General Marketing Overview Chapter 1 & 3: Marketing Process, Societal Implications, Customer Satisfaction and Value

What is marketing? ??????? What are your thoughts? “Create long term and mutually beneficial exchange relationships between an entity and the publics (individuals & organizations) in which it interacts” Create, sustain, maintain or add VALUE!

What is Marketing? American Marketing Association Definition: 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 goals.

Evolving Views of Marketing’s Role e. The customer as the controlling function and marketing as the integrative function Customer Marketing Production Human resources Finance

The Marketing Process People: Consumer Behavior, Segmentation Strategy: Planning, Competition, Research Performance: Satisfaction, profits, sales, repeat sales, brand awareness, brand recognition, market share, market growth, brand equity 4Ps: Product, Price, Place, Promotion

Customer is KING!! The 4 Ps of Marketing Product – good, service or idea that offers a bundle of tangible and intangible attributes to satisfy the consumer Promotion – the communication of all other Ps Price – what the product is exchanged for Place – all aspects of getting products to the consumer in the right location at the right time.

What can you “market”? Products, Services Experiences, Events People Places, Properties Organizations Information, Ideas Categories of markets: –Consumer –Business –Global –Government & Nonprofit

Elements of Exchange Desire to Deal With Other Party Freedom to Accept or Reject Something of Value Ability to Communicate Offer At Least Two Parties Necessary Conditions for Exchange

Tonight’s class Marketing: where are we? (Tipping Point/60 Minutes) Creating Value, Fostering Satisfaction and Loyalty Case analysis and presentation (Sorzal) Marketing Plan group formation and Project list distribution

Marketing Management Philosophies Philosophy Key Ideas Production Sales Market Societal Focus on efficiency of internal operations Focus on satisfying customer needs and wants Focus on satisfying customer needs and wants while enhancing individual and societal well-being Focus on aggressive techniques for overcoming customer resistance

Four Eras in the History of Marketing Production EraProduction Era –Prior to 1920s –Production orientation –Business success often defined solely in terms of production victories Sales EraSales Era –Prior to 1950s –Customers resist nonessential goods and services –Personal selling and advertising’s task is to convince them to buy

Marketing EraMarketing Era –Since 1950s Marketing Concept Emerges –Shift from seller’s to buyer’s market –Consumer orientation Marketing ConceptMarketing Concept –Company–wide consumer orientation –Objective of achieving long–run success

The Marketing Concept The idea that the social and economic justification for an organization’s existence is the satisfaction of consumer wants and needs while meeting organizational objectives. –TM & customer needs: Focus to distinguish from competitors –Integration: Integration of all activities to satisfy customer wants/needs –Profits: Achieve long term goals by satisfying customer wants/needs

Relationship EraRelationship Era –Began in 1990s –Carried customer orientation even further –Focuses on establishing and maintaining relationships with both customers and suppliers –Involves long–term, value–added relationships

DEBATE: Does Marketing CREATE or SATISFY NEEDS? Marketing has often been defined in terms of satisfying customers needs and wants. Critics, however, maintain that marketing does much more than that and creates needs and wants that did not exist before. According to these critics, marketers encourage consumers to spend more money than they should on goods and services they really don’t need.

Customer Value The ratio of benefits to sacrifice necessary to obtain benefits. –Offer products that perform –Give consumers more than they expect –Avoid unrealistic pricing –Give the buyer facts –Offer organization – wide commitment in service and after sales support

What is Perceived Customer Value? Product value Services value Personnel value Image value Total customer benefit Total customer benefit Monetary cost Time cost Energy cost Psychic cost Total customer cost Total customer cost Customer delivered value Customer delivered value

Customer Satisfaction The feeling that a product has met or exceeded the customers’ expectation –Focus on delighting customers –Provide solutions to consumers’ problems –Measuring satisfaction: complaint and suggestion systems, surveys, ghost shoppers, lost customer analysis

Satisfied Customers Are loyal longer Buy more (new products & upgrades) Spread favorable word of mouth Are more brand loyal (less price sensitive) Offer feedback Reduce transaction costs Is Satisfaction the same as LOYALTY?

“The Mismanagement of Customer Loyalty” How does your firm currently treat loyalty? Is it important? Do you currently measure it? How effective it is? What do you think needs to change? What companies can be considered “best practices” candidates for generating customer loyalty?

Avoiding Marketing Myopia Marketing Myopia is management’s failure to recognize the scope of its business. –To avoid marketing myopia, companies must broadly define organizational goals toward consumer needs.

Critical Thinking and Creativity Challenges presented by today’s complex and technologically sophisticated marketing environment require critical-thinking skills and creativity from marketing professionals Critical Thinking refers to the process of determining the authenticity, accuracy, and worth of information, knowledge, claims and arguments Creativity helps to develop novel solutions to perceived marketing problems

Where has marketing been criticized?

Social Criticisms of Marketing – the consumer interest Causes prices to be higher Deceptive practices in promotion, packaging and price High pressure selling Shoddy or unsafe products Poor service to disadvantaged people

Other Social Criticisms of Marketing Impact on society –Materialism –Too few social goods –Cultural pollution –Too much political power Impact on other business –Acquisitions, entry barriers