Chapter 1

What is Marketing? n n 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. n n Simply put, Marketing is all about satisfying needs.

Marketing is an Exchange of Value n n An exchange is the process by which some transfer of value occurs between a buyer and a seller. – – At least two parties (individuals or organizations) must be (freely) willing to make a trade; – – Each must have something the other values; – – Each party is capable of communication and deliver.

(Almost) Anything Can be Marketed Consumer Goods and Services Consumer Goods and Services Business- to- Business Marketing Business- to- Business Marketing Idea, Place, People Marketing Idea, Place, People Marketing Not-For- Profit Marketing Not-For- Profit Marketing

When Did Marketing Begin? Product Orientation Selling Orientation Customer Orientation Most Efficient Production & Distribution Seller’s Market Satisfies Customers’ Needs and Wants Total Quality Market Orientation Benefits to Customers, Plus Firm’s Employees, Shareholders, and Communities Focus on customer wants and needs and differentiation. Marketing as a Sales Function Buyer’s Market

The Marketing Concept n n The Marketing Concept is the idea that the social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting organizational objectives.

Needs, Wants and Benefits Needs Wants Desire to Satisfy Needs in Ways That are Culturally and Socially Influenced. Let’s go eat a cheeseburger. Benefits Outcome Sought by a Consumer That Motivates Buying Behavior. Now I’m full; I feel better. Difference Between a Consumer’s Actual State and Some Ideal or Desired State. I’m Hungry!

Social Marketing Concept Consumers Company Society Orientation that Focuses on Satisfying Consumers Needs While Also Addressing the Needs of the Larger Society. Social Marketing includes ‘Society at large’ as a constituency marketing seeks to provide value.

Marketing is a Process n n “Marketing is a process of planning and executing...” n n The concept of Relationship Marketing sees marketing as a process of building long-term relationships with customers to keep them satisfied and to keep them coming back.

Customer Satisfaction n Customers’ evaluation of a product or service in terms of whether it has met their needs and expectations. n Does satisfaction lead to brand loyalty?

Customer Value n The relationship between the benefits and the sacrifice necessary to obtain those benefits

How Do We Achieve Customer Value? n Offer products that perform n Earn the consumers’ trust – warranties and guarantees? n Avoid unrealistic pricing n Full disclosure of facts – what do they need? n Commitment to service and after sales support n Cocreation

Disney Does Right! n Every employee’s job title is Customer Service Representative? n Training – sufficient and with the customer and product in mind (i.e., everyone picks up trash!) n Empowerment – Enable employees to “solve” and “fix” problems … give them that magical experience they expect! n Teamwork – help each other, jump in

Customer Relationship Management n A company-wide business strategy designed t =o to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups.

Markets, Consumers and Demand Market Customers who share a common need that can be satisfied by a specific product AND who are willing, able and have the authority to make the exchange. Customers Potential Customers DEMAND

Finding and Reaching a Target Market n n Step 1. Segmenting the Market – – Divide the overall market into segments, in which consumers have similar characteristics. n n Step 2. Selecting a Target Market – – Evaluate the segments identified in the segmentation process; select target market(s). n n Step 3. Positioning the Product – – Marketer plans the product’s market position, which is how the target market perceives the product in comparison to competitors’ brands.

How is Marketing Done? Marketers Develop and Implement a Marketing Plan Based on the Following Information: Organization’s Strengths and Weaknesses Organization’s Strengths and Weaknesses Organization’s Overall Objectives Opportunities and Threats to the Organization in the Marketplace Opportunities and Threats to the Organization in the Marketplace

Marketing’s Tools: The Marketing Mix Product Good, Service, Idea, Place, Person Product Good, Service, Idea, Place, Person Price Assignment of Value Price Assignment of Value Place Availability of Product Place Availability of Product Promotion Activities to Inform Consumers Promotion Activities to Inform Consumers Tools that Are Used Together to Create a Desired Response Among a Set of Defined Customers Tools that Are Used Together to Create a Desired Response Among a Set of Defined Customers

Why is Marketing Important? n n Marketing Creates Utility – – Form Utility – – Place Utility – – Time Utility – – Possession Utility n n Marketing’s Role in the Firm – – A firm’s marketing-related decisions must affect and be affected by its other operations such as accounting and manufacturing.

Why is Marketing Important? n n Marketing’s Role in Our Daily Lives – – Popular Culture – – Marketing and Myths n n Marketing’s Role in Society – – Ethical Behavior is Good Business – – Social and Ethical Criticisms of Marketing