Chapter 1 — Marketing: The Art and Science of Satisfying
customers
● Every company must serve customer needs—
create customer satisfaction—to succeed.
● We refer to the art and science of satisfying
customers because
● ART: requires imagination and creativity
● SCIENCE: requires technical knowledge, skill, and
experience.
WHAT IS MARKETING?
● Production and marketing together create utility.
● UTILITY - The want-satisfying power of a good or
service.
TABLE 1.1 FOUR TYPES OF UTILITY
a. Form — created when raw materials and components
are converted into finished goods and services
b. Time — created when goods or services are available
when consumers want them
c. Place — created when goods or services are available
where consumers want them
d. Ownership — created when title to goods or services is
transferred
WHAT IS MARKETING?
All organizations must create utility to survive.
● FOUNDATION FOR THE CRESTION OF UTILITY —
Designing and marketing want-satisfying goods,
services.
Activities marketers perform to create customers:
● Identifying needs in the market place
● Finding out which needs the organization can
profitably serve
● Developing goods and services to convert
potential buyers into customers
Marketing specialists are responsible for most of the
activities necessary to create the customers the
organization wants, including;
a. Identifying customer needs
b. Designing products that meet those needs
c. Communicating information about those goods
and services to prospective buyers
d. Making the goods or services available at times
and places that meet customers’ needs
e. Pricing merchandise and services to reflect costs,
competition, and customers’ ability to buy
f. Providing the necessary service and follow-up to
ensure customer satisfaction
MARKETING
● The word marketing encompasses a broad scope
of activities and ideas
● An organizational function and a set of processes;
a. Creating, communicating, and delivering
value to customers
b. Managing customer relationships in ways
that benefit the organization and its
stakeholders
Today’s global marketplace
a. Factors that have extended their economic views
beyond national borders
i. International agreements designed to increase
trade
ii. Rise of electronic commerce
iii. Interdependence of the world’s economies
Companies seek the most efficient manufacturing sites and
most lucrative markets worldwide.
Companies are tailoring their marketing efforts to the
needs and preferences of local markets.
b. Expanding operations beyond the U.S. gives
companies access to about 6.5 billion new
consumers
c. Service firms also play a major role in today’s
global marketplace
d. The U.S. is an attractive market for foreign
companies
e. Marketing strategies are increasingly being
tailored to suit the needs and preferences of
consumers in foreign markets
Five Eras in the History of Marketing
● Essence of marketing includes managingcustomer
relationships and the exchangeprocess
● Exchange process - Activity in which twoor more
parties give something of value toeach other to
satisfy perceived need.
 ● Routine use of the Web and social networking
sites by companies to connect to consumers

Converting Needs to Wants

● Consumers acquire goods and services on a

continuing basis to fill certain needs
● To convert needs into wants, marketers:

— Focus on the benefits of goods and

services

Avoiding Marketing Myopia

The Production Era
● Marketing myopia - Management's failure to
● Period before 1925 recognize the scope of its business
● Production orientation - Stressing efficiency in ● Overcoming marketing myopia
producing a quality product, with the attitude
toward marketing that "a good product will sell — Developing broader marketing-
itself" oriented business ideas focusing on
● Business success was defined solely in terms of customer need satisfaction
production successes
● Characterized by production shortages and intense
consumer demand

The Sales Era

● Sales orientation - Customers will resist

purchasing nonessential items

Only personal selling and creative advertising

would persuade them to buy

● With the sophistication of production techniques,

output grew from the 1920s into the early 1950s

Manufacturers began to increase their emphasis

on effective sales forces
Marketing in not-for-profit organizations
The Marketing Era
● Operate in both the public and private sector
Emergence of the marketing concept
● Adopt marketing strategies to meet service
● Shift from a seller's market to a buyer's market objectives
● A strong buyer's market created the need for ● Communicate their messages through
consumer orientation advertisements relating to their goals
● Marketing concept - A companywide consumer ● Form alliances with for-profit firms to promote
orientation to achieve long-run success each other's causes
● A strong market orientation improves market
success and overall performance
Characteristics of Not-for-profit Marketing
The Relationship Era
● Focus is to generate revenue to support their
● Emerged during the 1990s 1990s and and
causes and not on the bottom line
continues continues to to grow in importance
● May market tangible goods and services
● Relationship marketing - Developing long-term,
● Markets to multiple audiences
value-added relationships over time with
● Often possess some degree of monopoly power in
customers and suppliers
a given geographic region
● Strategic alliances and partnerships benefit
● Service users have less control over the firm's
everyone
future
The Social Era

● Characterized by the accessibility to the Internet

and the creation of social media sites

Nontraditional Marketing
● Person marketing - Efforts to cultivate the
attention, interest, and preferences of a target
market toward a person
— Celebrity endorsements
● Place marketing - Efforts to attract people and
organizations to a particular geographic area
Using Social Marketing to Build Relationships
— Tourism enhancements
● Cause marketing - Identification and marketing of
a social issue, cause or idea to selected target
markets
● Many profit-seeking firms link their products to
social causes
● Strong support among customers and employees
for cause-related marketing
● Event marketing - Marketing of sporting, cultural,
and charitable activities to selected target markets
Also, includes sponsorship of such events by firms
● Event sponsorships have gained effectiveness in
increasing brand recognition, enhancing image,
boosting purchase volume
● Organization marketing - Intended t to persuade
others
— Accept the organization's goals
— Receive its services
— Contribute to the organization in some way
Developing Partnerships and Strategic Alliances
● Adopted by mutual-benefit organizations, service
organizations, and government organizations
From Transaction-Based Marketing to Relationship
Marketing
● Transaction-based marketing - Buyer and seller
exchanges characterized by limited
FORMS OF ALLIANCE
communications and little or no ongoing
relationships between the parties
● Marketers realize that consumers are becoming
more and more sophisticated
● Relationship marketing gives a company new
opportunities to gain a competitive edge by
moving customers up a loyalty ladder
— It starts with determining what customers need
and want, then developing high-quality products
to meet those needs
● Mobile marketing - Marketing messages
transmitted via wireless technology
● Interactive marketing - Buyer-seller
communications in which the customer controls
the amount and type of information received from
a marketer
● Social marketing - The use of online social media
as a communications channel for marketing
messages
— Electronic conversations can establish
innovative relationships between users and the
business
By converting indifferent customers into loyal
ones, companies generate repeat sales
Some of the best repeat customers are those who
are also willing to spread the word
Buzz marketing is the word of mouth messages
that bridge the gap between a company and its
products
● Relationship marketing extends to business-to-
business relationships with suppliers, distributors,
and other partners
● Strategic alliances - Partnerships in which two or
more companies combine resources and capital to
create competitive advantages in a new market
 ● Product development partnerships ● Enhance their relationships with customers and
● Vertical alliances suppliers

NOT-FOR-PROFIT ORGANIZATION often use strategic

alliances to raise awareness and funds for their causes.
CHAPTER 2: MARKETING RESEARCH AND SALES
FORECASTING

Introduction

● Marketing research Collecting and using

information about a market of an overall industry
that will be used to come up with a marketing
strategy.

Examples of Marketing Research

1. Surveys/ Questionnaires

● Online/ offline surveys to collectquantitative data

on consumer preferences.
● In-person interviews.

Examples of Marketing Research

1. Surveys/Questionnaires

● Telephone interviews

Quick and inexpensive way of getting a small

Ethics and Social Responsibility
● Ethics Moral standards ards of behavic expected in
a society
● Most businesses follow ethical practices, although
there have been breaches at times
● Social responsibility - Marketing philosophies,
policies, procedures, and actions that have the
enhancement of society's welfare as a primary
objective
Socially responsible efforts produce such benefits as:
● Improved customer relationships
● Increased employee loyalty
● Marketplace success
● Improved financial performance
Sustainable products - Products that can be produced,
used, and disposed of with minimal impact on the
environment
quantity of relatively impersonal information
Many people refuse to take part or are reluctant
to give personal information over the phone
Not a viable option in international markets where
telephone ownership is rare
● Personal interviews
Allows researchers to obtain detailed information
and ask follow-up questions
Researchers can establish rapport
withrespondents and explain confusing or vague
questions
Mall intercepts - Interviews conducted inside retail
shopping centers
● Focus group - A small group of individuals brought
together to discuss a specific topic

Firms stand to gain needed credibility from their efforts to Valuable for exploratory research
protect the environment
Drawback is the potential lack of honesty due to
Research reveals that customers are willing to pay a peer pressure
premium for environmental friendly goods and services
Researchers are experimenting with online focus
Strategic Implications of Marketing in the 21st Century groups

Advances and innovations in electronic commerce and ● Mail surveys

computer technologies have allowed organizations to:
Cost-effective and provides anonymity
● Reach new markets
● Reduce selling and marketing costs Lower response rates than for personal interviews
 Time-consuming

May be subject to bias through self-selection

Long follow-up time

● Online surveys and other Internet-based methods

Allow researchers to:

Increase the speed of the survey process

Increase sample sizes

Ignore geographic boundaries

Reduce costs

No industry wide standards define techniques

formeasuring Web use

2. Observational Research

● Observation of customers/ consumers

tounderstand their behaviors and preferences.
● Website analytics or social media interactions
(tracking and reviewingvisitors on a website and
online interaction)