Chapter 1 An Overview of Contemporary Marketing. Jason C. H. Chen, Ph.D. Professor School of Business Administration Gonzaga University Spokane, WA 99223 [email protected] OPENING VIGNETTE. WWW.AMAZON.COM What is the basis for Amazon.com’s initial success?
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Provided by marketing
Provided by production with
guidance of marketing
Value that comes
Marketing is the business function that deals with customers’ unfulfilled needs and wants. The role of marketing in organizations is to identify and measure customer needs and wants, determine which target markets the organization can serve, decide on the appropriate products and services to serve these markets, and determine the optimal methods of pricing, promoting, and distributing the products or services. Successful organizations are those that integrate the objectives and resources of the organization with the needs and opportunities in the marketplace.
In today’s competitive environment, market-oriented thinking is a necessity. A successful implementation of the marketing concept requires knowledge of the internal (company) and external (competitors and customers) environments, and how they are influenced by marketing mix variables -- product, price, distribution, and promotion.
“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
“Human activities of satisfying needs and wants through the exchange processes.”
Marketing is Valuable to a Variety of Organizations:
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
A business philosophy that emphasizes the production function. An organization following such a philosophy values activities related to improving production efficiency or producing sophisticated products and services.
The guiding belief is “the best-produced products can be easily marketed.”
A business philosophy that emphasizes the selling function. Organizations following such a philosophy focus on the selling process to address changes in market conditions.
The guiding belief is “any product can be old, if enough selling effort is given to it.”
A business philosophy that emphasizes satisfying the needs of the customer. Organizations following such a philosophy have organizational wide commitment to satisfying the needs of the customer.
The guiding belief is “long term success depends on satisfying the needs of the customer.”
Total company effort
Profit (or another
measure of long-term
success) as an
Customer Equity is the Financial Value of a Firm’s Customer Relationships and Consists Of:
Customer equity relationships (Exhibit 1-1)
The revenue stream from repeat purchases
+ The revenue stream from referrals
= The Lifetime Value of a Loyal Customer
What is customer value?
Goods & Services
Goods & Services
Consumer choices are
the invisible hand that
guides the economy
decide what consumers
EXCHANGE is the “transfer of something tangible or intangible, actual or symbolic between 2 or more social actors.”
Transactions in marketing exchanges can use:
Time & Money
B. Only five exchanges are required when a middleman (intermediary) in a central market is used
A. Ten exchanges are required when
a central market is not used
Maybelline Mary Kay Clinique
Advertising through mass media
Direct to consumers
Personal selling to consumers in home
Upscale department stores
Targeted advertising and personal selling to consumers in stores
Universal Functions of Marketing
(Exhibit 1-8, p.14)
Model of a Market-Directed Economy
Goods and Services
Secondary direction of feedback
Many Individual Producers
Perform universal marketing functions
To overcome discrepancies and
separation of production and consumers
Monitoring by government(s)
and public interest groups
Monitoring by government(s)
and public interest group
To create utility and direct flow of
need-satisfying goods and services
Many Individual Consumers
Viewing the world as the potential marketplace to include identifying and responding both to market opportunities around the world and to different cultural groups within each market.
Building partnerships with firms outside the organization and encouraging teamwork among different functions within the organization in order to develop long-term customer relationships.
Addressing the morality of marketing decisions and practicing social responsibility to include ecological considerations.
Constantly looking for ways to give customers more for less. Trying to get the best return for each marketing dollar spent. Translating new and emerging technologies into successful products and services, and using technology to improve marketing practice.
CUSTOMER VALUE PRODUCTIVITY TECHNOLOGY
Focusing on information, on risk taking, and on being proactive in marketing efforts.
© 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Basic Marketing
Knowledge Management/Business Intelligence
Businesses & Consumers