What is Marketing? Professor Chip Besio Cox School of Business Southern Methodist University

What Is Marketing?  Marketing is [the] “process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others [Italics mine].” ***Philip Kotler

 Marketing is the activity for creating, communicating, delivering and exchanging offerings that benefit an organization’s customers, the organization, its stakeholders and society at large. ***The American Marketing Association (2007) What Is Marketing?

 Marketing is so basic that it cannot be considered a separate function. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view [Italics mine]. *** Peter Drucker

Marketing Mix -- The Four P’s P RICE ROMOTION LACE RODUCT

The Marketing Mix - Product  Product line breadth and depth  Product characteristics (e.g., quality, features, design, reliability)  Brand  Packaging  Services  Return and/or warranty policies  The product is much more than the tangible item that the customer sees

The Marketing Mix - Price  List price  Discounts  Bundling  Terms (e.g., 2/10, net 30)  Credit  Price includes the tools that determine how much and when the customer pays

The Marketing Mix - Promotion  Advertising  Sales promotion  Direct marketing  Public relations  Personal selling  Promotion (what many people commonly think of as marketing) includes all communications with potential customers that are intended to influence their attitudes, beliefs and purchase decisions

The Marketing Mix - Place  Shelf location  Display  Inventory  Distribution channels  Transportation  Territory or coverage  Place involves how and when the customer gets the product

Marketing Mix - Summary  Marketers have many more tools at their disposal to achieve company objectives than you might have thought

The Company’s Micro Environment - The 5 Cs  The “5 Cs” can be used as a framework to describe and analyze the company’s immediate environment  Company  Customers  Competitors  Channels  Constituents

 Company’s Internal Environment  Company’s Internal Environment - functional areas such as top management, finance, and manufacturing, marketing, etc.  Customers  Customers - buyers in markets that purchase a company’s goods and services  Competitors  Competitors - those who serve the target market with similar products / services The Company’s Micro Environment

 Channels (Suppliers, Distributors, Wholesalers and Retailers)  Channels (Suppliers, Distributors, Wholesalers and Retailers) - Provide the resources needed to produce goods and services and help the company to promote, sell, and distribute to final buyers  Constituents (stakeholders)  Constituents (stakeholders) - any group that perceives itself having an interest in the company’s ability to achieve its objectives The Company’s Micro Environment

The Company’s Macro Environment  Beyond the channel of distribution there are other environmental factors that impact on the company and its market  Among them are:  Society/Culture  Society/Culture - e.g., dual income households are less likely to prepare meals in the home  Economy  Economy - e.g., recession reduces discretionary spending by consumers, as well as investments by competitors and suppliers  Natural Environment – e.g., resources needed by marketers

The Company’s Macro Environment  Among them are (continued):  Demographics  Demographics - e.g., the aging population dictates that more incontinence products will be needed in the future  Legal/Regulatory  Legal/Regulatory - e.g., EPA regulations regarding hazardous waste disposal could affect the demand for motor oil and batteries  Technology  Technology - e.g., low cost, high speed computers could allow quicker, more effective dissemination of information to the sales people and widely dispersed business units

What Is S.W.O.T. Analysis? S.W.O.T. analysis groups observations of the company and its environment into:  Internal  Strengths  Weaknesses  External  Opportunities  Threats

What Is S.W.O.T. Analysis?  Strengths and weaknesses are factors specific to company which contribute to either good performance (strengths) or poor performance (weaknesses).  Microsoft example:  Strengths - Scale, excellent development capability; Windows OS as a basis for development and product tie-ins; reputation with end users for ease of use  Weaknesses - Reputation for “vaporware;” broad scope makes focus on niches difficult

What Is S.W.O.T. Analysis?  Opportunities and threats are based on the activities in the company’s environment by others, including customers, competitors and suppliers and other constituents.  Examples include:  Opportunities - Increasing computing power; increasing penetration of PCs and handhelds; increasing availability and speed of internet access; bundling different software products  Threats - Government antitrust action; power of Intel as dominant supplier of microprocessors; investment by telephone and cable companies in internet “distribution”

What Is S.W.O.T. Analysis? The same information can often be viewed as either an opportunity or a threat Consider the company’s current position and determine the most likely effect (positive or negative) of the information