Marketing 300 Chp 1

Production
Actually making goods or performing services.

Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers.

Customer Satisfaction
The extent to which a firm fulfill’s a customer’s needs, desires, and expectations.
Innovation
*the development and spread of new ideas, goods, and services.

Fosters more choices among products and competition between firms.

One key reason that marketing plays a big part in economic growth and development.

Marketing
*The performance of activities that seek to accomplish an organization’s objectives by anticipating customer or client needs and directing flow of need-satisfying goods and service from producer to customer or client.

Social process

Micro and Macro views

Doesn’t occur unless two or more parties are willing to exchange something for something else.

Micro Marketing View
A set of activities formed by organizations: marketing within an individual firm.
Macro Marketing View
A social process that directs an economy’s flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. Emphasis on how the whole marketing system works.

Effective macro-marketing matches supply and demand: heterogeneous supply capabilities and heterogeneous demands for goods and services.

Singular firms are just small parts of a larger macro-marketing system.

Pure subsistence economy
Each family unit produces everything it consumes: there is no need for exchange of goods and services; no need for marketing.
Economies of scale
*as a company produces large numbers of a particular product, the cost of each unit of the product goes down.

Most firms specialize in producing and selling large amounts of narrow assortment of goods and services. This allows them to take advantage of mass production with *this concept.

Universal functions of marketing
*Buying, selling, transporting, storing, standardization and grading, financing, risk taking an market information.

Macro-marketing uses this solution to overcome separations and discrepancies.

Buying function
Looking for and evaluating goods and services.

Component of the Universal Functions of Marketing.

Selling function
Promoting the product, includes personal selling, advertising, customer service and other direct and mass selling methods.

Component of the Universal Functions of Marketing.

Transporting function
The movement of goods from one place to another.

Component of the Universal Functions of Marketing.

Storing function
Holding goods until customers need them.

Component of the Universal Functions of Marketing.

Standardization and Grading
Sorting products according to size and quantity. Makes buying and selling easier because it reduces the need for inspection and sampling.

Component of the Universal Functions of Marketing.

Financing
Provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products.

Component of the Universal Functions of Marketing.

Risk Taking
Bearing the uncertainties that are part of the marketing process. Products can easily be damaged, stolen, or outdated.

Component of the Universal Functions of Marketing.

Market Information Function
Involves collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities, whether in the firm’s own neighborhood or in a market overseas.

Component of the Universal Functions of Marketing.

Intermediary
Someone who specialized in trade rather than production.

Plays a role in the exchange process; helps make the whole macro-marketing system more efficient and effective.

Collaborators
Firms that facilitate or provide one or more of the marketing functions other than buying.

Marketing specialists that also help smooth exchanges in the macro-marketing system.

E-commerce
Exchanges between individuals and organizations, and activities that facilitate these exchanges.

Based on applications of information technology.

ex: Amazon and eBay (help cut cost of many marketing functions)

From micro view point: not every from must perform all the marketing functions.
ex: “pure services” like Delta Airlines do not need the storing function.

Economic system
The way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in society.
Command Economy
Government officials decide what and how much is to be produced and distributed by whom, when, to whom and why. Government planning.

Producers: little choice on what goods and services are produced.

Prices: set very rigid

Consumers: have some freedom of choice but limited assortment of goods/services.

Works in simple economy with little variety.

Market Directed Economy
The individual decisions of many producers and consumers make the macro-level decisions for the whole economy.

Price: measure of how society values particular goods.

Consumers: freedom of choice

Government: society assigns them to supervise/ enforce rules.

Public interest groups spread word of product: report satisfaction or dissatisfaction.

Simple Trade Era
A time when families traded or sold their “surplus” output to local distributors.

Remained this way until the Industrial revolution brought larger factories.

Production Era
(Industrial Revolution – 1920s)

A time when a company focuses on production of a few specific products perhaps because few of these products were available on the market.

If we make a few good products, the consumers will come.

Sales Era
(by 1930)

A time when a company emphasizes selling because of increased competition.

Marketing department era
(by 1950)

A time when all marketing activities are brought under the control of one department to improve short-run policy planning and try to integrate the firm’s activities.

Marketing company era
(since 1960)

A time when, in addition to short-run marketing planning, marketing people develop long-range plans – sometimes five or more years ahead – and the whole company effort is guided by the marketing concept.

Marketing concept
An organization aims all of its efforts at satisfying customers at a profit.

3 components:
1) customer satisfaction
2) a total company effort
3) profit as an objective

Production orientation
Making whatever products are easy to produce and then trying to sell them.

Customers exist to buy a firm’s output rather than firm’s exist to service customers.

Marketing Orientation
Trying to carry out the marketing concept instead of just trying to get customers to buy what the firm has produced, but offering customers what they need.
Triple bottom line
Measure an organization’s economic, social, and environmental outcomes: as a measure of long term success.

economic: profit

social: how the company’s business activities affect its employees and other people in the community where it operates.

environmental: environmental responsibility: trying not to harm the environment.

Customer Value
the difference between the benefits a customer sees from a marketing offering and the costs of obtaining those benefits.

ex: going to Starbucks

(good coffee, relaxing, cute boys) –
(cost, parking, bad service)

Consumers usually prefer firms with higher customer value

Micro-macro dilemma
*What is “good” for some firms and consumers may not be good for society as a whole.

Producers and consumers making free choices can cause conflicts and difficulties.

ex: NYC likes convenience of buying bottled water; however, making millions of bottles and transporting them is a waste of society’s resources when NYC has perfecting fine tap water.

Social Responsibility
A firm’s obligation to improve its positive effects on society and reduce its negative effects.

ex: Fracking: allows America to be more energy independent; however, chemicals and procedures are bad for the environment.

Some products are good for consumers in the long run

ex: alcohol or high heels

There are times when being socially responsible can increase not only a firm’s profit, but also its cost.

Marketing ethics
The moral standards that guide marketing decisions and actions.

Each individual develops moral standards based on his o her own values.

Breakthrough opportunity
A newly developed or brand new product that is hard to copy and will provide long term profits. Revolutionary new product.
Product evolution
Evolving a current product, making it better.
ex: iphone 6 compared to iPhone 7
Product revolution
A new product that is introduced and never seen before.
ex: iphone in general
What is marketing? What isn’t it? How is marketing important to you? What are the macro/micro concerns about marketing? Which if any are warranted and why?
Marketing is the performance of activities that seek to accomplish an organization’s objectives by anticipating customer or client needs and directing flow of need-satisfying goods and service from producer to customer or client. Marketing is not the actual production of goods and services. Marketing is important to me because it affects the every decisions that I, as a consumer, make when deciding what goods or services to purchase. The macro/micro concerns about marketing are that some products/services may be “good” for a consumer or a firm, but may be “bad” for society as a whole. In a market-directed economy, it is hard to say whether certain products are “okay” or not because every firm has its own developed set of moral standards. Certain ones are warranted if they do not break the law and if the company is okay with producing it.
Why is the distinction between marketing and production important? Under what conditions will a production mentality work, when will it fail?
Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. So, marketing is a crucial method in making sure the right product is produced that will satisfy customer needs. A production mentality will work if a firm is trying to keep costs low and only have a one time relationship with consumers. It will fail if a company is trying to build a strong, loyal customer base and have true value of customer satisfaction and innovation.
Define customer value and provide a “real world” example. Why is customer value important to customer satisfaction?
(Benefits a customer sees from a market offering) – (Costs of obtaining those benefits)

ex: Going to Starbucks for coffee. (Benefits: good coffee, relaxing environment)-(Costs: cost of coffee, bad parking)

Customer value is important to customer satisfaction because a customer will usually choose the firm that has the largest customer value, and customer satisfaction is a big component to customer value. The more satisfied a customer is with a product, the more customer value they have with that firm.

How is customer satisfaction linked to the marketing concept? Employee satisfaction? To profit? As a manufacturer with little to no competition should you spend to create customer satisfaction?
Customer satisfaction is one of the three components to the marketing concept. Part of the end goal of the marketing concept is to satisfy customers at a profit, so high customer satisfaction is part of that. Another part of the marketing concept is total firm effort, so if customers are being satisfied, then the company is doing well as a whole and the employees should be satisfied. The more customer satisfaction, the more loyal a customer becomes to a firm and the more willing they are to spend larger amounts of money on the firm’s products. Also, retaining customers is less expensive than obtaining new customers. Both of these components lead to higher and more long term profits. Yes you should spend more to create customer satisfaction because the customers will be loyal in case new competition enters the market and your profits will raise if loyal customers are willing to spend more money on your products.
What is the micro-macro dilemma? Examples? Give an example of this dilemma, identify the conflicting stakeholders. Propose how it could be ethically resolved.
The micro-macro dilemma is that some products producers decide to produce and consumers decide to consume can not be “good” for society as a whole. For example, NYC has perfectly good tap water; however, consumers like the convenience of plastic bottled water, and producers like the profits they earn from producing them, BUT this process is a waste of resources. An ethical solution could be changing bottled plastic water bottles into reusable bottles the NYC residents could fill up repeatedly.