGraw Hill Limited 1-7 Entails a marketing exchange The exchange can occur between any two parties Not simply a buyer and seller exchanging money for a good or service Can be an exchange of When you buy a information for Takeya Actives water bottle, you convenience exchange the bottle for money and information about yourself. © 2023 McGraw Hill Limited 1-8 Marketing entails an exchange © 2023 McGraw Hill Limited 1-9 Marketing requires marketing mix decisions © 2023 McGraw Hill Limited 1-10 Product: creating value Goods Services Ideas All watches are goods, and they tell the time. But Rolex is marketed as a status brand. © 2023 McGraw Hill Limited 1-11  Promotion of ideas creates value Ideas include thoughts, opinions, philosophies, and intellectual concepts that also can be marketed. Marketing creates value by promoting ideas such as bicycle safety. © 2023 McGraw Hill Limited 1-12  Price: transacting value Price is everything the money buyer gives up in energy exchange for the product. time © 2023 McGraw Hill Limited 1-13 Place: delivering value All activities necessary to get the product to the right customer when that customer wants it. Supply chain management is the field that examines these activities. Where would you find this product in the store? © 2023 McGraw Hill Limited 1-14 Place: Marketing Channels Distribution Strategy How does a company get the product to the right customer when and where they want it? © 2023 McGraw Hill Limited 1-15  Promotion: communicating value The communication activities of marketing Used to inform, persuade and remind potential buyers Used to influence their opinions or elicit a It isn’t easy to promote oat milk, response so Oatly first promoted it to coffee shops and then designed a fun package to get attention in supermarkets. © 2023 McGraw Hill Limited 1-16  Marketing can be performed by both individuals & organizations B2B: Wholesaling is often only Business to Business B2C: All retailing is Business to Consumer selling C2C: Swap Meets, EBay, yard sales, etc. © 2023 McGraw Hill Limited 1-17  Marketing impacts many stakeholders ⚫ Both profit and non-profit entities ⚫ Developing economies ⚫ Entire industries “Milk Life” replaced the well-known “Got Milk?” campaign, but the ads still create a high level of awareness for the milk industry. © 2023 McGraw Hill Limited 1-18  The four orientations of marketing Product Orientation Market Orientation Sales Orientation Value-based Orientation © 2023 McGraw Hill Limited 1-19  Product orientation Product-oriented companies focus on developing and distributing innovative products with little concern about whether the products best satisfy customers’ needs. © 2023 McGraw Hill Limited 1-20  Sales orientation View marketing as a selling function where companies try to sell as many of their products as possible rather than focus on making products consumers really want. © 2023 McGraw Hill Limited 1-21  Market orientation Market-oriented companies start out by focusing on what consumers want and need before they design, make, or attempt to sell their products and services. © 2023 McGraw Hill Limited 1-22  Value-based orientation To compete successfully, firms focus on the triple bottom line: People (consumer needs & wants) Profits (long-term profitable relationships) Planet (social and environmental responsibility) © 2023 McGraw Hill Limited 1-23 How do firms become more value driven? Firms focus on four activities: ⚫ Sharing Information Sharing information ⚫ Balancing benefits with costs Balance customer’s benefits & costs ⚫ Building customer Build relationships with customers relationships Use technology to connect with ⚫ Connecting with customers via customers social media © 2023 McGraw Hill Limited 1-24  Sharing information Why is sharing and coordinating information such a critical success factor for any firm? Fashion designers for Zara, the Spain-based fashion retailer, collect purchase information and research customer trends to determine what their customers will want to wear in the next few weeks. They share this information with other departments to forecast sales and coordinate deliveries. © 2023 McGraw Hill Limited 1-25 Case in point: Zara How does the flagship brand of Europe’s fastest growing apparel Challenge retailer keep up with the latest trends? By implementing sophisticated information technology into its Answer customer tracking and supply chain functions. Zara now has over 1500 women’s Results clothing stores in 78 countries. Products move from design through the supply chain and onto the stores shelves in about two weeks. © 2023 McGraw Hill Limited 1-26  Balancing benefits with costs Understand key benefits. Focus on key benefits. Eliminate cost of less strategic benefits. Furniture retailer IKEA focuses on what its customers value—low prices and great design. © 2023 McGraw Hill Limited 1-27 Building customer relationships ⚫ Take a long term view of customer relationships ⚫ Use data to assist in maintaining the relationship To help meet its sustainability commitments, Starbucks developed a lid that takes the place of a straw. © 2023 McGraw Hill Limited 1-28  Connect with customers using social media ⚫ Embrace social media to connect better with customers ⚫ 91% of North American companies now use social media for marketing purposes ⚫ Users are driving the way brands & stores are interacting with social media © 2023 McGraw Hill Limited 1-29 Why is marketing important? © 2023 McGraw Hill Limited 1-30 Marketing expands firms’ global presence Good are available to consumers from many countries from the far reaches of the globe Must understand customers needs & wants Segment-by-segment, region-by-region © 2023 McGraw Hill Limited 1-31  Marketing is pervasive across channel members Each step in the supply chain involves marketing All members in the chain must ultimately focus on creating value for their customer and the end user consumer © 2023 McGraw Hill Limited 1-32  Marketing Enriches society Canadian companies recognize that a strong social orientation is in both their and their customers’ best interests. It shows the consumer that the firm can be trusted with their business. © 2023 McGraw Hill Limited 1-33  Marketing can be entrepreneurial Though important to large firms, marketing is equally important to the success of small ventures—especially new ventures. Tonia Jahshan successfully parlayed her love Dani Reiss has grown Canada Goose into a of tea from a small business into a global premium outerwear company sold around the empire worth more than $20 million. world. © 2023 McGraw Hill Limited 1-34