Marketing Chapter 1 Homework Shift Demanding Return Marketing Investment Shift

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Chapter 01

Marketing in Today’s Business Milieu

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LEARNING OBJECTIVES

LO 1-2 Define what marketing and marketing management really are and how they contribute

to a firm’s success.

LO 1-4 Recognize the impact of key change drivers on the future of marketing.

CHAPTER OUTLINE

I. WELCOME TO MARKETING MANAGEMENT

II. MARKETING MISCONCEPTIONS

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A. Behind the Misconceptions

i. Marketing is Highly Visible by Nature

B. Beyond the Misconceptions and Toward the

Reality of Modern Marketing

III. DEFINING MARKETING

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A. Value and Exchange are Core Marketing Concepts

B. A New Agenda for Marketing

IV. MARKETING’S ROOTS AND EVOLUTION

A. Pre-Industrial Revolution

B. Focus on Production and Products

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C. Focus on Selling

D. Advent of the Marketing Concept

F. Post-Marketing Concept Approaches

i. Differentiation Orientation

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iii. Relationship Orientation

iv. One-to-One Marketing

V. CHANGE DRIVERS IMPACTING THE FUTURE OF

MARKETING

A. Shift to Product Glut and Customer Shortage

B. Shift in Information Power from Marketer to

Customer

C. Shift in Generational Values and Preferences

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D. Shift to Distinguishing Marketing (Big M) from

marketing (little m)

i. Marketing (Big M)

E. Shift to Justifying the Relevance and Payback of

the Marketing Investment

VI. YOUR MARKETING MANAGEMENT JOURNEY

BEGINS

VII. SUMMARY

KEY TERMS

marketing management The leading and managing of the facets of marketing to improve

individual, unit, and organizational performance.

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sustainability Business practices that meet humanity’s needs without harming future

generations.

value A ratio of the bundle of benefits a customer receives from an offering compared to the

costs incurred by the customer in acquiring that bundle of benefits.

exchange The giving up of something of value for something desired.

marketing mix (4Ps of marketing) Product, price, place, and promotion—the fundamental

elements that comprise the marketer’s tool kit that can be developed in unique combinations to

set the product or brand apart from the competition.

customer-centric Placing the customer at the core of the enterprise and focusing on investments

in customers over the long term.

differentiation The target marketing approach that involves developing different value offerings

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strategic marketing The long-term, firm-level commitment to investing in marketing—

supported at the highest organization level—for the purpose of enhancing organizational

performance.

market creation Approaches that drive the market toward fulfilling a whole new set of needs

that customers did not realize was possible or feasible before.

marketing (little m) The dimension of marketing that focuses on the functional or operational

level of the organization.

APPLICATION QUESTIONS

1. Consider the various marketing misconceptions introduced in this chapter.

a. Pick any two of the misconceptions and develop a specific example of each from your

own experience with firms and brands.

• Catchy and entertaining advertisements — or perhaps the opposite, incessant and

boring advertisements.

• Pushy salespeople trying to persuade someone to buy it right now.

b. How will it be beneficial for a new marketing manager to understand the misconceptions

that exist about marketing?

Effective marketing management isn’t about buzzwords or quick fixes. In today’s

business milieu, the reality of marketing is that it is a central function and set of

c. Can you come up with some other marketing misconceptions of your own – ones that are

not addressed in the chapter?

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2. In the chapter we make a strong case for the relevance of Peter Drucker’s key themes today,

even though much of his writing was done decades ago. Do you agree that his message was

ahead of its time and is still relevant? Why or why not? Assume you are the CEO of a firm

that wants to practice a market orientation. How will Drucker’s advice help you to

accomplish this goal?

Peter Drucker’s key themes included a business built around the customer with resources

and processes aligned to maximize customer value. He also believed that marketing is the

central core of the firm, and it should therefore be the concern and responsibility of the

3. Put yourself in the role of a marketing manager – from this perspective, do you agree with

the concepts of societal marketing and sustainability? Why or why not? How does a focus

on sustainability affect the marketing manager’s role and activities? Identify two

organizations that you believe do a great job of paying attention to sustainability and present

the evidence that leads you to this conclusion.

Marketing’s stakeholders include any person or entity inside or outside a firm with whom

marketing interacts, impacts, and is impacted by. At the broadest conceptual level, members

of society at large can be viewed as a stakeholder for marketing – a concept called societal

marketing.

Sustainability refers to business practices that meet humanity’s needs without harming future

generations.

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4. Review the section on change drivers and select any two within the set that you want to focus

on. Pick an organization of your choice and answer the following questions:

a. In what ways do each of the change drivers impact the firm’s ability to successfully do

marketing?

b. How is the firm responding to the change drivers in the way it approaches its business?

What should it be doing that it is not doing at present?

c. What role do you believe the marketing manager has in proactively preparing for these

and future change drivers?

Students will provide various answers. Here is information that should be used to inform

their responses:

Five key areas of shift, or change drivers, are:

• Shift to product glut and customer shortage.

5. In the chapter you learned that harmonious performance of Marketing (big M) and marketing

(little m) within a firm can lead to greater levels of success. Why is this true? What does it

mean that these two need to be “harmonious?” What would be some likely negative

consequences if they were out of sync?

Specific programs and tactics aimed at customers and other stakeholder groups tend to

emanate from marketing (little m).

However, marketing (little m) always needs to be

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Marketing (Big M) and marketing (little m) should be quite naturally connected within a

firm, as the latter tends to represent the day-to-day operationalization and implementation of

MANAGEMENT DECISION CASE

From Clydesdales to Talking Frogs: Budweiser’s Strategic Adaptability Keeps It a Winner

This case provides an opportunity to reinforce several key principles that are covered in this

introductory chapter. While the case is largely focused on advertising tactics, there are

examples of strategic marketing that can be discussed as well. A key idea to emphasize is that

brands that survive as long as Budweiser have done so by regularly updating the various

Questions for Consideration

1. Over the course of its history, Budweiser marketing responded to major regulatory and

cultural changes such as Prohibition and the changing role of women in society. What other

changes are either happening now or are on the horizon to which today’s marketing managers

at Budweiser should respond? What should that response be?

An issue of particular relevance to undergrads is underage drinking and abuse of alcohol on

college campuses. Anheuser Busch could respond with either specific social responsibility

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2. In this account of Budweiser’s history there is evidence of both “Big M” marketing and

examples of “little m” marketing. Which of these two types of marketing do you think is

Budweiser’s greater strength? Support your answer with examples to demonstrate your

understanding of these concepts.

“Big M” marketing (or strategic marketing) is focused on an understanding of markets,

competitors, and other external forces, coupled with attention to internal capabilities, while

“Little m” marketing is tactical in nature and serves the firm and its stakeholders at a

functional or operational level. Budweiser marketing has been very strong at the tactical

level, with a constant flow of innovative advertising and special events like the use of the

3. The most recent threat to Budweiser’s dominance is the microbrewery craze, which has

created (or resulted from) a set of more discriminating beer drinkers, not so different from

wine aficionados. One approach Budweiser has taken in their commercials is to make fun of

these enthusiasts. Do you believe that this is an effective strategy? Why or why not? What

alternative communication or product innovation strategies (if any) should be considered to

reach this segment?

Making fun of competitors (and their customers) could help reinforce the level of

commitment of Budweiser’s most loyal customers and could cause more marginal customers

to think twice about switching to microbrews. It is less likely to “convert” microbrew fans to

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brand under the Anheuser Busch family brand. This could lead to a discussion about the risk

of cannibalization of the current Budweiser products by the new product line.