MAR3023 Chapter 1

Marketing
is the process of creat-
ing, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying
exchange relationships with customers and to develop and maintain favorable relationships
with stakeholders in a dynamic environment
Customers
The purchasers of organizations’ products; the
focal point of all marketing activities
Target Market
A specific group of customers on whom an
organization focuses its marketing efforts
Examples of target market
Procter & Gamble is one of many companies trying to capitalize on this trend. Procter & Gamble is hoping to court more Hispanic shoppers with Spanish labeling and products customized toward Hispanic tastes, such as lavender-scented Downy detergent. Other companies target multiple markets with different products, promotions, prices, and distribution systems for each one.
Marketing Mix
product, pricing, distribution, and promotion
Marketing creates value through the
marketing mix
A primary goal
of a marketing manager is
to create and maintain the right mix of these elements to satisfy customers’ needs for a general product type
product
be a good, a service, or an idea (marriage counselors).
product variable involves
creating or modifying brand names and packaging and may include decisions regarding warranty and repair services
distribution variable involves
keeping inventory and shipping costs as low as possible, selecting and motivating intermediaries (wholesalers and retailers), establish and maintain inventory control procedures, and develop and manage transportation and storage systems.
promotion variable
relates to activities used to inform individu-
als or groups about the organization and its products.
price variable
Find price where you can sell most amount of products at highest price possible
value
customer’s subjective assessment of benefits relative
to costs in determining the worth of a product (customer value = customer benefits – customer
costs).
example of Two nonmonetary customer costs
time and effort customers expend to find and purchase desired products
What is the point of L.L. Bean offering a 100% satisfaction guaranteed to customers
to reduce the risk involved in ordering merchandise from its catalogs.– make customer risk smaller
necessary for an exchange to take place
First, two or more individuals, groups, or organizations must participate, and each must possess something of value that the other party desires.
Second, the exchange should provide a benefit or satisfaction to both parties involved in the transaction.
Third, each party must have confidence in the promise of the “something of value” held by the other.
Finally, to build trust, the parties to the exchange
must meet expectations.
stakeholders include
those constituents who have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry, and outcomes; these include customers, employees, investors and shareholders, suppliers, governments, communities, and many others
marketing environment
includes competitive, economic, political, legal, regulatory, technological, and sociocultural forces, surrounds the customer and affects the marketing mix
marketing environment affect a marketer’s ability to facilitate value-driven marketing exchanges in three general ways
First, they influence customers by affecting their lifestyles, standards of living, and preferences and needs for products.
Second, marketing environment forces help to determine whether and how a marketing manager can perform certain marketing activities.
Third, environmental forces may affect a marketing manager’s decisions and actions by influencing buyers’ reactions to the firm’s marketing mix.
marketing concept
philosophy that an organization should try to satisfy customers’ needs in a way that also allows the organization to achieve its goals.
This philosophy affects all organizational activities, not just marketing. Production, finance, accounting, human resources, and marketing departments must work together.
A firm that adopts the marketing concept must satisfy not only its customers’ objectives but also its own, or it will not stay in business long.
what is the major focus of the marketing concept
customer satisfaction
what kind of information do firms focus on to develop satisfying products
customer analysis, competitor analysis, and integration of the firm’s resources to provide customer value and satisfaction, as well as to generate long-term profits.
Example of how starbucks understands the marketing concept
demonstrates the company’s grasp on the marketing
concept by explaining that Starbucks is not a coffee business that serves people, but rather a “people business serving coffee.” Starbucks’ leadership sees the company as being “in the business of humanity,” emphasizing the fact that Starbucks is not only concerned about customers but society as well.
Production Era
2nd half of 19th century. Industrial revolution in full swing- electricity, rail roads, assembly lines made it possible to produce goods easily, into a time were the demand for manufactured goods was strong– made what they could “any color as long as its black”

Era ended with the Great Depression – all of a sudden no one was buying as much as they were- aggressive sales necessary hence next slide

Sales Orientation
1st half of the 20th century-
firms pushed products using aggressive sales tactics
Market Era
early 1950s. the “”great awakening” realization that businesses shouldn’t create the product first, then try to persuade customers to buy, but realzie what the customers want and produce that.

Stabilized after WWII
Colors of products become more important Research of what attracts customers

Market orientation
An organizationwide commitment to researching and responding to customer orientation
Example of market orientation
The recent craze with being green has caused companies to implement products better for the environment
key in implementing the
marketing concept.
Listening and responding to consumers’ frustrations and appreciation
Things necessary to implement marketing
information system to discover customer needs, internal operations in which all activities are coordinated with the same goal of marketing (despite a changing market or level in company–even top management needs marketing),
Customer relationship management
this technique is the goal of every marketing strategy, it focuses on informations about customers to create marketing strategies that develop and keep customer relationships
Implementing the marketing concept means optimizing the exchange relationship, otherwise known as
the relationship between a company’s
financial investment in customer relationships and the return generated by customers’ loyalty
and retention.
Relationship marketing
strives to build satisfying exchange relationships between buyers and sellers by gathering useful data at all customer contact points and analyzing that data
to better understand customers’ needs, desires, and habits.
Example of customer relationship marketing
frequent flyer miles
customer lifetime value (CLV)
a key measurement that forecasts a customer’s lifetime economic contribution based on continued relationship marketing efforts.
80 percent of business profits come from 20 percent of customers, knowing a customer’s potential lifetime value can help marketers determine how best to allocate
resources to marketing strategies to sustain that customer over a lifetime.
Marketing costs consume about how much of the price of a product?
50%
Non-profit organizations use marketing
For example, the massive earthquakes in Haiti in 2010 and Japan in 2011 prompted the Red Cross to release many promotional messages encouraging people to donate money for those impacted by the disasters.
success of our economic system depends on
marketers whose values promote trust and
cooperative relationships in which customers and other stakeholders are treated with respect.
green marketing
A strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment
market orientation combined with what improves overall business performance
social responsibility
From — to — percent of all civilian workers in the United States perform marketing activities
25 to 33
Societal Era
firms now serve three entities
Best indicator that a product is successful
when a competitor imitates it
If marketers get -,-,and – right, little promotion is needed
product, price, and distribution
Relationship Marketing Era (1990s-2010)
The focus is on long-term relationships and customer retention.
A 5% increase in customer retention yields up to a 95% improvement in NPV delivered by customers
Repeat customers generate over twice as much revenue as new customers
Engaged customers generate 1.7 times more revenue than normal customers
Societal Marketing Era (1960s- present)
“Green Marketing”
Focus on:
Adds society’s best interest to the mix
Corporate social responsibility
Firm now serves three entities
Popular Macro-Marketing Strategies
Creating value and relationships
Segmenting Markets
Identifying Opportunities
Point of segmentation
to get customers who were originally buying products to now buy them, or like best buy, segment customers according to what they will buy
Warren Buffet
Owns dairy queen
He lives in Omaha, Nebraska in the same house hes lived in since 1958
Pays himself 175,000
99% to welath
20 years to build a reputations and five minutes to ruin it
Berkshire Hathaway
holding company with a diverse portfolio of business in Omaha
Owns things like DQ, Geico, Fruit of the loom, Spalding, Benjamin Moore, Huffy bicycles
best known for insurance
Pepsi
named after enzyme pepsin
Originally called Brads drink
Coke offered to buy three times said no
Owns friotlay, quaker, gatorade, lipton, aquafina, mountain dew