Marketing Fundamentals: 4Ps, Value Creation, and Trends ch 1

Marketing

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (AMA, 2017)

Value

Value is created when customers' perceived benefits from a product or service equals or exceeds its cost associated with obtaining the product.

Customer Perceived Benefits

Perceived Benefits must satisfy customer needs and wants.

Customer Perceived Cost

Customer perceived cost includes money, time, effort.

Functional Benefits

Functional benefits are the practical advantages of a product or service, such as feeling safer with ADT Home security.

Economic Benefits

Economic benefits refer to savings, such as saving money with Walmart or Geico.

Convenience Benefits

Convenience benefits are related to saving time and effort, exemplified by Amazon.

Psychological and Emotional Benefits

Psychological and emotional benefits relate to status and social recognition, as seen with Hermes.

Needs

Needs are basic, universal human requirements for survival and well-being; not created by marketing.

Wants

Wants are the form human needs take as they are shaped by culture and individual personality.

Identifying Consumer Needs and Wants

Ask Consumers Directly through surveys and polls, observe consumer behavior, and listen actively in interviews or focus groups.

Example of Needs and Wants

Need: Shelter - Corresponding Wants: A studio apartment near campus; a room with a good view.

Surveys & Polls

Anonymous surveys can ask, 'What products or services do you wish existed?' and 'What do you look for outside of your daily essentials?'

Quick Polls

Quick polls can be conducted in-store, online, or via social media, asking preferences like 'Would you prefer a game night experience, a journaling workshop, or a wellness retreat?'

Consumer Behavior Observation

Observing where consumers spend time, such as retail stores, online, or community spaces.

Active Listening

Listening actively in one-on-one interviews, focus groups, or small community gatherings.

Consumer Needs

A clean home, dust removal

Smart/tech experience

Smart mapping, remote scheduling, route planning

Target Customer Group

Age, gender, family status, income level, lifestyle preferences, and purchasing behavior.

Customer Benefits

What kind of benefits and value could customers receive from this product/service?

Discussion Questions

What kind of needs related to this product/service?

Discussion Wants

What kind of wants related to this product/service?

Discussion Benefits

What kind of benefits did you receive from this product/service?

Discussion Value

What kind of value did you receive from this product/service?

Communicating Value

Firm must communicate not only the product but also the value the product brings to customers.

Delivering Value

Supply chain: set of companies that help deliver product to customers.

Logistics

Plans flow of goods, services and information from origin to final customer.

Marketing Mix

The marketing mix, also known as the four P's of marketing, is the combined tools and methodologies marketers use to achieve their marketing objectives.

Four Ps of Marketing

Often referred to as the four Ps of marketing: product, price, place, and promotion.

Product

What company offers to consumer/customer.

Price

Amount exchanged for product (money, time, or effort).

Place

Affects how value is viewed and available to consumers.

Promotion

Communicate value and persuade purchase through advertising, personal selling, sales promotions, and public relations.

History of Marketing

Production orientation (pre-1920s): Quality products, efficient production, low cost; 'sold themselves'.

Sales Orientation

Sales orientation (Great Depression - WWII): Personal selling and ads to convince people to buy more.

Marketing Concept

Characterized by customer orientation, beginning in the 1950s and continues to evolve, especially with new technology.

Global Marketing

Addresses customers, markets and competition around the world.

Globalization

Interconnected world economy.

Digital Marketing

Component of marketing wherein companies use digital media to engage with customers, fostering communication and promoting their products or services.

Reasons for Digital Marketing

1) More and more online customers; 2) Reach more customers; 3) Faster; 4) Cheaper and targeted.

Beginning of Digital Marketing

Digital marketing is considered to have begun in 1990 when the Archie search engine was created.

Marketing Analytics

Practice of measuring, managing, and analyzing the performance of various marketing activities to maximize effectiveness and optimize return on investment.

Big Data

Marketing analytics became possible and popular because of big data availability, storage, and analysis.

Definition of Marketing

Create, communicate, and deliver value.

Needs and Wants

Basic concepts in marketing that drive consumer behavior.

New Trend in Marketing

Especially digital marketing and marketing analytics.