CHAPTER 1
An Overview of Strategic Marketing
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Purpose and Perspective
IRM, p. 1
Lecture Outline
IRM, p. 2
Discussion Starters
IRM, p. 9
Class Exercise
IRM, p. 11
Answers to Developing Your Marketing Plan
IRM, p. 13
Answers to Discussion and Review Questions
IRM, p. 14
Comments on the Cases
IRM, p. 16
Video Case 1.1
IRM, p. 16
Case 1.2
IRM, p. 17
Examination Questions: Essay
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Examination Questions: Multiple-Choice
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Examination Questions: True-False
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PURPOSE AND PERSPECTIVE
The purpose of this chapter is to give students an overview of strategic marketing and provide a general
framework for studying the field of marketing. First, we develop a definition of marketing and explore
each element of the definition in detail. Next, we explore the importance of value-driven marketing. We
also introduce the marketing concept and consider several issues associated with its implementation.
Additionally, we take a look at the management of customer relationships and relationship marketing.
Finally, we examine the importance of marketing in global society.
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LECTURE OUTLINE
I. Defining Marketing
A. Marketing is the process of creating, distributing, promoting, and pricing goods, services, and
ideas to facilitate satisfying exchange relationships with customers and to develop and maintain
favorable relationships with stakeholders in a dynamic environment. This definition is consistent
with the American Marketing Association definition of marketing.
B. Marketing Focuses on Customers
1. As the purchasers of the products that organizations develop, promote, distribute, and price,
customers are the focal point of all marketing activities.
2. The essence of marketing is to develop satisfying exchanges from which both customers and
marketers benefit. Both customer and marketer expect to gain something of value from the
exchange.
3. Organizations generally focus their marketing efforts on a specific group of customers, or
target market.
II. Marketing Deals with Products, Distribution, Promotion, and Price
A. Marketing is more than simply advertising or selling a product; it involves developing and
managing a product, making the product available in the right place and at a price acceptable to
buyers, and communicating information to help customers determine if the product will satisfy
their needs.
1. These activities—product, distribution, promotion, and pricing—are known as the marketing
mix because marketers decide what type of each element to use and in what amounts.
2. Marketers must aim to create and maintain the right mix of elements to satisfy customers in
the target market.
3. Marketers must collect detailed and up-to-date information on their target market, consumer
preferences, and competitors in order to develop the marketing mix.
B. The Product Variable
1. The product variable of the marketing mix deals with researching customers’ needs and wants
and designing a product that satisfies them.
2. A product can be a good, a service, or an idea.
a. Good—a physical entity that you can touch
b. Service—the application of human and mechanical efforts to people or objects to provide
intangible benefits to customers
c. Idea—concept, philosophy, image, or issue
3. The product variable includes the creation or modification of brand names and packaging. It
may also include decisions regarding warranty and repair services.
4. Product variable decisions and activities directly impact the creation of products that meet
customers’ needs and wants.
C. The Distribution Variable
1. Distribution helps a marketing manager make products available in the quantities desired to
as many target market customers as possible.
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b. The exchange should provide a benefit or satisfaction to both parties involved in the
transaction.
c. Each party must have confidence in the promise of the “something of value” held by the
other.
d. To build trust, the parties to the exchange must meet expectations.
3. An exchange will not necessarily take place just because these conditions exist; marketing
activities can occur even without an actual transaction or sale. (Figure 1.2 depicts the
exchange process).
4. Marketing activities should attempt to create and maintain satisfying exchange relationships.
5. Marketers are also concerned with building relationships with relevant stakeholders who
have a “stake,” or claim, in some aspect of a company’s products, operations, markets,
industry, and outcomes; these may include customers, employees, investors and shareholders,
suppliers, governments, communities, and many others.
IV. Marketing Occurs in a Dynamic Environment
A. The marketing environment, which includes competitive, economic, legal, regulatory,
technological, and sociocultural forces, surrounds the customer and affects the marketing mix.
The effects of these forces can be difficult to predict.
B. The forces of the marketing environment affect marketers’ abilities to facilitate exchanges in
three ways:
1. They affect customers’ lifestyles, standards of living, and preferences and needs for products.
2. They help determine whether and how a marketing manager can perform certain marketing
activities.
3. They affect a marketing manager’s decisions and actions by influencing buyers’ reactions to
the organization’s marketing mix.
C. Marketing environment forces can fluctuate quickly and dramatically.
1. Changes in the marketing environment produce uncertainty for marketers and at times hurt
marketing efforts, but they also create opportunities. Marketers who are alert can adjust and
capitalize on opportunities provided by change.
2. Marketing mix elements—product, distribution, promotion, and price—are factors over
which an organization has control; the forces of the environment, however, are subject to far
less control.
V. Understanding the Marketing Concept
A. According to the marketing concept, an organization should try to provide products that satisfy
customers’ needs through a coordinated set of activities that also allows the organization to
achieve its goals.
1. Customer satisfaction is the major focus of the marketing concept.
a. An organization should focus on customer analysis, competitor analysis, and integration
of the organization’s resources to provide customer value and satisfaction, as well as
long-term profits.
b. The organization must continue to alter, adapt, and develop products to keep pace with
customers’ changing desires and preferences.
