MGMT 105 Ch 1: What is Marketing?

Brand marketing

long-term perspective that prioritizes shaping consumer’s feelings toward the brand and keeping the platform relevant

Performance marketing

Type of digital marketing where advertisers are paid when a customer action is taken directly bc of marketing (ex: sale or app download)

• more immediate challenges of acquisition or resurrection of users who no longer engaged with the brand

Growth marketing

targeting known or likely to convert users with creative communication via a variety of digital channels that quickly convinces them to respond or act

• Works best with people already familiar with a brand

Consumers

 ultimate users of a good or service

Customer experience (CX)

overall perception a customer has of your brand after interacting with your business across the buyer’s journey

Marketing

activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

• about satisfying consumer needs

processes that affect marketer’s decisions

market research, product development, pricing, getting products to consumer, delivering successful marketing messages to relevant audiences, etc

Marketing mix

marketer’s strategic toolbox that it uses to win over customers

• Includes the product, price of it, promotion activities that communicate it to customers, and the places it’s available

Product

good, service, idea, place, person, etc offered for sale in the exchange

• Include design, packaging, physical features, and associated services (like free delivery)

Promotion

coordination of marketer’s communication efforts to influence customer attitudes and behavior 

• Personal selling, TV ads, store coupons, billboards, magazine ads, publicity releases, web pages, social media sites, etc

Place

availability of the product to the customer at the desire time and location

Channel of distribution

series of firms or individuals that facilitate the movement of a product from producer to final consumer

Price

assignment of value or the amount the customer must exchange to receive the offering

Exchange

process by which transfer of value occurs between  buyer and seller

• When someone gives something and gets something else in return

• at least two people/organizations must be willing to make a trade and each must have something the other wants

offerings can be

goods, services, ecommerce, NGOs, places, people

Consumer goods

tangible products that individual consumers purchase for personal or family use

Services

intangible products that we pay for and use but don’t own

Business to business marketing (B2B)

exchange of goods/services from one organization to another

Industrial goods

good individuals/organizations buy for furthering processing or for their own use when they do business

E-commerce

buying/selling of goods/services online, via the internet

Nonprofit organizations/nongovernmental organizations (NGOs)

organizations with charitable, educational, community, and other public service goals that buy goods/services to support their functions and to attract/serve their members

Marketing concept

business philosophy that emphasizes organization-wide customer orientation with the objective of achieving long-run profits

Need

recognition of some difference between customer’s actual state and some ideal/desired state

Want

desire to satisfy needs in specific ways that are culturally/socially influences

Benefit

outcome sought by a customer that motivates buying behavior that satisfies a need/want

Demand

customer’s desires for products coupled with the resources needed to obtain them

Market

all customers/potential customers who share a common need that can be satisfied by a specific product, have the resources to exchange for it, are willing to make the exchange, and have the authority to make the exchange

Marketplace

any location/medium used to conduct an exchange

Customer value

ratio of benefits to costs as perceived by customers that motivates purchase

Utility

usefulness or benefit customer receive through the product itself, its price, its distribution, and the marketing communications of it

Types of utility

form, place, time, possession

Form utility

transforming raw materials into finished products

Place utility

making products available when and where customers want them

Time utility

 storing products until they’re needed

Possession utility

allowing consumers to own (at a reasonable price), use, and enjoy the product

Stakeholders

buyers/sellers/investors in a company, community residents, citizens in geographic areas where firm’s goods/services are made/sold, etc

• Any person or organization that has a “stake” in the outcome of marketing’s activities

4 eras of business

• production, sales, relationship, triple bottom line eras

Production era

consumers had to take whatever was available, marketing played relatively insignificant role

• Industrial revolution, late 19th century

• seller’s market

Sales era

product availability exceeded demand in a buyer’s market, management relied on a sales force to move products out of warehouses and into hands of customers so inventories didn’t pile up

• Post WWII

Relationship era

firms have customer orientation that prioritizes understanding customer’s needs and wants then works holistically and consistently to meet and exceed those needs and wants

• 1980s

Total quality management (TQM)

management philosophy that involves all employees from assembly line onward in continuous quality improvement of products/services (1990s)

Triple bottom line era

emphasizes need to maximize financial bottom line, social bottom line, and environmental bottom line

• Financial = profits to stakeholders

• Social = contributing to communities company operates in 

• Environmental = creating sustainable business practices to minimise environmental damageemphasizes need to maximize financial bottom line, social bottom line, and environmental bottom line

Societal marketing concept

management philosophy that marketers must satisfy customers’ need in ways that also benefit society and deliver profit to firm

Green marketing

developing marketing strategies that support environmental stewardship by creating an environmentally founded differential benefit in minds of consumers

What’s next in the evolution of marketing?

• AI

• machine learning

• branded content

• corporate social responsibility

• user generate content

AI

computer systems capable of performing complex tasks that historically only a human could do like reasoning, making decisions, or solving problems

Machine learning

process of using mathematical models of data to help a computer learn without direct instruction, application of AI

Branded content

produced by a brand and indicates the brand is the sponsor but still presents itself as something other than an attempt to sell a product

• Provides educational or entertainment value (ex: Barbie movie)

Corporate social responsibility/corporate citizenship

firm’s responsibility to the community in which it operates and to society in general, doing well by doing good

Goods-dominant logic

focused on building, exchanging, and destroying (through use) value

Service-dominant logic

understanding the exchange process, acknowledging all firms are service firms and that a firm creates more opportunities by adopting and executing this logic

Co-creation of value

when a company and its customers work together to jointly create an offering to suit the customers’ needs

• Companies understand customer product desires and customers gain a new appreciation for the firm

Value proposition

marketplace offering that fairly and accurately sums up the value that the customer will realize if they purchase the product

• Include benefits firm promises to deliver, not just of the product itself

Competitive advantage

firm’s edge over its competitors that allows it to have higher sales, higher profits, and more customers + enjoy greater success

• Comes from cost or differential advantage

Cost advantage

produces a good/service at a lower cost than competitors = charge lower price

Differential advantage

firm creates an offering that differs significantly from offerings of competitors = customers see it as superior to others in the value it provides them

Distinctive competency

firm’s capability that is superior to that of its competitors

Differential benefit

properties that set them apart from competitors’ products by providing unique and value adding customer benefits

Value chain

series of activities involved in design, producing, marketing, delivering, and supporting any product

Activities in value chain

• inbound logistics, operations, outbound logistics, marketing, service

Inbound logistics

bringing in materials/components necessary to make the product

Operations

converting the materials into another form or final product

Outbound logistics

shipping out final product

Marketing

promoting and selling product

Service

meeting customer’s needs by providing any additional support required

Consumer generated marketing (CGM)

creates value based on content produced by consumers themselves rather than intra-firm sources like the brand

Wisdom of crowds

groups are smarter than the smartest people in them = large numbers of nonexpert consumers can predict successful products

Folksonomy

sites rely on users instead of preestablished systems to sort content

dark side of marketing and consumer behaviors

• bait and switch = promise inexpensive items then attempt to get consumer to buy higher priced goods

• consumer addiction = dependency on goods/services

• anticonsumption = defacing products

Market planning

considering the “big picture” and where their firms and products fit within it

• Analyze marketing environment: firm’s strengths and weaknesses, opportunities and threats

Mass market

all possible customers in a market regardless of the differences in their needs and wants

• Can be cost effective BUT risks losing potential customers to competitors with specific marketing plans

Market segment

distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market

Target market

segments on which an organization focuses its marketing plan