Because learning changes everything.

Chapter 1
Why Marketing Matters to
You

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
 Learning Objectives
LO 1-1 Describe a marketer’s role in creating, communicating, and
delivering value.

LO 1-2 Differentiate among the various eras in the history of marketing.

LO 1-3 Distinguish between consumer needs and consumer wants.

LO 1-4 Explain the four elements in the marketing mix.

LO 1-5 Discuss the importance of globalization in the field of marketing.

LO 1-6 Explain the role of analytics in marketing.

LO 1-7 Demonstrate the relationship between ethical business practices

and marketplace success.

LO 1-8 Analyze the functions of marketing beyond the for-profit firm.

© McGraw Hill LLC 2

 Thought-Provoking Activity
READY?
• Do the activity. Answer the questions. Get points.
SET:
• You have four minutes.
GO!
• Random selection of two to three students.
1. What are the three marketing philosophies/orientations?
Provide one example of a product or service in each.
2. What are the four Ps? Provide an example for each.

© McGraw Hill LLC 3

 Executive Perspective
Jaime Gaudet
Market Director
Aflac

• Her success: Comes down to taking care of people, self-awareness,

continually growing, and being passionate about her work.
• Her advice: Take risks at the beginning of your career and find
something that makes you happy.
• Marketing: You can’t sell an intangible product without marketing.
• Her brand: Live by these values: communicate regularly, respond
immediately, know your stuff, treat everyone with respect and care,
your problem is my problem, shoot straight, and cover your customer
(not your behind).

© McGraw Hill LLC Jaime Gaudet 4

 LO1-1
The Value of Marketing
Marketing is an organizational function that consists
underlined

of three components:
Creating value
• Perceived benefits known as customer value.
underlined

Communicating value
• For example, a new restaurant near a college campus might use
online advertisements to communicate its convenient location,
healthy alternatives, and monthly student specials.
Delivering value
• Supply chain.underlined

• Logistics. underlined

Access to the key term Access to the key term

Access to the key term Supply chain Access to the key term Logistics
Marketing customer value

© McGraw Hill LLC 5

 Marketing Creates Value
Apple can
charge higher
prices than its
competitors
without fear of
losing sales
because of the
value
customers
place on Apple
products.

© McGraw Hill LLC Canadapanda/Shutterstock 6

 Effective Supply Chains
Many of the most
successful firms in the
world, including Coca-
Cola, Walmart, and UPS,
excel at managing their
supply chains efficiently
and have made delivering
value a competitive
advantage in their
industries.

© McGraw Hill LLC Justin Sullivan/Getty Images 7

 LO1-2
History of Marketing 1

underlined Production Orientation

• Prior to 1920s.
• Believed that quality products would sell themselves.

underlined Sales Orientation

• Especially important during Great Depression.
• Mid-1920s through end of WWII.
• As growth in production outpaced consumer demand,
needed new ways to sell products.

Access to the key term Production Orientation Access to the key term Sales Orientation

© McGraw Hill LLC 8

 The Production-Orientation Era
Henry Ford’s
production
line innovation and
success
manufacturing the
Model A automobile
represents the
production-
orientation era,
during which firms
believed that quality
products would sell
themselves.

© McGraw Hill LLC Hulton Archive/Archive Photos/Getty Images 9

 History of Marketing 2

underlined Marketing Concept

Era of expansion beginning in the 1950s.
Characterized by customer orientation.
• For example, at Walmart, employees in every department are
expected to meet customer needs.
Continues to evolve, especially with new technology.
underlined Relationship marketing is of primary importance today.
• For example, Amazon uses technology and large amounts of
data to develop a relationship with its customers.

Access to the key term Marketing Concept Access to the key term Relationship marketing

© McGraw Hill LLC 10

 History of Marketing 3

The Future of Marketing

As technology and other changes affect the business
world, firms will need new models that address what
customers want and how they receive information.
• Newspaper circulation has decreased, while news from social
media platforms has increased.
• Cable subscriptions have decreased while streaming services
like Netflix and Disney+ have increased.

© McGraw Hill LLC 11

 Figure 1.1 Social Media as a Pathway to News

Access the text alternative for slide images.

Source: Pew Research Center, “News Consumption across Social Media in 2021,” September 16, 2021,
https://www.pewresearch.org/journalism/2021/09/20/news-consumption-across-social-media-in-2021/.

© McGraw Hill LLC 12

 LO1-3
Needs versus Wants 1

Value is created when consumer wants and needs

are satisfied.
underlined Exchange makes each party better off.
underlined Needs are a basic part of human makeup.
Marketers strive to turn needs into wants. underlined

• For instance, turning your need for food into a want for a specific
type of food or restaurant.

Access to the key term Exchange Access to the key term Needs Access to the key term wants

© McGraw Hill LLC 13

 Needs versus Wants 2

Distinguishing Needs from Wants

• Not always clear.
• Marketers provide products that fulfill customers’ wants,
which then satisfies their underlying needs.
The Ethical Implications of Needs versus Wants
• Evaluating customer needs and wants must be done
through an ethical framework to avoid potential problems
for the firm and society as a whole.

© McGraw Hill LLC 14

 Satisfying Needs and Wants

Most people need transportation of one kind or another; it’s

marketing’s job to satisfy that need in a way that also meets
the customer’s wants, perhaps for a luxury car.
© McGraw Hill LLC Don Mason/Getty Images 15
 LO1-4
The Marketing Mix: The Four Ps 1

The marketing mix is made up the four Ps:

underlined

product, price, place, and promotion.

underlined Product contains many tangible and intangible
characteristics.
• Can also take the form of services or ideas.
underlined Price relates to the value consumers place on the product.
• Easiest marketing-mix element to change.
• Affects revenue, which is the amount earned from selling products
to customers.

Access to the key term marketing mix Access to the key term Product Access to the key term Price

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 Price Comparisons
Technology like
smartphone bar
code scanners
makes pricing a
more complicated
and influential
component of the
marketing mix
because
consumers can
quickly compare
prices from firm to
firm and from store
to store.
© McGraw Hill LLC javitrapero.com/Shutterstock 17
 The Marketing Mix: The Four Ps 2

The Four Ps (continued)

underlined Place is important because firms must distribute
products to where customers can buy and consume
them without difficulty.
• Relate to locations, transportation, logistics, and supply chain
management.

underlined Promotion includes advertising, sales promotion,

personal selling, and public relations.
• Advent of social media allows firms to communicate quickly and
underlined

directly with customers.

Access to the key term

Access to the key term Place Access to the key term Promotion
social media

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 Figure 1.2 The Marketing Mix and
Decisions That Affect It

Access the text alternative for slide images.

© McGraw Hill LLC 19

 LO1-5
Trends Affecting Marketing 1

Global Marketing
More than any time in history, businesses today are
affected by developments across the globe.
The interconnected world
• Globalization refers to the increasingly interconnected nature of
the world economy.
• NAFTA/USMCA for example.
Marketing on a global scale
• Global marketing.
underlined

• Brand.
underlined

Access to the key term Global marketing Access to the key term Brand

© McGraw Hill LLC 20

 Coca-Cola and the Four Ps
Coca-Cola has demonstrated a commitment to
using each of the four Ps—product, price, place,
and promotion—to drive global success.

© McGraw Hill LLC Dave Moyer 21

 LO1-6
Trends Affecting Marketing 2

underlined Marketing Analytics

Evaluating the success of marketing initiatives by measuring
performance using business metrics.
• For example, seeking out commercial spots that are not as expensive
but most likely to have the same number of viewers.
Analytics used when selling products, services, or ideas.
Business executives have more pressure to be data-driven.

Access to the key term Marketing Analytics

© McGraw Hill LLC 22

 LO1-7
Trends Affecting Marketing 3

Ethics in Marketing
underlined Ethics should be a key component of a successful
marketing approach.
The AMA Code of Ethics.
The impact of ethics on business:
• Can destroy a company, that is, Enron, WorldCom.
• Can generate profits.

Access to the key term Ethics

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 Figure 1.4 Performance Comparison of the
2021 World’s Most Ethical Companies and
the U.S. Large-Cap Index

Access the text alternative for slide images.

© McGraw Hill LLC Source: https://magazine.ethisphere.com/worlds-most-ethical-companies-insights-s2021/. 24

 Figure 1.5 Ethical Decision-Making
Framework
1. Determine the facts in an unbiased manner.
2. Identify the ethical issue at hand.
3. Identify the stakeholders affected by the decision.
4. Consider all available alternatives.
5. Consider how the decision will affect the stakeholders.
6. Discuss the pending decision with the stakeholders.
7. Make the decision.
8. Monitor and assess the quality of the decision.

© McGraw Hill LLC Source: Laura P. Hartman and Joseph Desjardins, Business Ethics: Decision Making for Personal Integrity and Social Responsibility (New York: McGraw-Hill, 2010), pp. 47–57. 25
 LO1-8
Marketing for Nonprofit Organizations
Motive is something other than to make a profit for
the owners.
Include hospitals, charities, universities, zoos, and
churches.
Employ about 11 million people.
Marketing helps attract membership and funding.

© McGraw Hill LLC 26

 Raising Donations for St. Jude’s

Pictured is the St. Jude Children’s Research Hospital cafeteria, named “Kay
Kafe” in honor of Kay Jewelers’ support of the hospital. By participating in
St. Jude Children’s Research Hospital Thanks and Giving campaign,
Kay Jewelers has raised over $70 million in donations from employees and
customers since 1999.
© McGraw Hill LLC Kay Kafe at St. Jude Children’s Research Hospital, Courtesy of St. Jude Children’s Research Hospital 27
 Today’s Professional
Austin Sandy
Brand Manager
KLTV 7, Tyler, TX

• His job: He oversees the brand development and implementation of

over a dozen subsidiaries and niche mobile apps owned by two local
ABC affiliates in East Texas.
• Landing the job: Interned at an advertising agency during college, was
offered a full-time job when he graduated, and was later promoted.
• His success: As a young professional, he has become unashamed of
three things: questions, failures, and weird ideas.
• His advice: You’re young and full of fresh ideas, so speak up.
• His brand: Everyone has multiple personal brands, and don’t be afraid
to change your personal brand over time.
© McGraw Hill LLC Austin Sandy 28
 Marketing Yourself
Marketing principles are useful for everyone.
Marketing principles help you position yourself
relative to others competing for the same job.
Marketing principles can help you answer the
question “Why should I hire you?”

© McGraw Hill LLC 29

 Discussion Questions 1

1. Identify a firm that you think effectively markets its goods,

services, or ideas, and describe how the firm creates,
communicates, and delivers value.
2. Reflect on the evolution of marketing over the past
century. Then describe three major changes that you
think will affect the field of marketing over the next
decade.
3. Ask five people you know to list their needs and wants.
Are their lists accurate reflections of the definition of
each? Are there any differences due to age or gender?

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 Discussion Questions 2

4. Illustrate each step of the ethical decision-making

framework by examining whether the state you live in
should use a lottery to help pay for part of your college
tuition. What are the ethical issues? Who are the relevant
stakeholders? How are those stakeholders affected by
potential outcomes? What decision would you make?
5. Describe three examples of promotion that caught your
attention in your hometown. Why do you think each
worked well?

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 Social Media Application
Choose three products that you currently use—for example,
clothes that you wear, restaurants where you eat, or the car that
you drive. Analyze the social media presence of these products
using the following questions and activities as a guide:
1. What is being done to market each product on social media?
2. What are people saying about each product on social media?
3. Give each of the three products a grade (A–F) based on how
o t

effective you feel its social media presence is.

4. Describe why you gave each the grade that you did, and make
recommendations for how the product’s firm could improve its
social media marketing activities (e.g., modifying content or
utilizing a different social media platform).

© McGraw Hill LLC 32

 End of Main Content

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© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.