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 5

CHARLES W. LAMB JOSEPH F. HAIR CARL MCDANIEL

JANE SUMMERS MICHAEL GARDINER
 5

CHARLES W. LAMB JOSEPH F. HAIR CARL MCDANIEL

JANE SUMMERS MICHAEL GARDINER
MKTG5 © 2023 Cengage Learning Australia Pty Limited
5th Edition
Charles W. Lamb Copyright Notice
Joseph F. Hair This Work is copyright. No part of this Work may be reproduced, stored in a retrieval
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Adapted from Lamb/Hair/McDaniel MKTG13 (c) 2021 South Melbourne, Victoria Australia 3205

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1 2 3 4 5 6 7 26 25 24 23 22
BRIEF CONTENTS
PART 1 — AN INTRODUCTION TO MARKETING

1 An overview of marketing 2

2 Ethics and the marketing environment 18

PART 2 — CONSUMER INFORMATION

3 Consumer decision making 36

4 Business-to-business marketing 64

5 Segmenting and targeting markets 82

6 Market research, data collection and analytics 103

PART 3 — MANAGING THE MARKETING MIX

7 Product concepts 126

8 Developing and managing products 145

9 Services, non-profit and other intangibles 162

10 Marketing channels and distribution decisions 176

11 Integrated marketing communication (IMC) 210

12 The promotions mix 230

13 Pricing 269

PART 4 — THE WORLD OF MARKETING

14 Global marketing 292

15 Marketing strategy and planning 308

16 Marketing and new technology 326

Endnotes 341
Index 350
Tear-out review cards

iii
 How social media have changed our behaviour 25
Growth of component lifestyles 25
The demographic environment 26
The changing character of families 26
Multiculturalism 26

CONTENTS The economic environment

Consumer incomes
Inflation
27
27
27
Recession 27
The technological environment 27
The competitive environment 28
Industry analysis 28
Identifying your place in the industry 29
Competitor analysis 29
The political and legal environment 29
Federal legislation 29
Regulatory agencies 30

PART 1 Ethics, morality and law 30

AN INTRODUCTION Ethical theories 31
Personal ethics 33
TO MARKETING 1

1 An overview of marketing 2

What is marketing? 2
A social and evolving science 3 PART 2
Participating in marketing 4 CONSUMER
Marketing exchange 4 INFORMATION 35
Marketing management philosophies 5
Production orientation 5 3 Consumer decision making 36
Sales orientation 6
Market orientation 6 Understanding consumer behaviour 36
Societal marketing orientation 8 Value 37
Co-created value orientation 8
Who’s in charge? 9 The traditional consumer decision-making process 38
Stage 1: Need recognition 39
How organisations apply the different orientations 10 Stage 2: Information search 39
The organisation’s focus 10 Stage 3: Evaluation of alternatives 42
The organisation’s understanding of customer value 10 Stage 4: Purchase 44
The organisation’s attitude to customer satisfaction 12 Stage 5: Post-purchase behaviour 44
Defining the organisation’s business 12
Identifying the product’s target audience 12 Consumer buying decisions and involvement 46
The organisation’s primary goal 13 Determining the level of consumer involvement 47
The sales tools the organisation uses 13 Marketing implications of involvement 48
Building relationships 14 The consumer decision journey 48

Why study marketing? 16 Factors influencing consumer buying decisions 50

Marketing plays an important role in society 16 Cultural influences 51
Marketing is important to businesses 16 Social influences 54
Marketing offers outstanding career opportunities 16 Individual influences 58
Marketing is important to you 17 Psychological influences 60

2 Ethics and the marketing environment 18 4 Business-to-business marketing 64

What is business-to-business marketing (B2B)? 64

The external marketing environment 18
Factor 1: Understand current customers 19 Business versus consumer markets 66
Factor 2: Understand what drives consumer decisions 20 Demand 66
Factor 3: Identify the most valuable customers and Purchase volume 67
understand their needs 20 Number of customers 68
Factor 4: Understand the competition 20 Distribution structure 68
Environmental management 20 Nature of buying 68
Primary promotional method 69
The sociocultural environment 21
Baby boomers: demanding change 22 Trends in B2B marketing 69
Generation X: savvy and cynical 23 Social media in B2B marketing 70
Generation Y (Millennials): born to shop 23 Content marketing 71
Generation Z or iGeneration: the silent generation 24 Personalised communications and AI 71
Generation Alpha 24 Account-based marketing 71

iv Contents
Relationship marketing and strategic alliances 73 The growth of emerging technologies 122
Major categories of business customers 74 Mobile-first delivery 122
Producers 74 Consumer-generated media (CGM) 123
Resellers 75 Competitive intelligence 124
Governments 75
Institutions 75
Types of business products 75
Major equipment 76
Accessory equipment 76
PART 3
Raw materials 76 MANAGING THE
Component parts 76
Processed materials 77 MARKETING MIX 125
Supplies 77
Business services 77
7 Product concepts 126
Understand business buying behaviour 77
Buying centres 77 What is a product? 126
Evaluative criteria 78
Buying situations 79 Types of products 127
Purchasing ethics 80 Convenience products 128
Customer service 81 Shopping products 129
Speciality products 129
Unsought products 129
5 Segmenting and targeting markets 82
Product items, lines and mixes 130
Understanding market segmentation 82 Adjustments to product items, lines and mixes 132
What is a market segment? 83 The market uses of branding 134
Why marketers use segmentation 84 Benefits of branding 134
The process of segmenting a market 85 Branding strategies 136
Generic products versus branded products 136
Step 1: Select a market or product category Manufacturers’ brands versus private brands 137
for study 85 Individual brands versus family brands 138
Step 2: Select bases and descriptors/variables Co-branding 139
for segmentation 86 Trademarks 139
Geographic base 86
Packaging and labelling 140
Demographic base 87
Packaging functions 140
Psychographic base 89
Labelling 142
Behavioural base 90
Greenwashing 142
Access base 91
Universal product codes 143
Step 3: Analyse and profile segments to identify Quick response codes 143
target markets 92
Product guarantees and warranties 143
Step 4: Select targeting strategies 94
Undifferentiated targeting
Concentrated targeting
94
95
8 Developing and managing products 145
Multi-segment targeting 95
The product life cycle (PLC) 145
Step 5: Develop a positioning strategy 96 Introductory stage 147
Perceptual mapping 97 Growth stage 148
Positioning bases 97 Maturity stage 149
Segmenting for markets other than consumer markets 98 Decline stage 149
Segmenting business markets 99 Implications for marketing management 150
Segmenting for a one-to-one market 100 The importance of new products 151
Segmenting a global market 101 Categories of new products 152
Segmentation in a social market 101
The new-product development process 152
New-product strategy 153
6 Market research, data collection and analytics 103 Idea generation 154
Idea screening 155
The role of market research in marketing Business analysis 155
decision making 103 Development 156
The practice of market research 104 Test marketing 156
Steps in a market research project 106 Commercialisation 157
Opportunity or problem definition 106 Global issues in new-product development 158
Secondary data 108
The spread of new products 159
Research design 110
Diffusion of innovation 159
Sampling 118
Product characteristics and the rate of adoption 160
Collecting data 120
Marketing implications of the adoption process 160
Analysing data 121
Present findings and recommend actions 121
Following up 122

Contents v
 Trends in supply chain management 201
9 Services, non-profit and other intangibles 162 Outsourcing logistics functions 201
Supply chain risk, security and resilience 201
The importance of services marketing 162 Electronic distribution 202
How services differ from goods 163 Blockchains 202
Intangibility 163 Global logistics and supply chain management 203
Inseparability 164 Channel and distribution decisions: retail and
Heterogeneity 164 services 204
Perishability 164 Retailing 204
Service quality 164 Main types of retail operations 205
The gap model of service quality 165 Services 207

Marketing mixes for services 167 Customer trends and advancements 207
Product (service) strategy 167 Omnichannel versus multichannel marketing 207
Place (distribution) strategy 168 Use of emerging technology 208
Promotion strategy 169
Price strategy 169 11 Integrated marketing communication (IMC) 210
Global issues 169
Relationship marketing in services 170 Introducing integrated marketing
Internal marketing in service organisations 170 communication (IMC) 210
Traditional media and digital marketing 212
Non-profit-organisation marketing 171
Unique aspects of non-profit organisation marketing The communication process 213
strategies 171 The sender and encoding 213
Product decisions 172 Message transmission 214
Place (distribution) decisions 172 The receiver and decoding 214
Promotion decisions 173 Feedback 215
Pricing decisions 173 The communication process and the promotional mix 216
Social and peer-to-peer marketing 173 The goals and tasks of promotion 218
Peer-to-peer marketing 174 Informing 218
Persuading 219
10 Marketing channels and distribution decisions 176 Reminding
Connecting
219
219
Marketing channels 176 The elements of the promotional mix 220
Specialisation and division of labour 176 Personal selling 220
Overcoming discrepancies 177 Direct marketing 220
Contact efficiency 178 Advertising 221
Sales promotion 221
Channel intermediaries and their functions 179
Public relations 222
Channel functions performed by intermediaries 180
Content marketing and social media 223
Channel structures 180
Alternative channel arrangements 183 Factors affecting the promotional mix 223
Nature of the product 223
Issues that influence channel strategy 184
Stage in the product life cycle 224
Factors affecting channel choice 184
Target market characteristics 225
Levels of distribution intensity 185
Type of buying decision 225
Channels and their relationships 187
Availability of funds for promotion 225
Supply chains and supply chain management 189 Push and pull strategies 225
Benefits of supply chain management 190
Promotional goals and the AIDA concept 227
Supply chain integration 190
AIDA and the promotional mix 228
The key processes of supply chain management 192
Customer relationship management
Customer service management
192
193
12 The promotions mix 230
Demand management 193
The importance and effects of advertising 230
Order fulfilment 193
Advertising and market share 231
Manufacturing flow management 193
Advertising and the consumer 233
Supplier relationship management 194
Product development and commercialisation 194 Types of advertising 234
Returns management 195 Institutional advertising 234
Product advertising 234
How supply chain functions affect company
success 195 Making creative and media decisions 236
Supply management 196 Determining advertising campaign objectives 237
Inventory control 196 Post-campaign evaluation 240
Order processing 197 Media types 240
Production 198 Media selection considerations 245
Warehousing and materials handling 198 Media scheduling 247
Transportation 199
Supply chain technologies 200
Sustainable supply chain management 200

vi Contents
Sales promotion 247
The objectives of sales promotion 248
Tools for consumer sales promotion 248
PART 4
Public relations 251 THE WORLD
Major PR tools 252
Managing unfavourable publicity 254 OF MARKETING 291
Personal selling 254
Relationship selling 255 14 Global marketing 292
Selling in the technology age 256
Customer relationship management (CRM) and The impact of global marketing 292
personal selling 257 Developing a global vision 293
Leveraging customer information 259 Importance of global marketing 294
Social media 260 The external environment 294
Types of media 261 Culture 294
Social behaviour of consumers 262 Economic and technological development 296
Identifying social media objectives 263 Political structure 298
Evaluation and measurement of social media 264 Demographic make-up 300
Social media tools 265 Natural resources 301
Mobile technology 265
The changing world of social media 268 Global marketing by an organisation 301
Exporting 301
Licensing 302
13 Pricing 269 Contract manufacturing 302
Joint venture 302
The importance of price 269 Direct foreign investment 302
What is price? 269
The importance of price to marketing managers 272 The global marketing mix 303
Product and promotion 303
Pricing objectives 274 Pricing 305
Profit-oriented pricing objectives 275 Place (distribution) 305
Sales-oriented pricing objectives 275
Status-quo pricing objectives 275 Effect of the Internet on global marketing 307
Social media 307
The demand determinant of price 275
The nature of demand 275
How demand and supply establish prices 276 15 Marketing strategy and planning 308
Elasticity of demand 276
Why plan? 308
The cost determinant of price 278 Developing a mission statement and objectives 309
Mark-up pricing 279
Levels of strategy 309
Other determinants of price 279
Stages in the product life cycle 279 Corporate social responsibility 310
The competition 280 Sustainability 311
Distribution strategy 281 Ethical business decision making 312
The electronic environment 281 Marketing strategic planning 313
Promotion strategy 281
Analysis of the marketing situation 316
Demands of large customers 282
Identifying competitive advantage 317
The relationship of price to quality 282
Identifying strategic alternatives 318
How to set a price on a product 283
Developing the marketing plan 322
Establish pricing goals 283
Marketing objectives 323
Estimate demand, costs and profits 284
Establishing marketing mix components for each
Choose a price strategy 284
target market 323
The legality and ethics of price strategy 286
Implementation, evaluation and control processes 324
Unfair trade 286
Price fixing or collusion 286
Price discrimination 286 16 Marketing and new technology 326
Predatory pricing 286
The impact of the changing environment on
Fine-tuning the base price 287
marketing 326
Discounts, allowances, rebates and value pricing 287
Sociocultural environment 327
Value-based pricing 288
Economic environment 328
Geographic pricing 288
Political and legal environment 328
Special pricing tactics 289
Competitive environment 329
Technological environment 329

Contents vii
 The impact of disruptive technologies on Emerging issues affecting marketing 335
marketing practice and strategy 330 Virtual worlds and virtual reality 335
Crowdsourcing 332 Value and co-creation 338
Technology and entrepreneurship 332 Analytics and metrics 338
Operating systems and mobile technology 332 Artificial intelligence (AI) 339
Market research and technology 333 Conclusion 339
The impact of new technologies and media on
business-to-business (B2B), business-to-consumer
(B2C) and peer-to-peer (P2P) markets 334
B2B markets 334 Endnotes 341
B2C markets 334 Index 350
P2P markets 334 Tear-Out Review Cards

viii Contents

CHAPTER OPENING FEATURES
Learning objectives at the
start of each chapter identify
key concepts that will be
covered. Learning objective
icons appear throughout the
chapter to identify where
each objective is discussed.
te less. Related to this
velopment of Recycling
e materials can be left,
Hong Kong residents
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s to use the recycling
troduced the GREEN$
to earn GREEN$ when
deemed in the form of
FEATURES WITHIN CHAPTERS
and environmentally
council probably has in
Important Key terms are marked in bold in the text
ls are actively involved and defined in the margin when they are used for the
you make judgements
e offer the best value in
first time.
eting is not a new area
ave been participating
of your life.
arketing
if you are already a
answer is that even
e marketing exchange
r in this chapter), there
ics that organisations
duct you want, when
want and at the time
his view, we see that
ers aiming to meet the
arketing can be viewed
hings you buy, acquire
d from the perspective Gain
ands you as a customer
real world through the Real world marketing boxes.
ducts and offerings to
er perspective that will
t i ng, t here a re two
xperienced marketing.
believe they know and
se of their experience.
keting, people often
ng and selling. These
s an organisation may
ny other promotional
her general strategies
plied to get a valued
aïve understanding of
ople undervalue what
ganisation, whether it
e iPhone or attempting
ch as by asking people
at you will find many
during your study, but
g
Guide to the text
As you read this text you will find a number of features in
every chapter to enhance your study of marketing
AN OVERVIEW
understand how the theory is applied in the
OF MARKETING
actually have specialised meanings in a marketing
context, so care needs to be taken to develop and use
your marketing vocabulary correctly.
Accordingly, when we look at marketing, there
are many facets and intricacies to be explored. One
of the easiest ways to do this is to look at the various
concepts and theories that we will address in this
text and think about how those concepts and theories
may describe the processes you follow when deciding
whether to buy or adopt the latest product.
The remainder of this chapter will consider some key
concepts: marketing exchange, marketing orientations
and the concepts of customer value and satisfaction.
LO2 Marketing exchange
Exchange is a core function of
exchange
marketing. The concept of exchange
When people give up
is quite simple: you must give up something of value
something of value to get something to receive something
of value that they
of value that you would rather have. would rather have.
Normally, we think of money as the
2
medium of exchange; that is, we ‘give up’ money
(something of value) to ‘get’ goods and services that
are of equal or greater value to us as buyers. But
BK-CLA-MKTG5-220105-Chp01.indd
exchange does not always require money. People may
barter or trade such items as lunches, computer games,
time, effort or behaviours and ways of thinking.
For an exchange to take place, five conditions need
to occur:
Stepan insight
There mustinto how
be at least twomarketing theories relate to the
parties (that is, people
1 or groups of people/organisations)
Step Each party must have something of value that
2 the other party also wants
Each party must be able to communicate with
Step the other party and deliver the goods or services
3 sought by the other party
Step Each party must be free to accept or reject the
4 other’s offer
Step
5
Each party must want to deal with the other party3
Exchange won’t always take place even if these
conditions exist – however, all five conditions must
exist for an exchange to be possible. For example,
suppose you place an advertisement on http://
carsales.com.au stating that your used car is for sale
at a certain price. Several people may contact you to
ask about the car; some may test-drive it; and one or
1
andwehelp
In this chapter, introduceyou
the idea of marketing
and explain how the study of marketing often covers a
real world.
wider scope than people realise. We focus on the core
principle of marketing – the exchange of value – and
reflect on different orientations that have been used in
the development of marketing practice. We also discuss
why the study of marketing will help you in your studies
and your career.
LO1 What is marketing?
What does the term marketing mean to you? Many
people think marketing is the same as personal
Learning Objectives selling. Others believe it is the same as
personal selling and advertising. Still
LO1 Define marketing. others believe that it has something
LO2 Explain the marketing to do with making products available
exchange conditions in stores, ar ranging displays and
and their influence on
What is marketing?
maintaining inventories of products
marketing. for future sales. Marketing includes all
these activities and more.
LO3 Describe the five
Marketing has two facets. First, it can
competing marketing
be considered a philosophy, an attitude, a
management orientations. perspective or a management orientation that
LO4 Discuss ways management stresses customer satisfaction. (These views
orientations are applied in an will be discussed further in this chapter.) Second,
organisation. marketing can also be an organisational process
used to apply the philosophy, attitude, perspective or
LO5 Identify reasons for studying marketing.
management orientation.
Australian and American marketing associations’
definitions encompass both perspectives. The
American Marketing Association suggests that
marketing is ‘the activity, set of
institutions, and processes for
marketing
‘[T]he activity, set
creat i ng, c o m m u n i c a t i n g , of institutions,
del ive r i ng a nd e xc ha ng i ng and processes
offerings that have value for communicating,
for creating,
customers, clients, partners and delivering and
exchanging offerings
society at large’.1 The ‘activity’ that have value for
Examine how theoretical concepts have been used
a nd ‘processes’ i nclude t he customers, clients,
planning and execution of the partners and society
in practice through the Marketing in practice
fol low i ng concepts: pr ici ng
at large’.
(price), promotion and distribution (place) of ideas,
boxes.
goods and services (i.e. product) to create exchanges
that add value to the customer while achieving
organisational goals.
Marketing entails processes that focus on
delivering value and benefits to customers, not
just selling goods, services and ideas. It uses
communication, distribution and pricing strategies
2 03/08/22 1:05 PM
Explore the real-world ethical issues faced by marketers
in the Ethical marketing boxes throughout the chapters.
Guide to the text ix
 END-OF-BOOK FEATURES

Chapter tear-out cards

found at the back of the book
provide a portable study tool,
summarising each chapter
REVIEW 1 AN OVERVIEW OF MARKETING

LEARNING OBJECTIVES
for class preparation and
LO1 Define marketing.
revision. Key Terms
The ultimate goal of all marketing activity is to facilitate mutually satisfying
marketing societal marketing exchange of value between parties. The activities of marketing include
‘[T]he activity, set orientation the conception, pricing, promotion and distribution of ideas, goods and
of institutions and The idea that an services.
processes for creating, organisation exists not
communicating, only to satisfy customer Creating
delivering and needs and wants, value
exchanging offerings and organisational Customer value
that have value for objectives, but also to and beneficial
customers, clients, preserve or enhance relationships
partners and society an individual’s and
at large’. society’s long-term Product Place
best interests.
exchange
When people give up co-created value
something of value orientation Exchange
in order to receive The orientation where A B
something of value that customers are part
they would rather have. of the value creation
in use and at the
production orientation exchange. Price Promotion
A marketing philosophy Delivering Communicating
that focuses on the co-creation of value value value
internal capabilities A concept of the source
of an organisation, of value that suggests
rather than on the value is created by
marketplace’s needs customers using
and wants. the resources of a
company, as opposed LO2 Explain the marketing exchange conditions and their
sales orientation to value being inherent influence on marketing.
A marketing philosophy to the product.
that assumes that Marketing exchange is the cornerstone of any marketing activity.
people will buy more competitive advantage To understand marketing exchange is to understand the process
goods and services The idea that of exchanging things of value, whether they are money or goods
if aggressive sales a product’s and services. An exchange has five conditions:
techniques are used characteristics can
and that high sales solve a set of customer ●● There must be at least two parties.
result in high profits. problems better than ●● Each party has something that might be of value to the other party.
any competitor’s ●● Each party is capable of communication and delivery.
market orientation product.
A marketing philosophy ●● Each party is free to accept or reject the exchange offer.
that assumes that a customer value ●● Each party believes it is appropriate or desirable to deal with the
sale depends on a The ratio of benefits to
customer’s decision to
other party.
the sacrifice necessary
purchase a product. to obtain those Even if all five conditions occur, an exchange might not transpire.
benefits. People engage in marketing whether or not an exchange happens.
marketing concept
The idea that the customer satisfaction LO3 Describe the five competing marketing management
social and economic The feeling that orientations.
justification for an a product has
organisation’s existence The five business orientations are:
met or exceeded
is the satisfaction the customer’s 1 Production orientation: focuses on the internal capabilities of
of customer wants expectations. an organisation.
and needs while
meeting organisational 2 Sales orientation: focuses on aggressive sales techniques.
relationship marketing
objectives. A strategy that focuses 3 Market orientation: focuses on consumer decision-making.
on keeping and 4 Societal marketing orientation: where the focus is on meeting the
improving long-term needs, wants and objectives of customers, and organisational
partnerships with
customers.
objectives, while meeting individuals’ and society’s long-term
best interests.
5 Co-created value orientation: recognises that value is created by the
customer by combining the new product with what the customer
already has available.

BK-CLA-MKTG5-220105-Review_Card.indd 1 15/09/22 10:34 AM

x Guide to the text

 Guide to the online resources
FOR THE INSTRUCTOR

Cengage is pleased to provide you with a selection of resources

that will help you to prepare your lectures and assessments,
when you choose this textbook for your course.
Log in or request an account to access instructor resources
at au.cengage.com/instructor/account for Australia
or nz.cengage.com/instructor/account for New Zealand.

MINDTAP
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MindTap for MKTG5 is full of innovative resources to support critical thinking, and help your students move from
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MindTap is a premium purchasable eLearning tool. Contact your
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INSTRUCTOR’S MANUAL
The Instructor’s Manual includes:
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for group work Marketing questions in the text
• Review questions • Additional case studies for use in class

COGNERO TEST BANK

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Guide to the online resources xi

 ARTWORK FROM THE TEXT
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FOR THE STUDENT

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xii Guide to the online resources

 PART ON E

AN INTRODUCTION
TO MARKETING

1 An overview of marketing

Ethics and the marketing

2
environment
 1 In this chapter, we introduce the idea of marketing

AN OVERVIEW and explain how the study of marketing often covers a

wider scope than people realise. We focus on the core

OF MARKETING principle of marketing – the exchange of value – and

reflect on different orientations that have been used in
the development of marketing practice. We also discuss
why the study of marketing will help you in your studies
and your career.

LO1 What is marketing?

What does the term marketing mean to you? Many
people think marketing is the same as personal
Learning Objectives selling. Others believe it is the same as
personal selling and advertising. Still
LO1 Define marketing. others believe that it has something
LO2 Explain the marketing to do with making products available
exchange conditions in stores, arranging displays and
What is marketing?
and their influence on maintaining inventories of products
marketing. for future sales. Marketing includes all
these activities and more.
LO3 Describe the five
Marketing has two facets. First, it can
competing marketing
be considered a philosophy, an attitude, a
management orientations. perspective or a management orientation that
LO4 Discuss ways management stresses customer satisfaction. (These views
orientations are applied in an will be discussed further in this chapter.) Second,
organisation. marketing can also be an organisational process
used to apply the philosophy, attitude, perspective or
LO5 Identify reasons for studying marketing.
management orientation.
Australian and American marketing associations’
definitions encompass both perspectives. The
American Marketing Association suggests that
marketing is ‘the activity, set of
marketing
institutions, and processes for
‘[T]he activity, set
creat i ng, c o m m u n i c a t i n g , of institutions,
del ive r i ng a nd e xc ha ng i ng and processes
for creating,
offerings that have value for communicating,
customers, clients, partners and delivering and
exchanging offerings
society at large’.1 The ‘activity’ that have value for
a nd ‘processes’ i nclude t he customers, clients,
planning and execution of the partners and society
at large’.
fol low i ng concepts: pr ici ng
(price), promotion and distribution (place) of ideas,
goods and services (i.e. product) to create exchanges
that add value to the customer while achieving
organisational goals.
Marketing entails processes that focus on
delivering value and benefits to customers, not
just selling goods, services and ideas. It uses
communication, distribution and pricing strategies

2
to provide customers and other stakeholders with
the goods, services, ideas, values and benefits they
desire, when and where they want them. It involves
building long-term, mutually rewarding relationships
that benefit all parties concerned. Marketing also
entails an understanding that organisations have
many connected stakeholder ‘partners’, including
employees, suppliers, stockholders, distributors
and others.
Marketing also helps find customer-focused
solutions to new and emerging problems. Consider
the following ‘Real World Marketing’ box to learn
how restaurateurs used marketing principles to adapt
during the COVID-19 pandemic.
A social and evolving science
Marketing is a social science, meaning that things
are not always as clear-cut as in fields of science
such as chemistry. Because it is a relatively new
area of business study, marketing is likely to evolve
as academics and practitioners understand more
about it.
You will find that you have an innate understanding
of marketing, one developed through your everyday
experiences. For example, suppose that one morning
you decide to have some cereal for breakfast. The
cereal you select will be a product you have chosen
from various other offerings in the marketplace. You
have decided that this product provides the value you
require from cereal. Factors you may consider include
your available time, the food’s quality and taste, and
its ability to sustain you until your next meal.
Another example is social marketing programs. In
Hong Kong, as in most countries, there is a problem
with the amount of household waste. The government
has established a promotional campaign encouraging

Real World Marketing

DISHING UP FINE DINING AT HOME

The hospitality industry has taken a hit in many
countries as COVID-19 restrictions have forced
fine-dining restaurants to close their doors or limit
customer numbers. While physical doors were
closing, restaurant owners were opening the door

Shutterstock.com/Aleksandrs Muiznieks
to new and innovative ways of delivering the fine
dining experience while upholding the quality of
their service offering.
Sydney fine-dining restaurant Sixpenny, owned
by three-hat chef Dan Puskas, turned its dining
room into a general store, offering everything from
house-made passatas and fluffy Japanese
cheesecakes to four-course take-home set menus.
In the UK, acclaimed chef Adam Handling, owner of multiple award-winning restaurants including Frog,
turned to creating menus that could be finished and enjoyed at home. Through business venture Hame,
Adam now delivers his signature dishes in the form of make-at-home meal kits. All dishes require varying
levels of at-home preparation and come with recipe cards featuring QR codes that link to a step-by-step
video of Adam finishing and plating the dishes. A Hame menu for two can cost upward of $260 and may
include courses such as Lobster Wagyu and Champagne truffles. Customers are encouraged to share
their Hame dishes online using the hashtag #Hamebyah. While other meal kit providers such as Hello
Fresh and Marley Spoon cater for the value-conscious consumer, these emerging fine-dining meal kits
target those seeking the taste of a restaurant experience in the comfort of home.
Whether through live-streamed cooking demonstrations on Instagram, online cooking class
subscriptions or cook-at-home recipe cards and meal kits, fine dining restaurants are leveraging content
creation and new distribution channels to support their core product offering. Furthermore, as customers
are provided with more opportunities to bring fine dining experiences into their own homes, they are
concurrently becoming co-creators in the dining experience, and then sharing these experiences online.
Source: Rigby, M, 2020, ‘Hats off to top Sydney chefs and providores changing with the new world order’, Good Food, 20 April,
https://www.goodfood.com.au/eat-out/news/hats-off-to-top-sydney-chefs-and-providores-changing-with-the-new-world-order-20200415-
h1ndm9; Adam Handling, 2022, https://www.adamhandling.co.uk/hame/

CHAPTER 1 An overview of marketing 3

 residents to use less and waste less. Related to this
promotional strategy is the development of Recycling
Stations, sites where recyclable materials can be left,
and a centre to educate the Hong Kong residents
about sustainable choices and waste minimisation.
To further encourage residents to use the recycling
facilities, the government introduced the GREEN$
Smart Card, allowing residents to earn GREEN$ when
they recycle, which can be redeemed in the form of
gifts such as recycling bags and environmentally
friendly products. 2 Your local council probably has in
place similar schemes.
As you can see, all individuals are actively involved
in marketing. As a consumer, you make judgements
about products that you believe offer the best value in
each situation. As such, marketing is not a new area
of study to you because you have been participating
in marketing activity for most of your life.
Participating in marketing
Why, then, study marketing if you are already a
marketing participant? The answer is that even
though you participate in the marketing exchange
(something we will discuss later in this chapter), there
are a lot of strategies and tactics that organisations
use to ensure you get the product you want, when
you want it, in the size you want and at the time
and place you want it. With this view, we see that
producers are resource providers aiming to meet the
customer’s expectations. So, marketing can be viewed
as a personal reflection on the things you buy, acquire
or are given; or it can be viewed from the perspective
of how an organisation understands you as a customer
and develops and refines products and offerings to
meet your needs. It is this latter perspective that will
be the focus of this text.
In t he study of ma rket i ng, t here a re two
downsides to already having experienced marketing.
The first is that many people believe they know and
understand marketing because of their experience.
W hen asked to define marketing, people often
respond that it is advertising and selling. These
are two promotional activities an organisation may
use. However, there are many other promotional
strategies and tactics, and other general strategies
and tactics that can be applied to get a valued
product to the market. This naïve understanding of
marketing can mean that people undervalue what
marketing can bring to an organisation, whether it
is selling a product such as the iPhone or attempting
to change social behaviour, such as by asking people
to reduce their home waste.
The other downside is that you will find many
terms that may seem familiar during your study, but
4 PART ONE An introduction to marketing
actually have specialised meanings in a marketing
context, so care needs to be taken to develop and use
your marketing vocabulary correctly.
Accordingly, when we look at marketing, there
are many facets and intricacies to be explored. One
of the easiest ways to do this is to look at the various
concepts and theories that we will address in this
text and think about how those concepts and theories
may describe the processes you follow when deciding
whether to buy or adopt the latest product.
The remainder of this chapter will consider some key
concepts: marketing exchange, marketing orientations
and the concepts of customer value and satisfaction.
LO2 Marketing exchange
Exchange is a core function of
exchange
marketing. The concept of exchange
When people give up
is quite simple: you must give up something of value
something of value to get something to receive something
of value that they
of value that you would rather have. would rather have.
Normally, we think of money as the
medium of exchange; that is, we ‘give up’ money
(something of value) to ‘get’ goods and services that
are of equal or greater value to us as buyers. But
exchange does not always require money. People may
barter or trade such items as lunches, computer games,
time, effort or behaviours and ways of thinking.
For an exchange to take place, five conditions need
to occur:
Step There must be at least two parties (that is, people
1 or groups of people/organisations)
Step Each party must have something of value that
2 the other party also wants
Each party must be able to communicate with
Step the other party and deliver the goods or services
3 sought by the other party
Step Each party must be free to accept or reject the
4 other’s offer
Step
5
Each party must want to deal with the other party3
Exchange won’t always take place even if these
conditions exist – however, all five conditions must
exist for an exchange to be possible. For example,
suppose you place an advertisement on http://
carsales.com.au stating that your used car is for sale
at a certain price. Several people may contact you to
ask about the car; some may test-drive it; and one or
more may even make you an offer. Some people might
Exhibit 1.1 F
 IVE MARKETING
even offer you a like-value car, or another item, in
trade. All five conditions that are necessary for an MANAGEMENT
exchange to occur are present in this scenario. But PHILOSOPHIES
unless you reach an agreement with a buyer and
actually sell the car, an exchange will not take place. Orientation Focus

Notice that marketing activities can occur even Production

What can we
if an exchange does not result. In this example, you
make or do best?

would have engaged in some marketing activities by

uploading the car’s details onto the website, even if Sales
How can we sell
more aggressively?
no one bought it.
Now that you have a basic understanding of
marketing exchange, it is important to understand Market
What do customers
want and need?
how an organisation’s marketing orientations will
influence the way it deals with you as a customer. What do customers
Societal want and need, and
how can we benefit society?
LO3 Marketing
management
What resources does the
Co-created product present to the customer
so that they can create value?

philosophies
An organisation’s marketing management philosophy
influences its behaviour and characteristics, and
how it interacts with its customers. Organisations
may adopt any of several marketing management
philosophies, but we will focus on the major
orientations in the following sections (see also
Exhibit 1.1). These orientations are:
1 A production orientation. The focus is on an
organisation’s internal capabilities to develop
and produce better and cheaper products.
2 A sales orientation. An organisation focuses on
aggressive sales techniques to encourage high
sales volume and, it is hoped, high profits.
3 A market orientation. An organisation focuses
on satisfying customers’ needs and wants as
well as organisational goals, thereby developing
the social and economic objectives of an
organisation.
4 A societal marketing orientation is a derivative
of the marketing orientation. It focuses on
customers’ wants and needs, and embraces
the notion of preserving, or improving, an
individual’s or society’s long-term best interest.
5 A co-created value orientation is the recognition
that value is not given to the customer when they
buy a product. Value is created by the customer
by combining the new product with what the
customer already has available.
Production orientation
A production orientation is an
production
orga n isat iona l ph i losophy t hat orientation
focuses on an organisation’s internal A marketing
capabilities, rather than on the philosophy that
focuses on an
marketplace’s needs and wants. A organisation’s
production orientation means that internal capabilities,
management assesses its resources
rather than on the
marketplace’s
and asks these questions: needs and wants.
•• ‘What can we do best?’
•• ‘What can our engineers design?’
•• ‘What is easy to produce, given our equipment?’
In the case of a service organisation, managers ask:
•• ‘What services are most convenient for the
organisation to offer?’
•• ‘Where do our talents lie?’
Some organisations have the belief that if they
produce something, the market will want to buy it.
There is nothing wrong with assessing an
organisation’s capabilities; in fact, such assessments
are major considerations in strategic marketing
planning (as discussed later in this chapter). The
only downfall of the production orientation is that it
doesn’t consider whether the products an organisation
efficiently produces also meet the marketplace needs.
Sometimes what an organisation can best produce
is just what the market wants. Apple has a history
of production orientation – creating computers,
operating systems and other gadgetry ‘because it can’,

CHAPTER 1 An overview of marketing 5

 hoping to sell the resulting products. Some items have
found a waiting market (early computers, the iPod Consumers may be left questioning the
and iPhone). Other Apple products, though, simply motivation behind Apple’s decision to remove
flopped. An example is the Newton Message Pad, one the headphone jack. Do you think this
of the first versions of a personal digital assistant, represents the company embracing an
which featured handwriting recognition technology: increasingly wireless future, or forcing one
an innovative feature in technological terms, but upon customers for its own gain?
one that, from the perspective of the market, simply
replicated the functionality of a paper notebook and
A s w it h t he product ion or ientat ion, t he
pen for a considerably higher price. 4
f u nda menta l issue fac i ng a sa les- or iented
organisation is that it risks a lack of understanding
Sales orientation of the market’s needs and wants. These organisations
A sales orientation is based on the belief that people find that, despite the quality of their sales teams,
will buy more products if aggressive sales techniques are they cannot convince people to buy products they
sales orientation used, and that high sales result in high don’t need or want, for example, life insurance and
A marketing profits. Not only are sales to the ultimate other products presented in early-morning and late-
philosophy that buyer emphasised, but intermediaries evening television infomercials. Some sales-oriented
assumes that people
will buy more are encouraged to push manufacturers’ organisations simply lack the understanding of what
goods and services products more aggressively. To sales- is important to their customers.
if aggressive sales
techniques are used
oriented organisations, marketing
and that high sales means selling things and collecting Market orientation
result in high profits. money (see the following ‘Marketing in
Organisations that have a market market orientation
Practice’ box).
orientation focus on the needs of A marketing
the customer that contribute to their philosophy that
Marketing in Practice assumes that a
decision to purchase a product. This sale depends on a
approach recognises that a sale does customer’s decision
The iPhone goes wireless at a cost to to purchase a
not depend on an aggressive sales product.
consumers
team, but rather on a customer’s
One of the dangers of a production or sales decision to purchase a product. What is of primary
orientation is failing to understand what is importance is that an organisation is defined not by
important to the organisation’s customers.
what the business thinks it produces, but by what
When Apple was developing the iPhone 7, it
the customer thinks they are buying – that is, the
decided to remove the headphone jack, a
perceived value.
design decision that would free up internal
space for other technologies. The decision
played an integral role in making the iPhone 7
Ethical Marketing
the first water-resistant iPhone, with its entire
enclosure re-engineered. While the water-
resistant feature may have benefited Apple
USING PRICE TO SELL OLD STOCK
When an organisation adopts a sales
iPhone 7 users, it came at a cost. Apple iPhone 7
orientation, the price is often a key component
users needed a headphone jack adaptor if they
of the sale. As we will discover later in this text,
wanted to use their existing earphones. The
the consumer often uses price as an indicator of
iPhone 7 came with a single adaptor; this
quality when they are unsure or unfamiliar with
meant that consumers could no longer listen
the product. In a marketing orientation the
to music while charging their phone. The
organisation looks to satisfy the needs and
solution to this problem involved purchasing
wants of the consumer. In the example below
an additional dual adaptor also sold at an extra
the wholesaler/retailer has unused stock with a
cost by Apple. Alternatively, customers had the
looming expiry date. How they choose to deal
option to purchase wireless headphones.
with the matter depends on their orientation.
Strategically, Apple timed the iPhone 7 release
A sales orientation philosophy will look to price,
with the release of its Apple AirPods, the
while a marketing orientation will look to value
company’s latest innovation in wireless
as to the key for the quick sale of the product.
headphone technology.

6 PART ONE An introduction to marketing

 During the COVID-19 pandemic many food
retail outlets suffered slow or low sales, and
some businesses needed to shift operation
from instore to takeaway, or close. The
outcome of this change in the marketplace
meant that wholesalers, who supply these
businesses, were holding more stock. It is
common for wholesalers to use a six-month
lead time when ordering stock from
manufacturers. With slowing demand from
their customers, and previously ordered and
paid-for stock arriving, wholesalers needed to
move old stock to have space for the arriving
stock and to move stock before it reached its
used-by date.
Wholesalers’ first response was to offer
sales deals such as buy 10 cases and get one
free, but the take-up was slow and did not
resolve the problem. Next, they went to hard
selling but with a greatly reduced price. In
some cases, they had to sell below cost price
to recover some sales before the stock would
have to be destroyed.
Question:
Do you think it is ethical to sell a product with a
limited life at a very low price? Explain your
answer.
Organisations that are market-oriented adopt and
implement the marketing concept, which is the idea
t hat t he soc ia l a nd econom ic
marketing concept
justification for an organisation’s
The idea that the
social and economic ex istence is the satisfaction of
justification for customer wants and needs while
an organisation’s
existence is the
meeting organisational objectives.
satisfaction of This means these organisations
customer wants and recognise that there is no reason why
needs while meeting
organisational customers should buy their product
objectives. offerings over those of another, unless
they are receiving a perceived better
value from the exchange.
The marketing concept includes:
• focusing on customer wants and needs so that
the organisation can distinguish its product(s)
from competitors’ offerings
•• integrating all organisation activities, including
production, to satisfy these wants and needs
•• achieving an organisation’s long-term goals by
satisfying customer wants and needs legally and
responsibly.
Achieving a marketing orientation involves
obtaining information about customers, competitors,
Shutterstock.com/Ben Wehrman
Tesla vehicles, that are both futuristic and eco-friendly,
are growing in popularity in Australia. These cars appeal
to customers who desire a cleaner and more economical
luxury car.
and markets; examining the information from a total
business perspective; determining how to deliver
superior customer value; and implementing actions to
provide value to customers. It also entails establishing
and maintaining mutually rewarding relationships
with customers.
Competitor analysis
Understa nd i ng you r compet it ive a rena a nd
competitors’ strengths and weaknesses is a critical
component of market orientation. This understanding
includes assessing what existing or potential
competitors might be intending to do tomorrow as well
as what they are doing today.
BlackBerry (formerly Research in Motion) failed to
realise it was competing against computer companies
as well as telecommunications companies, and its
wireless handsets were quickly eclipsed by offerings
from Google, Samsung and Apple. Had BlackBerry been
a market-oriented company, its management might
have better understood the changes taking place in
the market, seen a competitive threat and developed
strategies to counter the threat. Instead, after a five-
year slump, it re-entered the market with the wholly
redesigned BlackBerry 10 operating system, which
launched alongside two new handsets in 2013. These
strategies did not work, and the company underwent
a slow decline in market share. New life was brought
to the company with its adoption of Android and iOS
operating systems and newly designed devices –
however, the decision to stop production came in
2017. In 2021, there were rumours that Blackberry
will return with a 5G smartphone. Time will tell if
this relaunch will be a success. 5 By contrast, Tesla
recognised the need for an electric vehicle, but more
importantly an electric vehicle that complemented
CHAPTER 1 An overview of marketing 7
 existing needs and aspirations when buying a new car. In order to understand this orientation we
However, they also offered additional value items such first need to unpack the concept of value. The
as the over air software updates, automised driving exchange of value is the cornerstone of marketing.
and, of course, no CO2 emissions. But what exactly is value, and how is it explained?
Unfortunately, a precise definition of marketing
Societal marketing orientation value does not exist. Instead, there are several themes
related to the term; this led one group of researchers to
A market-oriented organisation may choose not to
conclude the term has a ‘fuzzy definitional problem’.7
deliver the benefits sought by customers on the grounds
In spite of this, all those who have attempted to
that these benefits may not be good for individuals
define value agree on the premise that some form of
or society. This philosophy is called
assessment of benefits against sacrifices occurs in
societal marketing a societal marketing orientation.
orientation the creation of value. 8
Organisations adopting this philosophy
The idea that an Today, value creation is seen as the process through
believe that an organisation exists to
organisation exists
which a customer is made better off in some respect, or
not only to satisfy satisfy customer needs and wants and
customer needs their wellbeing is increased, as a result of consuming
meet organisational objectives – in
and wants, and the good or service they purchase. 9 Thus, value
organisational this respect, it is the same as a market
creation emerges when a customer uses or possesses
objectives, but orientation – but also to preserve or
also to preserve resources (goods) or achieves particular mental states
or enhance an enhance individuals’ and society’s
(services). This is known as value-in-use. Because this
individual’s and long-term best interests.
society’s long-term process will be unique for everyone, the process of
best interests. For example, organisations that
value creation will differ for every individual, and this
adopt this orientation often strive
makes it challenging for marketers to fully utilise this
to help less privileged communities
concept. So why is it important?
receive fair and equitable payment for their goods
Customers have an increasing abundance of
and labour by dealing with other like-minded
choice in most of their purchases, and this creates
organisations.
a buyer’s market of high customer expectations
Although the societal marketing concept has been
and limited loyalty. If a brand cannot accurately
discussed for more than 30 years, it did not receive
create, communicate and deliver potential value to
widespread support until the early 2000s. Concerns
customers, it will quickly be rejected – or, worse, not
such as climate change, the depletion of the ozone
even considered for purchase. So, it is increasingly
layer, fuel shortages, pollution and health issues
important for brands to understand what customer
have caused consumers and legislators to become
value is and, more importantly, what it is not.
more aware of companies’ and consumers’ needs to
Remember from the previous paragraph that customer
adopt measures that conserve resources and cause
value is determined by the customer, and not by the
less damage to the environment. Studies reporting
seller or producer of a good or service. People buy
consumers’ attitudes towards, and intentions
things because they like them or need them, not
to buy, environmentally friendly products show
because they exist or because the company that sells
widely varying results. The 2020 pandemic made all
them likes them.
consumers change their behaviour, but researchers
When we think about value creation this way,
speculated on if the changes would stick. A study
it becomes clear that the design, development and
from October 2020 to March 2021 found that
manufacturing of resources and back-office processes
consumers are more digital, more health conscious,
are not part of the value-creation process for customers
more eco-friendly, more price sensitive and want to
(remember, value creation comes from the use or
buy more local. 6
experience of the resource, not from its production).
While these processes are important to enable a
Co-created value orientation customer to create or perceive value, they are not part of
An organisation adopting a co-created value the value-creation process for the customer. We can say
co-created value orientation can adopt the philosophies that these activities provide real value to the company
orientation of market and societal marketing and potential value to the customer, since the customer
The orientation orientations but differs in that can only achieve true value creation through their use
where customers
are part of the value these organisations see value being of these resources.
creation in use and co-created rather than a component of
at the exchange.
the product provided by the producer.

8 PART ONE An introduction to marketing

 Exhibit 1.2 A
 DIAGRAMMATIC EXAMPLE OF HOW TO THINK ABOUT THE CREATION
OF VALUE

Provider sphere Customer sphere

Value-in-use
accumulating
over time
(process)
Design Development Manufacturing Delivery Usage
Back office Front office

Creation of Value-in-exchange Creation of

value-in-exchange as a singular value-in-use
entity in time
(outcome)

Source: Gronroos, C, 2011, ‘Value co-creation in service logic: A critical analysis’, Marketing Theory, 11(3), 279–301: 283; permission conveyed through Copyright Clearance Center, Inc.

Exhibit 1.2 shows this diagrammatically. When the the strength of the company’s relationship with its
customer uses or consumes the resources on offer by customers all over the world.10
the organisation, they can experience value creation The co-creation theory, like most marketing theories,
in use. This process is considered to be in the customer is still developing, but it provides an understanding of the
sphere of influence. You can see in the exhibit that exchange of value that was not possible from previous
the provider sphere (or back-office processes) is where theoretical perspectives, and can give customers and
potential value is created. enterprises a better understanding of how to manage the
The only exception to this rule is when the marketing interface at the point of exchange.
customer is intrinsically involved in these production From this review, you should appreciate that not
activities. In these situations, customers play a role in all organisations are in the business of meeting and
both the provider and the customer spheres of satisfying customers’ needs and wants. Furthermore,
influence. This process is known as the orientation that organisations adopt will influence
co-creation of value co-creation of value. In this case, how they react to the customer and their needs. In
A concept of the value creation is considered to be an the next section, we will look at the impact of an
source of value
that suggests all-encompassing process. organisation’s orientation.
value is created by One company t hat has f ully
customers using
embraced this concept of co-creation
the resources of Who’s in charge?
a company, as of value is The LEGO Group, makers
opposed to value of LEGO-bra nd toys. LEGO has The Internet and the widespread use of social media
being inherent to the
product. recognised that its customers are have accelerated the shift in power from producers and
the greatest resource for innovation, retailers to consumers and business users. This change
and so encourages its online communities to submit began when customers started using catalogues,
ideas for new LEGO projects. If a project gets 10 000 electronics and the Internet to access information,
votes, LEGO will review the idea and create new sets goods and services. Customers use their widespread
based on it, which are then offered worldwide to its knowledge to ‘shop smarter’, leading executives such
market. In return for the idea, the creator is involved as former Procter & Gamble CEO AG Lafley to conclude
in final approval of the design and production of the that ‘the customer is boss’.11
sets, as well as receiving a royalty on sales and being As the use of the Internet and mobile devices
recognised for their input on the product’s packaging becomes increasingly pervasive, the shift of control
and marketing. This approach has not only helped from producer to customer will continue to grow.
LEGO grow its market appeal but has also increased This means that organisations must create strategy

CHAPTER 1 An overview of marketing 9

 from the outset by offering distinct and compelling
resources that are complementary to the customer
value.12 This can be accomplished only by carefully
studying customers and using deep market insights to
inform and guide companies’ outside-in view,13 which
is why most successful businesses today tend to adopt
a market or social marketing orientation.
LO4 How organisations
apply the different
orientations
As we saw in Exhibit 1.1 earlier in the chapter, each
management orientation has a different focus.
The sales and market orientations are those most
commonly adopted by organisations. The customer’s
experience, in terms of the attention they receive and
the delivery of the product, will vary depending on the
orientation adopted by an organisation.
This section reviews several key themes that
distinguish one organisation from another based on
their adopted orientations.
The organisation’s focus
E mployees i n produc t ion- or sa les- or ie nted
organisations tend to be ‘inward-looking’, focusing
on producing or selling what an organisation
makes, rather than thinking about what the market
wants. Historically, companies have successfully
gained competitive advantages by focusing on new
technology, innovation and economies of scale.
These allowed companies to prosper by simply
focusing their effor ts internally on what they
could do better. Today, however, many successful
organisations find themselves operating in markets
where the product is already highly developed,
with little scope for significant improvement,
competitive
so they must instead derive their
advantage competitive adva ntage from an
The idea that ex ter na l, ma rket-or iented focus.
a product’s
characteristics
In the Australian skincare market,
can solve a set of Sukin are loved for their eco-friendly
customer problems sta nce a nd a f fordabi l it y, wh i le
better than any
competitor’s Go-To skincare products have gained
product. success because of the company’s
si mpl ist ic a nd f u n approach to
product. A market orientation, or a derivative such as
societal orientation, helps companies such as Sukin
10 PART ONE An introduction to marketing
and Go-To outperform their competitors in such
an environment. Today, key issues in developing
competitive advantage include co-creating customer
value, maintain ing customer satisfaction and
building long-term relationships. The co-creation
focus means the organisation understands its
product offering does not give value to the customer.
Rather, the customer uses the product to complement
their own resources to develop a product that has
individual value to them. To be successful, the
organisation must understand its customers and
their needs and wants, and appreciate its product
complements the void the customer has and that the
product completes it.
The organisation’s
understanding of customer
value
Production- or sales-oriented organisations equate
customer value with the customer being satisfied
with what they get, rather than getting what they
want. For example, Henry Ford is often quoted as
having once said, ‘Any customer can have a car
painted any colour that he wants, so long as it is
black.’ He was focusing on providing a cheap and
reliable means of transport. Customers had to accept
that variety had to be sacrificed for a cheap car.
For the other orientations, customer value is
traditionally seen as the ratio of customer value
benefits that the customer receives The ratio of benefits to
versus the sacrifices they must make sacrifice of resources
necessary to obtain
to obtain those benefits. The customer those benefits.
determines the value of both the
benefits and sacrifices. Customer value is not merely
a matter of high quality. A high-quality product that is
available only at a high price may not be perceived as
good value; nor will bare-bones services or low-quality
goods selling for a low price. Instead, customers value
goods and services that are of the quality they expect,
and are sold at prices they are willing to pay.
Marketing value can be used to sell a $200 000
luxury car as well as a $5 pizza. To understand
marketing value, the criteria of existence, type,
direction and scale must be considered for any
given targeted market. Let’s consider some of the
key tenets of customer value in the ‘Real World
Marketing’ box.
 Real World Marketing

KEY TENETS OF CUSTOMER VALUE

Marketers interested in customer value ensure they
do the following:
1 Offer products that perform. Product
performance is the bare-minimum requirement.
After grappling with the problems associated

Shutterstock.com/Heather Shimmin
with its Vista operating system, Microsoft listened
to its customers and made drastic changes to
Windows 7, which received greatly improved
reviews. Microsoft’s subsequent release,
Windows 8, had some good features but was not
widely adopted by the public. In 2015, the release
of Windows 10 provided a platform for many
users across a range of devices to come under one operating system. In 2021 Windows 11 was
released, but many PC users are finding their existing hardware is not capable of running the new
operating system. This change in the minimum requirements will either see many upset users or a
long trail of support for Windows 10.
2 Earn trust. A stable base of loyal customers can help an organisation grow and prosper. To attract
customers, eyewear company Specsavers offers two pairs of glasses for one low price and provides special
discounts for kids, students and people over 60. Moreover, the company offers virtual glasses ‘try-ons’,
simple returns and encourages its staff members to do whatever it takes to ensure a smooth and stress-
free customer experience. Specsavers’ focus on earning customers’ trust is evident.
3 Avoid unrealistic pricing. E-marketers are leveraging Internet technology to redefine how prices are
set and negotiated. With lower costs, e-marketers can often offer lower prices than their brick-and-
mortar counterparts. As mobile device usage grows, brick-and-mortar stores are facing customers
who compare prices using their devices and purchase items for less online while standing in the store.
4 Give the buyer facts. Today’s sophisticated consumer wants informative advertising and knowledgeable
salespeople. It is becoming tough for business marketers to differentiate themselves from competitors.
Rather than trying to sell products, salespeople need to find out what the customer needs, which is
usually a combination of goods, services and thought leadership. In other words, salespeople need to
start with the customer needs and work towards the solution.
5 Offer organisation-wide commitment in service and after-sales support. Eyewear retailer Sunglass Hut is
widely known for its company-wide support system. As part of its ‘Perfect Pair Promise’, customers are
offered a lifetime of free personalised adjustments and custom cleaning services. Customer service
agents at each of Sunglass Hut’s 192 locations in Australia are knowledgeable and eager to assist
customers before, during and after a sale, and strive to make the return process as stress-free as
possible. Sunglass Hut also offers ‘Oops Coverage’, a 50 per cent replacement discount promise. This
attention to customer service is carried through to Sunglass Hut’s online store, as well, with free
delivery on all orders within Australia and New Zealand, and free returns within 90 days of purchase.
However, and wherever they place their orders, customers know that Sunglass Hut will support them
throughout, and long after, the checkout process.
6 Co-creation. Many companies are creating products that allow customers to contribute to creating their
own experience. For example, Vistaprint, a printing organisation that produces marketing materials,
makes form-fitting cases for mobile phones, laptops and other personal devices. Customers can
design their cases by uploading photos or by manipulating art from designers using the ‘design with’
feature at Vistaprint. Either way, customers produce unique covers for their devices.
Sources: Inc., 2010, ‘10 ways to support your best customers’, 3 August, http://www.inc.com/guides/2010/07/10-ways-to-support-your-
bestcustomers.html (accessed 16 April 2012); Sunglass Hut, 2021, ‘We offer more than a great pair of shades’, https://www.sunglasshut.com/au/
trends/Perfect-Pair-PromiseP (accessed 24 Feb 2021); Specsavers, nd., http://www.specsavers.com.au/ (accessed 6 July 2015).

CHAPTER 1 An overview of marketing 11

 The organisation’s attitude to
customer satisfaction
As noted earlier, for production- or sales-oriented
organisations, customer satisfaction is not considered,
since they are focused on producing at the most
efficient price or selling whatever is produced. Other
or ientations recog n ise customer
customer
satisfaction as the feeling that a
satisfaction
The feeling that product has met or exceeded the
a product has customer’s expectations. Keeping
met or exceeded
current customers satisfied is just as
the customer’s
expectations. important as attracting new ones –
and a lot less expensive. Organisations
that have a reputation for delivering high levels of
customer satisfaction do things differently from
their competitors. Top management place importance
on customer satisfaction, and employees in these
organisations understand the link between their
job and satisfied customers. The culture of these
organisations is to focus on delighting customers and
delivering products that meets the needs and wants of
customers, rather than on selling products.
In response, clients tend to become loyal to a
product or brand, or both, which is advantageous for
both the customer and the producer. Skincare and
apparel brands often garner loyalty. Fashion brands
that have a strong following can offer pre-order
options for seasonal lines, often leading to a line
being completely sold-out before it has even finished
being manufactured. Good examples of customer
loyalty also occur with technology products such
as smartphones or laptops, which are very personal
items. Apple buyers will camp outside stores to get the
latest Apple device.
Defining the organisation’s
business
Production- and sales-oriented organisations define
their business (or mission) in terms of goods and
services. Market-oriented organisations define their
business in terms of the resources and benefits their
customers seek. People who spend their money,
time and energy expect to receive benefits, not just
goods and services. This distinction has enormous
implications.
When customers predominantly seek benefits
rather than goods and services, there are three
significant advantages:
1 It ensures that organisations keep focusing on
customers and avoid becoming preoccupied with
goods, services or internal needs.
12 PART ONE An introduction to marketing
2 It encourages innovation and creativity by
reminding people that there are many ways to
satisfy customer wants.
3 It stimulates awareness of changes in customer
desires and preferences so that product offerings
are more likely to remain relevant.
Having a market orientation that focuses on
customers’ wants does not mean offering customers
anything they desire. It is not possible, for example,
to profitably manufacture and market car tyres that
will last for 200 000 kilometres for $25. Furthermore,
customers’ preferences must be mediated by sound,
professional judgement about how to deliver the
benefits they seek.
As one traditional adage suggests, ‘People don’t
know what they want – they only want what they
know.’ This traditional mindset suggests consumers
have a limited set of experiences and are unlikely to
request anything beyond those experiences because
they are not aware of the benefits they may gain from
other potential offerings. For example, before the
Internet, many people thought that shopping for some
types of products was boring and time-consuming but,
because the concept of electronic shopping didn’t yet
exist, they could not express their need for it as an
alternative. However, this thinking goes to the first
tenant of marketing value, which asks: Is the product
valuable to the customer?
Identifying the product’s target
audience
A sales-oriented organisation targets its product
at ‘everybody’ or ‘the average customer’, while a
production-oriented organisation does not target
anyone; it simply produces the most efficient product
for the whole market. A market-oriented organisation
aims at specific groups of people. The fallacy of
developing products directed at the average user is that
relatively few ‘average users’ actually exist. Typically,
populations are characterised by diversity. Because
most potential customers are not ‘average’, they are
unlikely to be attracted to an average product marketed
to the average customer. Consider the market for
shampoo as one simple example. There are shampoos
for oily hair, dry hair and for treating dandruff. Some
shampoos are marketed for curly, fine or treated hair.
There are even special ‘delicate’ shampoos for babies
and ‘fun’ shampoos for children.
Market-oriented organisations recognise different
customer groups with different features or benefits,
for which they may need to develop different goods,
services and promotional appeals. They carefully
analyse the market and divide it into groups of similar

Shutterstock.com/Minerva Studio
When you understand marketing, you can achieve better
value outcomes from the products you buy.
people in terms of selected characteristics. They
then develop marketing programs that will bring
about mutually satisfying exchanges with one
or more of these groups. For example, Redcat
Industries, established in 2000, focuses on wheel
safety products for large vehicles. This simple but
essential product allows heavy vehicle drives the
ability to check the wheels are remaining tight in
the axels with a simple inspection of the wheel hub.14
This product saves time and lives, but also saves
money for the fleet operators.
iStock.com/vkp-australia
Heavy vehicle drivers can inspect wheel security by looking
at the links.
The organisation’s
primary goal
A produc t ion-or iented orga n isat ion ach ieves
profitability by reducing cost, while a sales-oriented
organisation seeks to achieve profitability through
sales volume and tr ying to convince potential
customers to buy, even if the seller knows that the
customer and the product are mismatched. Sales-
oriented organisations place a higher premium
on making a sale than on developing a long-term
relationship with the customer. In contrast, a
marketing-oriented organisation’s ultimate goal
is to make a profit by presenting resources to help
customers co-create value, providing customer
satisfaction and building long-term relationships
with customers. An exception to the profit goal is
non-profit organisations that exist to achieve goals
other than profits, but still want to achieve the goals
of creating customer value, by providing customer
satisfaction and building long-term relationships
with customers. Non-profit organisations can,
and should, adopt a market or societal marketing
orientation and acknowledge the importance of
co-created marketing value.
The sales tools the
organisation uses
A production-oriented organisation will use sales
tools to present their products to the market. Sales-
oriented organisations seek to generate sales volume
through intensive promotional activities, mainly
personal selling advertising. In contrast, market-
oriented organisations recognise that promotional
decisions are one of the basic marketing mix
decisions (all elements of the marketing mix are
discussed later in the text; see, in particular, the
chapters in Part 3). The mix elements are product
decisions, place (or distribution) decisions, promotion
decisions and pricing decisions. A market-oriented
organisation recognises that each of the four
components is important. Furthermore, market-
oriented organisations accept that marketing is not
just the responsibility of the marketing department.
Skills and resources throughout an organisation are
needed to create, communicate and deliver superior
customer service and value elements.
Exhibit 1.3 summarises the key differences
between organisations that take on production, sales,
market, societal or co-created orientations.
CHAPTER 1 An overview of marketing 13
 Exhibit 1.3 C
 OMPARISON OF PRODUCTION-, SALES-, MARKET-, SOCIETAL- AND
CO-CREATED-ORIENTED ORGANISATIONS

Production- Sales-oriented Market-oriented Societal-oriented Co-created-oriented

oriented
The focus of the Tend to be inward-looking, focusing Tend to be outward- Tend to be outward looking, Tend to be outward-
organisation on how to produce or sell more looking, focusing on what focusing on the needs and looking, focusing on what
effectively customers are looking for wants of customers and customers are looking for
society
Perception of Value determined by the organisation Value determined by the Value determined by the Suppliers provide
customer value – the customer is expected to be customer customer and society resources that are
satisfied with the product that is most used by the customer
efficient to produce to complement their
resources for the
development of value
Approach to Not considered – the focus is on The high value placed on The organisation’s focus The high value placed on
customer producing or selling efficiently customers feeling that is on satisfying the needs customers feeling that
satisfaction their expectations have of the customer while their expectations have
been met ensuring the actions been met
taken are consistent
with or exceed society’s
expectations
Definition of the Business defined in terms of goods Business defined in terms Business defined in terms Business defined by the
organisation's and services of the benefits their of the customer’s and alignment of resources
business customers seek society’s expectations with the customers
The target audience Targets Targets nobody – Targets specific groups of Targets specific groups of Targets specific groups of
of the product ‘everybody’ or ‘the produces the customers customers customers
average customer’ most efficient
product for the
whole market
The primary goal of To achieve To achieve To achieve profitability To achieve organisational Achieving organisational
the organisation profitability by profitability by creating customer goals by creating goals through the
reducing cost through sales value, providing customer customer value, customer complementary
volume satisfaction and building satisfaction and building integration of resources
long-term relationships long-term relationships with customers
with customers with customers, while
ensuring the organisation's
practice is not detrimental
to society
Sales tools used Seek to generate sales volume Use a combination of Use a combination of Use a combination of
through intensive promotional the four elements of the the four elements of the the four elements of the
activities, mainly personal selling and marketing mix: product marketing mix: product marketing mix: product
advertising decisions, place (or decisions, place (or decisions, place (or
distribution) decisions, distribution) decisions, distribution) decisions,
promotion decisions and promotion decisions and promotion decisions and
pricing decisions pricing decisions pricing decisions

relationships with existing customers directly

Building relationships addresses two of the three possibilities and indirectly
The best companies view attracting new customers as addresses the other.
the launching point for developing and enhancing a Relationship marketing is a relationship
long-term relationship. But attracting new customers strategy that focuses on keeping and marketing
to a business is only the beginning. Companies can improving relationships with current A strategy that
focuses on keeping
expand market share in three ways: attracting new customers. It assumes that many and improving long-
customers, increasing business with existing consumers and business customers term partnerships
with customers.
customers and retaining current customers. Building prefer an ongoing relationship with

14 PART ONE An introduction to marketing

one organisation rather than continually switching
among providers searching for value. Virtual Legal
is a fixed fee online law firm established in 2013 that
offers legal services to people around Australia via a
client portal company and their client, regardless of
their location or financial circumstances. In addition,
the portal provides the client with a permanent
place where all their legal transactions and records
can be stored safely – thus creating an ongoing link
to or relationship with the client. This long-term
focus on customer needs is a hallmark of relationship
marketing.
Most successful relationship marketing strategies
depend on customer-orientated personnel, effective
training programs, employees with authority to make
decisions and solve problems, and teamwork.
The Internet
The Internet is an effective tool for generating
relationships with customers because of its ability
to interact with the customer. Companies can use
various tools such as emails, social media and
website live chat software for fast customer service,
discussion groups for building a sense of community
and database tracking of buying habits to customise
products to their customers.15
Customers also benefit from stable relationships
with suppliers. Business buyers have found that
partnerships with their suppliers are essential to
Rewards programs encourage customers to become loyal to a specific product or organisation
and reward them for their continuing patronage.
producing high-quality products while cutting costs.16
Customers remain loyal to organisations that provide
them with greater value and satisfaction than they
expect from competing organisations. This value and
satisfaction can come in various forms, ranging from
financial benefits to a sense of wellbeing or confidence
in a supplier, and structural bonds.17
Rewards and loyalty programs
Rewards programs are an example of financial
incentives to customers in exchange for their
continuing patronage. For example, supermarket
g ia nt Coles of fers a Coles Flybuys prog ra m,
allowing customers to earn redeemable points for
their purchases and exclusive discounts instore
and online. Other examples include Priceline’s
Sister Club and Myer’s Myer One. These programs
encourage customers to become loyal to specific
organisations or brands and ‘reward’ them for this
behaviour.
A sense of wellbeing occurs when a customer
establishes an ongoing relationship with a provider,
such as a medical practitioner, a hairdresser or
an accountant. The social bonding that takes
place between provider and customer involves
personalisation and customisation of the relationship.
Organisations can develop these bonds by referring to
customers by name and providing service continuity
through the same representative.
Courtesy of Qantas
CHAPTER 1 An overview of marketing 15
 LO5Why study
marketing?
Now that you have been introduced to the meaning
of the term marketing, and to how the elements of
marketing are put into effect by organisations, you
may be asking, ‘What’s in it for me?’ or ‘Why should I
study marketing?’ These are good questions.
Shutterstock.com/Monkey Business Images
There are many jobs in marketing, and over the next
decade, there will be new jobs that do not exist today.
There are several important reasons to study
marketing, even if you are not undertaking a
Marketing degree and are instead studying another
field, such as accounting or finance, journalism,
nursing or graphic design. This is because marketing
plays a major role in society, is essential to the
success of businesses, offers outstanding career
opportunities and affects your life as a consumer
every day.
Marketing plays an important
role in society
The Australian Bureau of Statistics predicts that the
Australian population will reach between 37.4 and
49.2 million people by 2066.18 Think about how many
transactions will be needed each day to feed, clothe
and shelter a population of this size. The number is
huge. And yet these consumers’ needs should be
met, partly because of the well-developed economic
systems in place that efficiently distribute the output
of farms and factories. Suppose you take the example
of food purchases. In that case, marketing helps to
make food available when we want it, in the desired
quantities, at accessible locations and in hygienic and
convenient packages and forms (such as instant and
frozen foods).
16 PART ONE An introduction to marketing
Marketing is important to
businesses
The basic objectives of most organisations are
survival, profits (cost minimisation) and growth.
Marketing contributes directly to achieving these
objectives. Marketing includes the following activities
vital to business organisations:
•• assessing the needs, wants and satisfaction
criteria of present and potential customers
•• designing and managing product offerings
•• determining price and pricing policies
•• developing distribution strategies
•• communicating with present and potential
customers, and as we see from the pandemic
experience, the means to be agile and respond to
changing customer needs.
A l l bu si nesspeople, rega rd less of t he i r
specialisation or area of responsibility, need to be
familiar with the terminology and fundamentals of
accounting, finance, management and marketing.
People in all business areas also need to be able
to communicate with specialists in other areas.
Furthermore, marketing is not just a job done by
people in the marketing department; marketing is a
part of the job of everyone in the organisation.
Marketing offers outstanding
career opportunities
There are many jobs in Australia and New Zealand
that are marketing-focused because the service
sectors of both countries are very strong. Marketing
offers excellent career oppor tunities in such
areas as professional selling, market research,
advertising, public relations, services, retail buying,
distribution management, product management,
product development, wholesaling and information
technology. The Australian Marketing Institute
(see http://www.ami.org.au), the Public Relations
Institute of Aust ralia (http://www.pria.com.
au) and the Research Society (various; https://
researchsociety.com.au/) publ i sh resou rces
that provide extensive information about career
oppor tunities in marketing. Marketing career
opportunities also exist in various non-business
organisations, including healthcare, museums,
universities, the armed forces and various government
and social service agencies.
As t he global ma rketplace becomes more
challenging, all organisations regardless of size will
need to become better at marketing, and the people in
those organisations need to become better marketers.
Statistics show that small business accounts for more
than 88 per cent of all jobs in Australia.19 Regardless of
your job title or activity, you will need to market your
products to the world, and employees with marketing
skills will be highly regarded.
Marketing is important to you
Marketing plays a major role in your everyday life.
You take part in the marketing process every day
as a consumer of goods and services. About half of
every dollar you spend pays for marketing costs,
such as marketing research, product development,
packaging, transportation, storage, advertising
a nd sa les ex penses. By developi ng a bet ter
understanding of marketing, you will become a
better informed and more discriminating consumer,
you will better understand the buying process and be
able to negotiate better with sellers. Moreover, you
will be better prepared to demand satisfaction when
the products you buy do not meet the standards
promised by the manufacturer, service provider or
marketer.
CHAPTER 1 An overview of marketing 17
Another random document with
no related content on Scribd:
supposed to clear a way for the spirit of the deceased to the spirit
land. When a member of the Wolf clan died, the flesh was stripped
from the bones and buried, and the bones were dried at some
private place. At the end of 12 days the skeleton would be wrapped
in white buckskin and taken to a place prepared for the dance and
there held up by some one. As the singers would sing the men who
held the skeleton would shake it and the bones would rattle as the
dancers would proceed around it. After the dance the skeleton was
buried. Traditions say that in ancient times some of the head men in
the Wolf clan had a dream that they must treat their dead in that way,
and the custom has been handed down to them for many centuries.
The other clans say the custom does not belong to them. The
custom has been long dropped. There has not been a skeleton
dance since 1860.”

Peyote Rite
 Fig. 19.—Peyote “Button.” (Diameter, 1.9 in.)

One of the latest of introduced ceremonies, which was still much in

favor with the Oklahoma Lenape when last visited by the writer, is
the Peyote Rite, a cult now widespread among the tribes of the
Central West, introduced among this people by an Indian named
John Wilson, who obtained it, they say, from the Caddo on Washita
river about the year 1890 or 1892. During this ceremony remarkable
visions are produced by eating the dried top of a small cactus, the
peyote (fig. 19), for which the cult is named, and these visions,
coupled with the moral teachings embodied in the ritual, make it very
attractive to the Indian, who, on joining the cult, is often persuaded to
discard entirely the ancient beliefs of his own people. The writer is
acquainted with two principal forms of the rite, one involving native
deities only, the other, almost entirely Christian in teaching and
symbolism. It is this latter form which has been adopted by the
Lenape, to whom the tipi, in which the ceremony is held, is as foreign
an institution as the little cactus itself, brought in from southern Texas
and Mexico.

PL. IX

THE PEYOTE RITE AMONG THE LENAPE

Native Painting by Earnest Spybuck, a Shawnee

Paraphernalia.—For this ceremony the tipi is erected with the door

to the east, and a complex series of symbols arranged inside, as
shown in the smaller drawing, pl. ix. On the western side of the lodge
is built a crescent-shaped mound, or “moon,” of earth, packed hard,
its horns turned toward the east, which they say represents the tomb
where Christ was buried, and on the center of this is placed a large
peyote, dampened and flattened (fig. 19), resting either on a bed of
feathers or on the bare earth; and to the west of this again,
sometimes a crucifix, as shown in the illustration. Between the points
of the crescent is built the fire in a certain prescribed manner with
overlapping sticks forming an angle pointing westward. Near the
door lies another mound—a round one representing the sun. From
the peyote resting on the embankment to the sun mound, directly
through the middle of the fire, a line is drawn in the earth of the floor.
This represents the “peyote road” along which the Peyote Spirit
takes the devotee on a journey toward the sun, and also symbolizes
the road to Heaven that Jesus made for the souls of men when He
returned thither. West of the crescent-shaped mound stands, when
not in use, the highly decorated arrow or staff, frequently made in the
form of a long cross, with a groove extending from end to end,
representing the spirit road. A small water-drum made of a piece of
deerskin stretched over a crock, as seen in pl. ix, a nicely carved
drumstick, an eagle-feather fan for brushing all evil influence away
from each devotee as he enters or leaves the ceremony, and a
supply of dried peyote, dampened and crushed in a mortar, are all
necessary for the ceremony. Each devotee, moreover, must be
supplied with a decorated gourd rattle of his own.
Officers.—The only officers needed for this rite are a “Road-man”
or speaker, who sits in the west, just opposite the door, and a fire
guard stationed at the door, whose duty it is to keep the fire burning,
and to brush with the feather fan the devotees as they enter. This is
illustrated in the colored plate (pl. ix), which represents also the
“Road-man” guiding a newcomer to a seat.
Conduct of the Ceremony.—When all are gathered in the tipi, the
leader first passes around a fragment herb which the people chew
and rub over hands and body. Then the macerated peyote is passed,
and each takes enough to make eight pellets about half an inch in
diameter, of which some eat all, some only part, reserving some
pellets to be eaten later. About this time the leader addresses the
peyote and the fire, prays, and often delivers a regular sermon or
moral lecture. He then takes the staff in his left hand, and sitting, or
kneeling on one knee, he sings a certain number of peyote songs,
which are a class to themselves, while the man to the left beats the
drum, then passes the staff to the person on his right, himself taking
the drum while this person sings, and so the staff travels round and
round the lodge, each taking his turn at singing, while the devotees,
men and women alike, keep their eyes fixed upon the fire or upon
the peyote lying on the mound. As the night wears on the “medicine”
begins to take effect, and the devotees see many strange visions,
pictures, and brilliant-colored patterns. Often one may see the
Peyote Spirit, in the form of an old man, who takes his spirit on a
wonderful journey along the “peyote road,” eastward toward the sun.
At daybreak they all file out of the tipi bearing their paraphernalia, as
seen in pl. ix, b, and when the sun appears they raise their hands in
salutation, and then those who are left standing (for some fall as if
dead at the sight of the sun) “give thanks to the Great Father in
Heaven.” Those who fall at sunrise, they say, are the ones who
visited the sun in their visions. All sleep, or at least rest, until about
noon, when a feast is served, after which everyone tells what he or
she saw while “on the peyote road.”
The Lenape variant of this ceremony, as related above, differs
somewhat from that of other tribes practising the Christian form of
the Peyote rite, but in all essentials it is almost identical.

Ghost Dance

The Ghost dance was also introduced among the Lenape by an

Indian named Wilson, about the same time, our informants thought,
as the Peyote rite, and, like it, probably from the Washita River
region.
Wilson would call a dance every now and then during his lifetime,
at which the people appeared in their everyday dress, without such
special costumes as were seen, for instance, at such functions
among the Kiowa and the Arapaho. At these meetings the
participants would dance round and round for a long time, with a
sidewise step, to the sound of song and water-drum, sometimes for
a considerable period without stopping. Occasionally one would fall
and appear to faint, and when revived would claim to have visited
Heaven in spirit while his body lay as if dead. When Wilson died, the
cult, so far as the Delawares were concerned, perished with him.
 Such were the ceremonies surviving until recent times among the
Lenape, from which have been omitted only the observances
connected with the dead, shamanism, witchcraft, and war, all of
which will be discussed in later papers.
 CHAPTER IX
Summary
RELIGION
A study of the material presented shows that the Lenape believed in
a Great Spirit, or Creator, whose goodness is acknowledged, who is
thanked for past blessings and petitioned for their continuance, but
who is not their only god. He is, however, the great chief of all, and
dwells in the twelfth, or highest heaven. He created everything,
either with his own hands or through agents sent by him, and all the
powers of nature were assigned to their duties by his word. That
these concepts are not new among the Lenape may be seen from
the fact that most of the early writers who treat of this people have
noticed such beliefs among them, which can be traced back as far
as 1679.
This Great Spirit gave the four quarters of the earth and the winds
that come from them to four powerful beings, or manĭʹtowŭk, namely,
Our Grandfather where daylight begins, Our Grandmother where it is
warm, Our Grandfather where the sun goes down, and Our
Grandfather where it is winter. To the Sun and the Moon, regarded
as persons and addressed as Elder Brothers by the Indians, he gave
the duty of providing light, and to our Elder Brothers the Thunders,
man-like beings with wings, the task of watering the crops, and of
protecting the people against the Great Horned Serpents and other
water monsters. To the Living Solid Face, or Mask Being, was given
charge of all the wild animals; to the Corn Spirit, control over all
vegetation, while Our Mother, the Earth, received the task of carrying
and feeding the people.
Besides these powerful personages were many lesser ones, such
as the Small People, the Doll Being, the Snow Boy, and the Great
Bear. Certain localities, moreover, were the abode of supernatural
beings, while animals and plants were thought to have spirits of their
own. Besides these there were, of course, the countless spirits of the
human dead who were still supposed to retain some influence in
earthly affairs.
This, then, was the supernatural world which, to the mind of the
Lenape, controlled all things—on which they must depend for health,
for success in all their undertakings, even the daily task of deer-
hunting or corn-raising. Benevolent beings must be pleased, and bad
spirits combated and overcome, or at least placated.
There was, however, until very lately, no conception of a “devil” in
the modern sense of the word.
The main channel of communication between the supernatural
world and man was the dream or vision, obtained, as before
described, by fasting and consequent purification in youth. Through
the vision the young man obtained his guardian spirit or supernatural
helper, who gave him some power or blessing that was his main
dependence through life, his aid in time of trouble, the secret of his
success. No wonder, then, that visions and helpers form the basis of
Lenape belief and worship. Among the guardian spirits figured not
only such great powers as the Sun and the Thunder Beings, the
personified powers of nature, but the spirits representing various
species of animals and birds, such as the Wolf or the Owl, of plants,
as “Mother Corn,” as well as the Mask Being, and even the spirits of
the dead which some Lenape claimed as helpers.
Those favored by such visions were considered the leading people
of their community. They usually composed rythmic chants referring
to their visions, and appropriate dance songs to go with them, to
recite at the Annual Ceremony.
Belief in a soul or spirit surviving the death of the body formed an
integral part of Lenape philosophy. The soul is supposed to linger for
eleven days after death, and is addressed and offered food by the
surviving relatives, sometimes in a formal “Feast of the Dead;” but on
the twelfth day, they say, it leaves the earth and finally makes its way
to the twelfth or highest heaven, the home of the Great Spirit, where
it leads a happy life in a land where work and worry are unknown.
Some persons are thought to have the power of communicating with
the departed.

CEREMONIES
Most of the beliefs summarized above were found among the
descendants of both Unami and Minsi; but when we consider their
great religious ceremonies, we begin to note differences. While it is
true that (1) in both cases these rites are based on the recital of the
visions seen by the participants, combined with thanksgiving to the
Great Spirit and his helpers for past blessings and prayers for their
renewal, that (2) the New Fire ceremony figures in both, and that (3)
they take place in a building of special form and decoration erected
for the purpose, we note that among the Unami the ceremony is
conducted only once a year, and is combined to a certain extent with
the cult of the Mĭsiʹngʷ', or Mask Being, a magnified guardian spirit or
personal helper; while the Minsi have in addition to that held in the
fall, a spring ceremony also, cognate with the Iroquois “Thanks for
the First Fruits,” or Strawberry Dance, and masked impersonators do
not appear in the Minsi ceremonial house.
In the ceremonies of both Unami and Minsi, however, we note
other similarities besides those first mentioned, such as the manner
of prayer, the use of a drum made of a dried deerhide beaten with
flat forked drumsticks each bearing a carved face, the fumigation
and sweeping of the Big House, the restriction against women in
their menses, and the use of twelve as a sacred number.
It therefore seems likely that the rites, in spite of the differences
noted, probably have a common origin, and hence date back to a
period before the separation of the Unami and the Minsi. Indeed we
have an historical account which seems to refer to this kind of
ceremony as early as 1683, while under date of 1779 there is a
description of the rites practically as enacted as late as 1920.

MINOR CEREMONIES
 Analyzing the minor ceremonies of Lenape origin we find the cults
of two types: one founded on a beneficent spirit, a personal helper
such as the Mask Being, whose relations are friendly with mankind;
the other based on a discarded toy or pet, which makes trouble for
its former owner unless propitiated by the ceremony in question.
A good example, in fact the only one we recorded, of the first type
is the ceremony in honor of the Mĭsinghâliʹkŭn, or Mask Being,
among the Unami, which, however, does not find its counterpart
among the Minsi, who had a Society of Masks whose rites and
functions were similar to those of the Iroquois “False Face
Company.”
The second class embraces the cults of the Doll, Bear, and Otter,
all of which must be propitiated periodically, under pain of sickness
or death.
It will be observed that recitals of visions form a part of the Bear
rites, and probably also of the Otter ceremony, all of which, taken
into consideration with the preceding, gives rise to speculations
concerning the basic form of Lenape ceremonies. Perhaps originally,
everyone who had been blessed with a vision, held a periodic
ceremony at which rites appropriate to his own guardian spirit were
emphasized, but at which others so blessed could recite their own
visions.
Of course ceremonies of extraneous origin, such as the Peyote
rite, can not be classified with those of true Lenape origin; and there
are others of which our accounts are so fragmentary that we can not
place them, and still others, doubtless, that have disappeared
entirely.
That such may have been the case is not remarkable—not nearly
so extraordinary as the fact that the Lenape have retained so much
of their ancient beliefs and practices after three centuries of contact
with civilization.
 NOTES
[1] Handbook of American Indians, Bulletin 30, Bureau of
American Ethnology, part i, p. 386, Washington, 1907. Indian
Population in the United States and Alaska, 1910, p. 73,
Washington, 1915. Annual Report of the Department of Indian
Affairs for 1913, Ottawa, 1913.
[2] Dankers, Jaspar, and Sluyter, Peter. Journal of a Voyage to
New York in 1679-80. Translated from the original manuscript in
Dutch for the Long Island Historical Society, pp. 266-267,
Brooklyn, 1869.
[3] Penn, William. A Letter from William Penn, Proprietary and
Governour of Pennsylvania in America to the Committee of the
Free Society of Traders of that Province, Residing in London, p. 6,
London, 1683.
[4] Holm, Thomas Campanius. Short description of the Province
of New Sweden, now called Pennsylvania. Mem. Hist. Soc. Pa.,
vol. iii, p. 139, Phila., 1834.
[5] David Zeisberger’s History of the Northern American Indians.
Edited by Archer Butler Hulbert and William Nathaniel Schwarze.
Ohio Archæological and Historical Quarterly, vol. xix, nos. 1 and
2, p. 128, Columbus, 1910.
[6] Heckewelder, John. An Account of the History, Manners and
Customs of the Indian Nations who once inhabited Pennsylvania
and the neighboring States. Transactions of the American
Philosophical Society, vol. i, p. 205, Phila., 1819.
[7] Waubuno, Chief (John Wampum). The Traditions of the
Delawares, as told by Chief Waubuno. London [n.d.]. This little
pamphlet contains some original material on the Minsi and some
purporting to apply to the Minsi, but copied from Peter Jones’
“History of the Ojebway Indians.”
[8] Brainerd, David. Memoirs of the Rev. David Brainerd,
Missionary to the Indians ... chiefly taken from his own diary, by
Rev. Jonathan Edwards, including his Journal, now ...
incorporated with the rest of his diary ... by Sereno Edwards
Dwight, pp. 344, 349, New Haven, 1822.
[9] Brinton, Daniel G. The Lenape and their Legends, p. 65 et
seq., Phila., 1885.
[10] Loskiel, George Henry. History of the Mission of the United
Brethren among the Indians in North America, p. 34, London,
1794. Zeisberger, op. cit., pp. 128-129. Heckewelder, op. cit., p.
205.
[11] Loskiel, op. cit.
[12] Zeisberger, op. cit., p. 130.
[13] Brainerd, op. cit., p. 238.
[14] Holm, op. cit., p. 139.
[15] Strachey, Wm. The Historie of Travaile into Virginia.
Hakluyt Soc. Pub., vol. vi, p. 98, London, 1849.
[16] Brainerd, op. cit., p. 344.
[17] Loskiel, op. cit., p. 43.
[18] Brainerd, op. cit.
[19] Loskiel, op. cit.
[20] Ibid.
[21] Ibid.
[22] Zeisberger, op. cit., p. 147.
[23] Heckewelder, op. cit., p. 205.
[24] Loskiel, op. cit., p. 43.
[25] Jones, Rev. Peter. History of the Ojebway Indians, p. 83,
London, 1861.
[26] Skinner, Alanson, and Schrabisch, Max. A Preliminary
Report of the Archæological Survey of the State of New Jersey,
Bulletin 9 of the Geological Survey of New Jersey, p. 32, Trenton,
1913.
[27] Skinner, Alanson. The Lenape Indians of Staten Island,
Anthropological Papers of the American Museum of Natural
History, vol. iii, p. 21, New York, 1909. Idem. Two Lenape Stone
Masks from Pennsylvania and New Jersey, Indian Notes and
Monographs, 1920.
 [28] Brainerd, op. cit., p. 237.
[29] Zeisberger, op. cit., p. 141.
[30] Ibid., op. cit., p. 139.
[31] Brainerd, John, quoted by Abbott in Idols of the Delaware
Indians, American Naturalist, Oct. 1882.
[32] Jones, op. cit., pp. 87, 95.
[33] Brainerd, David, op. cit., p. 344.
[34] Penn, William, op. cit.
[35] Brainerd, David, op. cit., p. 238.
[36] Ibid., p. 346.
[37] Zeisberger, op. cit., pp. 133-134.
[38] Ibid., p. 131.
[39] A similar vision of a black and white duck was reported by
the Lenape at the Grand River reserve in Ontario. See Harrington,
M. R., Vestiges of Material Culture among the Canadian
Delawares, American Anthropologist, n.s., vol. x, no. 3, p. 414,
July-Sept., 1908.
[40] Brainerd, David, op. cit., p. 347.
[41] Zeisberger, op. cit., p. 132.
[42] Loskiel, op. cit., p. 40.
[43] Heckewelder, op. cit., p. 238 et seq.
[44] Adams, R. C. Notes on Delaware Indians, in Report on
Indians Taxed and Indians not Taxed, U. S. Census 1890, p. 299.
[45] Zeisberger, op. cit., p. 138.
[46] Ibid. pp. 136, 137.
[47] Harrington, M. R. A Preliminary Sketch of Lenape Culture,
American Anthropologist, vol. xv, no. 2, April-June, 1913.
[48] Adams, loc. cit.
[49] Zeisberger, op. cit., p. 138.
[50] Harrington, Canadian Delawares, pp. 414, 415. See note
39.
[51] Waubuno, op. cit., p. 27.
[52] Brainerd, David, op. cit., p. 237.
 [53] Adams, loc. cit.
[54] Harrington, Canadian Delawares, p. 416.
[55] Ibid. p. 417.
[56] Marsh, Rev. Cutting. Documents Relating to the
Stockbridge Mission, 1825-48, Wisconsin Historical Collections,
vol. xv, pp. 164-165.
[57] Zeisberger, op. cit., p. 138.
[58] Adams, loc. cit.
[59] Ibid.
 INDEX

Aʹckas or attendants of Annual ceremony, duties of, 84-85, 87-

88, 96-97, 103, 105, 107.
See Attendants.
Adams, R. C., on Annual ceremony, 118-122;
on Buffalo dance, 182-183;
on dreams or visions, 80;
on Mĭsiʹngʷ' dance, 154-156;
on Skeleton dance, 183-184.
Air, mannitto of, 30.
See Thunder Beings
Alder, dye from bark of, 141
Alphabet used for Lenape words, 15-16
Altar at Annual ceremony, 115
America, prophecy of whites’ coming to, 121
American Anthropologist, account of Minsi ceremony in, 138-
143
American Museum of Natural History, Doll in collection of, 46,
168-169;
Tefft collection in, 15, 38
American tribes, concept of Great Spirit among, 19-20
Animals, as guardian spirits, 49-50, 65, 70, 77, 80, 121, 195;
ceremonies of, 171-183;
spirits of, 118, 125, 194;
thanks to, 134.
See Wild animals
Anima mundi compared with Great Spirit, 22
Annual ceremony, authorities on:
Adams, 118-122;
Indian comments, 111-115;
Penn, 115-116;
Zeisberger, 116-118;
Bear ceremony resembling, 171;
carved faces in, 31;
chant of Pokiteʹhemun at, 67-69;
chants of visions at, 66, 73-76, 195;
compared with Minsi ceremony, 127-145;
Four winds in ritual of, 26;
native name for, 109;
penalties of omitting, 113-116;
rites of Mask in, 36, 146, 151;
thanks given to Earth in, 29;
Unami rites of, 81-111;
variants of, 122-126;
worship of Great Spirit in, 19;
worship of Mask Being in, 35.
See Minsi
Anthony, Michael, acknowledgment to, 14, 139
Ants as guardian spirits, 78
Arapaho, Ghost dance of, 191
Arrow, ceremonial use of, at Peyote rite, 187-188;
arrows of Thunder Beings, 29
Ashes, ceremonial removal of, 101, 131-132;
prevention of disease by, 160
Aⁿsiptaʹgŭn or paint-dish of bark, 105
A'ʹtcigamuʹltiⁿ, native name for Otter ceremony, 176.
See Otter ceremony
Attendants, at Annual ceremony, 84-85, 87-88, 96-97, 103, 105-
111, 117-118, 120;
at Bear ceremony, 172-173;
at Feast of first fruits, 144;
 at Minsi ceremony, 132-133, 137;
at Otter ceremony, 179;
at Peyote rite, 188.
See Aʹckas
Axe, Tornado threatened with, 47

Bad luck, caused by neglect of rites, 113-116

Bag, full of snakes, 35, 153;
mask worn in, 42;
of Mask impersonator, 34;
of tobacco offered: to bear, 172;
to otter, 177
Bark, boiled for making dyes, 141;
ceremonial bowls and spoons of, 131, 137;
ceremonial paint-dish of, 105-106;
first Big House of, 148;
roof of Big House of, 83
Beads of wampum, as invitation to dance, 142-143;
payment in, 110-111, 135;
used in Minsi ceremony, 141-143.
See Wampum
Beans, offering of, 144;
thanks to, 134;
wampum string symbolizing, 141-142
Bear, abundance of, in Happy Hunting Ground, 58;
ceremony of, 171-176, 199;
fat of, burned, 117-118, 134;
flesh of, offered to Corn Goddess, 44;
hair of Mask Being like, 33;
head of, fastened to mask of Mask impersonator, 34;
provision of, for feast, 117
Bearskin, bag of Mask impersonator, 34, 155;
cap of Mask impersonator, 42;
 coat of Mask impersonator, 41;
dress of Mask impersonator, 56, 152-153;
leggings of Mask impersonator, 34, 41;
worn by members of Mask society, 159
“Beautiful town” or Heaven, 56-57.
See Happy Hunting Ground
Belief: in Doll Being, 162-171;
in dream or vision, 61-80;
in Great Spirit, 18-24, 88-92, 192-193;
in immortality, 52-60, 195-196;
in supernatural beings, 17-51
Bergen, New Jersey, information from Indians at, 20
Big-Deer, Naniʹtis given up by, 170-171
Big House or Xiʹngwikan, Annual ceremonies in, 35, 82-122;
common to both tribes, 129-133, 196-197;
construction of, 82-83, 119, 148-150;
Elkhair on significance of, 113-115;
Mask impersonator present in, 98-99;
Muxhatolʹzing in, 123;
of Bear cult, 173;
of Minsi, 127-145;
origin of, 147-152;
prayer in, 112-113;
preparation of, for Ceremony, 85-87, 117;
return of hunters to, 100-101;
rites of Mask in, 151-152;
seating of congregation in, 93;
serving of meals in, 110;
turtle rattles of, 181;
visions recited in, 75-76.
See Annual ceremony, Meeting-house
Bilberries, at Annual feast, 118;
in Happy Hunting Ground, 58
Birds as guardian spirits, 78, 80, 121, 195
Black, and red: carved faces painted with, 83, 119;
Mask painted with, 33, 41, 150, 155;
and white duck, as guardian spirit, 67, 140;
hog, offering of, 173;
symbolizing men, 140-141
Blanket, ceremonial waving of, 145;
blankets spread over sweating-oven, 125
Blessing granted by guardian spirits, 65-67, 77, 194-195
Blood, luminous ball of, 53-54
Body, luminous form of, 53-54
Bones, burning of, at Annual ceremony, 118
Bowl, and dice game of manĭʹtowŭk, 25-26;
ceremonial, in Bear cult, 173-174;
bowls, bark, in Minsi ceremony, 131, 137
Bows and arrows of Thunder Beings, 29
Box-tortoise rattle in Annual ceremony, 94-96, 118, 120.
See Rattles
Box-turtle rattle of Planting dance, 143.
See Rattles
Boys, dreaming of, for power, 54;
initiation of, 63-64, 78-80;
pet of, 172;
vision of Mask Being by, 147-152;
visions of, 62-63, 72-75, 92, 140, 194-195
Brainerd, David, on animal spirits, 50;
on Annual ceremony, 151-152;
on carved faces in Big House, 42;
on concept of soul, 56;
on dream or vision, 77;
on Evil Spirit, 25;
on Four Directions, 27;
on Great Spirit, 22-23;
 on impersonator of Mask Being, 41-42;
on sun, 28
Brainerd, John, on idol image or Doll, 46-47
Brass eyes of Miziʹnk, 158
“Bringing in” the meeting, 81, 92-94, 104, 122, 135, 174
Brown, William, acknowledgment to, 14
Brush house of Bear cult, 173-174
Buck, chant referring to, 69;
prayer to, 126;
ridden by Mask Being, 33, 148;
women’s share in, 106
Buckskin, skeleton wrapped in, 184
Buffalo, as guardian spirit, 78;
dance of, 182-183
Bunches of wampum, symbolism of, 141-143
Burial, Wolf clan rites of, 183-184
Burning, of bones, 118;
of cedar leaves, 105;
of fat, 117-118, 134, 173-175;
of hemlock-boughs, 133, 144-145;
of hog’s head, 175;
of moccasins, 47;
of tobacco, 29, 98, 126, 151.
See Offering

Cactus called peyote, 186.

See Peyote rite
Caddo, Peyote cult originating among, 185
Canada, Lenape now resident in, 13-14, 170.
See Ontario