1- MTKG 325 Principles of Marketing  Karen Porter  Syllabus  Who am I?

1- Information Sheets  Name  Major  Where you work  Any marketing-related job experience  Career goals  Something unique about yourself/what you like to do in Missoula/where you’re from

1- Marketing Careers  Marketers: –May have a wide variety of job titles –Work cross-functionally within the firm –Work in a wide variety of types of organizations –See Table 1.1, p. 7-8 –Marketing Mgr Median $100K Get the scoop on marketing salaries! Visit the Occupational Outlook Handbook!marketing salaries Occupational Outlook Handbook

Marketing Career Opportunities  Advertising –Agencies (1 person – intl) –In-house (Aramark – childcare) –Media  Brand Management –Karen: Lottery / Childcare  B2B Marketing –Karen: Consulting 1-

Marketing Career Opps  Supply Channel Management (ex: TLC)  Direct Response Marketing  International Marketing  Marketing Models / Systems Analysis  Marketing Research  New Product Development (ex: TLC)  Retail Management (ex: store & ecom) 1-

Marketing Career Opps  Services Marketing (ex: childcare, edu)  Sales & Sales Management (ex: TLC)  MISSING FROM TEXT: –Website Development and Online Marketing –Social Media Management –Mobile Marketing 1-

The Value of Marketing  What is marketing? –The activity, institutions, and functions/ processes for Creating, communicating, and delivering value to customers Managing customer relationships to benefit the firm (organization) and its stakeholders (customers, clients, partners, society).

1- Marketing Meets Needs  Marketing meets the needs of diverse stakeholders –Stakeholders are buyers, sellers, investors, community residents, citizens  Marketing concept –First identify customer needs –Then provide products that satisfy those needs – While making a profit/remaining in business

1- Marketing Is about Creating Utility  Utility: The sum of the benefits a customer receives from using a product/service –Form utility – What comprises the product or service –Place utility – Where that product is delivered (and is it accessible?) –Time utility – When is it available? (ex: rental cars) –Possession utility – Give consumers choices to own or experience the product or service

1- Marketing Is about Exchange Relationships  Exchange - the heart of every marketing act  An exchange occurs when something is obtained for something else in return –Nonprofits: motivating, educating, or delighting the public  Value is in the eye of the beholder –Discuss: shoes / cars  Marketers must create an attractive value proposition - WIIFM

1- The Evolution of Marketing  The Production Era –Production orientation  The Sales Era –Selling orientation  The Relationship Era –Consumer orientation –Total quality management  The Triple Bottom Line Era

1- The Evolution of Marketing: The Production Era  Dominated by production orientation:  Marketing played insignificant role  A management philosophy that emphasizes the most efficient ways to produce and distribute products  Demand exceeded supply –Marketing played an insignificant role  Examples of products created under a production orientation: –Henry Ford’s Model T and Ivory soap

1- The Evolution of Marketing: The Selling Era  When product availability exceeds demand, businesses may focus on a one-time sale of goods rather than repeat business –Great Depression –After WWII  Dominated by selling orientation: –Managerial view of marketing as a sales function, or a way to move products out of warehouses to reduce inventory (hard sell / “buyer beware”)

1- The Evolution of Marketing: The Relationship Era 70s - Inflation / 80s Recession Shifting focus to a customer orientation/marketing concept: –A management philosophy that emphasizes satisfying customers’ needs and wants  Marketing becomes more important in the firm  Total Quality Management (TQM) is widely followed in the marketing community

1- The Evolution of Marketing: The Triple Bottom Line Era  Focuses on building long-term bonds with customers: CRM  Seeks to maximize the financial, social, and environmental bottom lines (profit, people, planet) –Make Money and a Contribution = Corporate Social Responsibility (CSR) – company supports social causes –Sustainability: Creating products that meet present needs and ensuring that future generations can have their needs met  Greater focus on accountability-marketing metrics –ROI (Return on Investment) is the direct financial impact of a firm’s expenditure of resources such as time or money

1- What Can Be Marketed?  From “serious” goods/services to fun things  Product: any good, service, or idea –Consumer goods/services Chia pets, Ben & Jerry, NFL, soup, dental care –Business-to-business goods/services Consulting, software, medical equipment, etc. –Not-for-profit marketing United Way, Race for the Cure, etc. –Idea, place, and people marketing Meth – Not Even Once, Taylor Swift, Travel MT  YOU!

1- The Marketing of Value  Value: –The benefits a customer receives from buying a good or service –JM: relative to price paid + non-monetary costs  Marketing communicates the value proposition: –A [statement] that fairly and accurately sums up the value that the customer will realize if he/she purchases product/service

1- Value from the Customer’s Perspective  Customer perspective: –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 Brand image is a critical component

1- Building LONG-TERM Value Through Customer RELATIONSHIPS  Customers are now regarded as partners rather than victims  It is more expensive to attract new customers than to retain current ones  Calculating the lifetime value of a customer allows a firm to decide which customers are “worth keeping” vs. which should be “fired”

1- The Value of a Customer to the Firm: A CRM Perspective  “Customer Relationship Marketing” –Transaction vs. relationship focus –Lifetime value of a customer –Cheaper to retain current customers than attract new ones –80/20 rule: Not all customers are created equal –Company may sacrifice short-term gains for life-time value

1- More on CRM “Permission-based” marketing: opt-in Individualized offers Database used for Tiering Tailoring Also: cross-sell; up-sell; bundle 21 More in Ch. 4, Ch. 7, Ch. 12

1- Providing Value Through Competitive Advantage  Creating a competitive advantage requires: –Identification of a distinctive competency: The ability of a firm to outperform the competition by providing customers with a benefit the competition cannot provide

1- Consumer-Generated Value: Facilitated by Web 2.0  “User-generated content” –Everyday people functioning in marketing roles such as: Creating ads Providing input into new product development Serving as retailers –Social networking is growing explosively Wisdom of crowds –Open source business models

1- Value from Society’s Perspective  Marketing transactions and company activities influence the world and add or subtract value from society  Stressing ethical or socially responsible decisions is often good business in the long run

1- The Dark Side of Marketing  Marketing is often criticized  Illegal practices do occur  Some marketing activities have detrimental effects on society  The dark side of consumer behavior: –Terrorism, addictive consumption, exploitation, illegal activities, shrinkage, anticonsumption

1- Marketing as a Process  Marketing planning (thinking carefully and strategically about the big picture) –Analyzing the marketing environment –Developing a marketing plan –Deciding on a market segment –Choosing the marketing mix—product, price, promotion, and place

1- The Marketing Mix

Karen’s Marketing Mix 1-

Marketer’s Strategic Toolbox: The Marketing Mix (4 Ps)  Product  Place  Price: –Value = Benefits (functional + symbolic)/Price ($ + Non-monetary)  Promotion (Marketing Communications) –advertising, –public relations, –personal selling, –sales promotion

1- 4Ps Mandatories  Each P must align with target market needs & expectations  Each P must align with the other P’s –Consistency –Synergy –Examples: Godiva vs. Hershey Bud vs. __?