Chapter 1

Contemporary Marketing

Copyright © 2016 Pearson Canada Inc. 1-1

 Chapter 1 Learning Objectives

1. Define the term marketing.

2. Describe the importance of marketing in organizations today.

3. Describe how marketing has evolved to become the driving

force of business growth.

4. Explain the fundamental process of marketing practiced by

organizations today

Copyright © 2016 Pearson Canada Inc. 1-2

 Chapter 1 Learning Objectives
5. Explain the concept of the marketing mix.

6. Explain how an organization maximizes the value of its

customers.

7. Identify fundamental methods for measuring effectiveness of

marketing activities.

8. Explain how ethical considerations impact marketing

strategies.

Copyright © 2016 Pearson Canada Inc. 1-3

 Marketing Defined

“The activity, set of set of institutions, and processes

for creating, communicating, delivering, and
exchanging offerings that have value for customers,
clients, partners, and society at large.”

American Marketing Association

Copyright © 2016 Pearson Canada Inc. 1-4

 Marketing Defined
Many experts believe marketing should be at the forefront of
an organization and positioned as the “philosophy” that
spreads throughout the entire organization.

Examples:
Apple
Coca-Cola
McDonald’s
Starbucks

Copyright © 2016 Pearson Canada Inc. 1-5

 The Importance of Marketing
• Agent of change into the future

• Provides a means to assess changing conditions

• Provides expertise to develop appropriate strategies

• Ensures organizations create the right products/

services for unique customer groups for
sustainability

Copyright © 2016 Pearson Canada Inc. 1-6

The Importance of Marketing
Effective Marketing helps companies grow and prosper

Copyright © 2016 Pearson Canada Inc. 1-7

 The Nature of Marketing
Has Evolved

Marketing is based on a simple idea:

identify a need and then satisfy it.

Copyright © 2016 Pearson Canada Inc. 1-8

The Evolution of Marketing

An organization concentrated on
Production what it was capable of producing.
Orientation A quality product at a good price
would sell itself.

Companies believed the more they

Selling sold the more profit they would
Orientation make. The “hard sell” was the basic
philosophy of doing business.

Copyright © 2016 Pearson Canada Inc. 1-9

The Evolution of Marketing

The Marketing Concept:

“Determining the needs and wants

Marketing of a target market and delivering a
Orientation set of satisfactions in such a way
that a product is perceived as better
value than competing products.”

“Have it your way.”

…Burger King

Copyright © 2016 Pearson Canada Inc. 1-10

The Evolution of Marketing

“Conducting all operations in an

Socially
ethical manner and in the best
Responsible
interests of consumers and
Marketing
society.”

Copyright © 2016 Pearson Canada Inc. 1-11

Socially Responsible Marketing

Copyright © 2016 Pearson Canada Inc. 1-12

Socially Responsible Marketing

Cause Marketing: An organization’s support of causes

that benefit society

1.Programs that conserve, preserve, and protect the

environment

2.Programs that support causes (cause marketing)

Copyright © 2016 Pearson Canada Inc. 1-13

Being Socially Responsible

Copyright © 2016 Pearson Canada Inc. 1-14

Being Socially Responsible

Copyright © 2016 Pearson Canada Inc. 1-15

 Social Media Marketing

“An interactive communications

Social Media process where brands and
Marketing consumers engage with each other;
a phase of marketing where some
control of marketing has shifted to
consumers.”

Copyright © 2016 Pearson Canada Inc. 1-16

 Social Media Marketing
A social network connects people with different types of
interests at one website.

Communications are participative in nature –

• Consumers can manipulate brand information

• Create new information about a brand
• Distribute it freely among their network of friends
—a concept referred to as brand democratization.

Copyright © 2016 Pearson Canada Inc. 1-17

 Social Media Marketing

Consumer-generated content refers to content

produced by consumers for consumers.

People create the content without being asked, and in

many cases it presents the brand effectively are
sometimes call brand evangelists.

Copyright © 2016 Pearson Canada Inc. 1-18

 Social Media Marketing
Content marketing is a format that involves the creation and
sharing of relevant brand-oriented content in order to acquire
customers

Copyright © 2016 Pearson Canada Inc. 1-19

 The Marketing Process

“A market is a group of people (or an organization or

both) who have a similar need for a product or service,
the resources to purchase the product or service, and
the ability to buy it.”

Copyright © 2016 Pearson Canada Inc. 1-20

 The Marketing Process
The goal of marketing is to attract, retain, and maximize
the value of a customer, so that organizational objectives
are achieved.

Typical objectives: an increase in sales, profit, market

share, image and reputation improvement

Copyright © 2016 Pearson Canada Inc. 1-21

The Marketing Process

Copyright © 2016 Pearson Canada Inc. 1-22

 Assessing Customer Needs
An organization collects information about needs to
determine if a market is worth pursuing.

Market Analysis – Marketers consider

market demand, sales potential, production
capabilities and availability of resources.

Consumer Analysis – marketers monitor

social, demographic and behaviour changes
to detect new product opportunities.

Copyright © 2016 Pearson Canada Inc. 1-23

 Target Market
Identification and Selection

A target market is a group of people to which a

company markets its products.

The target has something in common:

• age
• education
• lifestyle
• activity

Copyright © 2016 Pearson Canada Inc. 1-24

The Marketing Mix

Copyright © 2016 Pearson Canada Inc. 1-25

 Product Strategy
A product may possess tangible and intangible characteristics.

Product decisions are numerous and embrace:

• Quality
• Features
• Brand Name
• Image
• Size
• Format
• Service
• Package Design

Copyright © 2016 Pearson Canada Inc. 1-26

 Price Strategy
Establishing a fair and equitable price for customers while being
profitable for the organization.

Price decisions consider the following:

• Cost of manufacturing a good
• Location of customers
• Desired profit level
• Degree of competition

Copyright © 2016 Pearson Canada Inc. 1-27

 Distribution Strategy
The selection and management of marketing channels and the
physical distribution of products.
Wholesalers and Retailers

Producers Distributors
Consumer
of Goods of Goods

A marketing channel is a series of firms that participate in the flow

of goods and services from producers to final users.

Copyright © 2016 Pearson Canada Inc. 1-28

 Distribution Strategy
A change in consumer behaviour is fuelling direct distribution
strategies to consumers.

Among Canadian Internet users:

• 77 % research goods and services online
• 56 % order goods and services for direct delivery

Total value of goods and services ordered online by consumers

• $18.9 billion in 2012, a 24 % increase from 2010.

“Canadian online shopping rises 24% in two years,” Marketing, Oct 28, 2013,
www.marketingmag.ca

Copyright © 2016 Pearson Canada Inc. 1-29

 Marketing Communications Strategy
Marketing Communications Strategy defined as:

“The blending of advertising, sales promotion, event marketing

and sponsorship, personal selling, and public relations to present
a consistent and persuasive message about a product or service.”

Integrated Marketing Communications (IMC) strategy defined as:

“The coordination of relevant forms of marketing communications

in a unified program that maximizes the impact on consumers”.

Copyright © 2016 Pearson Canada Inc. 1-30

 IMC Mix
The IMC Mix includes:

•Media Advertising (traditional media such as TV, radio, magazines,

newspapers, and outdoor; and interactive media such as the Internet,
social media and mobile communications.

•Sales Promotions which offer incentives to encourage purchases.

•Public Relations communications to improve brand image and

reputation.

•Experiential Marketing which engages consumers with brands in

personal ways.

Copyright © 2016 Pearson Canada Inc. 1-31

 Public Image and Its Influences
Public image is an important component of an organization’s
corporate strategy and marketing strategy. A good reputation is
an important asset and is something that is earned through good
marketing.

An organization must:

• Be sensitive to customer needs and interests

• Encourage customer loyalty
• Be socially responsible marketers

Copyright © 2016 Pearson Canada Inc. 1-32

 Maximizing Customer Value:
Building Customer Relationships
Marketing today is about building relationships with channel
members and consumers.

CRM refers to strategies that optimize profitability, revenue,

customer retention, and customer satisfaction.

Successful CRM programs rely on a strong internal data

management system.

Copyright © 2016 Pearson Canada Inc. 1-33

 Customer Retention Strategies
Loyalty Programs
An incentive is offered to
customers to encourage
repeat purchases.

Customer Relationship Management Programs

A system that collects and analyzes information for the purpose of
devising unique marketing offers to individual customers.

Copyright © 2016 Pearson Canada Inc. 1-34

 Customer Retention Strategies
Customer Relationship Management (CRM) Programs

Three distinct organizational functions:

1. To collect and analyze information.

2. Develop new marketing offers that should be of interest

to its customers based on its analysis of the information.

3. A communications plan that delivers the details of the

new offer to the market.

Copyright © 2016 Pearson Canada Inc. 1-35

 Evaluating Marketing Activity
Marketing strategies must be periodically reviewed for
effectiveness. A typical review may include an assessment of:

• Market conditions (external influences)

• Competitor activity (their success or failure)
• Brand performance to date (are objectives being achieved?)

Potential changes in marketing strategy are addressed in

the review process.

Copyright © 2016 Pearson Canada Inc. 1-36

 Ethical Considerations for
Marketing
• Business ethics is defined as the study and examination of
moral and social responsibility in relation to business
practices and decision-making in business.

• In Canada, the CMA’s Code of Ethics and Standards of Practice

guides marketing organizations

• Businesses today strive for sustainability… the ability to

sustain or the capacity to endure.

Copyright © 2016 Pearson Canada Inc. 1-37