Chapter 1: Marketing’s Value

to Consumers, Firms, and

Society

For use only with

Perreault/Cannon/
McCarthy texts, © 2009
McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin

www.mhhe.com/fourps
Marketing—What’s It All About?

More than Selling or Advertising

More than Selling

All Those
and Advertising
Bicycles!
Things a Firm Should Do in Producing a Bike

Analyze Needs

Predict Wants

Estimate Demand

Predict When

Determine Where

Estimate Price

Decide Promotion
Estimate Competition

Provide Service
Production vs. Marketing

Marketing
Makes sure right goods &
services are produced

Production
• Making Goods
• Performing Services

Creates Customer Satisfaction

Marketing Is Important to You!

Important to every consumer!

Important to your job!

Affects innovation and

standard of living
What Is Marketing?

Micro View Macro View

• Set of activities • Social process

and
• Performed by • Matches supply
individual with demand
organizations
Macro-Marketing

Emphasis on Every Economy

Whole System Needs It

Key
Characteristics

Matches
Producers and
Consumers
Universal Functions of Marketing

Buying Selling

Market
Transporting
Information
Marketing
Functions
Risk Taking Storing

Standardization
Financing
& Grading
Who Performs Marketing Functions?

Producers Wholesalers Other

Specialists

Transport
Firms Retailers
Ad Agencies
ISP's

Product
Testing Research
Firms Firms Consumers
How Decisions are Made in an Economic System

Command Market-Directed
Economy Economy
• Government • Adjusts itself
officials decide • Price is value
• May work well if: measure
OR
• Simple • Freedom of
economy
choice
• Little Variety
• Government’s
• Adverse
role limited
Conditions
Marketing’s Role Has Changed Over Time

Focus:
Simple Trade Era
Sell Surplus

Focus:
Production Era
Increase Supply

Focus:
Sales Era
Beat Competition

Marketing Department Focus:

Era Coordinate and Control

Focus: Long-Run
Marketing Company Era
Customer Satisfaction
The Marketing Concept (Exhibit 1-3)

Total
Customer company
satisfaction effort

The
Marketing
Concept

Profit (or another measure

of long-term success) as
an objective
Creating
Customer
Satisfaction
Adopting The
Marketing
Concept

Now Flying To
More Places In
Europe.
The Marketing Concept and Customer Value

Take Customer’s
Point of View

Customer May
Not Dwell On
Value

Costs Benefits Where Does

Competition Fit?

Customer Value
Builds
Relationships
Interactive Exercise: Customer Value

© 2009 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

 Price Benefit Rating Price Index Benefit Index Value Index
Dirt Devil 90 58 26.09956501 91.33858268 65.23901767
GE 110 58 31.89946834 91.33858268 59.43911433
Oreck 380 58 110.1981634 91.33858268 -18.85958069
Kenmore 199 66 57.70903818 103.9370079 46.22796969
Hoover 300 75 86.99855002 118.1102362 31.1116862
Kirby 990 66 287.0952151 103.9370079 -183.1582072

Average 344.83 63.5

Putting It All Together (Exhibit 1-6)

Total Company
Effort to Satisfy
Customers
Build Profitable Offer Superior
Customer Customer Value
Relationships

Increase Sales to Attract

Customers Customers

Satisfy
Retain Customers
Customers
The Marketing Concept Applies in Nonprofit
Organizations

Support and
“Satisfied
Customers”

Newcomers The Bottom

to Marketing Characteristics Line ?
of Nonprofit
Organizations

Marketing May Not Be

Concept Organized
Provides for
Focus Marketing
Government
Marketing
The Marketing Concept, Social Responsibility,
and Marketing Ethics

Micro - Macro
Group Needs Individual Needs
Dilemma

Should All
Social What if Profits
Needs Be
Responsibility Suffer?
Satisfied?
The Marketing Concept Guides Ethics
You should now be able to:

1. Know what marketing is and why you should

learn about it.
2. Understand the difference between marketing
and macro-marketing.
3. Know the marketing functions and why
marketing specialists—including
intermediaries and collaborators—develop to
perform them.
4. Understand what a market-driven economy is
and how it adjusts the macro-marketing
system.
You should now be able to:

5. Know what the marketing concept is—and

how it should guide a firm or nonprofit
organization.
6. Understand what customer value is and why it
is important to customer satisfaction.
7. Know how social responsibility and marketing
ethics relate to the marketing concept.
Key Terms

• Production • Buying
• Customer • Selling
satisfaction
• Transporting
• Innovation
• Storing
• Marketing
• Standardization and
• Pure subsistence grading
economy
• Financing
• Macro-marketing
• Risk-taking
• Economies of
• Market information
scale
• Intermediary
• Universal functions
of marketing
Key Terms

• Collaborators • Marketing company era

• E-commerce • Marketing concept
• Economic system • Production orientation
• Command • Marketing orientation
economy • Customer value
• Market-directed • Micro-macro dilemma
economy • Social responsibility
• Simple trade era • Marketing ethics
• Production era
• Sales era
• Marketing
department era