Chapter 1- Welcome to Marketing

Thursday, September 6, 2018 2:56 PM

Why Study Marketing? What To study

• Important to society • Understand te
• Important to business • Skip what is no
• Career opportunities • Dig deeper in
perspective.
• Affects you everyday

What marketers do Value= wha

Value- Creating activities give
• Access the need, wants and satisfaction of costumers.
• Design and manage product offerings.
• Determine prices and pricing policies.
• Develop distribution (Place) strategies. The
• Communicate (Promote) with present and potential
costumers. Prod
Plac
Pric
LO1 What is Marketing? Prom

What is marketing?
• Many people think of marketing as either advertising or Voca
sales.
• Others put advertising and sales together and call it Market
Marketing.
• Enlightened beings see marketing as much more as much Produc
more.
Consum
Marketing is the activity, set of institutions, and process
for creating, communicating, delivering, and exchanging Consum
offerings that have value for costumers, clients, partners
and society at large. Costs-
-American Marketing Association
Benefi
What is the goal of business?
Profit Exchan

What is Marketing? Need-

The science of profitably changing behavior.
Want-
erms listed
oted in LO 1.2
LO 1.3, especially seller's and society's

at you get - what you

e Four Ps.
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What is the goal of business?
Profit Exchan

What is Marketing? Need-

The science of profitably changing behavior.
Want-

Definitions Market

Consumer- The Entity (person or business) who converts to Market

product to value.

Product- A good, service, or idea (e.g. Place or Person)

Consumption- process by which products are transformed into

value
Costs- negative results of consumption
Benefits- Positive results of consumption

Exchange- acting out the decision to give up something to

get something of greater value.
An exchange occurs when one party gives up something in
return for getting something else of greater value.

Requirements for exchange:

• At least to two parties willing to deal
• Something of value
• Communication and delivery
• Freedom to accept or reject

Marketing occurs (but fails) even if exchange does not take

place.

Marketing Mix: The Four Ps

• Marketers relate activities to the marketing mix
(a.k.a. the Four Ps)
• The Four Ps are the essential interrelated components
to create, communicate and deliver value.

Products can be
○ A good (Heinz, a blender)
○ A service (Restaurants, Banks)
○ An idea (Goodwill, Disney)
nge-

t-
tplace-
 Products can be
○ A good (Heinz, a blender)
○ A service (Restaurants, Banks)
○ An idea (Goodwill, Disney)

Place (A.K.A Distribution)

○ Product availability where and when customers want
them
○ All activities from raw materials to finish
products (i.e. the supply chain)
○ Ensure products arrive in usable condition at
designated places when needed.

Promotion
○ Goal is bring about exchange with target markets
by:
§ Informing
§ Educating
§ Persuading
§ Reminding
○ Includes integration of:
§ Personal selling
§ Advertising
§ Sales promotion
§ Public relations

Price
○ Price is what (one of the things) a buyer must
give up to obtain a product.
○ Higher prices can communicate higher quality for
some goods.
○ Marketers often lower prices via sales promotions
in order to increase demand.
○ The most flexible of the "4 Ps"-- easiest to
change, quickest to give results.
○ Competitive weapon (maybe)

Need Vs. Want

What is need?
What is want?

Need- a gap between the actual and desired

state.

Want- a specific desire representing a way a

consumer may go about addressing a recognized
 Need- a gap between the actual and desired
state.

Want- a specific desire representing a way a

consumer may go about addressing a recognized
need.

Market Orientation
• Modern marketers use the market orientation concept
(vs. "sales orientation")
○ This is based on identifying and satisfying the
needs of consumers to ensure possibilities.
• But, Marketing also must meet the needs of diverse
stakeholders including:
○ Consumers
○ Business Buyers
○ Sellers
○ Investors
○ Government agencies
○ And Community residents.

Sale vs. Market Orientation

• Market
○ Firms Focus: Outward
○ How firms sees it's business: Satisfying needs and
wants
○ For whom: Specific groups of people
○ Primary profit goal: Customer satisfaction
○ Tools used: Coordinated use of all marketing
activities.
• Sales
○ Firms Focus: Inward
○ How firms sees it's business: Selling goods and
services
○ For whom: Everyone
○ Primary profit goal: Maximum sales volume
○ Tools used: Primarily promotion

Market Vs. Marketplace

• A market consists of all consumers who share a common
need that can be satisfied by a specific product. They
also have:
○ Resources
○ Willingness
○ Authority to purchase
 • A market consists of all consumers who share a common
need that can be satisfied by a specific product. They
also have:
○ Resources
○ Willingness
○ Authority to purchase
• A marketplace is any location or medium used to
facilities and exchange.

LO2 Evolution of Marketing

Triple bottom Line
• Management seeks to Maximize financial, social, and
environmental bottom lines
○ Social marketing concept
○ ROI measurement across all three areas.
• Including sustainability: creating products that meet
present needs while ensuring future generations can
have their needs met.
What's next? [Who knows!]
• The attention Economy?
○ In the internet era, success is measured by share
of mind rather than share of market.
• User-to-user?
○ User-generated content and mobile marketing change
the dynamic of marketing
• Big Data?
○ Ford, Apple, Google, Bank of America, Johnson &
Johnson, and many others employ data scientists to
generate insights leading to innovations across
the marketing mix.

LO3 Value and Marketing

What is Value?
Value= What you get - what you give
Benefits: Costs:
Quality Time
Convenience Money
Emotions Effort
Prestige Opportunity
Experience Emotions
Image
Other:
 Convenience Money
Emotions Effort
Prestige Opportunity
Experience Emotions
Image
Other:
Scarcity
Nostalgia

Value: a personal assessment of the net worth obtained from

an activity.

Creation of Value
• All marketing creations should create value through
innovations that increase benefits and reduce costs to
the costumer.
• Marketing promotional activities communicate the value
proposition.
Value: Costumer's Perspective
• Value is the difference between perceived benefits and
perceived costs
• Value proposition includes the whole bundle of benefits
the firm promises to deliver, not just the benefits of
the product itself.

Value: Seller's Perspective

• Value for the seller can take many forms:
○ Profit
○ Market share
○ Brand Value
• What is the economic value of a single customer?
○ Typically more costly to acquire than to retain.
• Marketers increase customers value through co-
creations.

Value: Society's Perspective

• Marketing transactions may add or subtract value from
society
○ Stressing socially responsible and ethical
decisions is good for business.
• Marketing often faces criticism
○ "Dark Side" Marketing and consumption issues.
Organizations that survive over the long-term not only
satisfy consumers' current needs, but also preserve or
enhance what is in society's long term interest.
 decisions is good for business.
• Marketing often faces criticism
○ "Dark Side" Marketing and consumption issues.
Organizations that survive over the long-term not only
satisfy consumers' current needs, but also preserve or
enhance what is in society's long term interest.