1. MAR 6815 MARKETING MANAGEMENT HUDSON ROGERS FLORIDA GULF COAST UNIV.

2. Value of Marketing b Form Utility – Physical Product (a production function with help from marketing) b Task Utility – Service Performance b Time Utility – available when needed b Place Utility – Available where needed b Possession Utility – right to consume b Accounts for about 50% of goods sold b Affects every aspect of life in developed countries b Firm’s interface with the public b Brings resources to the firm b Applies to all organizations!

3. Core Concepts of Marketing b Need – basic human requirement. Marketing cannot create needs b Want – need directed at a specific object b Demand – want backed by willingness and ability to pay b Market – collection of potential buyers (customers) with similar needs who are willing and able to exchange something of value with sellers (industry) of a given product

4. Stages of Economic Development b Marketing occurs only where society developed beyond the self-supporting stage. b Pre- Industrial b Primary Manufacturing b Consumer Markets (Non-durable & Semi-Durable) b Capital Equipment and Durables b Exporting Manufactured Products b Services b As economies change and advance so does marketing

5. Evolution of Marketing b Production Era b Product Concept b Selling Concept b Marketing Concept b Societal Marketing Concept

6. Controllable and Uncontrollable Elements of Marketing b Controllable Elements – those that are under the direct influence (control) of the marketer b 4 P’s (Product, Price, Place, Promotion) b The 4 Ps also called the Marketing Mix – it’s really a mix of 4 separate mixes (Product Mix, Price Mix, Place Mix, Promotion Mix)

7. Uncontrollable Elements b Uncontrollable Elements are those things that are not directly under the control of the marketer. b What are the uncontrollable elements that marketers face? b Marketers must cope with the seven Social Institutions - P.E.L.F.R.E.C b These change and affect the way in which the 4 P’s can be used.

8. Seven Social Institutions b Political – means of determining power b Economic – means of gathering and sharing resources b Legal – method by which laws/rules are passed and implemented b Family – unity of procreation b Religious – system of beliefs adhered to in the society b Education – Means whereby the knowledge and values passed on from generation to generation b Culture – way of life of a people. Involves both concrete and abstract elements.

9. Marketing and the New Economy b Marketing constantly changes in response to changes in the environment b Recent changes involve DeregulationDeregulation Digital CommunicationDigital Communication b These changes give rise to new forms of businesses and products Cell phonesCell phones E-Commerce/E-BusinessE-Commerce/E-Business Hybrid Brick & Mortar + Point and ClickHybrid Brick & Mortar + Point and Click

10. Marketing Paradigm b Old Paradigm – Mass Marketing b New Paradigm – One-to-One or Customized Marketing ( read McKenna – “Marketing is Everything” )

11. Building Customer Satisfaction, Value & Retention b What is Value? b Value – benefit derived from a product b Value - from customer’s perspective it is the difference between benefits and costs (+ive/-ive) b View two types of value: Value in use – benefits from consumptionValue in use – benefits from consumption Value in Exchange – giving product to get something in returnValue in Exchange – giving product to get something in return b Is there a difference between the two?

12. Satisfaction b Satisfaction – what is it? b Satisfaction – feeling of pleasure or disappointment derived from using a product and having it perform (not perform) as expected b What are the factors involved in satisfaction?

13. Satisfaction (Continued) b Perceived Expectation – benefits expected based upon information and perceptions. b Performance b Performance >/= Expectations – satisfaction b Performance </= Expectations - dissatisfaction b Firms do not seek to maximize satisfaction – it would be too expensive b How much satisfaction should the firm provide? – As much as you are willing to pay for.

14. Measuring Satisfaction b Ask the customer (when should you ask the customer – before or after product usage)? How should you reconcile the two. b Ask before to get expectations data b Ask after usage to get at performance data b Derive performance by viewing the difference between performance and expectations. b You can also use a global measure by asking – “How satisfied are you with the product?” However this measure not thought to be very reliable.

15. Value Chain b Firms are really customer satisfying entities – Value Chair (Porter 1985) b Nine Value Creating Activities: b 1. Inbound Logistics -- [ First 5 are Primary Activities ] b 2. Operations b 3.Outbound Logistics b 4. Marketing and Sales b 5. Service b 6. Procurement -- [ Next four are support Activities ] b 7. Technology Development b 8. Human Resource Management b 9. Infrastructure of the Firm

16. Value Chain (Cont’d) b Success depends upon how well the firm does these activities. Porter suggest focusing on CORE BUSINESS PROCESSES: New Product DevelopmentNew Product Development Inventory ManagementInventory Management Getting and Keeping CustomersGetting and Keeping Customers Customer Service,Customer Service, Marketing Activities.Marketing Activities.

17. Getting and Keeping Customers b Which activity is easier? Why? b Which is more expensive? Why? b What is the cost of a lost customer? Annual sales per customer ($6,000)Annual sales per customer ($6,000) Average number of years (5 yrs)Average number of years (5 yrs) Profit Margin (.10)Profit Margin (.10) Customer lifetime value to the firm ($3,000) compared with the cost of getting a new customer.Customer lifetime value to the firm ($3,000) compared with the cost of getting a new customer.

18. Total Quality Management b TQM requires continuous improvement of the firm’s processes, products, and services. b New products always introduced to satisfy customer current needs --- market what customers want not what the firm has to sell. b TQM – key to value creation and customer satisfaction and is an essential element of marketing. McKenna notes that within the firm every thing we do creates a perception of the firm and its ability to satisfy the customer --- hence he asserts that marketing is everyone’s business.