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CHAPTER OVERVIEW OF MARKETING McGraw-Hill/Irwin 01 Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. 1-1 Overview of Marketing LEARNING OBJECTIVES LO1 Define the role of marketing in organizations. LO2 List the elements of the marketing mix. LO3 Describe how marketers create value for a product or service. LO4 Understand why marketing is important both within and outside the firm. 1-2 Ryan Anson/AFP Getty Images Apple How does this company provide value? 1-3 What is Marketing? Marketing is an organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. 1-4 What is Marketing? 1-5 Marketing Entails an Exchange 1-6 Marketing Requires Product, Price, Place, and Promotion Decisions 1-7 Product: Creating Value • The fundamental purpose of Marketing is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs. Goods Royalty-Free/Corbis Services Flying Colours Ltd./Getty Images Ideas Roz Wodward/Getty Images 1-8 Price: Capturing Value • Price is everything a buyer gives up (money, time, energy) in exchange for the product • The key to determining prices is to figure out how much customers are willing to pay and assess whether a profit can be made at that point 1-9 Place: Delivering the Value Proposition • Place, or supply chain management, describes all activities necessary to get the product to the right customer when the customer wants it • Where would you find this product in the store? Courtesy Horizon Organic Dairy 1-10 Promotion: Communicating Value • Promotion is communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions or elicit a response Photo by Paul Hawthorne/Getty Images 1-11 Marketing Can be Performed by Individuals and Organizations ETSY Website 1-12 Marketing Impacts Stakeholders Society Customers Employees Supply Chain Courtesy National Fluid Milk Processor Promotion Board; Agency: Lowe Worldwide, Inc. 1-13 Marketing Helps Create Value 1 2 3 4 5 1. H.Armstrong Roberts/Retrofile/Getty Images 2. Jamie Grill/Iconica/Getty Images 3. ©Ted Dayton Photography/Beateworks/Corbis 4. Ciaran Griffin/Stockbyte/Getty Images 5. ©Colin Anderson/Blend Images/Corbis 1-14 Value-Based Marketing “Pure Dark Chocolate Light Exquisite Cookie” 1-15 Check Yourself 1. What is the definition of marketing? 2. Marketing is about satisfying ______ and ______ . 3. What are the four components of the marketing mix? 4. Who can perform marketing? 5. What are the various eras of marketing? 1-16 Check Yourself 1. Does providing a good value mean selling at a low price? 2. What type of relationship is best for providing value to customers? 1-17 Andrew Ward/Life File/Getty Images ©Roy McMahon/Corbis ©Edward Rozzo/Corbis BananaStock/JupiterImages Jason Reed/Getty Images Digital Vision/Getty Images Why Is Marketing Important? 1-18 Marketing and Society Focusing on many factors Product Marketing practices Communities Environment ©M. Hruby 1-19 Marketing Can Be Entrepreneurial Ben & Jerry’s Product Mission To make, distribute, and sell the finest quality all natural ice cream and euphoric concoctions with a continued commitment to incorporating wholesome natural ingredients and promoting business practices that respect the Earth and the Environment Ben & Jerry’s Website Ben & Jerry’s Commercial 1-20