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Chapter 1
Overview of Marketing
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Learning Objectives
Learning Objective 1.1 Define the role of
marketing.
Learning Objective 1.2 Describe the evolution of
marketing over time.
Learning Objective 1.3 Describe how marketers
create value for a product or service.
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Water Bottles
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What Is Marketing?
Marketing is the activity, set of institutions, and processes
for creating, capturing, communicating, delivering, and
exchanging offerings that have value for customers, clients,
partners, and society at large.
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Exhibit 1.1 Core Aspects of Marketing
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Marketing Is about Satisfying Customer
Needs and Wants
How does Dove offer value?
• Dove added the Dove
Men+Care line and expanded
into products for babies.
• In advertising to male
consumers, Dove seeks to
acknowledge and recognize
modern men’s caregiving roles,
so it can link these
communications to its baby care
products too.
• Dove seeks to acknowledge and Dove seeks to acknowledge and recognize
modern men’s caregiving roles, so it can link
recognize modern men’s these communications to its baby care
caregiving roles, so it can link products.
these communications to its
baby care products.
© McGraw Hill LLC Source: Unilever 7
Exhibit 1.2: Exchange: The Underpinning of
Seller-Buyer Relationships
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Exhibit 1.3: The Marketing Mix
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Marketing Creates Value through Product,
Price, Place, and Promotion Decisions
The Marketing Mix: • Product.
• Price.
The controllable set
of decisions or • Promotion.
activities that the firm
uses to respond to • Place.
the wants of its target
markets.
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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.
• Services.
• Ideas.
Marketing creates value by
promoting ideas, such as bicycle
safety.
© McGraw Hill LLC Source: Street Smart, a public safety campaign of Metro, the District of Columbia, Maryland, and Virginia. 11
Price: Capturing Value
Price is everything a
buyer gives up (money,
time, energy) in
exchange for the
product or service.
If you don’t mind sitting in a middle seat and
putting all your baggage under your seat, flying
on low-cost carriers like Frontier is a good value.
© McGraw Hill LLC Kateryna Kukota/Alamy Stock Photo 12
Place: Delivering the Value Proposition
Place represents all the
marketing processes
necessary to get the product to
the right customer when that
customer wants it.
Place more commonly deals
specifically with retailing and
marketing channel
management, also known as
supply chain management.
Hertz creates customer value by using biometrics to
create a function that recognizes loyal customers
using facial, iris, or fingerprint scans.
© McGraw Hill LLC Jeff Martin/AP Images 13
Promotion: Communicating the Value
Proposition
Promotion is
communication by a
marketer that informs,
persuades, and reminds
potential buyers about a
product or service to
influence their buying
decisions and elicit a
response.
Babar books wanted to celebrate the 80th anniversary of the
series. It initiated a $100,000 campaign, working in collaboration
with toy stores and bookstores.
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Exhibit 1.4: Marketing Can Be Performed by
Individuals and by Organizations
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Marketing Impacts Various Stakeholders
Customers.
Supply Chain Partners.
Employees.
Industry.
Society.
The Great American Milk Drive, run in conjunction with
Feeding America, seeks to ensure that local food banks are
sufficiently stocked with nutritious, frequently requested items.
© McGraw Hill LLC Source: America’s Milk Companies 16
PROGRESS CHECK (1 of 3)
1. What is the definition of marketing?
2. Marketing is about satisfying blank and
blank.
3. What are the four components of the marketing
mix?
4. Who can perform marketing?
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Exhibit 1.5 Marketing Evolution:
Production, Sales, Marketing and Value
Photos (left to right): Ryan McVay/Photodisc/Getty Images; Clement Mok/Photodisc/Getty Images; Lawrence Manning/Corbis/Getty Images; Ryan McVay/Photodisc/Getty
Images; Mark Dierker/McGraw-Hill
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Value-Based Marketing
A Lipstick Option for Those Who Dream of a Hermès
Bag
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Value-Based Marketing Era
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PROGRESS CHECK (2 of 3)
1. What are the various eras of marketing?
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How Does Marketing Create Value and
How Do Firms Become More Value Driven?
Build relationships with customers.
Gather and analyze information.
Balance benefits and costs.
Connect with customers using social and
mobile media.
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Value Stems From Four Main Activities
Adding Value
Using Marketing Analytics
Embracing Social and Mobile Marketing
Ethical and Societal Dilemma: Engaging in
Conscious Marketing
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Marketing Analytics
Companies collect massive amounts of data about
how, when, why, where, and what people buy.
Kroger collects massive amounts of data about how, when, why, where, and what people buy and
then analyzes those data to better serve its customers.
© McGraw Hill LLC © Daniel Acker/Bloomberg/Getty Images 24
Connecting With Customers Using Social
and Mobile Marketing
Social media ad
spending is growing,
increasing by 32 percent
in 2018 alone.
3.26 billion people link
to some social media
sites through their
mobile devices.
Make travel arrangements online either
through Facebook or hotels’ mobile app and
check-in is a breeze.
© McGraw Hill LLC Erik Isakson/Blend Images/Getty Images 25
Resolving Ethical and Societal Dilemmas
Conscious Marketing
Socially Responsible
Firms
Making socially
responsible activities an
integral component of
corporate strategies.
Too Good To Go is a UK-based app that
has partnered with 1,381 food stores to
match hungry customers to restaurants and
stores with surplus food that would
otherwise go to waste.
© McGraw Hill LLC Guillaume Payen/SOPA Images/LightRocket/Getty Images 26
PROGRESS CHECK (3 of 3)
1. Does providing a good value mean selling at a
low price?
2. How are marketers connecting with customers
through social and mobile media?
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