Transcript The Definition of Marketing

Chapter 1:
The Concept of Marketing
The marketing concept
 Different organizational philosophies about
marketing
 The importance of being customer focused
 How marketing is changing.
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The Definition of Marketing
Marketing is whenever an individual or an
organization has a choice to make.
 Marketing includes marketing situations
and personal situations.
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Marketing is Difficult
Marketers spend time talking to customers.
 Customers do not always accurately tell you
what products they want.
 Competitors’ actions are difficult to predict.
 Customer tastes and society change
frequently.
 Implementing strategies is difficult.
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The Marketing Concept
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Marketing concept emphasizes:
A. Customer focus
B. Organizing resources to understand
customer needs and wants.
C. Offering products and services that
meet those needs.
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Generating Profits
Purpose of a business: create and keep
customers
 Produce and deliver products that people
want.
 Value at a price and under conditions that
are attractive.
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The Marketing Concept
Being competitor focused.
 Making a profit.
 Serving only segments of the customer
population.
 Turning away customers that are
unprofitable.
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Customer Orientation
Organizations have to produce excellent
products and services.
 Figure out what customers want.
 Offer it in a better way than competitors.
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Strategic Approaches to the
Marketplace
Sales driven organization “What we make,
we sell.”
 Technology-driven organization focuses on
R&D and sales.
 Marketing driven organizations. Too much
money is spent on marketing research.
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Customer-Oriented Organization
Understand customers buy benefits, not
products.
 Marketing translates these benefits into
products and services.
 Satisfy more customers than competitors to
make a profit.
 Make key investments in customers long
term satisfaction.
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Achieving Customer Orientation
Buying influence information should be
distributed to every corporate function.
 Make strategic and tactical decisions
interfunctionally and interdivisionally.
 Divisions and functions should make
coordinated decisions, execute them with
commitment.
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Customer Orientation Checklist
Are we easy to do business with?
 Do we keep our promises?
 Do we meet the standards we set?
 Are we responsive?
 Do we work together?
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Customer Orientation and
Product innovation
Customer orientation and being market
driven are consistent with revolutionary
new products.
 Marketers must put product concepts in
terms of benefits.
 Customers can tell you about problems with
current products and benefits they want
from new products.
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The Changing Nature of
Marketing
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Four issues affecting marketing:
A. Adoption and investment in
information technology.
B. Rapid commercialization of internet.
C. Globalization of business.
D. Customer relationship-building and
maintaining customer databases.
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The Increased Adoption of
Information Technology
Companies in the United States spent over
$200 billion on investments in information
technology hardware.
 More customer information is being
collected at a more rapid pace.
 Money is being poured into transactionbased information systems (TBISs) and
electronic data interchange (EDI).
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Diffusion of Information
Technology
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Companies invest large sums for:
A. Better customer service operations.
B. Improved database marketing to
target narrowly defined segments.
C. Help salespeople make presentations
to customers with up-to-the-minute
information about competitors.
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The Rapid Commercialization of
the Internet
A communication vehicle: Companies pay
money to other Web site sponsors to advertise
on their sites.
 A distribution channel: Companies have been
successful selling products to customers from
around the World via the Web.
 A means for disseminating information about
products or services.
 A source for answering technical questions
about product use.
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Two Internet-Related
Technologies
Intranets are Web-based systems within an
organization that cannot be accessed from
the outside without special codes.
 Extranets are pipelines from an organization
to other organizations such as channel
members.
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The Continued Globalization of
Business
Europe is moving toward a common
monetary unit with the introduction of the
Euro.
 The breakup of the Soviet Union and
increased democratization of Russia are
creating new market opportunities.
 Asia is creating many new markets through
its developing economies.
 Latin America is an emerging market.
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The Value of the Customer Base
Lifetime customer value is the present value of a
stream of revenue that can be produced by a
customer.
 Marketing managers will focus on the
relationship between the organization and
customer as the end of a successful marketing
strategy.
 Retaining more customers by satisfying them
better than competitors will be profitable in the
long run.
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Relationship Marketing Involves
Different Activities
Database marketing, created through
transactions, surveys, warranty cards, and a
number of other ways.
 Take products traditionally mass marketed
and make them appear to be targeted - mass
customization.
 Customer satisfaction often done through
extraordinary customer service.
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©2000 Prentice Hall