Welcome to the World of Marketing

Chapter 1

Welcome To The World of Marketing

Overview: The primary goal of this first chapter is help dispel misconceptions that students have about what is marketing. Much time is devoted to helping the student understand what is marketing. In addition to providing the standard definition of marketing and the marketing concept, the terms and concepts which are used in these definitions are also examined. The evolution of the marketing concept and the role of marketing in society are also discussed. Levi Strauss is the focus of the real people, real choices segment.

Objectives

1.  Define the marketing concept.

2  Describe the marketing mix.

3.  Understand the basics of marketing planning.

4.  Describe the evolution of the marketing concept.

5.  Explain how marketing is important to both individual and business customers in the marketplace, in our daily lives, and in society.

6.  Explain marketing’s role within an organization.

Lecture Outline and Suggested Activities

Introduction: The following exercise could be used at the beginning of class to help students understand what marketing is and the role that marketing activities have in their everyday life. Begin by asking students to answer a few questions about their activities for that day. For example, you might begin the discussion by asking students to think about their answers to the following questions:

What did you have for breakfast and why did you eat that particular food? Or

What brand(s) of bath soap or shampoo did you use this morning? And Why did you use that brand?

Student responses to these questions will of course vary, but if you probe and ask “why” did you eat Lucky Charms cereal or “why” did you use Dove body wash you will begin to find some aspects of the marketing concept and the marketing mix emerge.

Try to engage students in a discussion directed toward examining the 4 P’s of the marketing mix. For example:

Product: Why do you eat Lucky Charms and not Special K? Try to probe and discuss the feature benefits of products and the use of brand names. You might want to also discuss the new cereal combos which are available from Kellogg where a milk box and cereal box are packaged together. You might also want to mention that some cereals, like Cheerio’s for example, are now packaged in small single serving bags and are available at convenience stores. Discuss the importance of convenience and adapting packaging to meet the demands of a time pressured society.

Ask students if the product they mentioned satisfied a need or a want? See if students know the difference between a need and a want.

Place: Where did you buy the cereal? Discuss all of the possible places for purchasing cereal. Responses will probably be the grocery store or the store cafeteria, but be sure to discuss the importance of modifying where a product is sold and the channels of distribution used to deliver the product. Mention that groceries can even be purchased over the Internet and the role of the Internet in delivering goods.

Price: Was price a factor in your selection? For example did you buy a cereal that was on sale or that you had a coupon for? Price competition from private brands of cereal could also be explored.

Promotion: Ask students about any marketing messages they recall for the cereal. Discuss whether or not these messages had any impact on their selection and purchase of a cereal. Ask students if marketers create needs.

Ideally the above discussion will provide the class with an overview of marketing and the objectives for the first chapter.

Class Discussion
Having completed the opening exercise, ask students to define marketing and then show them the definition of marketing and lead them through the terms found in the definition.

1. What Is Marketing?

Marketing: is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

Class Discussion

Refer students to the definition of marketing. Who are the individuals and organizations and what do they desire? Engage students in a discussion to examine who are the individuals and organizations referred to in the definition and what are their needs and wants.

a.  Marketing Satisfies Needs

1). Marketing more than any other business function deals with people. The consumer, the ultimate user of a good or service is the focus all marketing activities.

2). The consumer can be individuals or organizations, whether a company (Levi), government (federal, state, local), sorority, or a charity.

3). The Marketing Concept: A management orientation that focuses on identifying and satisfying consumer needs to ensure the organization’s long term profitability objectives.

a). Need: Recognition of any difference between a consumer’s actual state and some ideal or desired state.

b). Want: The desire to satisfy needs in specific ways that are culturally and socially influenced.

c). Benefit: The outcome sought by a customer that motivates buying behavior.

d). Demand: Customers’ desire for products coupled with the resources to obtain them.

Class Discussion

What is the difference between a need and a want? Students will probably be quick to answer this question. If they are having trouble distinguishing between the two ask if any student has recently made a large purchase (i.e., car, stereo, computer, or even a diamond ring). Then ask what need was meet when you made the purchase? How was your want satisfied by the purchase? Discuss with students that needs can be satisfied in different ways that are culturally and socially influenced. If you have any international students in your class might ask to discuss how needs might be satisfied differently in their home country.

Class Discussion
Have students comment on the growth of the cosmetic surgery market. Discuss how new procedures, like Botox injections and lazer peels can be done during lunch hour and the individual can return to work immediately after the procedure is performed. Discuss the concepts of need, want, desire, and demand.

4). The market is composed of all customers and potential customers who share a common need that can be satisfied by a specific product, who have the resources to exchange for it and are willing to make the exchange, and who have exchange authority.

a). Marketplace: is any location or medium used to conduct an exchange.

b). Technology has greatly changed the meaning of “marketplace”. Today exchanges occur via telephone, fax, and the Internet. These new technologies, coupled with the increased use of credit and debit cards, have changed where and how exchanges occur.

Class Discussion

Involve students in a discussion of purchasing over the Internet. What types of products have they purchased and why did they choose to make the purchases via the Internet rather than through a retail store? What concerns do students have about Internet purchasing?

5). A recent movement in marketing is the societal marketing concept: an orientation that focuses on satisfying consumer needs while addressing the needs of a larger society.

Class Discussion
In what ways might a firm practice the societal marketing concept? How does the consumer, society, and the firm benefit from these actions?

b. Marketing is an Exchange of Value.

1). Exchange: The process by which some transfer of value occurs between a buyer and a seller. There are two requirements which must be meet for an exchange to occur:

a). Need two willing people or organizations.

b). Each must possess something that the other wants.

2). Electronic commerce systems are changing not only the place where the transaction occurs, but the role of money in the exchange process.

c. (Almost) Anything Can Be Marketed

1). Consumer Goods and Services

a). Product: A tangible good, a service, an idea, or some combination of these that through the exchange process satisfies consumer or business customer needs, a bundle of attributes, features, functions, benefits, and uses.

b). Consumer goods are purchased by individuals for personal or family consumption.

c). Services: Intangible products that are exchanged directly from the producer to the customer. Examples include a haircut or computer assistance.

2). Business-to-Business Marketing

a). Businesses and organizations are also consumers of goods and services.

b). Industrial Goods: Goods bought by individuals or organizations for further processing or for use in doing business.

Class Discussion

Consider a product that is purchased by both individual customers and organizations. For each group discuss the needs and benefits sought.

3). Not-For-Profit Marketing

Marketing is not just for goods and services. Local school districts, churches, and the Red Cross are all examples of not-for-profit organizations which engage in marketing activities.

4). Idea, People, and Place Marketing

Marketing activities can be used to convince consumers to change a behavior, change their attitude about a person, and to help consumers decide on a vacation location.

Class Discussion

What behaviors have you changed as a result of idea marketing? Listed below are some slogans from recent advertisements. Have any of these had an impact on behaviors?

Just Say No to Drugs

Don’t Drink and Drive

Get High, Get Aids, Die

Abuse hurts

People – How are the principles of marketing applied to people? Consider President Clinton, or Monica Lewinsky? Discuss candidates for public offices, how are marketing concepts used by these individuals?

How do you market yourself? A resume and/or an interview are both examples of situations in which you market yourself.

Place: Places are also involved in marketing. For example, your school baseball team, the symphony, Disney World, New York City all relay heavily on the activities involved in marketing.

Spotlight on Real People at JobDirect

Summary: Rachel Bell and Sara Sutton, two 21 year olds, believed that the Internet was the answer to matching up student job seekers with employers. So Bell and Sutton put their last year of college on hold and started JobDirect, an Internet-based service that is now the largest database of entry-level student jobs on the Web (www.jobdirect.com).

Suggested Answers to Discussion Questions

1.  What is JobDirect’s market?

JobDirect serves two markets, the consumer market and the business market. College students who are looking for jobs use the services of JobDirect and so do businesses who are searching for employees.

2.  What benefits does the service provide to customers?

For college students the service is free. Students can enter their resume directly into the database and they also have access to one of the largest databases of entry-level jobs on the Web. Although businesses pay a fee to access the resume database, they can search for resumes fitting specific criteria.

3.  How does the chapter’s concept of people marketing fit here?

A resume is nothing more than a vehicle to market ones self. In a resume the product, in this case the person, is described. It is very important that the resume be professionally written and contain the appropriate information desired by firms in the area where employment is being sought. Thus, the resume is similar to product packaging. Consumers often examine a product’s package when they are purchasing a new product. In the same way, employers examine resumes to help determine if an individual would be a good candidate for a position in their organization.

4. If you were running this business, what advice might you give to Bell and Sutton about how to get even more students to register their resumes in the database?

Bell and Sutton need to be more aggressive about recruiting students. The bus tour of universities was successful, but now Bell and Sutton need to develop some new promotional activities. Below are some suggested promotional activities:

a. Be a guest speaker on university campuses.

b. Provide promotional give-aways which include the firms name. T-shirts and drink cup holders would be good promotional items.

c. Spend time networking and calling on prospective businesses.

d. Marketing’s Tools: The Marketing Mix

** Refer to Objective 2

** Use the video on Terra Chips

** Use Instructor’s Manual Mini-Project 1-B

** Use Marketing in Action: Real Choices at Florida International Museum

** Use Figure 1.1

Class Discussion

Begin this topic by referring to the opening exercise and the class discussion which followed. You might also want to use question one in Marketing Practice: Applying What You’ve Learned as part of a class discussion on the marketing mix.

Marketing Mix: A combination of the product itself, the price of the product, the place where it is made available, and the activities that introduce it to consumers that creates a desired response among a set of pre – defined consumers.

1). Product: Good, service, idea offered for exchange.

2). Price: The assignment of value to a product.

Class Discussion

What is value? Students will probably provide a variety of definitions, but basically value is based on perception. Do consumer’s definitions value change for different purchase situations? For example, would value be defined the same way for a purchase of a pair of jeans and dinner at a fine restaurant? Discuss the popularity and growth of value oriented retail formats like the Dollar Store where every item in the store costs only $1 dollar.

3). Place: The availability of the product to the customer at the desired time and location.

Class Discussion

Discuss the channel of distribution used for Levi Jeans. How has the Internet changed channels of distribution?

4). Promotion: The coordination of efforts by a marketer to inform or persuade consumers or organizations about goods, services or ideas.

Class Discussion

Many think that promotion is only advertising. Promotion includes the combination of advertising, sales promotion, and personal selling. Discuss the variety of promotional methods which might be used by Levi. If you are using the Computer Friendly Stuff (CFS) case series, refer to the Marketing Plan (Appendix A) for CFS and examine the promotional activities used by CFS.

2.  How is Marketing Done?

** Refer to Objective 3

a. Marketing Planning: The first phase of marketing planning is analyzing the organization’s current strengths and weaknesses. This analysis also examines threats and opportunities the organization might face in the marketplace.