Hult | Pride | Ferrell

Part 1
marketing 16e Marketing
Strategy and
Environment
 1: Strategic Marketing Management
2: Developing and Implementing
Marketing Strategies
3: The Global Marketing Environment

© 2012 South-Western, a part of Cengage Learning 1-2

 Learning Objectives

 To be able to define marketing as focused on

customers
 To identify some important marketing terms,
including target market, marketing mix, marketing
exchanges, and marketing environment
 To become aware of the marketing concept and
market orientation
 To understand the importance of building customer
relationships
 To learn about the process of marketing management
 To recognize the role of marketing in our society
© 2012 South-Western, a part of Cengage Learning 1-3
 Marketing Defined

The process of creating, distributing, promoting

and pricing goods, services and ideas to
facilitate satisfying exchange relationships with
customers and develop and maintain favorable
relationships with stakeholders in a dynamic
environment

© 2012 South-Western, a part of Cengage Learning 1-4

 Components of Strategic Marketing

© 2012 South-Western, a part of Cengage Learning 1-5

 Who is the Focus of Marketing?

Customers
 The purchasers of organizations’ products
 Are the focal point of all marketing activities

Target Market
 A specific group of customers on whom an
organization focuses its marketing efforts

© 2012 South-Western, a part of Cengage Learning 1-6

 Think About It
 Axe features a line of body sprays
 Uses a multimedia marketing approach
 YouTube
 Facebook
 Twitter
 Viral Marketing
 To promote a new fragrance, Axe Music,
Unilever staged concerts around the country
featuring major music acts
 Based on what you know about Axe, who is
Axe’s target market?

© 2012 South-Western, a part of Cengage Learning 1-7

 Discussion Question

 Skinny Cow low-fat

dessert products are
not for all consumers
 Who is Skinny
Cow’s target market?

© 2012 South-Western, a part of Cengage Learning 1-8

 The Marketing Mix Variables

Marketers combine and balance four elements

when determining how to satisfy customers’
needs for a product
 Product
 Price
 Distribution
 Promotion

© 2012 South-Western, a part of Cengage Learning 1-9

 Product Variable

• A product can be a:
 Good
 Service
 Idea

 Is a haircut a product?
 What about telecommunications services?

© 2012 South-Western, a part of Cengage Learning 1-10

 Price Variable

 Relates to decisions and actions associated

with establishing pricing objectives and
policies
 Relates to determining product prices
 Determines the value of the exchange

© 2012 South-Western, a part of Cengage Learning 1-11

 Think About It
 Honda promotes the safety of its vehicles
and great value for the price. Can you think
of any other brands or products that do that?
 Do you agree that Hondas are a good value
for the cost?
• Click here to access the company website

© 2012 South-Western, a part of Cengage Learning 1-12

 Distribution Variable

 Make products available in quantities desired

 Minimize costs:
• Inventory
• Transportation
• Storage
 Select/motivate intermediaries
 Establish/maintain inventory control
 Develop/manage transportation and
storage systems
© 2012 South-Western, a part of Cengage Learning 1-13
 Promotion Variable

 Inform individuals or groups about the

organization and its products/services
• Advertising
• Public relations
• Personal selling
• Promotions
• Street teams
• Viral marketing

© 2012 South-Western, a part of Cengage Learning 1-14

 Think About It

 Advertising firm, vm-people, put together

the this ad outlining the use of viral
marketing

Do you think viral marketing can help firms

attract business?

© 2012 South-Western, a part of Cengage Learning 1-15

 Relationships with Customers

Exchange
 The provision or transfer of goods, services,
or ideas in return for something of value

© 2012 South-Western, a part of Cengage Learning 1-16

 Stakeholders

 Constituents who have a “stake,” or claim,

in some aspect of a company’s products,
operations, markets, industry and outcomes

 BP was implicated in the largest

oil spill in history
• Who were affected stakeholders?
• What has BP done to repair stakeholder relations?
• What else can it do?

© 2012 South-Western, a part of Cengage Learning 1-17

 Marketing Environment
 The six forces that surround the customer
and affect the marketing mix:
1. Economic forces
2. Political forces
3. Legal and regulatory forces
4. Technological forces
5. Socio-cultural forces
6. Competitive forces
 The marketing environment is dynamic
 Unlike marketing-mix variables, an
organization has no control over these forces
© 2012 South-Western, a part of Cengage Learning 1-18
 Marketing Environment

© 2012 South-Western, a part of Cengage Learning 1-19

 The Marketing Concept

 A management philosophy that an

organization should try to provide products
that satisfy customers’ needs through a
coordinated set of activities that also allows
the organization to achieve its goals
• Not a second definition of marketing or a
philanthropic philosophy
• A firm must satisfy its own objectives

© 2012 South-Western, a part of Cengage Learning 1-20

 Firms To Know: Herman Miller

 A successful high-end furniture maker

 Recognized as highly ethical
• Long history of environmental advocacy and
stakeholder awareness
 Satisfied employees
• Comprehensive benefits
• Non-discriminatory workplace
 Does Herman Miller utilize the marketing
concept?
• Click here for more information

© 2012 South-Western, a part of Cengage Learning 1-21

 The Evolution of the
Marketing Concept

© 2012 South-Western, a part of Cengage Learning 1-22

 Production and Sales Orientations

Production Orientation
 Industrial Revolution improved speed and
efficiency
 Large increases in available products
Sales Orientation
 Many products with not enough demand
 Businesses viewed sales and selling as the main
means of increasing profits

© 2012 South-Western, a part of Cengage Learning 1-23

 The Market Orientation

 An organization-wide commitment to
researching and responding to
customer needs
• Emerged in the mid-20th century
• Determine what customers want and product
those products

© 2012 South-Western, a part of Cengage Learning 1-24

 Implementing the
Marketing Concept

 Establish an information system to discover

customers’ real needs
 Use the information to create satisfying
products
 Coordinate all activities

© 2012 South-Western, a part of Cengage Learning 1-25

 Managing Customer
Relationships

Relationship Marketing
 Establishing long term mutually satisfying,
buyer/seller relationships

Customer-centric Marketing
 Developing collaborative relationships with
customers based on focusing on their individual
needs and concerns

© 2012 South-Western, a part of Cengage Learning 1-26

 Think About It
 How can the Internet help marketers engage
in relationship marketing?
• Facebook and Twitter help companies improve
their relationship marketing
 Live, real-time updates
 Two-way dialogue with customers
 Fan pages and Like features on Facebook help
businesses find their target markets

© 2012 South-Western, a part of Cengage Learning 1-27

 Customer Relationship
Marketing (CRM)

Using information about customers to create

marketing strategies that develop and sustain
desirable customer relationships

© 2012 South-Western, a part of Cengage Learning 1-28

 Value-Driven Marketing

Value
 A customer’s subjective assessment of benefits
relative to costs in determining the worth of a
product

Value
=
Customer
Benefits – Customer
Costs

© 2012 South-Western, a part of Cengage Learning 1-29

 Discussion Question
 What kind-of
marketing
approach did
Maxwell
House take?

© 2012 South-Western, a part of Cengage Learning 1-30

 Marketing Management

 The process of planning, organizing,

implementing and controlling marketing
activities to facilitate exchanges effectively
and efficiently
 Effectiveness is the degree to which an exchange
helps achieve organizational objectives
 Efficiency involves maximizing the resources an
organization must spend to achieve a specific
level of desired exchanges

© 2012 South-Western, a part of Cengage Learning 1-31

 The Importance of Marketing in Our
Global Economy
Consumes
Large
Proportion of
Buyers’
Dollars
Creates
Is Used by
Career
Non-Profits
Prospects

Promotes
Is Important
Welfare
to Business
of Marketing and the
Consumers
Economy
and Society

Connects
Fuels
People
the Global
through
Economy
Technology
Enhances
Consumer
Awareness

© 2012 South-Western, a part of Cengage Learning 1-32

 Discussion Questions

 Marketing helps to
connect people in the
global economy
 How does Apple utilize
technology in its
marketing efforts?
 How do Apple products
keep customers
connected?

© 2012 South-Western, a part of Cengage Learning 1-33

 Green Marketing

 A strategic process involving stakeholder

assessment to create meaningful long-term
relationships with customers while
maintaining, supporting and enhancing the
natural environment
 A way to engage in socially responsible
marketing

© 2012 South-Western, a part of Cengage Learning 1-34

 Think About It

 What are the benefits of green marketing?

 Method sells home care and personal
products with stakeholders in mind
• Safe, biodegradable ingredients
• Minimal packaging
• Eco-friendly

© 2012 South-Western, a part of Cengage Learning 1-35

 Career Prospects

 All organizations engage in some kind of

marketing
• Even non-profits and government agencies
 25-33% of non-government workers in the
U.S. perform marketing activities
 Marketing skills are valuable in every field

© 2012 South-Western, a part of Cengage Learning 1-36

 Important Terms

•
Marketing Marketing concept
Customers Marketing orientation
Marketing mix Relationship marketing
Target market Customer-centric marketing
Products Customer relationship
management (CRM)
Exchanges Value
Stakeholders Marketing management
Marketing environment Green marketing

© 2012 South-Western, a part of Cengage Learning 1-37