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Welcome to the World of Marketing: Create and Deliver Value Chapter One.

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Presentation on theme: "Welcome to the World of Marketing: Create and Deliver Value Chapter One."— Presentation transcript:

1 Welcome to the World of Marketing: Create and Deliver Value Chapter One

2 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-2 Chapter Objectives Understand who marketers are, where they work, and marketings role in the firm Understand who marketers are, where they work, and marketings role in the firm Explain what marketing is and how it provides value to everyone involved in the marketing process Explain what marketing is and how it provides value to everyone involved in the marketing process Explain the evolution of the marketing concept Explain the evolution of the marketing concept Understand the range of services and goods that organizations market Understand the range of services and goods that organizations market Understand value from the perspectives of customers, producers, and society Understand value from the perspectives of customers, producers, and society Explain the basics of market planning and the marketing mix tools we use in the marketing process Explain the basics of market planning and the marketing mix tools we use in the marketing process

3 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-3 Welcome to Brand You You are a product and have market value as a person You are a product and have market value as a person You position yourself for a job interview in a number of ways You position yourself for a job interview in a number of ways

4 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-4 The Who and Where of Marketing Marketers: Marketers: Come from many different backgrounds Come from many different backgrounds Work in many locations Work in many locations Maintain cross-functional relationships within the firm Maintain cross-functional relationships within the firm Enjoy exciting, diverse careers Enjoy exciting, diverse careers Get the scoop on marketing salaries! Visit the Occupational Outlook Handbook!marketing salaries Occupational Outlook Handbook

5 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-5 The Value of Marketing Definition of Marketing (AMA, 2007) Definition of Marketing (AMA, 2007) 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. 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.

6 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-6 Marketing Meets Needs Marketing meets the needs of diverse stakeholders Marketing meets the needs of diverse stakeholders Stakeholders are buyers, sellers, investors, community residents, citizens, consumers Stakeholders are buyers, sellers, investors, community residents, citizens, consumers Marketing concept Marketing concept Identifying and satisfying consumer needs to ensure long-term profitability Identifying and satisfying consumer needs to ensure long-term profitability

7 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-7 Needs, Wants, and Benefits Needs Can be physical or psychological Benefits Outcome sought by consumer that satisfies need or want and motivates buying behavior Want Desire to satisfy needs in specific ways Demand Customers desires for products coupled with the resources needed to obtain them

8 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-8 Marketing Meets Needs The modern marketplace The modern marketplace Takes many forms, including a mall, eBay auction, e-commerce Web site Takes many forms, including a mall, eBay auction, e-commerce Web site

9 © 2012 Pearson Education, Inc. publishing as Prentice-Hall. 1-9 Marketing Creates Utility Utility: The sum of the benefits we receive from using a product/service Utility: The sum of the benefits we receive from using a product/service Form utility Form utility Place utility Place utility Time utility Time utility Possession utility Possession utility

10 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Place Utility Rent the Runway is a new service that rents high-end dresses from fashion designers and rents them at a one-tenth of the cost of buying the same garment in the store. Rent the Runway

11 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Marketing and Exchange An exchange occurs when something is obtained for something else in return, like cash for goods or services An exchange occurs when something is obtained for something else in return, like cash for goods or services Buyer receives an object, service, or idea that satisfies a need Buyer receives an object, service, or idea that satisfies a need Seller receives something of equivalent value Seller receives something of equivalent value

12 © 2012 Pearson Education, Inc. publishing as Prentice-Hall The Evolution of Marketing The Production Era The Production Era Production orientation Production orientation The Sales Era The Sales Era Selling orientation Selling orientation The Relationship Era The Relationship Era Consumer orientation Consumer orientation Total quality management Total quality management The Triple Bottom Line Era The Triple Bottom Line Era

13 © 2012 Pearson Education, Inc. publishing as Prentice-Hall The Production Era Dominated by production orientation: Dominated by production orientation: A management philosophy that emphasizes the most efficient ways to produce and distribute products A management philosophy that emphasizes the most efficient ways to produce and distribute products Marketing played an insignificant role Marketing played an insignificant role Henry Fords Model T and Ivory soap are examples of products that were created under a production orientation Henry Fords Model T and Ivory soap are examples of products that were created under a production orientation

14 © 2012 Pearson Education, Inc. publishing as Prentice-Hall The Selling Era When product availability exceeds demand, businesses may focus on a one-time sales of goods rather than repeat business When product availability exceeds demand, businesses may focus on a one-time sales of goods rather than repeat business Dominated by selling orientation: Dominated by selling orientation: Managerial view of marketing as a sales function, or a way to move products out of warehouses to reduce inventory Managerial view of marketing as a sales function, or a way to move products out of warehouses to reduce inventory

15 © 2012 Pearson Education, Inc. publishing as Prentice-Hall The Relationship Era Focused on a customer orientation: Focused on a customer orientation: A management philosophy that emphasizes satisfying customers needs and wants A management philosophy that emphasizes satisfying customers needs and wants Marketing becomes more important in the firm Marketing becomes more important in the firm Total Quality Management (TQM) is widely followed in the marketing community Total Quality Management (TQM) is widely followed in the marketing community

16 © 2012 Pearson Education, Inc. publishing as Prentice-Hall The Triple Bottom Line Era: Make Money and a Contribution Focuses on building long-term bonds with customers Focuses on building long-term bonds with customers Triple orientation seeks to maximize the financial, social, and environmental bottom lines Triple orientation seeks to maximize the financial, social, and environmental bottom lines This ad focuses on the environmental bottom line

17 © 2012 Pearson Education, Inc. publishing as Prentice-Hall The Triple Bottom Line Era: Make Money and a Contribution Marketing uses customer relationship management (CRM) Marketing uses customer relationship management (CRM) CRM involves systematically tracking consumers needs in ways that also benefit society and delivers profit to the firm CRM involves systematically tracking consumers needs in ways that also benefit society and delivers profit to the firm Social marketing concept: Social marketing concept: Management philosophy that marketers must satisfy customers needs in ways that also benefit society and deliver value to the firm Management philosophy that marketers must satisfy customers needs in ways that also benefit society and deliver value to the firm

18 © 2012 Pearson Education, Inc. publishing as Prentice-Hall The Triple Bottom Line Era: Make Money and a Contribution Sustainability: Sustainability: Creating products that meet present needs and ensuring that future generations can have their needs met Creating products that meet present needs and ensuring that future generations can have their needs met Green marketing is one type of sustainable business practice Green marketing is one type of sustainable business practice ROI measures value ROI measures value

19 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Green Marketing in Action Green marketing is practiced by many forward-thinking firms today. Visit Ads of the World to see examples of Volkswagens green marketing and sustainable business practicesgreen marketing sustainable business practices

20 © 2012 Pearson Education, Inc. publishing as Prentice-Hall What Can Be Marketed? From serious goods and services to fun things From serious goods and services to fun things Products mirror changes in popular culture Products mirror changes in popular culture Marketing messages often communicate myths Marketing messages often communicate myths

21 © 2012 Pearson Education, Inc. publishing as Prentice-Hall What Can Be Marketed? Product: any good, service, or idea Product: any good, service, or idea Consumer goods/services Consumer goods/services Business-to-business goods/services Business-to-business goods/services Not-for-profit marketing Not-for-profit marketing Idea, place, and people marketing Idea, place, and people marketing Linked in Linked in

22 © 2012 Pearson Education, Inc. publishing as Prentice-Hall The Marketing of Value Value: Value: The benefits a customer receives from buying a good or service The benefits a customer receives from buying a good or service Marketing communicates the value proposition: Marketing communicates the value proposition: A marketplace offering that fairly and accurately sums up the value that the customer will realize if he/she purchases product/service A marketplace offering that fairly and accurately sums up the value that the customer will realize if he/she purchases product/service

23 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Value from the Customers Perspective Customer perspective: Customer perspective: Value is the ratio of costs (price) to benefits (utilities) Value is the ratio of costs (price) to benefits (utilities) Value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself Value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself Discussion Discussion

24 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Value from the Sellers Perspective Value for the seller takes many forms Value for the seller takes many forms Sellers should build value by marketing with customers, not to them Sellers should build value by marketing with customers, not to them Partnering with customers via brandfests Partnering with customers via brandfests Customers have value – it is more expensive to attract new customers than to retain current ones Customers have value – it is more expensive to attract new customers than to retain current ones

25 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Lifetime value of a customer Lifetime value of a customer Calculating the projected profit from a particular customer allows a firm Calculating the projected profit from a particular customer allows a firm Creating a competitive advantage Creating a competitive advantage Identification of a distinctive competency Identification of a distinctive competency Turning distinctive competencies into differential benefits Turning distinctive competencies into differential benefits Examples?? Examples?? Value from the Sellers Perspective Pandora Video

26 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Its Debatable Class Discussion Question Does this product provide a differential benefit that is important to consumers? Are the benefits provided to consumers unique and superior to those offered by the competition, and if so, is this competitive advantage sustainable?

27 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Figure 1.1 A Value Chain for the Apple iPod

28 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Figure 1.2 Steps in the Value Chain

29 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Table 1.3 An Example of a Customer Service Scorecard

30 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Consumer-Generated Value: From Audience to Community Everyday people are generating value instead of just buying it Everyday people are generating value instead of just buying it Social networking continues to grow and leverages Web 2.0 Social networking continues to grow and leverages Web 2.0 Open source business models are on the rise. Open source business models are on the rise.

31 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Value from Societys Perspective Marketing transactions add or subtract value from society Marketing transactions add or subtract value from society Stressing socially responsible and ethical decisions is good business Stressing socially responsible and ethical decisions is good business Marketing is often criticized Marketing is often criticized Marketings dark side Marketings dark side

32 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Marketing Is a Process Marketing planning is a major portion of the process and involves: Marketing planning is a major portion of the process and involves: Analyzing the marketing environment Analyzing the marketing environment Developing a marketing plan Developing a marketing plan Deciding on a market segment Deciding on a market segment Choosing the marketing mix product, price, promotion, and place Choosing the marketing mix product, price, promotion, and place

33 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Figure 1.3 The Marketing Mix

34 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Real People, Real Choices: Decision Made at Pandora Joe chose option 2 Joe chose option 2 Implementation: Pandora chose personal communication to build awareness. Town halls were led by the firms founder; , blogs, tweets, and Facebook were also instrumental. Listeners wore branded merchandise. Service was made available on as many devices as possible Implementation: Pandora chose personal communication to build awareness. Town halls were led by the firms founder; , blogs, tweets, and Facebook were also instrumental. Listeners wore branded merchandise. Service was made available on as many devices as possible Measuring Success: As of mid-2010, Pandora boasted 50 million listeners Measuring Success: As of mid-2010, Pandora boasted 50 million listeners

35 © 2012 Pearson Education, Inc. publishing as Prentice-Hall Keeping It Real: Fast-Forward to Next Class Decision Time at First Flavor Meet Jay of First Flavor Meet Jay of First Flavor First Flavor markets edible film strips that allow users to taste flavors. Other potential uses of film strips beyond sampling are being investigated First Flavor markets edible film strips that allow users to taste flavors. Other potential uses of film strips beyond sampling are being investigated The decision to be made: Whether or not to diversify into new product categories The decision to be made: Whether or not to diversify into new product categories

36 © 2012 Pearson Education, Inc. publishing as Prentice-Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.


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