Chapter 1 ♦ An Overview of Marketing 1-1
CHAPTER 1 An Overview of Marketing
CHAPTER FEATURES
Chapter Features
Key Points
✓ Marketing & You
Students are given a survey to determine their company and brand
loyalty.
✓ Global Perspectives
Soy sauce giant, Kikkoman uses a program called Global 2020 to
increase consumer awareness about the company’s sustainability
measures around the world.
USING THIS MANUAL
Chapter one includes four learning outcomes that help students become more familiar with the philosophy and process of
marketing. The chapter one outline provides detailed analysis of the four learning outcomes, listing PowerPoint slides
Visit Marketing 12e’s companions site for the Career Appendix that helps students begin working
toward a career in marketing.
to customer satisfaction and loyalty.
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LEARNING OUTCOMES
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.
2 Describe four marketing management philosophies
The role of marketing and the character of marketing activities within an organization are strongly influenced by its
3 Discuss the differences between sales and market orientations
First, sales-oriented forms focus on their own needs; market–oriented firms focus on customers’ needs and preferences.
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
CHAPTER OUTLINE
Learning Outcomes and Suggested PowerPoint Slides:
Slides are available on the Marketing 12e Web site.
1 Define the term “marketing”
PowerPoint 1-4:
What Is Marketing?
I. What Is Marketing?
A. Marketing is a philosophy or a management orientation that stresses the
Chapter 1 ♦ An Overview of Marketing 1-3
Review Question 1.1
B. The American Marketing Association definition of marketing:
Marketing is an organizational function and a set of processes for creating,
PowerPoint 1-5:
What Is Marketing?
C. Research shows that companies that reward employees on a consistent
basis are those that perform best.
When an organization creates a high level of employee satisfaction, this leads
PowerPoint 1-6:
Exchange
D. The Concept of Exchange
The concept of exchange means that people give up something in order to
receive something that they would rather have.
1. The usual medium of exchange is money. Exchange can also be
through barter or trade of items or services.
2. Five conditions must be satisfied for an exchange to take place:
a. There must be at least two parties.
PowerPoint 1-9:
Marketing Management
Philosophies
2 Describe four marketing management philosophies
II. Marketing Management Philosophies
Four competing philosophies strongly influence an organization’s marketing
Review Question 2.3
PowerPoint 1-10:
A. Production Orientation
The production orientation focuses on internal capabilities of the firm
B. Sales Orientation
A sales orientation assumes that more goods and services will be
1-4 Chapter 1 ♦ An Overview of Marketing
PowerPoint 1-11:
Market Orientation
C. Market Orientation
1. The marketing concept states that the social and economic
2. The marketing concept involves:
a. Focusing on customer wants and needs so the organization can
differentiate its product(s) from competitors’ offerings
Review Question 2.2
PowerPoint 1-12:
Achieving a Marketing
Orientation
3. A market orientation involves obtaining information about
customers, competitors, and markets; examining the information from
a total business perspective; determining how to deliver superior
customer value; and implementing actions to provide value to
customers.
PowerPoint 1-13:
Societal Marketing
PowerPoint 1-16:
Sales and Marketing
Orientations
1. The philosophy called a societal marketing orientation states that an
organization exists not only to satisfy customer wants and needs and
to meet organizational but also to preserve or enhance individuals’
and society’s long-term best interests.
Global Perspectives Box
Kikkoman uses its Global Vision 2020 program to demonstrate its sustainable
business practices around the world.
3 Discuss the differences between sales and marketing
orientations
III. Differences Between Sales and Market Orientations
A. The Organization’s Focus
Chapter 1 ♦ An Overview of Marketing 1-5
external focus. Departments in these firms coordinate their activities
and focus on satisfying customers.
B. Customer Value
PowerPoint 1-17:
Customer Value
1. Customer value is the ratio of benefits to the sacrifice necessary to
obtain those benefits.
PowerPoint 1-18:
Customer Satisfaction
Review Question 3.1, 3.2
C. Customer Satisfaction
Customer satisfaction is the feeling that a product has met or exceeded the
customer’s expectations. The organizational culture focuses on delighting
customers rather than on selling products.
D. Building Relationships
Building Relationships
Relationship marketing is a strategy that entails forging long-term
The Customer Experience
The essence of marketing is a good customer experience, which leads to customer
satisfaction and loyalty.
PowerPoint 1-20:
What Is This Firm’s
Business?
E. The Firm’s Business
1. A sales-oriented firm defines its business in terms of the goods and
services it offers, like an encyclopedia publisher defining itself simply
as a book publisher/seller.
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always receive the specific goods and services they want.
F. Those To Whom the Product Is Directed
1. A sales-oriented organization targets its products at “everybody” or
G. The Firm’s Primary Goal
1. The goal of a sales-oriented firm is profitability through sales volume.
2. The ultimate goal of most market-oriented organizations is to make a
profit from satisfying customers. Superior customer service enables a
1. Sales-oriented firms seek to generate sales volume through intensive
promotional activities, mainly personal selling and advertising.
2. Market-oriented organizations recognize that promotion is only one of
the four basic tools that comprise the marketing mix.
PowerPoint 1-23
Why Study Marketing?
Review Question 4.1
PowerPoint 1-24
Why Study Marketing?
4 Describe several reasons for studying marketing
IV. Why Study Marketing?
A. Marketing Plays an Important Role in Society
Marketing provides a delivery system for a complex standard of living. The
The fundamental objectives of most businesses are survival, profits, and
Chapter 1 ♦ An Overview of Marketing 1-7
Marketing provides the following vital business activities:
PowerPoint 1-29
Why Study Marketing?
1. Assessing the wants and satisfactions of present and potential
customers
2. Designing and managing product offerings
C. Marketing Offers Outstanding Career Opportunities
1. Between one-fourth and one-third of the entire civilian work force in
the United States performs marketing activities.
2. Marketing offers career opportunities in areas such as professional
3. Increasing importance of the global marketplace.
D. Marketing Affects Your Life Every Day
1. As consumers of goods and services, we participate in the marketing
process every day.
2. Almost 50 cents of every dollar consumers spend goes to pay
TERMS
customer satisfaction
market orientation
relationship marketing
customer value
marketing
sales orientation
empowerment
societal marketing orientation
exchange
production orientation
teamwork
Suggested Homework:
• The end of each chapter contains numerous questions that can be assigned or used as the basis for longer
investigations into marketing.
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REVIEW AND APPLICATIONS
1.1 What is the AMA? What does it do? How do its services benefit marketers?
The AMA stands for the American Marketing Association. The AMA is a professional association for professionals
working in the field of marketing. It provides its members information and resources about marketing in many
2.1 Your company president has decided to restructure the firm and become 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) customer wants and needs; 2) distinguishing the company’s products and
2.2 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 marketing concept focuses on
2.3 Give an example of a company that might be successfully following a production orientation. Why might a
firm in this industry be successful following a production orientation?
A mature product, such as small no-frills calculators are sold basically on price. A production orientation of lowest
3.1 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, they should address some of these points. Marketers cannot create demand or
3.2 Your local supermarket’s slogan is “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 never be credible unless their employees carry it out.
Students’ answers will vary widely, but they should explain that the marketing orientation, the concern for
Chapter 1 ♦ An Overview of Marketing 1-9
3.3 How does Philip Morris handle the sensitive issues associated with marketing tobacco? What kind of
information does its web site at www.phillipmorrisusa.com provide about smoking and its negative effects on
health? How do you think Philip Morris is able to justify such marketing tactics? After checking around the
site, do you think that approach makes the company more or less trustworthy?
4.1 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 some field other than marketing.
Students’ answers will vary, but they should include a discussion of market orientation to the success of the firm,
Supplemental Exercise: Group Work
Review and Applications
Review and Applications Questions 2.1, 2.2, 3.2, and 4.1 are best suited to group work. For these activities, divide the
APPLICATION EXERCISE
Purpose: The purpose of this application is to introduce the students to the marketing concept. This exercise sends
students to the supermarket to evaluate the range of products and product categories 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 Idea in Teaching Marketing:
Deanna R.D. Mader, Marshall University
Fred H. Mader, Marshall University
GIVE THEM WHAT WE MAKE, OR GIVE THEM WHAT THEY WANT?
Task
Divide the class into four groups. Have the groups separate as much as classroom space will allow in order to minimize
Outcomes
Invariably, the “producers” do not produce what the “consumers” had in mind. Products and concepts may come close,
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ETHICS EXERCISE
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
2. Do you think it is ethical to use customer information across multiple divisions of the same company?
Explain.
This is a situation to be handled with caution. Rani’s should not simply hand over customer information. Although it
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 orientation marketing approach. This is an
MARKETING PLAN EXERCISE
Purpose: The purpose of this exercise is to help students develop a marketing plan aimed at getting the career they
want. Students will build a marketing plan on a one-page document with the following elements:
• Mission
• Strengths and Weaknesses
• Objectives
Chapter 1 ♦ An Overview of Marketing 1-11
CASE STUDY
Girl Scout Cookies: What’s Your Favorite Cookie?
1. Can you identify examples of decisions about each part of the marketing mix (product, place promotion and
pricing) that are being made in the cookie program?
Product – number of cookie varieties offered, portion size per package, packaging material, etc.
Place – sales locations might include door–to-door, tables outside supermarkets, and in the case of the Florida
2. How well do you think the Girl Scouts succeed in relationship marketing? Examine the different factors which
relationship marketing depends on.
Answers and examples may vary. The Girl Scouts emphasize the importance of self–presentation during sales—
3. Although some people take away clear benefits from selling Girl Scout cookies, not ever Girl Scout is going to go
into a marketing career, and many might find the job of cookie selling particularly difficult. Do you think the
experience of cookie selling, and more generally the lessons you might learn from this course about marketing and
sales, can still be beneficial, especially to someone who might find the activities challenging?
COMPANY CLIPS
Method – Live Clean
1. Is Method best described as having a market orientation or a societal-marketing orientation?
The company Method would be best described as having a societal-marketing orientation because Method takes the
2. How does Method implement the marketing concept?
Method implements its marketing concept by satisfying its customers’ needs and desires and in turn, finding a
1-12 Chapter 1 ♦ An Overview of Marketing
Supplemental Exercise: Video
Company Clips
These teaching notes can be assigned for students to prepare before class, in-class before watching the video, during
class while watching the video, or after students watched the video.
During the viewing portion of the teaching notes, stop the tape periodically where appropriate to ask students the
questions or perform the activities listed on the grid. You may even want to give the students the questions before
starting the tape and have them think about the answer while viewing the segment. That way, students will be engaged
in active viewing rather than passive viewing.
Pre-Class Prep for You:
• Preview the Company Clips video segment for Chapter 1. This exercise reviews concepts for LO1, LO2, and LO3
Pre-Class Prep for Students:
• Have students familiarize themselves with the following terms and concepts: marketing, production orientation,
Video Review Exercise Activity
• Warm Up – Begin by asking students: “What is marketing?”
• In-Class Preview
o Segue into a discussion of the marketing concept and the four marketing management philosophies.
o Write the four marketing philosophies on the board. Consider using the graphic Review Learning Outcome
LO2 as your diagram.
o Take an informal class poll to see which model resonates most with students.
Chapter 1 ♦ An Overview of Marketing 1-13
Supplemental Exercise: 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 ask students to assume that 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?
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?
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GREAT IDEAS FOR TEACHING CHAPTER 1
Rich Brown, Freed-Hardeman University
HOW SHOULD SERVICE MAKE YOU FEEL AND WHY IS THAT IMPORTANT?
A problem in teaching people to be good service providers (or effective managers of them), is that many people don’t
know how intrinsically rewarding it is to truly be of service to another person. Many students have experience in service
related jobs but not so many have worked in great service environments. Most have experienced, accepted, and expect
mediocre service in a great variety of service environments. In the classroom it is fairly easy to point out the mediocrity
You could ask the students to write about their experience, but I have found the discussion format to be extremely
beneficial. Most students will have had positive experiences and most will still feel good about what they have done;
this tends to snowball, and the reality that providing good service is intrinsically rewarding becomes very clear. It is
often hard for individual students to get started with ideas for ways typical service jobs can be made more rewarding. In
a group setting, even if I have to get things started, they are soon helping each other come up with useful strategies to
help service providers see how they really can be of help to their customers in their specific situations.
Here is a list of questions to use in starting discussion.
• Who did you help and what exactly did you do for them?
• Did they really need the help? Why?
• What would their situation have been like if you had not helped them?
• How was their situation changed because of your help? Was the change in situation worth the effort?
Why?
James S. Cleveland, Sage College of Albany
DISCUSSION BOARD TOPICS TO ENCOURAGE PARTICIPATION
Discussion board questions provided to students to encourage them to engage in thinking and writing about the
content of the Principles of Marketing course usually take the form of a provocative statement to which students are
Chapter 1 ♦ An Overview of Marketing 1-15
course material, and to make their own responses more interesting to themselves and to the other students in the class
who will read and comment on them. Each question has three parts:
1. A sentence or two from the students’ textbook to introduce the topic. By using the text author’s own words,
students are enabled to locate relevant material in the text more easily, the text content is reinforced, and
The following example is for Chapter One of the Lamb, Hair, McDaniel Essentials of Marketing text. The three parts
have been separated here so they are more readily visible.
1. Four competing philosophies strongly influence an organization’s marketing activities. These philosophies are
Stephen Baglione, Saint Leo University
RELATIONSHIP MARKETING MADE EASY
Before discussing the impact of packaging, I bring a bag of dirt to class, and tell the students that it’s cake mix.
It is a clear plastic bag with a scotch taped piece of paper on it that indicates the brand name and basic information like
nutritional value, address and telephone number of manufacturer, a suggested retail price, etc. I then place the bag on a
Ira S. Kalb, University of Southern California
EFFECTIVE STRATEGIES USING A UNIVERSAL MARKETING STRUCTURE
The Universal Marketing Structure™ is designed to teach students and clients to create consistent and
The Universal Marketing Structure™ is displayed below and on the following page.
Because 5 times as many people read the headline as the
The Structure of a Good Ad (or any marketing piece)
1-16 Chapter 1 ♦ An Overview of Marketing
Body text should not be thought of as filler. It should be
limited to what is essential to explain your main messages)
and to tell a good story. A good rule of thumb is when in
Body Text— Supports, clarifies, and explains the
headline for those readers who want more information.
concentrates on benefits over features since (1)
expensive products).
Last point left with the reader; should include the main
message.
shows it in the best light possible, and serves to break
up the text so it is easier to read.
Close— Reinforces the headline (the main point(s) of the
ad), ends the ad, solicits action, and provides a system
Intangibles – Creativity and Uniqueness. They give the ad
something special that make the ad more attractive,
entertaining, and enjoyable to read.
Marketing Principles – The main principles are the 7 building blocks of marketing
— the 5P’s, Corporate Image, and the Marketing Information System.
The 5P‘s
• Positioning — finding a unique image for the product (or a window) in the minds of prospects (market targets).
Corporate Image
• Unlike positioning, which relates to the image of the product, corporate imaging relates to the image of the company.
• Keeping Corporate Image and Positioning of the product separate proved important to Proctor & Gamble when
rumor circulated that their corporate logo is a satanic symbol.
Marketing Information System (includes Market Research)
does not typically happen with high-tech or more
Chapter 1 ♦ An Overview of Marketing 1-17
• Market Intelligence—complaints, compliments, competition, market needs and wants
Nancy Ryan McClure, University of Central Oklahoma
James L. Thomas, Jacksonville State University
MARKETING IN ACTION
Marketing majors and non–majors alike persist in thinking that “marketing is selling.” To overcome this
misperception, a marketing course was developed that took students out of the classroom and into the “real world.” A
study tour was offered between semesters that took the students to a major metropolitan area for two purposes: (1) see
the variety of activities involved in the marketing discipline, and (2) expose students to multiple career opportunities.
The tour was designed to provide students with maximum exposure to some of the “best” in the field of
This course was offered for 2 hours of either undergraduate or graduate credit (with Fundamentals of Marketing
as a prerequisite.) The students stayed in the Dallas area Monday through Friday in January between semesters. Upon
returning to the university, students were required to write thank-you notes to each of the organizations and to take a
final exam. One of the questions, naturally, was “Marketing is selling. Discuss.” It was evident from the student’s
responses that they had clearly learned that marketing is much more than selling.
While there is nothing novel about field trips, the combination of organizations and the class format permitted a
It should be noted that the first time such a course is offered, a great deal of time and planning must be devoted
to the development of the course. The authors found that the process of simply contacting the appropriate individuals,
much less completing the details with these individuals, requires an extensive number of telephone calls, faxes, emails,
Rich Brown, Freed-Hardeman University
AN ASSIGNMENT THAT TIES THE PRINCIPLES OF MARKETING COURSE TOGETHER
The purpose of this assignment is to cause students to connect the different parts of the Principles of Marketing
course. The assignment is a 3 to 5 page paper. It begins with identification of a target market and ends with the student
assuming the role of marketing consultant making suggestions for ways to improve the effectiveness of the marketing
mix being used to attract it. Feedback from students is overwhelmingly positive and indicates that completing the
assignment really helps them to “put it all together.” My written instructions to the students are as follows:
1. Choose an organization that does marketing. Make it easy on yourself and choose an organization that you
can observe the marketing efforts of and are familiar with. If you choose a very large organization that
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2. After choosing an organization, your next step is to identify and describe the target market for the
products(s). Do not say something like “young, mid–to-upper class women who wash their hair” and
3. After discussing the target market you should then discuss the marketing-mix (4-Ps) the firm is using to
4. After discussing the firm’s marketing-mix you should assume the role of marketing consultant and make
specific suggestions for improving the firm’s effectiveness. These suggestions can be in the form of
Sheri Carder, Lake City Community College
LEMONADE FROM LEMONS MARKETING – CONSUMERISM EXERCISE
As a consumer, you expect quality products and good service. But sometimes things go wrong. If you’re
unhappy with your purchase or the service you received, do you know how to obtain satisfaction?
Consider yourself an active consumer. Choose a company or service with which you’ve recently been
disappointed. Write them a letter, using the following guidelines, to explain the problem and what you would like to see
happen. Make two copies – one to mail to the company and one to put in our class file as we compare “responsiveness
rates” among the various companies. When you receive a reply, share it with the class.
consumer, so type the letter rather than writing in pencil on notebook paper.
1. Describe the problem and what (if anything) you’ve already done to resolve it. List fact: date and place of
purchase, serial or model number, etc.)
2. Send sales receipts, repair orders, warranties, etc. (copies, not originals) to make your case.
3. Don’t be angry or sarcastic. In fact, begin your letter with a compliment to the company, e.g., “Colgate
Palmolive products are central to any household. I have used your _____ for the five years and have been
completely satisfied. That is why I was disappointed when the _____ didn’t live up to the Colgate
9. If you don’t receive resolution, decide if you want to pursue it. Keep a record of everyone to whom you
talk or write, and when. You can appeal to the higher-ups. You can approach the Better Business Bureau,