{"id":23,"date":"2015-03-06T19:44:44","date_gmt":"2015-03-07T00:44:44","guid":{"rendered":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/chapter\/1-1-defining-marketing\/"},"modified":"2023-01-12T13:04:35","modified_gmt":"2023-01-12T18:04:35","slug":"defining-marketing","status":"publish","type":"chapter","link":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/chapter\/defining-marketing\/","title":{"raw":"1.1 Defining Marketing","rendered":"1.1 Defining Marketing"},"content":{"raw":"<div class=\"textbox textbox--learning-objectives\"><header class=\"textbox__header\">\r\n<p class=\"textbox__title\">Learning Objectives<\/p>\r\n\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n\r\nType your learning objectives here.\r\n<ul>\r\n \t<li>Define marketing and the 4 components of marketing.<\/li>\r\n \t<li>Define the 4P's marketing.<\/li>\r\n \t<li>Explain the difference between the 4 components of marketing in the definition of marketing and the 4P components.<\/li>\r\n \t<li>Define what value means in marketing.<\/li>\r\n \t<li>Identify the differences between market-oriented, product-orientated, and selling-oriented companies.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<\/div>\r\nMarketing is defined by the American Marketing Association as;\r\n<blockquote>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.[footnote]American Marketing Association, \u201cDefinition of Marketing,\u201d https:\/\/www.ama.org\/the-definition-of-marketing-what-is-marketing\/\u00a0 (accessed July 19, 2021).[\/footnote]<\/blockquote>\r\nIf you read the definition closely, you see that there are four activities, or components, of marketing:\r\n<ol id=\"fwk-133234-ch01_s01_l02\" class=\"orderedlist editable block\">\r\n \t<li><strong><span class=\"margin_term\">Creating<\/span>.<\/strong> The process of collaborating with suppliers and customers to create offerings that have value.<\/li>\r\n \t<li><strong class=\"emphasis bold\">Communicating<\/strong>. Broadly, describing those offerings, as well as learning from customers.<\/li>\r\n \t<li><strong class=\"emphasis bold\">Delivering<\/strong>. Getting those offerings to the consumer in a way that optimizes value.<\/li>\r\n \t<li><strong>Exchanging.<\/strong> Trading value for those offerings.<\/li>\r\n<\/ol>\r\n<p id=\"fwk-133234-ch01_s01_p02\" class=\"para editable block\">The traditional way of viewing the components of marketing is via the four Ps:<\/p>\r\n\r\n<ol id=\"fwk-133234-ch01_s01_l03\" class=\"orderedlist editable block\">\r\n \t<li><strong class=\"emphasis bold\">Product<\/strong>. Goods and services (creating offerings).<\/li>\r\n \t<li><strong class=\"emphasis bold\">Promotion<\/strong>. Communication.<\/li>\r\n \t<li><strong class=\"emphasis bold\">Place<\/strong>. Getting the product to a point at which the customer can purchase it (delivering).<\/li>\r\n \t<li><strong class=\"emphasis bold\">Price.<\/strong> The monetary amount charged for the product (exchanging).<\/li>\r\n<\/ol>\r\n<p id=\"fwk-133234-ch01_s01_p03\" class=\"para editable block\">Introduced in the early 1950s, the four Ps were called the <strong>marketing mix<\/strong>, meaning that a marketing plan is a mix of these four components.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_p04\" class=\"para editable block\">If the four Ps are the same as creating, communicating, delivering, and exchanging, then you might be wondering why there was a change. The answer is that they are <em class=\"emphasis\">not<\/em> exactly the same. Product, price, place, and promotion are nouns. As such, these words fail to capture all the activities of marketing. For example, exchanging requires mechanisms for a transaction, which consist of more than simply a price or place. Exchanging requires, among other things, the transfer of ownership. For example, when you buy a car, you sign documents that transfer the car\u2019s title from the seller to you. That\u2019s part of the exchange process.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_p05\" class=\"para editable block\">Even the term <em class=\"emphasis\">product<\/em>, which seems pretty obvious, is limited. Does the product include services that come with your new car purchase (such as free maintenance for a certain period of time on some models)? Or does the product mean only the car itself?<\/p>\r\n<p id=\"fwk-133234-ch01_s01_p06\" class=\"para editable block\">Finally, none of the four Ps describes particularly well what marketing people do. However, one of the goals of this book is to focus on exactly what it is that marketing professionals do.<\/p>\r\n\r\n<div id=\"fwk-133234-ch01_s01_s01\" class=\"section\">\r\n<h1>Value<\/h1>\r\n<p id=\"fwk-133234-ch01_s01_s01_p01\" class=\"para editable block\">Value is at the center of everything marketing does (Figure 1.1). What does value mean?<\/p>\r\n\r\n\r\n[caption id=\"attachment_906\" align=\"aligncenter\" width=\"380\"]<img class=\"wp-image-906\" src=\"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value.jpg\" alt=\"A diagram. Value is in the middle. It is surrounded by four circles labelled: Creating, communicating, delivering, and exchanging.\" width=\"380\" height=\"380\" \/> Figure 1.1: Marketing is composed of four activities centered on customer value: creating, communicating, delivering, and exchanging value.[\/caption]\r\n\r\n<span style=\"font-size: 14pt; text-align: initial;\">When we use the term value, we mean <em>the benefits buyers receive that meet their needs<\/em>. In other words, value is what the customer gets by purchasing and consuming a company\u2019s offering. So, although the offering is created by the company, the value is determined by the customer.<\/span>\r\n\r\n<\/div>\r\n<p id=\"fwk-133234-ch01_s01_s01_p03\" class=\"para editable block\">Furthermore, our goal as marketers is to create a profitable exchange for consumers. By profitable, we mean that the consumer\u2019s personal value equation is positive. The personal value equation is;<\/p>\r\n<p style=\"text-align: center;\">[latex]\\text{value}=\\text{benefits received}-(\\text{price}+\\text{hassle})[\/latex]<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_p04\" class=\"para editable block\"><strong>Hassle<\/strong> is the time and effort the consumer puts into the shopping process. The equation is a personal one because how each consumer judges the benefits of a product will vary, as will the time and effort he or she puts into shopping. Value, then, varies for each consumer.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_p05\" class=\"para editable block\">One way to think of value is to think of a meal in a restaurant. If you and three friends go to a restaurant and order the same dish, each of you will like it more or less depending on your own personal tastes. Yet the dish was exactly the same, priced the same, and served exactly the same way. Because your tastes vary, the benefits you received varied. Therefore the value varied for each of you. That\u2019s why we call it a <em class=\"emphasis\">personal<\/em> value equation.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_p06\" class=\"para editable block\">Value varies from customer to customer based on each customer\u2019s needs. The <strong>marketing concept<\/strong>, a philosophy underlying all that marketers do, requires that marketers seek to satisfy customer wants and needs. Firms operating with that philosophy are said to be <strong>market-oriented<\/strong>. At the same time, market-oriented firms recognize that exchange must be profitable for the company to be successful. A marketing orientation is not an excuse to fail to make a profit.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_p07\" class=\"para editable block\">Firms don\u2019t always embrace the marketing concept and a market orientation. Beginning with the Industrial Revolution in the late 1800s, companies were <strong>production orientated<\/strong>. They believed that the best way to compete was by reducing production costs. In other words, companies thought that good products would sell themselves. Perhaps the best example of such a product was Henry Ford\u2019s Model A automobile, the first product of his production line innovation. Ford\u2019s production line made the automobile cheap and affordable for just about everyone.<\/p>\r\n\r\n\r\n[caption id=\"attachment_22\" align=\"aligncenter\" width=\"787\"]<img class=\"size-large wp-image-19\" src=\"https:\/\/opentextbc.ca\/accessibilitytoolkit\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd-787x1024.jpg\" alt=\"A color magazine illustration advertisement for a Ford Model T from 1929. The image shows a blue model T car in a snowy driveway in front of a house with a man and a woman standing behind the car.\" width=\"787\" height=\"1024\" \/> 1929 Model A Ford: \"A YEAR OF PROGRESS\"[\/caption]\r\n<p class=\"para editable block\">The production era lasted until the 1920s, when production-capacity growth began to outpace demand growth and new strategies were called for. There are, however, companies that still focus on production as the way to compete.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_p08\" class=\"para editable block\">From the 1920s until after World War II, companies tended to be <strong>selling orientated<\/strong>, meaning they believed it was necessary to push their products by heavily emphasizing advertising and selling. Consumers during the Great Depression and World War II did not have as much money, so the competition for their available dollars was stiff. The result was this push approach during the selling era. Companies like the Fuller Brush Company and Hoover Vacuum began selling door-to-door and the vacuum-cleaner salesman (they were always men) was created. Just as with production, some companies still operate with a push focus.<\/p>\r\n\r\n\r\n[caption id=\"attachment_22\" align=\"aligncenter\" width=\"305\"]<img class=\"wp-image-20\" src=\"https:\/\/opentextbc.ca\/accessibilitytoolkit\/wp-content\/uploads\/sites\/386\/2022\/01\/1024px-Great_Depression_Salesman-781x1024.png\" alt=\"Black and white photo of a man in a suit and hat carrying a briefcase standing in front of a residential door preparing to knock.\" width=\"305\" height=\"400\" \/> A door-to-door salesperson selling during the Great Depression. Historically, this was a major method of distributing goods outside large towns, with the salespeople often self-employed. With the huge growth of retail shops in the 19th century, it became less important.[\/caption]\r\n<p id=\"fwk-133234-ch01_s01_s01_p09\" class=\"para editable block\">In the post\u2013World War II environment, demand for goods increased as the economy soared. Some products, limited in supply during World War II, were now plentiful to the point of surplus. Companies believed that a way to compete was to create products different from the competition, so many focused on product innovation. This focus on product innovation is called <strong>product orientation<\/strong>. Companies like Procter &amp; Gamble created many products that served the same basic function but with a slight twist or difference in order to appeal to a different consumer, and as a result products proliferated. But as consumers had many choices available to them, companies had to find new ways to compete. Which products were best to create? Why create them? The answer was to create what customers wanted, leading to the development of the marketing concept. During this time, the <strong>marketing concept<\/strong> was developed, and, from about 1950 to 1990, businesses operated in the marketing era.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_p10\" class=\"para editable block\">So what era would you say we\u2019re in now? Some call it the <strong>value era<\/strong>: a time when companies emphasize creating value for customers. Is that really different from the marketing era, in which the emphasis was on fulfilling the marketing concept? Maybe not. Others call today\u2019s business environment the <strong>one-to-one era<\/strong>, meaning that the way to compete is to build relationships with customers one at a time and seek to serve each customer\u2019s needs individually. For example, the longer you are a customer of Amazon, the more detail they gain in your purchasing habits and the better they can target you with offers of new products. With the advent of social media and the empowerment of consumers through ubiquitous information that includes consumer reviews, there is clearly greater emphasis on meeting customer needs. Yet is that substantially different from the marketing concept?<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_p11\" class=\"para editable block\">Still others argue that this is the time of service-dominant logic and that we are in the s<strong>ervice-dominant logic era<\/strong>. <strong>Service-dominant logic<\/strong> is an approach to business that recognizes that consumers want value no matter how it is delivered, whether it\u2019s via a product, a service, or a combination of the two. Although there is merit in this belief, there is also merit to the value approach and the one-to-one approach. As you will see throughout this book, all three are intertwined. Perhaps, then, the name for this era has yet to be devised.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_p12\" class=\"para editable block\">Whatever era we\u2019re in now, most historians would agree that defining and labelling it is difficult. Value and one-to-one are both natural extensions of the marketing concept, so we may still be in the marketing era. To make matters more confusing, not all companies adopt the philosophy of the era. For example, in the 1800s Singer and National Cash Register adopted strategies rooted in sales, so they operated in the selling era forty years before it existed. Some companies are still in the selling era. Recently, many considered automobile manufacturers to be in the trouble they were in because they work too hard to sell or push products and not hard enough on delivering value.<\/p>\r\n\r\n<div id=\"fwk-133234-ch01_s01_s01_s01\" class=\"section\">\r\n<h2>Creating Offerings That Have Value<\/h2>\r\n<p id=\"fwk-133234-ch01_s01_s01_s01_p01\" class=\"para editable block\">Marketing creates those goods and services that the company offers at a price to its customers or clients. That entire bundle consisting of the <strong>tangible good<\/strong>, the <strong>intangible service<\/strong>, and the <strong>price<\/strong> is the company\u2019s offering. When you compare one car to another, for example, you can evaluate each of these dimensions\u2014the tangible, the intangible, and the price\u2014separately. However, you can\u2019t buy one manufacturer\u2019s car, another manufacturer\u2019s service, and a third manufacturer\u2019s price when you actually make a choice. Together, the three make up a single firm\u2019s offer.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_s01_p02\" class=\"para editable block\">Marketing people do not create the offering alone. For example, when the iPad was created, Apple\u2019s engineers were also involved in its design. Apple\u2019s financial personnel had to review the costs of producing the offering and provide input on how it should be priced. Apple\u2019s operations group needed to evaluate the manufacturing requirements the iPad would need. The company\u2019s logistics managers had to evaluate the cost and timing of getting the offering to retailers and consumers. Apple\u2019s dealers also likely provided input regarding the iPad\u2019s service policies and warranty structure. Marketing, however, has the biggest responsibility because it is marketing\u2019s responsibility to ensure that the new product delivers value.<\/p>\r\n\r\n<\/div>\r\n<div id=\"fwk-133234-ch01_s01_s01_s02\" class=\"section\">\r\n<h1>Communicating Offerings<\/h1>\r\n<p id=\"fwk-133234-ch01_s01_s01_s02_p01\" class=\"para editable block\"><strong>Communicating<\/strong> is a broad term in marketing that means <em>describing the offering and its value to your potential and current customers, as well as learning from customers what it is they want and like<\/em>. Sometimes communicating means educating potential customers about the value of an offering, and sometimes it means simply making customers aware of where they can find a product. Communicating also means that customers get a chance to tell the company what they think. Today companies are finding that to be successful, they need a more interactive dialogue with their customers. For example, Comcast customer service representatives monitor Twitter. When they observe consumers tweeting problems with Comcast, the customer service reps will post resolutions to their problems. Similarly, JCPenney has created consumer groups that talk among themselves on JCPenney-monitored Web sites. The company might post questions, send samples, or engage in other activities designed to solicit feedback from customers.<\/p>\r\n<p id=\"e11.tanner_p-5254-20111101-161309-296184\" class=\"para editable block\">Mobile devices, like iPads and Droid smartphones, make mobile marketing possible too. For example, if consumers check-in at a shopping mall on Foursquare or Facebook, stores in the mall can send coupons and other offers directly to their phones and pad computers.<\/p>\r\n&nbsp;\r\n\r\n[caption id=\"attachment_21\" align=\"aligncenter\" width=\"600\"]<img class=\"wp-image-21\" src=\"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-1024x512.jpg\" alt=\"A BMW X5 and a Honda CRV\" width=\"600\" height=\"300\" \/> Figure 1.2: A BMW X5 costs much more than a Honda CRV, but why is it worth more? What makes up the complete offering that creates such value?[\/caption]\r\n\r\n<\/div>\r\nCompanies use many forms of communication, including advertising on the Web or television, on billboards or in magazines, through product placements in movies, and through salespeople.\r\n\r\n&nbsp;\r\n\r\n[caption id=\"attachment_22\" align=\"aligncenter\" width=\"500\"]<img class=\"wp-image-22\" src=\"https:\/\/opentextbc.ca\/accessibilitytoolkit\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1.2.jpg\" alt=\"\" width=\"500\" height=\"750\" \/> Figure 1.3: Social media sites like Foursquare and Facebook have a location feature that allows consumers to post their location. Retailers can then use this to send coupons and other special offers to the consumer\u2019s phone or pad for immediate use.[\/caption]\r\n\r\n<div id=\"fwk-133234-ch01_s01_s01_s02\" class=\"section\">\r\n<p id=\"fwk-133234-ch01_s01_s01_s02_p02\" class=\"para editable block\">Other forms of communication include attempting to have news media cover the company\u2019s actions (part of public relations [PR]), participating in special events such as the annual International Consumer Electronics Show in which Apple and other companies introduce their newest gadgets, and sponsoring special events like the Susan G. Komen Race for the Cure.<\/p>\r\n\r\n<\/div>\r\n<div id=\"fwk-133234-ch01_s01_s01_s03\" class=\"section\">\r\n<h1>Delivering Offerings<\/h1>\r\n<p id=\"fwk-133234-ch01_s01_s01_s03_p01\" class=\"para editable block\">Marketing can\u2019t just promise value, it also has to deliver value. Delivering an offering that has value is much more than simply getting the product into the hands of the user; it is also making sure that the user understands how to get the most out of the product and is taken care of if he or she requires service later.<\/p>\r\n<p class=\"para editable block\">Value is delivered in part through a company\u2019s supply chain. The supply chain includes a number of organizations and functions that mine, make, assemble, or deliver materials and products from a manufacturer to consumers. The actual group of organizations can vary greatly from industry to industry, and include wholesalers, transportation companies, and retailers. Logistics, or the actual transportation and storage of materials and products, is the primary component of supply chain management, but there are other aspects of supply chain management that we will discuss later.<\/p>\r\n\r\n<\/div>\r\n<div id=\"fwk-133234-ch01_s01_s01_s04\" class=\"section\">\r\n<h1>Exchanging Offerings<\/h1>\r\n<p id=\"fwk-133234-ch01_s01_s01_s04_p01\" class=\"para editable block\">In addition to creating an offering, communicating its benefits to consumers, and delivering the offering, there is the actual transaction, or exchange, that has to occur. In most instances, we consider the exchange to be cash for products and services. However, if you were to fly to Louisville, Kentucky for the Kentucky Derby, you could \u201cpay\u201d for your airline tickets using frequent-flier miles. You could also use Hilton Honors points to \u201cpay\u201d for your hotel, and cashback points on your Discover card to pay for meals. None of these transactions would actually require cash. Other exchanges, such as information about your preferences gathered through surveys, might not involve cash.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_s04_p02\" class=\"para editable block\">When consumers acquire, consume (use), and dispose of products and services, exchange occurs, including during the consumption phase. For example, via Apple\u2019s \u201cOne-to-One\u201d program, you can pay a yearly fee in exchange for additional periodic product training sessions with an Apple professional. So each time a training session occurs, another transaction takes place. A transaction also occurs when you are finished with a product. For example, you might sell your old iPhone to a friend, trade in a car, or ask the Salvation Army to pick up your old refrigerator.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_s04_p03\" class=\"para editable block\">Disposing of products has become an important ecological issue. Batteries and other components of cell phones, computers, and high-tech appliances can be very harmful to the environment, and many consumers don\u2019t know how to dispose of these products properly. Some companies, such as Office Depot, have created recycling centers to which customers can take their old electronics.<\/p>\r\n<p id=\"fwk-133234-ch01_s01_s01_s04_p04\" class=\"para editable block\">Apple has a Web page where consumers can fill out a form, print it, and ship it along with their old cell phones and MP3 players to Apple. Apple then pulls out the materials that are recyclable and properly disposes of those that aren\u2019t. By lessening the hassle associated with disposing of products, Office Depot and Apple add value to their product offerings.<\/p>\r\n\r\n<div class=\"textbox textbox--key-takeaways\"><header class=\"textbox__header\">\r\n<h1 class=\"textbox__title\">Key Takeaways<\/h1>\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n\r\nThe focus of marketing has changed from emphasizing the product, price, place, and promotion mix to one that emphasizes creating, communicating, delivering, and exchanging value. Value is a function of the benefits an individual receives and consists of the price the consumer paid and the time and effort the person expended making the purchase.\r\n\r\nTo summarize, click on each category and review how the approach to the marketing mix has changed: [h5p id=\"2\"]\r\n\r\n<\/div>\r\n<\/div>\r\n<div class=\"textbox textbox--exercises\"><header class=\"textbox__header\">\r\n<h1 class=\"textbox__title\">Review Questions<\/h1>\r\n<\/header>\r\n<div class=\"textbox__content\">\r\n\r\nLet's practice some of the concepts you learned in this chapter!\r\n<ol>\r\n \t<li>What is the marketing mix?<\/li>\r\n \t<li>How has marketing changed from the four Ps approach to the more current value-based perspective?<\/li>\r\n \t<li>What is the personal value equation?<\/li>\r\n \t<li>Looking at the new value-based perspective, evaluate why it is now preferred: [h5p id=\"3\"]<\/li>\r\n \t<li>Do you think the current business environment justifies additional changes to the marketing approach? [h5p id=\"4\"]<\/li>\r\n<\/ol>\r\n<h2>Word Search<\/h2>\r\n[h5p id=\"1\"]\r\n\r\n<\/div>\r\n<\/div>\r\n<h3>Text Attributions<\/h3>\r\n<ul>\r\n \t<li>Great Depression Salesman image caption was adapted from <a class=\"internal\" href=\"https:\/\/en.wikipedia.org\/wiki\/Door-to-door\">\"Door-to-door\" on Wikipedia<\/a>, which is licensed under a <a class=\"internal\" href=\"https:\/\/en.wikipedia.org\/wiki\/Wikipedia:Text_of_Creative_Commons_Attribution-ShareAlike_3.0_Unported_License\">CC BY-SA 3.0 licence<\/a>.<\/li>\r\n<\/ul>\r\n<h3>Media Attributions<\/h3>\r\n<ul>\r\n \t<li>\"<a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/dok1\/9741668453\" target=\"_blank\" rel=\"noopener\">1929 Model A Ford: A year of progress<\/a>\" by <a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/dok1\/9762966652\/in\/photostream\/\" target=\"_blank\" rel=\"noopener\">Don O\u2019Brien<\/a> licensed under a <a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/dok1\/9743470272\/in\/photostream\/\" target=\"_blank\" rel=\"noopener\">CC BY 2.0 licence<\/a>.<\/li>\r\n \t<li>\"<a class=\"internal\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:Great_Depression_Salesman.png\" target=\"_blank\" rel=\"noopener\">Great Depression Salesman<\/a>\" by Jrouse5 is licensed under a <a class=\"internal\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/deed.en\" target=\"_blank\" rel=\"noopener\">CC BY-SA 4.0 licence<\/a>.<\/li>\r\n \t<li>\"Vehicle Comparison\" by University of Minnesota is licensed under a <a class=\"internal\" href=\"https:\/\/creativecommons.org\/licenses\/by\/3.0\/deed.en\">CC BY 3.0 licence<\/a>. It includes the following images:\r\n<ul>\r\n \t<li>\"<a class=\"internal\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:2003_BMW_X5_3.0i_--_NHTSA_01.jpg\">2003 BMW X5 3.0i<\/a>\" by the National Highway Traffic Safety Administration is in the public domain.<\/li>\r\n \t<li>\"<a class=\"internal\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:2008_Honda_CRV.jpg\">2008 Honda CRV<\/a>\" by AutoPhoto is licensed under a <a class=\"internal\" href=\"https:\/\/creativecommons.org\/licenses\/by\/3.0\/deed.en\">CC BY 3.0 licence<\/a>.<\/li>\r\n<\/ul>\r\n<\/li>\r\n \t<li>\"<a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/smemon\/5432244488\/\">Foursquare<\/a>\" by <a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/smemon\/\">Sean MacEntee<\/a> is licensed under a <a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/dok1\/9743470272\/in\/photostream\/\" target=\"_blank\" rel=\"noopener\">CC BY 2.0 licence<\/a>.<\/li>\r\n<\/ul>\r\n<\/div>","rendered":"<div class=\"textbox textbox--learning-objectives\">\n<header class=\"textbox__header\">\n<p class=\"textbox__title\">Learning Objectives<\/p>\n<\/header>\n<div class=\"textbox__content\">\n<p>Type your learning objectives here.<\/p>\n<ul>\n<li>Define marketing and the 4 components of marketing.<\/li>\n<li>Define the 4P&#8217;s marketing.<\/li>\n<li>Explain the difference between the 4 components of marketing in the definition of marketing and the 4P components.<\/li>\n<li>Define what value means in marketing.<\/li>\n<li>Identify the differences between market-oriented, product-orientated, and selling-oriented companies.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<p>Marketing is defined by the American Marketing Association as;<\/p>\n<blockquote><p>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.<a class=\"footnote\" title=\"American Marketing Association, \u201cDefinition of Marketing,\u201d https:\/\/www.ama.org\/the-definition-of-marketing-what-is-marketing\/\u00a0 (accessed July 19, 2021).\" id=\"return-footnote-23-1\" href=\"#footnote-23-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p><\/blockquote>\n<p>If you read the definition closely, you see that there are four activities, or components, of marketing:<\/p>\n<ol id=\"fwk-133234-ch01_s01_l02\" class=\"orderedlist editable block\">\n<li><strong><span class=\"margin_term\">Creating<\/span>.<\/strong> The process of collaborating with suppliers and customers to create offerings that have value.<\/li>\n<li><strong class=\"emphasis bold\">Communicating<\/strong>. Broadly, describing those offerings, as well as learning from customers.<\/li>\n<li><strong class=\"emphasis bold\">Delivering<\/strong>. Getting those offerings to the consumer in a way that optimizes value.<\/li>\n<li><strong>Exchanging.<\/strong> Trading value for those offerings.<\/li>\n<\/ol>\n<p id=\"fwk-133234-ch01_s01_p02\" class=\"para editable block\">The traditional way of viewing the components of marketing is via the four Ps:<\/p>\n<ol id=\"fwk-133234-ch01_s01_l03\" class=\"orderedlist editable block\">\n<li><strong class=\"emphasis bold\">Product<\/strong>. Goods and services (creating offerings).<\/li>\n<li><strong class=\"emphasis bold\">Promotion<\/strong>. Communication.<\/li>\n<li><strong class=\"emphasis bold\">Place<\/strong>. Getting the product to a point at which the customer can purchase it (delivering).<\/li>\n<li><strong class=\"emphasis bold\">Price.<\/strong> The monetary amount charged for the product (exchanging).<\/li>\n<\/ol>\n<p id=\"fwk-133234-ch01_s01_p03\" class=\"para editable block\">Introduced in the early 1950s, the four Ps were called the <strong>marketing mix<\/strong>, meaning that a marketing plan is a mix of these four components.<\/p>\n<p id=\"fwk-133234-ch01_s01_p04\" class=\"para editable block\">If the four Ps are the same as creating, communicating, delivering, and exchanging, then you might be wondering why there was a change. The answer is that they are <em class=\"emphasis\">not<\/em> exactly the same. Product, price, place, and promotion are nouns. As such, these words fail to capture all the activities of marketing. For example, exchanging requires mechanisms for a transaction, which consist of more than simply a price or place. Exchanging requires, among other things, the transfer of ownership. For example, when you buy a car, you sign documents that transfer the car\u2019s title from the seller to you. That\u2019s part of the exchange process.<\/p>\n<p id=\"fwk-133234-ch01_s01_p05\" class=\"para editable block\">Even the term <em class=\"emphasis\">product<\/em>, which seems pretty obvious, is limited. Does the product include services that come with your new car purchase (such as free maintenance for a certain period of time on some models)? Or does the product mean only the car itself?<\/p>\n<p id=\"fwk-133234-ch01_s01_p06\" class=\"para editable block\">Finally, none of the four Ps describes particularly well what marketing people do. However, one of the goals of this book is to focus on exactly what it is that marketing professionals do.<\/p>\n<div id=\"fwk-133234-ch01_s01_s01\" class=\"section\">\n<h1>Value<\/h1>\n<p id=\"fwk-133234-ch01_s01_s01_p01\" class=\"para editable block\">Value is at the center of everything marketing does (Figure 1.1). What does value mean?<\/p>\n<figure id=\"attachment_906\" aria-describedby=\"caption-attachment-906\" style=\"width: 380px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-906\" src=\"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value.jpg\" alt=\"A diagram. Value is in the middle. It is surrounded by four circles labelled: Creating, communicating, delivering, and exchanging.\" width=\"380\" height=\"380\" srcset=\"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value.jpg 1145w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value-300x300.jpg 300w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value-1024x1024.jpg 1024w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value-150x150.jpg 150w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value-768x768.jpg 768w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value-65x65.jpg 65w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value-225x225.jpg 225w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2015\/03\/Marketing-activities-on-value-350x350.jpg 350w\" sizes=\"auto, (max-width: 380px) 100vw, 380px\" \/><figcaption id=\"caption-attachment-906\" class=\"wp-caption-text\">Figure 1.1: Marketing is composed of four activities centered on customer value: creating, communicating, delivering, and exchanging value.<\/figcaption><\/figure>\n<p><span style=\"font-size: 14pt; text-align: initial;\">When we use the term value, we mean <em>the benefits buyers receive that meet their needs<\/em>. In other words, value is what the customer gets by purchasing and consuming a company\u2019s offering. So, although the offering is created by the company, the value is determined by the customer.<\/span><\/p>\n<\/div>\n<p id=\"fwk-133234-ch01_s01_s01_p03\" class=\"para editable block\">Furthermore, our goal as marketers is to create a profitable exchange for consumers. By profitable, we mean that the consumer\u2019s personal value equation is positive. The personal value equation is;<\/p>\n<p style=\"text-align: center;\">[latex]\\text{value}=\\text{benefits received}-(\\text{price}+\\text{hassle})[\/latex]<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_p04\" class=\"para editable block\"><strong>Hassle<\/strong> is the time and effort the consumer puts into the shopping process. The equation is a personal one because how each consumer judges the benefits of a product will vary, as will the time and effort he or she puts into shopping. Value, then, varies for each consumer.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_p05\" class=\"para editable block\">One way to think of value is to think of a meal in a restaurant. If you and three friends go to a restaurant and order the same dish, each of you will like it more or less depending on your own personal tastes. Yet the dish was exactly the same, priced the same, and served exactly the same way. Because your tastes vary, the benefits you received varied. Therefore the value varied for each of you. That\u2019s why we call it a <em class=\"emphasis\">personal<\/em> value equation.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_p06\" class=\"para editable block\">Value varies from customer to customer based on each customer\u2019s needs. The <strong>marketing concept<\/strong>, a philosophy underlying all that marketers do, requires that marketers seek to satisfy customer wants and needs. Firms operating with that philosophy are said to be <strong>market-oriented<\/strong>. At the same time, market-oriented firms recognize that exchange must be profitable for the company to be successful. A marketing orientation is not an excuse to fail to make a profit.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_p07\" class=\"para editable block\">Firms don\u2019t always embrace the marketing concept and a market orientation. Beginning with the Industrial Revolution in the late 1800s, companies were <strong>production orientated<\/strong>. They believed that the best way to compete was by reducing production costs. In other words, companies thought that good products would sell themselves. Perhaps the best example of such a product was Henry Ford\u2019s Model A automobile, the first product of his production line innovation. Ford\u2019s production line made the automobile cheap and affordable for just about everyone.<\/p>\n<figure id=\"attachment_22\" aria-describedby=\"caption-attachment-22\" style=\"width: 787px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"size-large wp-image-19\" src=\"https:\/\/opentextbc.ca\/accessibilitytoolkit\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd-787x1024.jpg\" alt=\"A color magazine illustration advertisement for a Ford Model T from 1929. The image shows a blue model T car in a snowy driveway in front of a house with a man and a woman standing behind the car.\" width=\"787\" height=\"1024\" srcset=\"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd-787x1024.jpg 787w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd-231x300.jpg 231w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd-768x999.jpg 768w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd-1180x1536.jpg 1180w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd-65x85.jpg 65w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd-225x293.jpg 225w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd-350x455.jpg 350w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/ModelTAd.jpg 1573w\" sizes=\"auto, (max-width: 787px) 100vw, 787px\" \/><figcaption id=\"caption-attachment-22\" class=\"wp-caption-text\">1929 Model A Ford: &#8220;A YEAR OF PROGRESS&#8221;<\/figcaption><\/figure>\n<p class=\"para editable block\">The production era lasted until the 1920s, when production-capacity growth began to outpace demand growth and new strategies were called for. There are, however, companies that still focus on production as the way to compete.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_p08\" class=\"para editable block\">From the 1920s until after World War II, companies tended to be <strong>selling orientated<\/strong>, meaning they believed it was necessary to push their products by heavily emphasizing advertising and selling. Consumers during the Great Depression and World War II did not have as much money, so the competition for their available dollars was stiff. The result was this push approach during the selling era. Companies like the Fuller Brush Company and Hoover Vacuum began selling door-to-door and the vacuum-cleaner salesman (they were always men) was created. Just as with production, some companies still operate with a push focus.<\/p>\n<figure id=\"attachment_22\" aria-describedby=\"caption-attachment-22\" style=\"width: 305px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-20\" src=\"https:\/\/opentextbc.ca\/accessibilitytoolkit\/wp-content\/uploads\/sites\/386\/2022\/01\/1024px-Great_Depression_Salesman-781x1024.png\" alt=\"Black and white photo of a man in a suit and hat carrying a briefcase standing in front of a residential door preparing to knock.\" width=\"305\" height=\"400\" srcset=\"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1024px-Great_Depression_Salesman-781x1024.png 781w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1024px-Great_Depression_Salesman-229x300.png 229w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1024px-Great_Depression_Salesman-768x1007.png 768w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1024px-Great_Depression_Salesman-65x85.png 65w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1024px-Great_Depression_Salesman-225x295.png 225w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1024px-Great_Depression_Salesman-350x459.png 350w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1024px-Great_Depression_Salesman.png 1024w\" sizes=\"auto, (max-width: 305px) 100vw, 305px\" \/><figcaption id=\"caption-attachment-22\" class=\"wp-caption-text\">A door-to-door salesperson selling during the Great Depression. Historically, this was a major method of distributing goods outside large towns, with the salespeople often self-employed. With the huge growth of retail shops in the 19th century, it became less important.<\/figcaption><\/figure>\n<p id=\"fwk-133234-ch01_s01_s01_p09\" class=\"para editable block\">In the post\u2013World War II environment, demand for goods increased as the economy soared. Some products, limited in supply during World War II, were now plentiful to the point of surplus. Companies believed that a way to compete was to create products different from the competition, so many focused on product innovation. This focus on product innovation is called <strong>product orientation<\/strong>. Companies like Procter &amp; Gamble created many products that served the same basic function but with a slight twist or difference in order to appeal to a different consumer, and as a result products proliferated. But as consumers had many choices available to them, companies had to find new ways to compete. Which products were best to create? Why create them? The answer was to create what customers wanted, leading to the development of the marketing concept. During this time, the <strong>marketing concept<\/strong> was developed, and, from about 1950 to 1990, businesses operated in the marketing era.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_p10\" class=\"para editable block\">So what era would you say we\u2019re in now? Some call it the <strong>value era<\/strong>: a time when companies emphasize creating value for customers. Is that really different from the marketing era, in which the emphasis was on fulfilling the marketing concept? Maybe not. Others call today\u2019s business environment the <strong>one-to-one era<\/strong>, meaning that the way to compete is to build relationships with customers one at a time and seek to serve each customer\u2019s needs individually. For example, the longer you are a customer of Amazon, the more detail they gain in your purchasing habits and the better they can target you with offers of new products. With the advent of social media and the empowerment of consumers through ubiquitous information that includes consumer reviews, there is clearly greater emphasis on meeting customer needs. Yet is that substantially different from the marketing concept?<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_p11\" class=\"para editable block\">Still others argue that this is the time of service-dominant logic and that we are in the s<strong>ervice-dominant logic era<\/strong>. <strong>Service-dominant logic<\/strong> is an approach to business that recognizes that consumers want value no matter how it is delivered, whether it\u2019s via a product, a service, or a combination of the two. Although there is merit in this belief, there is also merit to the value approach and the one-to-one approach. As you will see throughout this book, all three are intertwined. Perhaps, then, the name for this era has yet to be devised.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_p12\" class=\"para editable block\">Whatever era we\u2019re in now, most historians would agree that defining and labelling it is difficult. Value and one-to-one are both natural extensions of the marketing concept, so we may still be in the marketing era. To make matters more confusing, not all companies adopt the philosophy of the era. For example, in the 1800s Singer and National Cash Register adopted strategies rooted in sales, so they operated in the selling era forty years before it existed. Some companies are still in the selling era. Recently, many considered automobile manufacturers to be in the trouble they were in because they work too hard to sell or push products and not hard enough on delivering value.<\/p>\n<div id=\"fwk-133234-ch01_s01_s01_s01\" class=\"section\">\n<h2>Creating Offerings That Have Value<\/h2>\n<p id=\"fwk-133234-ch01_s01_s01_s01_p01\" class=\"para editable block\">Marketing creates those goods and services that the company offers at a price to its customers or clients. That entire bundle consisting of the <strong>tangible good<\/strong>, the <strong>intangible service<\/strong>, and the <strong>price<\/strong> is the company\u2019s offering. When you compare one car to another, for example, you can evaluate each of these dimensions\u2014the tangible, the intangible, and the price\u2014separately. However, you can\u2019t buy one manufacturer\u2019s car, another manufacturer\u2019s service, and a third manufacturer\u2019s price when you actually make a choice. Together, the three make up a single firm\u2019s offer.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_s01_p02\" class=\"para editable block\">Marketing people do not create the offering alone. For example, when the iPad was created, Apple\u2019s engineers were also involved in its design. Apple\u2019s financial personnel had to review the costs of producing the offering and provide input on how it should be priced. Apple\u2019s operations group needed to evaluate the manufacturing requirements the iPad would need. The company\u2019s logistics managers had to evaluate the cost and timing of getting the offering to retailers and consumers. Apple\u2019s dealers also likely provided input regarding the iPad\u2019s service policies and warranty structure. Marketing, however, has the biggest responsibility because it is marketing\u2019s responsibility to ensure that the new product delivers value.<\/p>\n<\/div>\n<div id=\"fwk-133234-ch01_s01_s01_s02\" class=\"section\">\n<h1>Communicating Offerings<\/h1>\n<p id=\"fwk-133234-ch01_s01_s01_s02_p01\" class=\"para editable block\"><strong>Communicating<\/strong> is a broad term in marketing that means <em>describing the offering and its value to your potential and current customers, as well as learning from customers what it is they want and like<\/em>. Sometimes communicating means educating potential customers about the value of an offering, and sometimes it means simply making customers aware of where they can find a product. Communicating also means that customers get a chance to tell the company what they think. Today companies are finding that to be successful, they need a more interactive dialogue with their customers. For example, Comcast customer service representatives monitor Twitter. When they observe consumers tweeting problems with Comcast, the customer service reps will post resolutions to their problems. Similarly, JCPenney has created consumer groups that talk among themselves on JCPenney-monitored Web sites. The company might post questions, send samples, or engage in other activities designed to solicit feedback from customers.<\/p>\n<p id=\"e11.tanner_p-5254-20111101-161309-296184\" class=\"para editable block\">Mobile devices, like iPads and Droid smartphones, make mobile marketing possible too. For example, if consumers check-in at a shopping mall on Foursquare or Facebook, stores in the mall can send coupons and other offers directly to their phones and pad computers.<\/p>\n<p>&nbsp;<\/p>\n<figure id=\"attachment_21\" aria-describedby=\"caption-attachment-21\" style=\"width: 600px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-21\" src=\"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-1024x512.jpg\" alt=\"A BMW X5 and a Honda CRV\" width=\"600\" height=\"300\" srcset=\"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-1024x512.jpg 1024w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-300x150.jpg 300w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-768x384.jpg 768w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-1536x768.jpg 1536w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-2048x1024.jpg 2048w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-65x33.jpg 65w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-225x113.jpg 225w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1-collage-350x175.jpg 350w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><figcaption id=\"caption-attachment-21\" class=\"wp-caption-text\">Figure 1.2: A BMW X5 costs much more than a Honda CRV, but why is it worth more? What makes up the complete offering that creates such value?<\/figcaption><\/figure>\n<\/div>\n<p>Companies use many forms of communication, including advertising on the Web or television, on billboards or in magazines, through product placements in movies, and through salespeople.<\/p>\n<p>&nbsp;<\/p>\n<figure id=\"attachment_22\" aria-describedby=\"caption-attachment-22\" style=\"width: 500px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-22\" src=\"https:\/\/opentextbc.ca\/accessibilitytoolkit\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1.2.jpg\" alt=\"\" width=\"500\" height=\"750\" srcset=\"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1.2.jpg 640w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1.2-200x300.jpg 200w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1.2-65x98.jpg 65w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1.2-225x338.jpg 225w, https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-content\/uploads\/sites\/386\/2022\/01\/1.1.2-350x525.jpg 350w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><figcaption id=\"caption-attachment-22\" class=\"wp-caption-text\">Figure 1.3: Social media sites like Foursquare and Facebook have a location feature that allows consumers to post their location. Retailers can then use this to send coupons and other special offers to the consumer\u2019s phone or pad for immediate use.<\/figcaption><\/figure>\n<div id=\"fwk-133234-ch01_s01_s01_s02\" class=\"section\">\n<p id=\"fwk-133234-ch01_s01_s01_s02_p02\" class=\"para editable block\">Other forms of communication include attempting to have news media cover the company\u2019s actions (part of public relations [PR]), participating in special events such as the annual International Consumer Electronics Show in which Apple and other companies introduce their newest gadgets, and sponsoring special events like the Susan G. Komen Race for the Cure.<\/p>\n<\/div>\n<div id=\"fwk-133234-ch01_s01_s01_s03\" class=\"section\">\n<h1>Delivering Offerings<\/h1>\n<p id=\"fwk-133234-ch01_s01_s01_s03_p01\" class=\"para editable block\">Marketing can\u2019t just promise value, it also has to deliver value. Delivering an offering that has value is much more than simply getting the product into the hands of the user; it is also making sure that the user understands how to get the most out of the product and is taken care of if he or she requires service later.<\/p>\n<p class=\"para editable block\">Value is delivered in part through a company\u2019s supply chain. The supply chain includes a number of organizations and functions that mine, make, assemble, or deliver materials and products from a manufacturer to consumers. The actual group of organizations can vary greatly from industry to industry, and include wholesalers, transportation companies, and retailers. Logistics, or the actual transportation and storage of materials and products, is the primary component of supply chain management, but there are other aspects of supply chain management that we will discuss later.<\/p>\n<\/div>\n<div id=\"fwk-133234-ch01_s01_s01_s04\" class=\"section\">\n<h1>Exchanging Offerings<\/h1>\n<p id=\"fwk-133234-ch01_s01_s01_s04_p01\" class=\"para editable block\">In addition to creating an offering, communicating its benefits to consumers, and delivering the offering, there is the actual transaction, or exchange, that has to occur. In most instances, we consider the exchange to be cash for products and services. However, if you were to fly to Louisville, Kentucky for the Kentucky Derby, you could \u201cpay\u201d for your airline tickets using frequent-flier miles. You could also use Hilton Honors points to \u201cpay\u201d for your hotel, and cashback points on your Discover card to pay for meals. None of these transactions would actually require cash. Other exchanges, such as information about your preferences gathered through surveys, might not involve cash.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_s04_p02\" class=\"para editable block\">When consumers acquire, consume (use), and dispose of products and services, exchange occurs, including during the consumption phase. For example, via Apple\u2019s \u201cOne-to-One\u201d program, you can pay a yearly fee in exchange for additional periodic product training sessions with an Apple professional. So each time a training session occurs, another transaction takes place. A transaction also occurs when you are finished with a product. For example, you might sell your old iPhone to a friend, trade in a car, or ask the Salvation Army to pick up your old refrigerator.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_s04_p03\" class=\"para editable block\">Disposing of products has become an important ecological issue. Batteries and other components of cell phones, computers, and high-tech appliances can be very harmful to the environment, and many consumers don\u2019t know how to dispose of these products properly. Some companies, such as Office Depot, have created recycling centers to which customers can take their old electronics.<\/p>\n<p id=\"fwk-133234-ch01_s01_s01_s04_p04\" class=\"para editable block\">Apple has a Web page where consumers can fill out a form, print it, and ship it along with their old cell phones and MP3 players to Apple. Apple then pulls out the materials that are recyclable and properly disposes of those that aren\u2019t. By lessening the hassle associated with disposing of products, Office Depot and Apple add value to their product offerings.<\/p>\n<div class=\"textbox textbox--key-takeaways\">\n<header class=\"textbox__header\">\n<h1 class=\"textbox__title\">Key Takeaways<\/h1>\n<\/header>\n<div class=\"textbox__content\">\n<p>The focus of marketing has changed from emphasizing the product, price, place, and promotion mix to one that emphasizes creating, communicating, delivering, and exchanging value. Value is a function of the benefits an individual receives and consists of the price the consumer paid and the time and effort the person expended making the purchase.<\/p>\n<p>To summarize, click on each category and review how the approach to the marketing mix has changed: <\/p>\n<div id=\"h5p-2\">\n<div class=\"h5p-iframe-wrapper\"><iframe id=\"h5p-iframe-2\" class=\"h5p-iframe\" data-content-id=\"2\" style=\"height:1px\" src=\"about:blank\" frameBorder=\"0\" scrolling=\"no\" title=\"Marketing Mix Components\"><\/iframe><\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"textbox textbox--exercises\">\n<header class=\"textbox__header\">\n<h1 class=\"textbox__title\">Review Questions<\/h1>\n<\/header>\n<div class=\"textbox__content\">\n<p>Let&#8217;s practice some of the concepts you learned in this chapter!<\/p>\n<ol>\n<li>What is the marketing mix?<\/li>\n<li>How has marketing changed from the four Ps approach to the more current value-based perspective?<\/li>\n<li>What is the personal value equation?<\/li>\n<li>Looking at the new value-based perspective, evaluate why it is now preferred:\n<div id=\"h5p-3\">\n<div class=\"h5p-iframe-wrapper\"><iframe id=\"h5p-iframe-3\" class=\"h5p-iframe\" data-content-id=\"3\" style=\"height:1px\" src=\"about:blank\" frameBorder=\"0\" scrolling=\"no\" title=\"Benefits of the value-based marketing mix\"><\/iframe><\/div>\n<\/div>\n<\/li>\n<li>Do you think the current business environment justifies additional changes to the marketing approach?\n<div id=\"h5p-4\">\n<div class=\"h5p-iframe-wrapper\"><iframe id=\"h5p-iframe-4\" class=\"h5p-iframe\" data-content-id=\"4\" style=\"height:1px\" src=\"about:blank\" frameBorder=\"0\" scrolling=\"no\" title=\"Further Trends in Marketing\"><\/iframe><\/div>\n<\/div>\n<\/li>\n<\/ol>\n<h2>Word Search<\/h2>\n<div id=\"h5p-1\">\n<div class=\"h5p-iframe-wrapper\"><iframe id=\"h5p-iframe-1\" class=\"h5p-iframe\" data-content-id=\"1\" style=\"height:1px\" src=\"about:blank\" frameBorder=\"0\" scrolling=\"no\" title=\"Past and current components of the marketing mix\"><\/iframe><\/div>\n<\/div>\n<\/div>\n<\/div>\n<h3>Text Attributions<\/h3>\n<ul>\n<li>Great Depression Salesman image caption was adapted from <a class=\"internal\" href=\"https:\/\/en.wikipedia.org\/wiki\/Door-to-door\">&#8220;Door-to-door&#8221; on Wikipedia<\/a>, which is licensed under a <a class=\"internal\" href=\"https:\/\/en.wikipedia.org\/wiki\/Wikipedia:Text_of_Creative_Commons_Attribution-ShareAlike_3.0_Unported_License\">CC BY-SA 3.0 licence<\/a>.<\/li>\n<\/ul>\n<h3>Media Attributions<\/h3>\n<ul>\n<li>&#8220;<a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/dok1\/9741668453\" target=\"_blank\" rel=\"noopener\">1929 Model A Ford: A year of progress<\/a>&#8221; by <a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/dok1\/9762966652\/in\/photostream\/\" target=\"_blank\" rel=\"noopener\">Don O\u2019Brien<\/a> licensed under a <a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/dok1\/9743470272\/in\/photostream\/\" target=\"_blank\" rel=\"noopener\">CC BY 2.0 licence<\/a>.<\/li>\n<li>&#8220;<a class=\"internal\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:Great_Depression_Salesman.png\" target=\"_blank\" rel=\"noopener\">Great Depression Salesman<\/a>&#8221; by Jrouse5 is licensed under a <a class=\"internal\" href=\"https:\/\/creativecommons.org\/licenses\/by-sa\/4.0\/deed.en\" target=\"_blank\" rel=\"noopener\">CC BY-SA 4.0 licence<\/a>.<\/li>\n<li>&#8220;Vehicle Comparison&#8221; by University of Minnesota is licensed under a <a class=\"internal\" href=\"https:\/\/creativecommons.org\/licenses\/by\/3.0\/deed.en\">CC BY 3.0 licence<\/a>. It includes the following images:\n<ul>\n<li>&#8220;<a class=\"internal\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:2003_BMW_X5_3.0i_--_NHTSA_01.jpg\">2003 BMW X5 3.0i<\/a>&#8221; by the National Highway Traffic Safety Administration is in the public domain.<\/li>\n<li>&#8220;<a class=\"internal\" href=\"https:\/\/commons.wikimedia.org\/wiki\/File:2008_Honda_CRV.jpg\">2008 Honda CRV<\/a>&#8221; by AutoPhoto is licensed under a <a class=\"internal\" href=\"https:\/\/creativecommons.org\/licenses\/by\/3.0\/deed.en\">CC BY 3.0 licence<\/a>.<\/li>\n<\/ul>\n<\/li>\n<li>&#8220;<a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/smemon\/5432244488\/\">Foursquare<\/a>&#8221; by <a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/smemon\/\">Sean MacEntee<\/a> is licensed under a <a class=\"internal\" href=\"https:\/\/www.flickr.com\/photos\/dok1\/9743470272\/in\/photostream\/\" target=\"_blank\" rel=\"noopener\">CC BY 2.0 licence<\/a>.<\/li>\n<\/ul>\n<\/div>\n<hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-23-1\">American Marketing Association, \u201cDefinition of Marketing,\u201d https:\/\/www.ama.org\/the-definition-of-marketing-what-is-marketing\/\u00a0 (accessed July 19, 2021). <a href=\"#return-footnote-23-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":90,"menu_order":1,"template":"","meta":{"pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-23","chapter","type-chapter","status-publish","hentry"],"part":17,"_links":{"self":[{"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/pressbooks\/v2\/chapters\/23","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/wp\/v2\/users\/90"}],"version-history":[{"count":11,"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/pressbooks\/v2\/chapters\/23\/revisions"}],"predecessor-version":[{"id":914,"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/pressbooks\/v2\/chapters\/23\/revisions\/914"}],"part":[{"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/pressbooks\/v2\/parts\/17"}],"metadata":[{"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/pressbooks\/v2\/chapters\/23\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/wp\/v2\/media?parent=23"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/pressbooks\/v2\/chapter-type?post=23"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/wp\/v2\/contributor?post=23"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/opentextbc.ca\/principlesofmarketingh5p\/wp-json\/wp\/v2\/license?post=23"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}