Solomon rprc11 PPT 01 PDF

Marketing: Real People, Real Choices
Eleventh Edition
Chapter 1
Welcome to the World of
Marketing: Create and
Deliver Value
Copyright © 2022, 2020, 2018 Pearson Education, Inc. All Rights Reserved
Learning Objectives
1.1 Explain what marketing is, the marketing mix, what
can be marketed, and the value of marketing.
1.2 Explain the evolution of the marketing concept.
1.3 Understand value from the perspectives of customers,
producers, and society.
1.4 Explain the basics of market planning.
1.5 Understand how to increase your chances of getting a
great first job and having a successful career by using the
marketing process to create a personal brand.
Real People, Real Choices: A Decision
Maker at Comcast
Which option should be pursued?

• Option 1: Don’t email these customers about anything
more than the products they have.
• Option 2: Add promotional emails to the flow, but keep
them distinct from the service emails to ensure that
customers don’t tune out a service email by thinking it is
just a sales message.
• Option 3: Use emails to highlight ways to upgrade
service plans as a part of the service email.
Marketing: What Is It?
• “emails and popups from Amazon and others on my
computer?”
• “TV commercials?”
• As consumers, you all know a lot about it!
• Marketing is first and foremost about satisfying customer
needs in a profitable manner.
The Consumer Experience (CX or CEX)
• Why does one product succeed while another fails?

• Today, what matters is the customer experience (CX or
CEX).
• CX is the customer’s overall assessment of every
interaction the customer has experienced with a
business.
How Do You Define Marketing?
• AMA Definition of Marketing
• Marketing is the activity, set of institutions, and
processes for creating, communicating, delivering, and
exchanging offerings that have value for customers,
clients, partners, and society at large.
Marketing Defined: Activity, Institutions,
Processes
• Marketing includes many different activities:

– More than just sales and advertising
– Involves interactions with non-marketers: Finance,
HR, MIS, Operations, Accounting, and so on.
• Marketing is also a decision process.
Marketing Defined: Creating, Communicating,
Delivering, and Exchanging
Marketing Facilitates Exchange
• Exchange occurs when one party gives up something in
return for receiving something else.
• Conditions for Exchange
– At least two people or organizations must be willing to
make a trade.
– Each must have something the other party wants
– Must agree on value of exchange and terms
– Each party is free to accept or reject exchange
The Education Exchange
What do you exchange in return for your college
education?
Marketing Defined: Offerings
• Product: any good, service,
or idea
– Consumer
goods/services
– Business-to-business
goods/services
– Not-for-profit, a.k.a. A product is actually a “bundle” of benefits.
For some universities, that means that in
non-governmental addition to a great education they offer cool
organization (NGO), amenities like a rock-climbing wall.
marketing.
– Idea, place, and people
marketing
Marketing Defined: Value for Customers
• Marketing concept
– Modern marketers practice the marketing concept:
identifying and satisfying the needs of consumers to
ensure profitability.
• Practicing the marketing concept is complex.
• Requires that marketers understand needs, wants,
benefits, demand, a market, and a marketplace.
Table 1.1 Value for Customers (1 of 2)
Term Definition In Practice
Need The recognition of any difference If the difference is big enough, the consumer
between a consumer’s actual state is motivated to take action to satisfy the need.
and some ideal or desired state. When you’re hungry, you buy a snack. If
you’re not happy with your hair, you get a
new hairstyle.
Want The desire to satisfy needs in If two students are hungry, the first student
specific ways that are culturally and may be a health nut who fantasizes about
socially influenced. gulping down a big handful of trail mix,
whereas the second person may lust for a
greasy cheeseburger and fries. The first
student’s want is trail mix, whereas the
second student’s want is fast food (and some
antacid for dessert).
Benefit The outcome sought by a customer After several years when sales were down,
that motivates buying behavior that McDonald’s responded to the number-one
satisfies a need or want. request of its customers: breakfast all day.
The new program attracted lapsed customers
back and increased lunch business.1
Table 1.1 Value for Customers (2 of 2)
Table 1.1 [Continued]
Term Definition In Practice
Demand Customers’ desires for products coupled with Demand for a snappy red BMW convertible includes
the resources needed to obtain them. the people who want the car minus those who can’t
afford to buy or lease one.
Market All the customers and potential customers The availability of scholarships, government aid, and
who share a common need that can be loans has increased the market for college education
satisfied by a specific product, who have the as more students can afford an education.
resources to exchange for it, who are willing
to make the exchange, and who have the
authority to make the exchange.
Marketplace Any location or medium used Today the exchange may be face-to-face or through a
to conduct an exchange. mail-order catalog, a TV shopping network, an eBay
auction, or a phone app.
1Julie Jargon, “McDonald’s All-Day Breakfast Is Luring in Consumers, Study Finds,” Wall Street Journal,
December 8, 2015,
www.wsj.com/articles/mcdonalds-all-day-breakfast-isluring-in-customers-study-finds-
1449609778?cb=logged0.9060535116359343
(accessed March 3, 2016).
Collaborative Consumption
• Consumers in the sharing economy increasingly would
rather rent than purchase the products they use.
• Ridesharing: Uber and Lyft drivers use their own cars
and work when they want to.
• Zipcar rents cars by the hour.
• Traditional marketers are also looking to take advantage
of this trend.
Marketing Creates Utility
• Utility refers to the usefulness or benefit customers
receive through the product, its price, its distribution, and
the marketing communications about it.
– Form utility
– Place utility
– Time utility
– Possession utility
Place Utility
• Rent the Runway is a
new service that rents
high-end dresses from
fashion designers and
rents them at a one-tenth
of the cost of buying the
same garment in the
store.
Marketing Defined: Value for Society
• Is it possible to make profits and contribute to society
and the planet in a positive way?
• Contributing value to society
– Marketers identify consumer societal concern by
monitoring the consumers’ social conscience
– Greater concern for equality seen in demonstrations
– Desire for an end to discrimination against certain
groups
– Companies have joined the movement for change
– What about value for clients and
partners/stakeholders
Value for Clients and Partners
• Marketing must meet the needs of diverse stakeholders
– Buyers
– Sellers
– Investors
– Community residents
– Citizens of nations where goods and services are
made or sold
– Everyone involved in the marketing process
What Do You Think?: Marketing Defined
• Marketing is the activity, set of institutions, and processes

for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners,
and society at large.
How does the AMA definition of marketing relate to

you as a consumer? To your future career?
Evolution of the Marketing Concept
• The idea that organizations succeed when they satisfy
customers’ needs is a somewhat recent idea. Since the
1950s, marketing has and continues to evolve.
• Production era
• Sales era
• Relationship era
• Triple-bottom-line era
Production Era
• Marketing dominated by a production orientation
– A management philosophy that emphasizes the most
efficient ways to produce and distribute products.
• Marketing promotions played a minor role.
• Henry Ford’s Model T is an example of a product that
was developed and sold with a production orientation.
Sales Era
• Dominated by selling orientation
– A managerial view of marketing as a sales function, or

a way to move products out of warehouses to reduce
inventory.
– Emphasis on aggressive promotional activities, the
“hard sell.”
– After World War II, production capacity exceeded
demand.
– Led businesses to focus on one-time sales of goods.
Relationship Era
• Focused upon a customer orientation
– A management philosophy that emphasizes satisfying
customers’ needs and wants
• Marketing plays a more central role
– Emergence of the marketing concept
– Total Quality Management (TQM) and other quality
initiatives gains wide acceptance
• Organizations research customer needs and develop
products to meet the needs of various groups.
Triple-Bottom-Line Era
• Management seeks to
maximize financial, social,
and environmental bottom
lines.
– Emergence of societal
marketing concept
– Emphasis on
sustainability,
accountability, ROI, and
ROMI
This ad focuses on the

environmental bottom line.
Sustainability
• Sustainability: A design and manufacturing focus that
meets present needs without compromising the ability of
future generations to meet their needs.
• Green marketing is a marketing strategy that supports
environmental stewardship, thus creating a differential
benefit in the minds of consumers.
What’s Next in the Evolution of
Marketing?
• User-generated content • The Internet of Things

or consumer-generated (IoT)
content • An infinite media
• Branded content market
• Corporate citizenship or • Customer experience
corporate social CX or CEX
responsibility • Influencer marketing
• Big Data • Service dominant logic
• Mobile Marketing • Co-creation of value
• Artificial Intelligence
The Changing World of Marketing
• Marketing has experienced many changes
– The Production Era
– The Sales Era
– The Relationship Era
– The Triple-Bottom-Line Era
• Marketing in the midst of an exciting period of rapid
change right now!
What do you think the next era of marketing will look

like?
Ethical/Sustainable Decisions in the
Real World
• Many people are literally addicted to their phones and

tablets (small screens).
• Nearly three-quarters of Americans sleep with their smart
phones.
Do you think consumers’ use of their small screens is

harmful? Were attitudes toward small screens change
due to the pandemic?
The Value of Marketing and the
Marketing of Value
• Marketing is about delivering value to everyone who is

affected by a transaction:
– the customer
– the seller
– society at large
Value from the Customer’s Perspective
• Customer perspective:
– Value is the ratio of perceived benefits to perceived
costs.
– Value proposition includes the whole bundle of
benefits the firm promises to deliver, not just the
benefits of the product itself.
Value from the Seller’s Perspective (1 of 2)
• In addition to financial gain, sellers also value marketing

because it provides prestige among rivals or pride in
what they do well.
• Many sellers today see customers as partners in
transactions, not victims.
• It is more expensive to attract new customers than to
retain current ones.
– Marketers calculate the lifetime value of a
customer.
– 1 Baby (24months): 1month: rm500x12x2=2400
Value from the Seller’s Perspective (2 of 2)
• To provide value, firms must first have a distinctive
competency—a capability that is superior to that of the
competition. Iphone ios
• Marketers must turn their distinctive competency into a
differential benefit—a benefit customers can receive from
one firm only.
• When a firm can offer customers a benefit they can’t get from
competitors, the firm has a competitive advantage
– something unique that customers want,
– reasons for customers to pay a premium for the product,
and
– a strong brand preference
Table 1.4 How Firms Achieve a Competitive
Advantage with a Distinctive Competency
Distinctive
Company Differential Benefit Competitive Advantage
Competency
Coca-Cola Distribution and Convenience and brand Other soft drinks are unable to take
marketing awareness for loyal customers away from Coke.
communications customers all over the Coca-Cola has more than 50 percent
world of the world soft-drink market.
Apple Product quality and Easy access to cutting- Apple’s sales of its Mac computer
design edge technology increased 28.5 percent as the overall
market for PCs decreased.
JetBlue Airlines Customer service A fun flight without any JetBlue has been ranked first in
unpleasant surprises customer satisfaction by JD Powers for
13 years.
Amazon.com Fulfillment and Availability, 55 percent of consumers search
distribution convenience, ease of Amazon first. Worldwide, it has 6.4
access, its customer- percent of e-commerce and a 20
friendly services and percent annual growth rate since its
policies founding.
Starbucks Product quality Customer satisfaction Starbucks has just under 33 percent of
the market share in its industry.
Add Value through the Value Chain
• Value chain: a series of activities involved in designing,
producing, marketing, delivering, and supporting any
product; the series of activities necessary to change a
raw materials into a product the customer buys.
• Each activity adds/removes value from the product.
• The main activities of value chain members include
inbound logistics, operations, outbound logistics,
marketing, and service after the sale.
• Firms gain a competitive advantage when they perform
one or more of these activities better than other firms.
Figure 1.2 Apple’s Value Chain
Outbound Marketing and
Inbound Logistics Operations Logistics Sales Service
• Planar lithium battery • Consumer • Trucking • Advertising • Computer
(Sony) research companies • Social media technicians
• Hard drive (Toshiba) • New product • Wholesalers and other forms
• MP3 decoder and development • Retailers of marketing
controller chip team communication
(PortalPlayer) • Engineering • Sales force
• Flash memory chip and
(Sharp Electronics production
Corp.)
• Stereo digital-to-
analog converter
(Wolfson
Microelectronics Ltd.)
• Firewire interface
controller (Texas
Instruments)
Source: Based on information from Erik Sherman, “Inside the Apple iPod Design Triumph,” May 27, 2006,
www.designchain.com/coverstory.asp?issue=summer02 .
Figure 1.3 Create and Deliver Value
• A value exchange that satisfies both the seller and the
customer includes a series of steps in the marketing process.
Consumer Generated Value: From
Audience to Community
• Everyday people generate value instead of just buying it.
– Place their own ads for products on YouTube
– Buy and sell merchandise on eBay and other sites
– Share their own purchases on haul videos
• Social networking platforms provide numerous opportunities
for users to create their own content and share it with others,
thus creating value through social media.
• New media companies may take the wisdom of crowds
perspective using crowdsourcing to solicit ideas from
consumers.
Value from Society’s Perspective
• Marketing transactions may add or subtract value from
society.
• We trust marketers to sell products that are safe and
perform as promised.
– Sometimes the pressure to succeed provokes
dishonest business practices.
– Stressing socially responsible and ethical decisions is
good for business.
The Dark Side of Marketing
• Harsh criticism of marketers who engage in illegal
activities
• Detrimental effects on society
– Encouraging purchase of harmful products
– Addictive consumption
– Illegal consumer activities
– Anticonsumption when people deface or damage
products
Marketing as a Process
• Marketing is a decision process, not a one-shot
operation.
• Market planning: marketing managers think strategically
about the “big picture.”
• Marketers develop the marketing plan
– Analyze the marketing environment
– Determine the strategies that will help the firm meet
its objectives
– Execute those strategies using the tools they have at
their disposal.
Disruptive Marketing
• The only way to stay in business for the long term
• Marketers seek to understand the consumer and identify
what is missing in the marketplace to satisfy the
consumer
• Turning existing marketing rules upside down
• “a process whereby a smaller company is able to
challenge established businesses”
Brand You: A Framework for Managing
Your Career
• What is the most important product you will ever market?

It’s Brand You!
• If you don’t know what you want to do after you graduate.
• If you have no clue about how to get the job that you
want.
• Brand You is a process to create your personal brand
using the same concepts and tools marketers have used
to create great brands.
• Neelofar: instant shawl, inai
Applying Marketing Concepts to Brand
You
• Marketing is about meeting needs: What kind of employer
do you want? What skills and knowledge do you need to
provide value for the firm.
• Marketing is about creating utility: develop your value
proposition. How can you increase and communicate
your value?
• Marketing is about exchange relationships: you exchange
your skills for learning opportunities, compatible work
arrangements, and financial rewards.
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Marketing: Real People, Real Choices

Which option should be pursued?

• Why does one product succeed while another fails?

• Marketing includes many different activities:

• Marketing is the activity, set of institutions, and processes

How does the AMA definition of marketing relate to

– A managerial view of marketing as a sales function, or

This ad focuses on the

• User-generated content • The Internet of Things

What do you think the next era of marketing will look

• Many people are literally addicted to their phones and

Do you think consumers’ use of their small screens is

• Marketing is about delivering value to everyone who is

• In addition to financial gain, sellers also value marketing

• What is the most important product you will ever market?

This work is protected by United States copyright laws and is

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