The Evolution of Marketing

Introduction to
Marketing Production Era

Sales Era

Marketing Era
Relationship
chapter 1 Dr. Rosebloom
Marketing Era
Harcourt, Inc.

The Evolution of Marketing The Evolution of Marketing

Production Era Sales Era

n Business philosophy n Business philosophy

Orientation: focusing on
Orientation: focusing on selling
manufacturing existing products;
efficiency; demand supply exceeds
exceeds supply = demand = buyer’s
seller’s market market
Dominant n Prior to the Dominant n Prior to the
time period: 1920s time period: 1950s
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The Evolution of Marketing The Evolution of Marketing

Marketing Era Relationship Marketing Era

n Business philosophy n Business philosophy

Orientation: focusing on
Orientation: focusing on
consumer wants and reinforcing the
needs; any customer-oriented
supply/demand focus of the
situation marketing era
Dominant n Last half of 20th Dominant n Last decade of
time period: century time period: 20th century
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AMA Definition of Marketing What is a market?

n Marketing is the process of “A market consists of all the potential

planning and executing the customers sharing a particular need or want
conception, pricing, who might be willing and able to engage in
promotion, and distribution of exchange to satisfy that need or want” (Philip
ideas, goods, and services to Kotler).
create exchanges that will
satisfy individual For instance…..
and organizational
objectives.
Dr. Rosebloom

The Overall Themes of Marketing As far as Customers are concerned there are
The Traditional Marketing Mix three elements to address
n Customer value: Difference between the
values that the customer gains from owning
and using a product versus the costs of
obtaining the product.
n Product
n Price • Customer satisfaction: The extent to which a
product’s perceived performance in delivering
n Promotion value matches a buyer’s expectations.

n Place
• Quality: the characteristics of a product or
service that bear on its ability to satisfy stated or
implied customer needs.

Marketing Management Philosophies

Relationships
Agree or Disagree?
1. Production: consumers will favor products that are
available and highly affordable
2. Product: consumers favor products that offer the most in • Relationship marketing: the process of creating, maintaining,
quality, performance, and innovative features and enhancing strong, value-laden relationships with customers and
other stakeholders.
3. Selling: consumers will not buy unless an organization
undertakes a large-scale selling and promotional effort
4. Marketing: determining the needs and wants of target
markets and delivering the desired satisfactions more
effectively and efficiently then the competitors
5. Societal marketing: generating customer satisfaction
and long-run societal well-being are the keys to both
achieving the company’s goals and fulfilling its
responsibilities

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 Marketing Management Practice
Essentially Two Types Orientations towards marketing
n Entrepreneurial marketing: n Production concept (before 1930):
n Businesses started by individuals demand > supply
n Creativity, drive, and perseverance are keys to
n Selling concept (1930-1950):
success
supply > demand
Formulated marketing: n Marketing concept (post-1960s):
– Professional, disciplined
approach analyze consumer needs before
– Achieving a market orientation producing and selling, market
orientation, competition…

Marketing Concept versus Marketing Management

Selling Concept
n What is marketing management?
Starting Point Focus Means Ends « Marketing management is the process of
planning and executing the conception, pricing,
The Marketing Concept promotion, and distribution of ideas, goods,
and services to create exchanges that satisfy
Integrated Profits from individual and organizational goals » (Philip
Market Customer needs
marketing satisfied customers
Kotler)

The Selling Concept n Marketing management has the task of

Profits through influencing the level, timing, and
Factory Product Sell and
composition of demand in a way that will
Promote it sales volume
help the organization achieve its objectives.
Figure 1.3

Exchange Process Exchanges

Learning Environment

Process by which one or more Tuition

parties give something of
value to each other to satisfy Promised Action
perceived needs

Votes
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 Exchanges Exchanges
Fee
Producer

Consulting Wholesaler

Products/services
Retailer

Money Consumer
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Activities of Marketing
Activities of Marketing Exchange

n Buying - seeking and

evaluating alternatives
n Selling - promotion of
alternatives to consumers

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Activities of Marketing
Activities of Marketing Logistical

n Transporting - movement
of goods and services
n Storing - holding of goods
and services

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 Activities of Marketing
Activities of Marketing Facilitating

n Financing - facilitating exchange

n Risk-taking - holding title
n Providing information -
understanding markets (consumer
and industrial)
n Standardizing and grading - sorting
by size and quality
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The Marketing Concept Strategic Marketing Concept

n Customer orientation Corporate mission is to seek

n Coordinated effort by all departments n Sustainablecompetitive
of the firm to satisfy customers advantage
n Emphasis on long term profit
n Meet customer needs

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Societal Marketing Concept The Marketing Mix Variables

n Adoption of Marketing Concept Product Place

n Considering the needs of society as a
whole Target
n Environment Market
n Health
n Safety Price Promotion

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 MARKETING MIX The 7Ps of Marketing Mix
n The marketing mix is the tactical or
operational part of a marketing plan.
The marketing mix is also called the
4Ps and the 7Ps. The 4Ps are price,
place, product and promotion. The
services marketing mix is also called
the 7Ps and includes the addition of
process, people and physical evidence.
Dr. Rosebloom

The Marketing Mix Variables

The 7Ps of Marketing Mix Target Market
n PEOPLE -They are the ones who make the products and services a
success. People refer to the staff and salespeople who work for your
business, including yourself.
n PROCESS - refers to the processes involved in delivering your
products and services to the customer. Group(s) of potential
n PHYSICAL EVIDENCE - refers to everything your customers see
when interacting with your business. This includes:
customers toward which
• the physical environment where you provide the product or a firm directs its
service;
• the layout or interior design;
marketing mix(es)
• your packaging;
• your branding.
n Physical evidence can also refer to your staff - how they dress and act. Dr. Rosebloom

The Marketing Mix Variables The Marketing Mix Variables

Product Strategy Distribution Strategy

n Identifying consumer needs and

wants
n New product development n Physicaldistribution
n Designing the product n Channel management
n Branding
n Packaging

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The Marketing Mix Variables The Marketing Mix Variables
Pricing Strategy Promotion Strategy

n Advertising
n Pricing objectives
n Personal selling
n Price determination
n Sales promotion
n Pricing policies
n Public relations

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The Marketing Environment Environmental Scanning

n Microenvironment
n Objectives and resources
n Identificationof important
n Macroenvironment trends
n Competitive environment
n Analysis of impact on the
n Legal/politicalenvironment
n Socio-cultural environment firm
n Economic environment
n Technological environment
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Separations Between Producers and Consumers

Separations Between Producers and Consumers
Spatial Separation
n Producers and
consumers are
generally separated by
Separations naturally exist between space or geography
producers and consumers, buyers
and sellers, and any other parties
who enter into exchanges

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Separations Between Producers and Consumers Separations Between Producers and Consumers
Temporal Separation Perceptual Separation
n Producers and consumers want to produce and
consume at different times. Sales of skis n Producers may lack
generally occur during the winter but information about
producers want to manufacture them all year the whereabouts of
consumers and
consumers may lack
information about
the producer’s
offerings
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Separations Between Producers and Consumers Separations Between Producers and Consumers
Ownership Separation Values Separation
n There is a
n There is a
separation between
separation between
producers and
producers and
consumers in
consumers because
reference to title.
producers value the
Producers pass
costs and prices of
(exchange) title of
their products while
product/services for
consumers value the
title to the money
utility of the product
the consumer holds
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Four Types of Utility

Four Types of Utility Form Utility

n Transformation of
raw materials
and/or labor into
Utility a finished good
and/or service
that the consumer
desires
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Four Types of Utility Four Types of Utility
Form Utility Place Utility

n Transformation of
raw materials n Availabilityof a
and/or labor into good and/or
a finished good service where the
and/or service consumer wants
that the consumer or needs it
desires
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Four Types of Utility Four Types of Utility

Place Utility Place Utility

n Availabilityof a good and/or service

where the consumer wants or needs it
n Availabilityof a
good and/or
service where the
consumer wants
or needs it

Dr. Rosebloom Dr. Rosebloom

Four Types of Utility Four Types of Utility

Ownership Utility Time Utility

n Transferring title n Availabilityof a

of a good and/or good and/or
service from service when
producer to consumer
consumer wants/needs it

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Four Types of Utility
Time Utility

n Availabilityof a
good and/or
service when
consumer
wants/needs it

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