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Copyright 1999 Prentice Hall
1-1
Chapter 1
Chapter 1
Marketing in a Changing World: Creating Customer Value and
Satisfaction
PRINCIPLES OF MARKETING
Eighth Edition
Philip Kotler and Gary Armstrong
Copyright 1999 Prentice Hall
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What is Marketing?What is Marketing?
• Process by which individuals and groups obtain what they needneed and want want through creating and exchanging exchanging products products and value with others.
•More simply: Marketing is the delivery of customer satisfaction at a profit.
Copyright 1999 Prentice Hall
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Core Marketing ConceptsCore Marketing Concepts
Products and
Services
Value, satisfaction,and quality
Needs, wants,and demands
Exchange, transactions,and relationships
Markets
CoreMarketingConcepts
CoreMarketingConcepts
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What Motivates a Consumerto Take Action?What Motivates a Consumerto Take Action?
• NeedsNeeds - state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am thirsty
• WantsWants - form that a human need takes as shaped by culture and individual personality. i.e. I want a Coca-Cola.
• DemandsDemands - human wants backed by buying power. i.e. I have money to buy a Coca-Cola.
Copyright 1999 Prentice Hall
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What Will Satisfy Consumer’sNeeds and Wants?What Will Satisfy Consumer’sNeeds and Wants?
• ProductsProducts - anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a need or want.
• Examples: persons, places, organizations, activities, and ideas.
• ServicesServices - activities or benefits offered for sale that are essentially intangible and don’t result in the ownership of anything.
• Examples: banking, airlines, haircuts, and hotels.
Copyright 1999 Prentice Hall
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How Do Consumers ChooseAmong Products and Services?
How Do Consumers ChooseAmong Products and Services?
• Customer ValueCustomer Value - benefit that the customer gains from owning and using a product compared to the cost of obtaining the product.
• Customer SatisfactionCustomer Satisfaction - depends on the product’s perceived performance in delivering value relative to a buyer’s expectations. Linked to Quality and Total Quality Management (TQM).
Copyright 1999 Prentice Hall
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How do Consumers ObtainProducts and Services?How do Consumers ObtainProducts and Services?
• ExchangesExchanges - act of obtaining a desired object from someone by offering something in return.
• Transactions Transactions - trade of values between parties. Usually involves money and a response.
• RelationshipsRelationships - building long-term relationships with consumers, distributors, dealers, and suppliers.
Copyright 1999 Prentice Hall
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Who Purchases Products and Services?Who Purchases Products and Services?
Market - buyers who share a
particular need or want that canbe satisfied by a
company’s productsor services.
Market - buyers who share a
particular need or want that canbe satisfied by a
company’s productsor services.
Actual BuyersActual Buyers
PotentialBuyers
PotentialBuyers
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Modern Marketing SystemModern Marketing System
SuppliersSuppliers
End UserMarket
End UserMarket
MarketingIntermediaries
MarketingIntermediaries
CompetitorsCompetitors Company(Marketer)
Company(Marketer)
En
viro
nm
ent
En
viron
men
t
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Marketing ManagementMarketing Management
Marketing ManagementImplementing programs to create exchangeswith target buyers to achieve organizational
goals
Finding and increasing demand, alsochanging or reducing demand
Demand Management
Attracting new customers and retaining current customers
Profitable Customer Relationships
Copyright 1999 Prentice Hall
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Marketing ManagementPhilosophiesMarketing ManagementPhilosophies
Production ConceptProduction Concept
Product ConceptProduct Concept
Selling ConceptSelling Concept
Marketing ConceptMarketing Concept
Societal Marketing ConceptSocietal Marketing Concept
• Consumers favor products that are available and highly affordable•Improve production and distribution
•Consumers favor products that offer the most quality, performance, and innovative features
•Consumers will buy products only if the company promotes/ sells these product
•Focuses on needs/ wants of target markets & delivering satisfaction better than competitors
•Focuses on needs/ wants of target markets & delivering superior value•Society’s well-being
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1-12Marketing & Sales Concepts Contrasted
Marketing & Sales Concepts Contrasted
FactoryExistingProducts
Sellingand
Promoting
ProfitsthroughVolume
MarketCustomer
NeedsIntegratedMarketing
Profitsthrough
Satisfaction
The Selling ConceptThe Selling Concept
The Marketing ConceptThe Marketing Concept
StartingPoint
Focus Means Ends
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Societal Marketing ConceptSocietal Marketing Concept
Society(Human Welfare)
Society(Human Welfare)
Consumers(Wants)
Consumers(Wants)
Company(Profits)
Company(Profits)
SocietalMarketingConcept
SocietalMarketingConcept
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EmergingChallengesEmerging
Challenges
NonprofitMarketing
New Marketing
Landscape &InformationTechnology
EthicalConcerns Globalizatio
n
ChangingWorld
Economy
New Marketing ChallengesNew Marketing Challenges
