An Overview of Contemporary MarketingLearning ObjectivesAmazon: An Entrepreneurial StoryAmazon and MarketingMarketing - DefinitionWhy is marketing important?The Importance of MarketingViews of MarketingMarketing as an Organizational PhilosophyPracticing the Marketing ConceptDeveloping a Market OrientationCustomer EquityCustomer Equity RelationshipsMarketing as a Societal ProcessThinking CriticallyMarketing as a Set of ProcessesMarketing ExchangesMarketing StrategiesMarketing Mix DecisionsSlide 20Marketing ActivitiesMarketing PositionsMarketing Positions (con’t)Slide 24Slide 25Marketing InstitutionsMarketing EnvironmentKey Marketing PerceptiveKey Marketing Perceptive (con’t)Slide 30SummaryC H A P T E RC H A P T E R© 2007 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinAn Overview of Contemporary MarketingAn Overview of Contemporary Marketing11-2© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdLearning ObjectivesLearning ObjectivesLearning ObjectivesLearning ObjectivesAfter studying this chapter, you should be able to:Discuss what marketing is and why it is important to organizations and individuals.Distinguish between marketing as an organizational philosophy and a societal process. Understand the components of a marketing strategy and the different activities involved in marketing products and services.Be aware of the various types of marketing institutions and the different marketing positions available in these institutions.Understand the basic elements and relationships in the contemporary marketing framework.1-3© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdAmazon: An Entrepreneurial StoryAmazon: An Entrepreneurial StoryAmazon: An Entrepreneurial StoryAmazon: An Entrepreneurial StoryAmazon.com represents an interesting entrepreneurial story. Jeff Bezos started Amazon.com as a book retailer in 1995. The company’s mission was to use the Internet to transform book buying into the fastest, easiest, and most enjoyable shopping experience available.Sales have increased from about $150 million in 1997 to over $7 billion today.1-4© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdAmazon and MarketingAmazon and MarketingAmazon and MarketingAmazon and MarketingThe Amazon.com story illustrates a basic principle of successful marketing: Identify market opportunities and respond by developing and executing marketing strategies to take advantage of the opportunities better than competitors do.1-5© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdMarketing - DefinitionMarketing - DefinitionMarketing - DefinitionMarketing - DefinitionWhat is marketing?Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.- American Marketing Associationwww.marketingpower.com1-6© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdWhy is marketing important?Why is marketing important?Why is marketing important?Why is marketing important?Marketing is important to many organizations.For example, the Humane Society uses advertising to promote animal protection.1-7© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdDifferent TypesDifferent Typesof Organizationsof OrganizationsSocialSocialEntrepreneursEntrepreneursFarmersFarmersNonprofitNonprofitIndividualsIndividualsSmall FirmsSmall FirmsThe Importance of MarketingThe Importance of MarketingThe Importance of MarketingThe Importance of Marketing1-8© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdMarketing asMarketing asan Organizationalan OrganizationalPhilosophyPhilosophyProductionProductionPhilosophyPhilosophySellingSellingPhilosophyPhilosophyMarketingMarketingPhilosophyPhilosophyViews of Marketing Views of Marketing1-9© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdSellingSellingPhilosophyPhilosophyMarketingMarketingPhilosophyPhilosophyA selling philosophy predominates where the selling function is most valued.A marketing philosophy suggests that the organization focuses on satisfying the needsof customers. ProductionProductionPhilosophyPhilosophyA production philosophy exists when an organization emphasizes the production function.Marketing as an Organizational PhilosophyMarketing as an Organizational PhilosophyMarketing as an Organizational PhilosophyMarketing as an Organizational Philosophy1-10© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdPracticing the Marketing ConceptPracticing the Marketing ConceptPracticing the Marketing ConceptPracticing the Marketing ConceptMarketing as an organizational philosophy has been based on the marketing concept. This concept consists of three interrelated principles:An organization’s basic purpose is to satisfy customer satisfy customer needsneeds.Satisfying customer needs requires integrated, integrated, coordinated effortscoordinated efforts throughout the organization. Organizations should focus on long-term successfocus on long-term success.1-11© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdDeveloping a Market OrientationDeveloping a Market OrientationDeveloping a Market OrientationDeveloping a Market OrientationA market orientation consists of creating norms and values that encourage customer-oriented behavior throughout the organization, including:GeneratingGenerating MarketMarketIntelligenceIntelligenceDisseminatingDisseminatingMarketMarketIntelligenceIntelligenceResponding toResponding toMarketMarketIntelligenceIntelligence1-12© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Bearden Marketing 5th EdCustomer EquityCustomer EquityCustomer EquityCustomer EquityCustomer equity is the financial value of a firm’s customer relationships. It consists of profits from first-time customers plus expected profits from future sales to these and other customers. Customer equity can be increased in several ways:Acquire more profitable customers at a lower cost.Retain profitable customers longer.Win back profitable customers.Eliminate unprofitable customers.Sell more to profitable