Chapter 1

The Field of
Marketing

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 Chapter Goals
• Centrality of exchange in marketing
• Definition of marketing
• Evolution of marketing in the U.S.
• Marketing concept
• Ethics in marketing
• Company’s marketing program
• Ways marketing affects our lives

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McGraw-Hill/Irwin Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
 Marketing Defined

Systemof
System ofbusiness
businessactivities
activitiesdesigned
designedto
to

Plan
Plan
Price
Price
Promote
Promote
Distribute
Distribute

Want-satisfyingproducts
Want-satisfying productsto
totarget
targetmarkets
markets

toachieve
to achieve
organizationalobjectives
organizational objectives

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 Stages of the Evolution
of Marketing
Product-Orientation
Product-Orientation Increase
Increase Supply
Supply
Stage
Stage Produce
Produce Efficiently
Efficiently

Sales-Orientation
Sales-Orientation Promote
Promote through
through
Stage
Stage Sales
Sales and
and Advertising
Advertising

Market-Orientation
Market-Orientation Long-Run
Long-Run
Stage
Stage Customer
Customer Satisfaction
Satisfaction

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 How Should
a Business Be Defined?

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 Marketing Concept

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 Customer Orientation

Relationships
Customer Relationship Management
(CRM)

Mass Customization
Produce products with variety and
uniqueness

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 Coordinated Marketing Activities

Quality
Total Quality Management

Value Creation
Benefits vs. Costs

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 Organization’s Performance
Objectives
Performance Metrics
Return on the marketing investment

Societal Marketing Concept

Fulfill firm’s social responsibility

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 A Market

People
People Needs
Needs
or
or to
to
Organizations
Organizations Satisfy
Satisfy

Market
Market
Money
Money Willingness
Willingness
to
to to
to
Spend
Spend Spend
Spend

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 Market Segments
Segments
Segments are
are subgroups
subgroups
of
of the
the market
market with
with similarities
similarities

Buying
Buying
Wants
Wants Preferences
Preferences

Product
Product
Use
Use

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 Target market
A
A market
market segment
segment at at which
which the
the firm
firm
directs
directs its
its marketing
marketing program
program

Market Market Market

Segment Segment Segment
A B C

TARGET
MARKET

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 Position
Strategiesand
Strategies andtactics
tacticsestablish
establishaaunique
uniqueposition
position
in the
in theprospect’s
prospect’smind
mind so
sothe
theproduct
product isis
viewedin
viewed inaadistinctive
distinctiveand
andattractive
attractiveway
way

PRODUCT PRICE
TARGET
MARKET

DISTRIBUTION PROMOTION

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 Ethics and Marketing

ETHICS
CONFLICTS
Standards
Challenges from
accepted by a
conflicting goals
society

TRUST
Builds
CODE
Business OF
Relationships ETHICS

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 Importance of Marketing

Globally

Domestically

Organizationally

Personally

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 Nordstrom
How can a retailer’s website help it
more effectively meet the conditions
of the marketing concept?

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 Key Terms and Concepts
 Exchange
 Marketing
 Product-orientation
 Sales-orientation
 Market-orientation
 Marketing concept
 Quality
 Total Quality Management
(TQM)
 Relationship marketing
 Mass customization
 Value
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McGraw-Hill/Irwin
 Value creation
 Return on marketing investment
 Societal marketing concept
 Market
 Market segment
 Target Market
 Position
 Forecast demand
 Marketing mix
 Ethics
 Utility
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.