Chapter 1 MARK3000

Marketing
-Organizational function and a set of processes for creating, capturing, communication, and delivering VALUE to customers, marketplace, and society at large AND for managing customer relationships in ways that benefit the firm and its stakeholders **VALUE IS AT THE CORE
Stakeholders
Stakeholders: customers, employees, investors/ stockholders/owners
Marketplace
Includes competition and corporate partners
Marketing plan
-Specifies marketing activities for specific period of time
Core Aspects of Marketing
*Value is at its core

• Occurs in many settings
• Helps create value
• About satisfying customers needs and wants
• Entails an exchange
• Requires price, product, place, and promotion decisions
• Can be performed by both individuals and organizations

Corporate strategy
-Anticipating and determining (research) the needs and wants of consumers (target market) and satisfying those needs through the use of the 4Ps to create long term exchanges of value (4Ps)
Exchanges of value
-Both parties must believe they are getting value for exchange to take place
*Value is created through marketing mix (4Ps)
Value
-Ratio of what is given up for what is obtained

-Reflects relationship of benefits to costs

What is marketing’s fundamental purpose?
To create Value with a Product
Marketing Mix: What is the 4Ps? What are the 4Ps?
4Ps: controllable set of decisions/activities that firm uses to respond to wants of its target market
-Promotion
-Price
-Product
-Place/Distribution
Product
-Product: developing a variety of offerings, including goods, services, and ideas to satisfy customer needs

*Creating the Value

Goods
items you can physically touch
Services
intangible offerings that involve deeds, performance, or effort
Ideas
concepts, opinions, and philosophies
Price
-Price: everything a buyer gives up (money, time, energy) in exchange for a product
-must be amount customer is willing to pay and amount that gives a profit

*Least difficult P to change
*If price is too low, could mean the good is an inferior good or could mean lack of quality

*Capturing the Value

Place
-Place: supply chain management represents all activities needed to get product to the right customer when the customer wants it
* Value proposition delivery
Marketing Channel Management (supply chain management)
-All the people and activities firms have to deal with to efficiently integrate the suppliers, manufacturers, warehouses, stores, and other firms into a value chain

-Firms or businesses that make and deliver a set of goods and services, made up of corporate partners

Promotion
-Promotion: communication that informs, persuades, or reminds potential buyers about a new product/service
-Informs: new products
-Reminds: established products

*Value communicated

Different Marketing Chains
-B2C: business sells to consumer
-B2B: business sells merchandise to another business
-C2C: consumers sell to other consumers
1920s Corporate Marketing Orientations
1920s: Production-Oriented
*Mass production: What do we have that we can easily make?
-most firms production-oriented
-thought product could sell itself
-focus on internal capability and technology
-Concerned with product innovation
-NOT concerned with satisfying customer needs and wants
*Key question: What does the firm do best?
1950s Corporate Marketing Orientation
1950s: Sales-Oriented

*Overproduction
-Focus on aggressive sales techniques
-Manufacturers had capacity to produce more than customers really wanted/ were able to buy
-Depend on personal selling and advertising

*Key question: How can we sell more of what we have?

Modern Marketing Orientation
Modern Day: Marketing Orientation

**Value-based marketing orientation: most successful firms today are market-oriented

-purpose of organization is to satisfy customers needs and wants-while still meeting organizational objectives
-provide more value than competitiors
-consumers able to make purchasing decisions- consider quality, convenience, and price
-firms discovered marketing and value-based marketing
*Key question: What does the customer want?

Marketing concept
-Make what you can sell, rather than sell what you can make
-ex: Ford’s Model T
History of Ford Marketing
A)Ford’s market share decline in 2006
-Ford’s market share plummeted from consumers wants for fuel efficient cars

B) Ford-Production Era
-Bill Ford, chairman and CEO of company founded by grandfather, stopped the prevailing philosophy of Ford “if you will build it, they will buy it.”

C) Ford-Marketing Era
-Bill modified philosophy for Ford to “be contingent on customers demands, todays and tomorrows
-“We’re going to figure out what people want before they know it”

D) Ford-recently
-Very popular and successful with many awards
-Only member of big 3 US automakers that didn’t declare bankruptcy or take out bail money

How do firms become more value drive?
•Share information about their customers and competitors across their own organization and even with other firms, such as transportation companies that help them get their product to the market place

•Strive to balance customers benefits and costs

•Concentrate on building relationships with customers

•Take advantage of new technologies and connect with customers by using social and mobile media

Importance of Marketing
•Marketing enriches society (charitable contributions)
•Can be entrepreneurial (encourages invention)
•Expands global presence (world-wide brands like Coke)
•Strengthens channel relationships (business to business)
Customer Relationship Management
business philosophy and set of strategies that focuses on identifying and building loyalty among the firm’s most valued customers