What is Marketing?

Professor Chip Besio Cox School of Business Southern Methodist University

What Is Marketing?

 Advertising?

 Selling?

 Sales promotion?

What Is Marketing?

 Marketing is [the] “process by which individuals and groups obtain what they

need and want

through

creating, offering, and exchanging products

others [Italics mine].” of

value

with ***Philip Kotler

What Is Marketing?

 Marketing is so basic that it cannot be considered a separate function. It is the whole business seen from the point of view of its final result, that is, from the

customer’s point of view

[Italics mine]. *** Peter Drucker

The Evolution of Marketing  Production orientation  Sales orientation  Marketing orientation

Production Orientation Persuade customer to want what firm has

Generic Lowest Cost Volume, Margins

Product Competitive Advantage Objectives

Short-term

Time Horizon Marketing Orientation Persuade firm to have what the customer wants

Differentiated Quality and Service Market Position, Customer Satisfaction Long-term

What Is Marketing?

Core Concepts

Needs, wants, and demands Markets Exchange, transactions, and relationships Products and Services Value, satisfaction, and quality

Source: Prentice Hall

The Marketing Concept  Focus on customers’

needs and wants

 Orient activities of the firm toward them  Achieve long-term goals by offering

customer value

, generating

customer satisfaction

and developing

relationships

with customers Adapted from Prentice Hall

What Motivates Consumers?



Needs

- state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging “

I am thirsty”



Wants

- form that a human need takes as shaped by culture and individual personality. “

I want a Coca-Cola

” 

Demands

- human wants backed by buying power “

I can buy a Coca-Cola

” Adapted from Prentice Hall

This Is a Need Needs - state of felt deprivation including physical, social, and individual needs.

This Is a Want Wants - form that a human need takes, as shaped by culture and individual personality.

Wants

This Is Demand

Buying Power

“Demand”

Need / Want Fulfillment  Needs and Wants Fulfilled through a

Marketing Offer

:  Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

What Satisfies Consumer’s Needs and Wants?



Products

- anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a need or 

Services

- activities or benefits offered for sale that are essentially intangible and don’t result in the want ownership of anything  Examples : food, electronics, cars, jewelry, clothing, and machinery  Examples : banking, airlines, haircuts, and hotels Adapted from Prentice Hall

How Consumers Choose Products and Services 

Customer Value

- benefit that the customer gains from owning and using a product compared to the cost of obtaining it 

Customer Satisfaction

- depends on the product’s perceived performance in delivering value relative to a buyer’s expectations Source: Prentice Hall

How Consumers Obtain Products and Services 

Exchanges and Transactions

- trade of values between parties, usually involving money 

Development of Relationships

building long-term relationships with consumers, distributors, dealers, and suppliers Source: Prentice Hall

The Marketing Concept - Major Goals By:  focusing on satisfying consumer needs and wants    generating customer value and satisfaction developing relationships with customers The result: 

The firm creates a sustainable competitive advantage over its rivals

Emerging Challenges for Marketers

Information Technology Ethical Concerns Nonprofit Marketing Changing World Economy Globalization

Source: Prentice Hall

Marketing Mix - The Four P’s

RICE ROMOTION LACE RODUCT

The Marketing Mix - Product  Product line breadth and depth  Product characteristics (e.g., quality, features, design, reliability)  Brand  Packaging  Services  Return and/or warranty policies 

The product is much more than the tangible item that the customer sees

The Marketing Mix - Price  List price  Discounts  Bundling  Terms (e.g., 2/10, net 30)  Credit 

Price includes the tools that determine how much and when the customer pays

The Marketing Mix - Promotion  Advertising  Sales promotion  Direct marketing  Public relations  Personal selling 

Promotion (what many people commonly think of as marketing) includes all communications with potential customers that are intended to influence their attitudes, beliefs and purchase decisions

The Marketing Mix - Place  Shelf location  Display  Inventory  Distribution channels  Transportation  Territory or coverage 

Place involves how and when the customer gets the product

Marketing Mix - Summary 

Marketers have many more tools at their disposal to achieve company objectives than you might have thought