Marketing 305 – Chapter 1

Marketing
-The activity for creating, communicating, delivering, and exchanging offerings that benefit its customers, the organization, its stakeholders, and society at large
Marketing (AMA, 2007)
-The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
Marketing (AMA, 2004)
-An organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Marketing seeks to:
1) Discover the needs and wants of customers, and
2) Satisfy those needs
Exchange
-The trade of things of value between a buyer and a seller so that each is better off after the trade.
Market
-People with both the desire and the ability to buy a specific offering, made up by potential customers. (All markets ultimately are people.)
Target Market
-One or more specific groups of potential consumers toward which an organization directs its marketing program
What 4 Factors are Needed for Marketing to Occur?
1) Two or more parties with unsatisfied needs (individuals or organizations);
2) Desire and ability to satisfy these needs;
3) A way for the parties to communicate; and
4) Something to exchange
Consumer Needs and Wants
-Marketing tries to satisfy both consumer needs and consumer wants.
-A need occurs when a person feels deprived of basic necessities such as food, clothing, and shelter.
-A want is a need that is shaped by a person’s knowledge, culture, and personality.
New Products
-Most new products fail.
-Consumers may not know or cannot describe what they need or want.
-The Challenge: 1) Focus on the consumer benefit; and 2) Learn from the past
-Marketing seeks to discover consumer needs through research and then satisfy them with a marketing program that has the right combination of the 4 P’s.
The 4 P’s: Controllable Marketing Mix Factors
-Product
-Price
-Promotion
-Place
Product
-A good, service, or idea to satisfy the consumer’s needs.
Price
-What is exchanged for the product.
Promotion
-A means of communication between the seller and the buyer.
Place
-A means of getting the product to the consumer.
Marketing Mix
-Consists of the marketing manager’s controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem.
Customer Value Proposition
-A cluster of benefits that an organization promises customers to satisfy their needs.
Environmental Forces: Uncontrollable Marketing Mix Factors
-Consist of the uncontrollable forces in a marketing decision involving social, economic, technological, competitive, and regulatory forces.
-a.k.a. CERTS
Customer Value
-The unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price.
Value Strategies
-Best Price
-Best Service
-Best Product
Value
-The fundamental purpose of marketing is to create value for both the firm and customer.
-Value is in essence what you get for what you give up.
Value-Based Marketing
-Firms must offer customers something in excess of that being offered by the competitors.
-Firms must understand how each aspect of their product/service creates value for customers.
Relationship Marketing
-Links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit.
-Easy to understand, hard to do
Marketing Program
-A plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.
-All forms of advertising matches
Social Meta-cognition
-Thinking about other people’s thinking.
Evolution of Marketing
-4 Different Orientations in the History of the American Business:
1) Production Era
2) Sales Era
3) Marketing Concept Era
4) Customer Relationship Era
Production Era
-Pre-1930
-Succeeded with the best production
Sales Era
-1920’s-early 1960’s
-Succeeded with the best salespeople
Marketing Concept Era
-Late 1950’s-2000
-When the 4 P’s came together
-Focus on both the customers’ needs and the organization’s
Customer Relationship Era
-1980’s-?
-Succeeded with the best customer relationship
Authenticity
-Being true to yourself
The Experience Economy
-How we are progressing historically
Utility
-The benefits or customer value received by users of the product, created by marketing.
-This utility is the result of the marketing exchange process and the way society benefits from marketing.
-4 Different utilities:
1) Form Utility
2) Place Utility
3) Time Utility
4) Possession Utility
-Marketing creates its utilities by bridging space (place utility) and hours (time utility) to provide products (form utility) for consumers to own and use (possession utility).