Welcome to the World of Marketing Chapter 1 Welcome to the World of Marketing Marketing: Real People, Real Choices 3rd edition

Chapter Objectives Know what marketing is all about Define the marketing mix Understand the basics of marketing planning Describe the evolution of the marketing concept Explain why marketing is important Marketing: Real People, Real Choices 3rd edition

What is Marketing? Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. Marketing: Real People, Real Choices 3rd edition

What is marketing?? Identify needs of consumers and fill them in the right place, time and way. Consumer: the ultimate end user of a good or service.

Marketing Satisfies Needs Most successful firms practice the marketing concept first identify consumer needs and then provide products that satisfy those needs Marketing: Real People, Real Choices 3rd edition

Marketing Satisfies Needs A need is the difference between a consumer’s actual state and some ideal or desired state physical needs (water) psychological needs (looking good) Marketing: Real People, Real Choices 3rd edition

Needs versus Wants A need is the difference between the actual and ideal states of being A want is a desire for a particular product used to satisfy that need wants are culturally and socially influenced Marketing: Real People, Real Choices 3rd edition

Needs, Benefits, Demand, and Markets A product delivers a benefit when it satisfies a need or want Benefit: the outcome sought by a consumer that motivates buying behavior to satisfy a need or want. The challenge: identify what benefits people are looking for?? Marketing: Real People, Real Choices 3rd edition

Needs, Benefits, Demand, and Markets Desire coupled with the resources to satisfy a want results in demand A market consists of all the consumers with that need and the resources to make the exchange

Marketing is an Exchange of Value Exchange - the heart of every marketing act An exchange occurs when something is obtained for something else in return “Value is in the eye of the beholder” Marketing: Real People, Real Choices 3rd edition

Marketing is an Exchange of Value Appropriate value exchange occurs when both parties are satisfied, making it more likely to continue business in the future. Making marketing value decision (I) Understanding consumer’s value needs (II) Create value proposition (III) Communicating the value proposition (IV) Delivering the value proposition (V)

Anything Can Be Marketed!! Consumer Goods and Services Goods: Tangibles purchased for personal/family use (EXAMPLE??!) Services: intangibles we pay for and use but never own (EXAMPLE??!) Both must have value that come from competing goods and services Business-to-Business Marketing Industrial goods Marketing: Real People, Real Choices 3rd edition

Anything Can Be Marketed!! Cont. Not-for-profit Organizations Organizations with charitable, educational, community and other public-service goals, that buy goods and services to support their functions and to attract and serve their members. Museums, zoos, Gov, Idea, Place, and People Marketing

Anything Can Be Marketed!! Cont. Idea, Place, and People Marketing Endorse ideas Change behavior (seat belts) Places; tourism Ads, (Turkey) People; “Stars are made, not born”, resumes, YOU

The Marketing Mix It is a combination of the product itself, the price of the product, the place where it is made available, and the activities that introduce it to consumers that creates a desired response among a set of predefined consumers

The Marketing Mix (4 P’s) Product Place Price Promotion Marketing: Real People, Real Choices 3rd edition

Product Good, service, idea, place, person...etc Design package, physical features, associated services, product design, developing new products, introducing new products, find new uses of old products, product identity, management of the product.

Price Price is the amount to exchange to receive the offering. Price decisions, market conditions, people willingness to pay, price analysis, price will lure new customers to the product, price creates value. Do people buy only for a lower price??!

Promotion Is the coordination of a marketer's marketing communications efforts to influence attitudes or behavior; the coordination of efforts by marketer to inform or persuade consumers or organizations about goods, services, or ideas.

Promotion Cont. Personal selling Advertising & publicity (TV Ads) Public relation (conferences) Promotional activities (store coupons)

Place Availability of the product to the customer at the desired time and location. Channels of distribution, get the product from producer to consumer Retailers, internet sites…

Marketing is a Process “Process of planning and executing” Successful marketing exchanges occur continually over time.

Marketing is a Process cont. Customer Relationship Management (CRM) emphasizes the importance of building long-term relationships with customers to keep them satisfied and coming back. “Selling products that don’t come back to people that do.” Marketing: Real People, Real Choices 3rd edition

How is marketing done? Marketing planning Finding and reaching the target market Looking for customers Marketing: Real People, Real Choices 3rd edition

Marketing Planning Analyze the organization’s current strengths, weaknesses, opportunities, and threats How is our firm different from the competition? Which customer groups should we pursue in the future? How will changes in the environment affect our marketing mix? Marketing: Real People, Real Choices 3rd edition

Finding and Reaching a Target Market Mass Market - all possible customers regardless of differences in their specific needs and wants Market segments - distinct groups of customers within a larger market A target market - an organization’s chosen segment Marketing: Real People, Real Choices 3rd edition

The Evolution of Marketing Production Orientation Selling Orientation Consumer Orientation New Era Orientation The E-marketing era Production concept Selling concept Product concept Marketing concept Societal marketing concept Marketing: Real People, Real Choices 3rd edition

Production orientation 12/8/2018 Production orientation Emphasize the most efficient ways to produce and distribute. Ford’s T-model Demand is greater than supply Take whatever is available No strong competition Soviet Union (quotas, shoppers lines) 27

Production orientation Cont. 12/8/2018 Production orientation Cont. Market is a homogeneous group Satisfied with the basic functions Example?? 28

12/8/2018 Selling orientation Managerial view of marketing as a sales function, or a way to move product out of warehouse to reduce inventory. After world war II the race for consumer pockets started. 29

Selling orientation cont. 12/8/2018 Selling orientation cont. Consumers don’t like to be pushed… right? Will be successful in one-time sale, not building a relationship with the consumer. Good for unsought goods. Goods that we don’t tend to buy without prodding. 30

12/8/2018 Consumer orientation A management philosophy that focuses on ways to satisfy customers’ needs and wants. Consumers don’t mind to pay more Consumer are the most important 31

Consumer orientation cont. 12/8/2018 Consumer orientation cont. Competition Market segmentation Tailoring products, customization, marketing messages, More features Better quality Early 1990s TQM 32

12/8/2018 New era orientation A management philosophy in which marketing means a devotion to excellence in designing and producing products that benefit customers plus the firm’s employee, shareholders and communities. 33

New era orientation cont. 12/8/2018 New era orientation cont. Customer is still No. 1 CRM Social marketing concept (Customer VS. Society VS profit???) Cleaner, safer, environment, sponsorship. Why social marketing??! DOES MARKETING HELP OR USE CONSUMER? 34

12/8/2018 The E-marketing era SIMPLY, using the internet to connect with consumers. Connect: Personalization Products and new products Advertising News Relationship 35

Marketing Creates Utility Utility: usefulness or benefit consumers receive from a product. Form utility (Raw -> products) Place utility (availability of products) Time utility (storing products) Possession utility (own, use, enjoy!) Marketing: Real People, Real Choices 3rd edition

Pop Culture and Myths Popular Culture Music, Movies, Sports, Books, Celebrities Marketers provide the materials that become part of this culture TV at dinner, cosmetics made of natural materials Marketing: Real People, Real Choices 3rd edition

Marketing and Myths Marketing messages communicate stories containing symbolic elements that may express shared emotions and ideas of a culture Examples? Marketing: Real People, Real Choices 3rd edition

Exercise!!! Copy or clip three advertisements from newspapers or magazines. What customer needs are the advertisers trying to meet? Select two companies of your choice (in the same market), determine how they differ in their marketing mix elements!! How the different marketing mix elements are affecting each of the company’s business and “selling”.