Chapter 1: An Overview of Marketing
1
Chapter 1
An Overview of Marketing
This chapter begins with the learning outcome summaries followed by a set of lesson plans for
instructors to use to deliver the content.
• Lecture (for large sections) on page 3
• Company Clips (video) on page 5
• Group Work (for smaller sections) on page 8
Review and Assignments begin on page 9
Review question
Application questions
Application exercise
Ethics exercise
Video Assignment
Case assignment
Great Ideas for Teaching Marketing from faculty around the country begin on page 22
Chapter 1: An Overview of Marketing
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Learning Outcomes
1-1 Define the term marketing
Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society
at large. Marketing has two facets. First, it is a philosophy, an attitude, a perspective, or a
The five conditions of exchange are as follows:
1-2 Describe four marketing management philosophies
The role of marketing and the character of marketing activities within an organization are
strongly influenced by its philosophy and orientation. A production-oriented organization
focuses on the internal capabilities of the firm rather than on the desires and needs of the
1-3 Discuss the differences between sales and market orientations
First, sales-oriented firms focus on their own needs; market-oriented firms focus on customers’
needs and preferences. Second, sales-oriented companies consider themselves to be deliverers of
goods and services, whereas market-oriented companies view themselves as satisfiers of
Chapter 1: An Overview of Marketing
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© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
premium on making a sale, while market-oriented firms seek a long-term relationship with the
customer. Finally, sales-oriented businesses pursue maximum sales volume through intensive
promotion, whereas market-oriented businesses pursue customer satisfaction through
interfunctionally coordinated activities.
1-4 Describe several reasons for studying marketing
First, marketing affects the allocation of goods and services that influence a nation’s economy
and standard of living. Second, an understanding of marketing is crucial to understanding most
Key Terms
Customer relationship
management (CRM)
Exchange
Production orientation
Market orientation
Relationship marketing
Customer satisfaction
Marketing
Sales orientation
Customer value
Marketing concept
Societal marketing orientation
Empowerment
On-demand marketing
Teamwork
Lesson Plan for Lecture
Brief Outline and Suggested PowerPoint Slides
Learning Outcomes and Topics
PowerPoint Slides
LO1 Define the term marketing
1-1 What Is Marketing?
1. An Overview of Marketing
2. Learning Outcomes
3. What Is Marketing?
4. Marketing
5. Exchange
Chapter 1: An Overview of Marketing
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Learning Outcomes and Topics
PowerPoint Slides
LO2 Describe four marketing management
philosophies
1-2 Marketing Management Philosophies
6. Marketing Management Philosophies
7. Marketing Management Philosophies
8. Production Orientation
9. Sales Orientation
10. Market Concept
11. Achieving a Marketing Orientation
12. Societal Marketing Orientation
13. Questions That Help Determine
Marketing Philosophy
LO3 Discuss the differences between sales
and market orientations
1-3 Differences between Sales and
Market Orientations
14. Differences between Sales and Market
Orientations
15. Differences between Sales and Market
Orientations
16. Customer Value Requirements
17. Customer Satisfaction
18. Relationship Marketing
19. Advantages of Knowing a Firm’s Business
20. End Targets of Organizations
21. Customer Relationship Management
(CRM)
22. Firm’s Primary Goals
23. Tools the Organization Uses to Achieve
Its Goals
LO4 Describe several reasons for studying
marketing
1-4 Why Study Marketing?
24. Why Study Marketing?
25. Why Study Marketing?
26. Key Terms
27. Summary
Suggested Homework
• This instructor manual contains assignments for the Geoffrey B. Small video and for the
Walt Disney case.
• This chapter’s online study tools include flashcards, visual summaries, practice quizzes,
and other resources that can be assigned or used as the basis for longer investigations into
marketing.
Chapter 1: An Overview of Marketing
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Lesson Plans for Video
Company Clips
Segment Summary: Geoffrey B. Small
Geoffrey B. Small is a super luxury fashion designer with an eye toward social justice and
connecting with his buyers. In this video, Small discusses how he began designing clothes and
deciding whom to design clothes for and how to connect with his customers. He also discusses
the nature of consumer behavior. He also mentions his beliefs in terms of how consumers
purchase fashion and how this affects clothing prices.
These teaching notes combine activities that you can assign students to prepare before class, that
you can do in class before or while watching the video, and that you can assign students to
complete on their own after watching the video.
During the viewing portion of the teaching notes, stop the video periodically when appropriate to
ask students the questions listed on the grid or perform the activities listed on the grid. You may
even want to give the students the questions before starting the video and have them think about
the answer while viewing the segment. That way, students will be engaged in active rather than
passive viewing.
Pre-Class Prep for You
Pre-Class Prep for Your Students
• Have students familiarize themselves
with the following terms and
concepts: marketing, production
orientation, marketing concept,
market orientation, and societal
marketing orientation.
• Have students search for Geoffrey B.
Small and read some articles about
him. Depending on the amount of
controversy/discussion you would
like to spark, Small’s articles on his
forum at StyleZeitgeist (here) are
very informative about his stance on
clothing and politics, but can be
highly divisive.
Chapter 1: An Overview of Marketing
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Video Review Exercise
Teaching Method
Begin by asking students “What is
marketing?”
In-Class Preview
• Segue into a discussion of the
marketing concept and the four
marketing management philosophies.
• Write the four marketing philosophies
on the board.
• Take an informal class poll to see
which model resonates most with
students.
• Ask students, while writing on the
board: “What does a firm need to
succeed in competitive markets?”
• While listening to students’ insights,
write the following points on the
board:
A clear understanding of what
customers want
Focus on producing what the
customer wants, rather than on
what management thinks should
be produced
• Write the following “viewing”
questions on the board, or simply
prompt students to think about them as
they watch the video.
Viewing
(solutions below)
1. Is Geoffrey B. Small best described as having a market
orientation or a societal marketing orientation?
2. How does Geoffrey B. Small implement the marketing
concept?
Chapter 1: An Overview of Marketing
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Follow-up
• Have students reflect on their earlier research on Geoffrey B.
Small, and have them write a paragraph on how they think he
uses social media to demonstrate his commitment to a societal
marketing orientation.
• Divide the class into groups of up to four students each, and
have each group brainstorm a marketing concept for one
product, including their intended customer and marketing
philosophy.
• Outside of class, have students individually create a marketing
concept for one product. Have them compose a brief paragraph,
to be turned in later, discussing how they found out what the
customer wanted.
Solutions for Viewing Activities
1. Is Geoffrey B. Small best described as having a market orientation or a societal
marketing orientation?
Geoffrey B. Small would be best described as having a societal marketing orientation
2. How does Geoffrey B. Small implement the marketing concept?
Geoffrey B. Small implements the marketing concept by creating clothing that satisfies his
Lesson Plan for Group Work
Class Activity—Marketing Is Not Just Advertising
The objective of this exercise is to get students to think about what may be involved in marketing
a product. They should construct plans that list the major variables in the marketing mix. This
activity will emphasize that marketing is not just advertising.
First, divide the class into small groups of four or five people. Then ask students to assume that
Chapter 1: An Overview of Marketing
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they have just purchased a tennis racquet factory that has been shut down for the last few years.
The automated equipment and computer system are in excellent shape, and the personnel needed
to run the factory are readily available. But before jumping into production, what questions need
to be asked and answered? What plans need to be made? Which of these plans concern
marketing?
The following suggested questions should be brought up after the students suggest theirs. All
these questions are about marketing issues.
1. What are the needs of tennis players? Do they need more or different styles of tennis
racquets?
2. How many different categories of tennis players are there? What kind of racquet does each
category need? (Handles, sizes, shapes, weights, and prices are factors.)
3. Which category of player does this firm want to sell to?
4. Estimate how many people are in this chosen category. How many of them will be playing
over the next five years? How often will they buy a new racquet?
5. When will these customers buy? (Are there seasons or trends?)
6. Where are these customers located? Where do they shop for tennis racquets?
7. What price are these customers willing to pay? Does this price leave a profit for the
company?
8. How will the company communicate with potential customers? What type of promotion will
reach them?
9. How will the racquets be packaged? What type of warranty will they carry? How will the
firm provide customer service?
10. How many other companies are making racquets? What kinds of racquets and what prices do
competitors offer?
11. What is the industry as a whole projected to do in the next five to ten years?
All these questions must be answered before beginning production. As the students will see,
marketing strategy drives the business.
Review and Assignments for Chapter 1
Review Question
1. Give an example of a company that is successfully following a production orientation.
Why does following a production orientation make a firm in this industry successful?
A mature product, such as a small no-frills calculator, is sold basically on price. A
Chapter 1: An Overview of Marketing
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Application Questions
1. Your company president has decided to restructure the firm to make it more market
oriented. She is going to announce the changes at an upcoming meeting. She has
asked you to prepare a short speech outlining the general reasons for the new
company orientation.
Students’ answers should focus on 1) customers’ wants and needs, 2) distinguishing the
2. Donald E. Petersen, chairman of the board of Ford Motor Company, remarked, “If
we aren’t customer driven, our cars won’t be either.” Explain how this statement
reflects the marketing concept.
Although students’ answers will vary, they should address some of these points. The
3. A friend of yours agrees with the adage “People don’t know what they want—they
only want what they know.” Write your friend a letter expressing the extent to which
you think marketers shape consumer wants.
Although students’ answers will vary. Marketers cannot create demand or make people buy
4. Your local supermarket uses the slogan “It’s your store.” However, when you asked
one of the stock people to help you find a bag of chips, he told you it was not his job
and that you should look a little harder. On your way out, you noticed a sign with an
address for complaints. Draft a letter explaining why the supermarket’s slogan will
Chapter 1: An Overview of Marketing
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never be credible unless its employees carry it out.
Students’ answers will vary widely, but they should explain that the marketing orientation,
5. How does Philip Morris handle the sensitive issues associated with marketing
tobacco? What kind of information does its website at http://www.philipmorris.com/
provide about smoking and its negative effects on health? How do you think Philip
Morris is able to justify such marketing tactics? After browsing the site, do you think
that approach makes the company more or less trustworthy?
Students’ answers will vary.
6. Write a letter to a friend or family member explaining why you think that a course in
marketing will help you in your career in a field other than marketing.
Students’ answers will vary, but they should include a discussion of the importance of
Application Exercise
Understanding the differences among the various marketing management philosophies is the
starting point for understanding the fundamentals of marketing. From reading the chapter, you
may be convinced that a market orientation is the most appealing philosophy and the one best
suited to creating a competitive advantage. Not all companies, however, use a market orientation.
And even companies that follow it may not execute well in all areas.
Activities
1. Visit your local grocery store and go through the cereal, snack food, and dental hygiene
aisles. Go up and down each aisle slowly, and notice how many different products are
available and how they are organized on the shelves.
2. Count the varieties of product in each product category. For example, how many different
kinds of cereal are on the shelves? How many different sizes? Do the same for snack food
and toothpaste.
3. Now, try to find a type of product in the grocery store that does not exhibit such variety.
Chapter 1: An Overview of Marketing
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There may not be many. Why do you think there are enough kinds of cereals to fill an
entire aisle (and then some), but only a few different types of, say, peanut butter? Can this
difference be explained in terms of marketing management philosophy (peanut butter
manufacturers do not follow the marketing concept) or by something else entirely?
4. Have you ever wanted to see a particular kind of cereal or snack food on the shelf? Think
of product varietals (like grapefruit-flavored toothpaste or peanut butter-covered popcorn)
that you have never seen on the shelf but would be interested in trying if someone would
make them. Write a letter or send an e-mail to an appropriate company, suggesting that it
add your concept to its current product line.
Purpose: The purpose of this application is to introduce the students to the marketing concept.
This exercise enables students to evaluate the range of products and product categories at a
supermarket and to draw conclusions about the marketing orientations of particular
brands/companies based on what they find.
Setting It up: You may want to assign this to pairs of students. That way they can discuss their
observations as they move through the store. There is no single solution for this application.
This exercise was inspired by the following Great Ideas for Teaching Marketing:
Deanna R. D. Mader, Marshall University
Fred H. Mader, Marshall University
GIVE THEM WHAT WE MAKE, OR GIVE THEM WHAT THEY WANT?
The following simple in-class exercise can be used either to illustrate the differences between the
sales orientation and the marketing orientation or as an example of the importance of concept
testing in new product development.
Task: Divide the class into four groups. Have the groups separate as much as classroom space
will allow to minimize interference. Tell two of the groups that they are the “producers” and that
their job is to make a product for the other groups. Tell the remaining two groups that they are
the “consumers.” Give the two “producer” groups five sheets of paper (each a different color),
and whisper instructions that they are to build one paper airplane. They must use one sheet of
paper, but color selection and design must be group decisions. Give each “consumer” group one
sheet of white paper. Whisper to these groups that they are to write, in detail, what kind of paper
airplane they want. Upon task completion, compare the results.
Outcomes: Invariably, the “producers” do not produce what the “consumers” had in mind.
Chapter 1: An Overview of Marketing
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Products and concepts may come close, but they are never identical. Class discussion is typically
spontaneous. Students laugh at the results. “Producers” complain that they were not given
instructions as to what the “consumers” wanted, and “consumers” defend themselves by stating
they were never asked. The professor can then direct discussion depending on whether
orientation or new product development is the focus of the class.
Ethics Exercise
In today’s business environment, ethics are extremely important. In recent years, there have been
numerous scandals and trials that stem from a lack of ethical judgment. For this reason, we are
including an ethical exercise in every chapter. A brief scenario will present you with a situation
in which the right thing to do may or may not be crystal clear, and you will need to decide the
ethical way out of the dilemma. To help you with these decisions, we will give you reference to
the AMA’s Statement of Ethics, found online at http://www.marketingpower.com. This will give
you a resource for the exercise and will also help reinforce the ethical standards that marketers
should uphold.
Rani Pharmaceuticals is the maker of several popular drugs that are used to treat high blood
pressure and arthritis. Over time, the company has developed a positive relationship with many
of the patients who use its medications through a quarterly newsletter that offers all the latest
information on new medical research findings and general health and fitness articles. The
company has just been acquired by a group of investors who also own Soothing Waters Hot Tubs
and Spas. The marketing director for Soothing Waters would like to use Rani Pharmaceuticals’s
mailing list for a direct-mail promotion.
Questions
1. What should Rani Pharmaceuticals do?
In order to avoid the semblance of impropriety, it might be better for the marketing director
of Soothing Waters to ask Rani Pharmaceuticals to include an information piece about the
2. Do you think it is ethical to use customer information across multiple divisions of the
same company? Explain.
Chapter 1: An Overview of Marketing
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This is a situation to be handled with caution. Rani Pharmaceuticals should not simply
3. To which marketing management philosophy do you think the marketing director for
Soothing Waters subscribes? Explain.
The marketing director for Soothing Waters seems to be taking a sales-oriented marketing
4. Does the AMA Statement of Ethics address using customer information by multiple
divisions of the same company in its Statement of Ethics? Go to
http://www.marketingpower.com, and review the code. Then write a brief paragraph
on how the AMA Code of Ethics relates to Rani Pharmaceuticals’s dilemma.
The AMA Code of Ethics does not provide specific guidelines for the use of information
Video Assignment: Geoffrey B. Small
Geoffrey B. Small is a super luxury fashion designer with an eye toward social justice and
connecting with his buyers. In this video, Small discusses how he began designing clothes and
deciding whom to design clothes for and how to connect with his customers. He also discusses
the nature of consumer behavior. He also mentions his beliefs in terms of how consumers
purchase fashion and how this affects clothing prices.
1. Geoffrey B. Small takes great pride in offering a high level of handwork in his clothing
because:
a. it offers higher customer value.
b. it is part of his marketing orientation.
c. it is how he markets his clothing.
d. he can employ more people that way.
Chapter 1: An Overview of Marketing
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2. Geoffrey B. Small believes that one function of advertising is to make the customer believe
what companies say. Therefore, he doesn’t advertise and lets the clothes speak for
themselves.
a. True
b. False
3. How would Geoffrey B. Small answer the question “what is this firm’s business?”
a. Making clothes for environmentally aware customers
b. Offering a great product and great service by honestly communicating with the
customer
c. Showing people how clothes should be made locally
d. Giving the customer something they need badly enough that they will pay for it
4. To which marketing management philosophy does Geoffrey B. Small subscribe?
a. Production Orientation
b. Marketing Orientation
c. Sales Orientation
d. Societal Orientation
© 2018 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5. When Small describes how his customers choose to purchase his clothes (by evaluating
that his brand is environmentally conscientious, whereas most other brands are not), which
condition of exchange is being met?
a. Each party has something of value to the other party.
b. Each party is capable of communication and delivery.
c. Each party is free to accept or reject the exchange offer.
d. Each party believes it is appropriate or desirable to deal with the other party.
6. When Small discusses how customers crave personal interaction, crave knowledge of the
person who created the garment, and want unique humanness in their clothing, what is he
describing?
a. Avoiding unrealistic pricing
b. Having a strong sales team
c. Building relationships
d. Building trust
7. Which aspect of customer value is Small discussing when he refers to cost cutting, dividing
the cost of a garment over the years it is worn, and the money invested in the company?
a. Avoiding unrealistic pricing
b. Empowering customers
c. Using the marketing concept
d. Increasing customer satisfaction