1. Defining Marketing
i. The process of creating, distributing, promoting, and pricing of goods, services, and ideas to facilitate satisfying exchange relationships with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment.
i. Marketing Focuses on Customers
i. Customers - the focal point of all marketing activities
ii. Target market - the specific group of customers that organizations generally focus their marketing efforts on
1. Can be large or small groups
2. Can target multiple markets with different products, promotions, prices, and distribution systems.
ii. Marketing Deals with Products, Distribution, Promotion, and Prices
i. Marketing involves developing and managing a product that will satisfy customer needs
1. Involves right place and right price
2. Involves communication information
3. Marketing mix - four marketing activities - products, distribution, promotion, prices - that a firm can control to meet the needs of target market customers
a. The Product Variable
i. Successful marketing efforts result in products - goods, services, or ideas - that become a part of everyday life.
1. Goods are physical entities
2. Services are the application of human and mechanical efforts to people or objects to provide intangible benefits to customers
3. Ideas include concepts, philosophies, images, and issues
ii. Involves creating or modifying brand names and packaging, and may include decisions regarding warranty and repair services
iii. Goal achieving: create new products, modify existing ones, and eliminate those that no longer satisfy buyers or yield unacceptable profits.
b. The Distribution Variable
i. Customer satisfaction depends on products must be available at the right time and in convenient locations
ii. Make product available to target market as much as possible in order to keep total inventory, transportation and storage costs low
iii. The internet creates a global market without the need for global storage
c. The Promotion Variable
i. Relates to activities used to inform individuals or groups about the organization and its products
ii. Can also urge people to take a particular political or social stance
d. The Price Variable
i. Relates to decisions and actions associated with establishing pricing objectives and policies and determining prices
ii. High price establish high quality image
iii. Economic conditions, competitive structure, or government regulations may prevent price adjustments
iii. Marketing builds relationships with customers
i. Exchanges - the provision or transfer of goods, services, or ideas in return for something of value
ii. For an exchange to take place there are 4 conditions:
1. Two or more individuals, groups, or organizations must take part and each must possess something of value the other wants
2. Exchange should provide a benefit or satisfaction to both parties
3. Each part must have confidence in the promise of the valuable held by the other
4. Each party must meet expectations
a. Achieving all 4 conditions does not guarantee the exchange.
iii. Stakeholders - constituents who have a stake or claim in some aspect of a company's products, operations, markets, industry, and outcomes
1. Includes customers, employees, investors, shareholders, suppliers, governments, communities
iv. Marketing occurs in a dynamic environment
i. Marketing environment - the competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surround the customer and affect the marketing mix
ii. Market environment forces affection marketers ability to facilitate exchanges in 3 ways:
1. They influence customers by affecting their lifestyles, standards of living, preferences and needs for products
2. Market environment forces help determine whether and how a marketing manager can perform certain marketing activities
3. Marketing environment forces may affect a marketing manager's decisions and actions by influencing buyers' reactions to the firm's marketing mix
a. Marketers must plan for unknown and unpredictable changes in the environment
2. Understanding the Marketing Concept
a. Marketing concept - a philosophy that an organization should try to provide products that satisfy customers' needs through a coordinated set of activities that also allows the organization to achieve its goals
i. Customer satisfaction is key
b. A positive association between customer satisfaction and shareholder value
c. High levels of customer satisfaction creates attraction and retention of high quality employees and managers
d. Evolution of the Marketing Concept
i. Product Orientation
1. 1850s - 1910s
2. Focus on efficiency
ii. Sales Orientation
1. 1920s - 1950s
2. Focus on promotion of goods
iii. Marketing Orientation
1. 1950s - present
2. Focus on needs of the customer
e. Implementing the Marketing Concept
i. Demands the support of top level officials as well as managers and staff across all levels of the organization
3. Managing Customer Relationships
a. Relationship marketing - long term, mutually beneficial arrangements in which both buyer and seller focus on value enhancement through the creation of more satisfying exchanges.
i. Greater customer confidence --> firm's better understanding of customer needs
b. Customer centric marketing - developing collaborative relationships with customers based on focusing on individual needs
c. Customer relationship management - using information about customers to create marketing strategies that develop and sustain desirable customer relationships
i. Involves indentifying behavior patterns and focusing on the most profitable customers
4. Value-Driven Marketing
a. Value - a customer's subjective assessment of benefits relative to costs in determining the worth of a product
b. Customer costs are monetary, time, and effort in location the good, and risk
5. Marketing Management
a. Marketing management - the process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently
i. Planning - determines when and how marketing activities are performed and who performs them
ii. Market activities can be organized by functions, products, regions, types of customers or some combination of
iii. Implementation hinges on coordination and communication within all levels of the firm
iv. Control consists of establishing standards and comparing actual performances with those standards and reducing the difference
1. Effective control has 4 requirements:
a. Ensure a rate of information flow that allows a marketing manager to quickly detect any differences between actual and planned performance levels
b. Accurately monitor activities and be flexible enough to accommodate changes
c. Costs must be low relative to costs f there was no control process
d. Designed so that managers and subordinates understand it
6. The Importance of Marketing in a Global Economy
a. Marketing costs are a big part of the price
i. 50-60% profits goes towards marketing costs
b. Marketing is used by non-profit organizations
c. Marketing is important
i. Profits from sold products helps R&D
d. Marketing fuels the global economy
e. Marketing enhances consumer awareness
f. Marketing connects people
i. Surveys & feedback forums
g. Green marketing - a strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment
h. 25-33% of the American workforce are in marketing