Intro to Marketing

Chapter 1

One

What is Marketing?

Marketing is engaging customers and managing profitable customer relationships.

What are the goals of marketing?

To attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction.

Traditional form of marketing

Making a sale, abundance of products in the nearby shopping centers, television, magazines, and direct-mail ads.

Contemporary form of marketing

satisfying customer needs, imaginative web sites and mobile phone apps, blogs, online videos, and social media. Reach customers directly, personally, and interactively.

Customer needs

States of felt deprivation, shared among all of us, basic physical needs, social needs, and individual needs.

Customer wants

Form taken by human needs when shaped by culture and individual personality. Unique and individuals shaped by our experience, culture.

Customer demands

Human wants that are backed by buying power.

Customers needs and wants are through what?

Market offerings

A _________ is a tangible, physical item that can be offered to a market for acquisition, use, consumption that satisfy a physical need.

Product

A ________ is an activity or benefit offered for sale that is intangible and does result in the ownership of anything.

Service

Exchange is the act of

obtaining a desired object by offering something in return.

Marketing consists of

creating, maintaining, and growing desirable exchange relationships.

A market is

A set of actual and potential buyers of a product

Customer value-driven marketing strategy

Once a company fully understands its consumers and the marketplace, it must decide which customers it will serve and how it will bring them value.

Marketing management

choosing target markets and building profitable relationships.

Market segmentation

refers to dividing the markets into segments of customers.

Target marketing

refers to which segments to go after.

Choosing a value proposition

the company must decide how it will differentiate and position itself in the marketplace.

A brand’s Value proposition

the set of benefits or values it promises to deliver to consumers to satisfy their needs.

Marketing management orientations

Production concept, product concept, selling concept, marketing concept

Four Ps of marketing

Product (Packaging), Price, Place, Promotion

Customer-perceived value

Customer’s evaluation of a marketing offer relative to those of competing offers.

Customer satisfaction

Extent to which a product’s perceived performance matches a buyer’s expectations.

Customer engagement marketing

makes the brand a meaningful part of consumers’ conversations and lives.

Greater consumer empowerment means that

companies must practice marketing by attraction-engage customers rather than interrupt their lives.

Consumer-generated marketing

Brand exchanges created by consumers— consumers play an increasing role in shaping their own brands experiences and those of other consumers.

Partner relationship management

Working closely with partners both inside and outside the company to jointly bring more value to customers.

Partners inside the firm—cross-functional teams

Partners outside the firm—suppliers, channel partners

Customer lifetime value

the value of the entire stream of purchases a customer makes over a lifetime of patronage.

Customer defections can be costly

can lose that customer’s lifetime value and may cause other customers to defect.

Building customer equity

refers to the total combined customer lifetime values of all of the company’s customers.

Building customer equity does what?

the future value of the company’s customers base and increases when the loyalty of the firm’s profitable customers increases.

Better measure of a firm’s performance than current sales or market share reflect —>

the future

Digital and social media marketing

engaging customers via their digital devices using digital marketing tools.

Mobile marketing

Using mobile channels to stimulate immediate buying, make shopping easier, and enrich the brand experience.

Brands can use big data to

• gain deep customers insights

• personalize marketing offers

• and improve customer engagements and service

Sound marketing can help —>

not-for-profits attract membership, funds, and support

Managers around the world are taking both local and global views of the company’s:

• industry

• competitors

• opportunities

Chapter 2

two

Strategic planning

the process of developing and maintaining a strategic fit between the organization’s goals, capabilities and its changing marketing opportunities.

game plan for long-run survival and growth

helps maintain a strategic fit between its goals and company capabilities and changing marketing opportunities.

Mission statement

Statement of the organization’s purpose

Market oriented—defined in terms of satisfying basic customer needs —> satisfying basic customers needs

Emphasizes the company’s strengths

Focus on customers and the customer experience

Setting company objectives and goals

detailed supporting objectives for each level of management

setting a hierarchy of objectives

• business and marketing objectives

Business portfolio

Collection of businesses and products that make up the company.

Steps in business portfolio planning:

1. Analyze the firm’s current business portfolio

2. Develop strategies to shape the future portfolio

Portfolio Analysis

Management’s evaluation of the products and businesses that make up the company.

1. Identify the strategic business units (SBUs), SBU can be a company division, a product line within a division, or sometimes a single product or brand

2. Assess SBUs’ attractiveness and decide on the level of support SBU deserves

Direct resources toward more profitable businesses and ease down or drop its weaker ones

Planning marketing: Partnering to build customer relationships

• Provides a guiding philosophy

  • Marketing concept— company strategy should create customer value and build profitable relationships

• Provides inputs to strategic planners

  • Identify market opportunities and potential to take advantage of them

• Designs strategies for reaching the business unit’s objectives

  • How to carry out marketing tasks profitably

Partnering with other company departments

• Company departments are links in the company’s internal value chain

• Firm’s success depends on how well the various departments coordinate their activities.

• Marketers should ensure all the departments are customer-focused and develop a smooth functioning value chain.

Customer value driven marketing strategy

Marketing logic by which the company creates customer value and achieves profitable customer relationships

Integrated marketing mix: product, price, place, and promotion

Activities for best marketing strategy and mix

• Marketing analysis

• planning, implementation, and control

Chapter 3

Three

Marketing Environment

Outside forces that affect marketing management’s ability to build and maintain successful relationships with target customers.

Microenvironment

Actors close to the company that affect its ability to serve its customers

Macroenvironment

Larger societal forces that affect the microenvironment

The company

Interrelated groups in a company form the internal environment

Departments share the responsibility for understanding customer needs and creating customer value.

Suppliers

Provide the resources needed by the company to produce its goods and services

Marketing Intermediaries

help the company to promote, sell, and distribute its products to final buyers.

• Resellers

• Physical distribution firms

• Marketing services agencies

• Financial intermediaries

Competitors

Marketers must gain strategic advantage by positioning products strongly against competitors.

No single strategy is best for all companies

• Consider its own size and industry position compared with those of its competitors

• Be aware of competitors both large and small

Publics

any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives

• Financial

• Media

• Government

• Citizen action

• Local

• General

• Internal

Five types of customer markets

• Consumer markets

• Business markets

• Reseller markets

• Government markets

• International markets

Demography

the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.

Marketers analyze:

• Changing age and family structures

• Geographic population shifts

• Educational characteristics

• Population diversity

Demographic Environment

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Baby Boomers 1946-1964

Population: 74 million, Wealthiest generation is history-22% of pop. but 42% of spending power. Open to new brands, fastest growing online shopping demo.

Generation X 1965-1980

pop. 49 million. Less materialist, prize experience over acquisition. Skeptical — research heavily before buying.

Millennials 1981-1997

pop. 75 million. Comfort with technology = 75% shop online, 90% bank online. Seek authenticity value, ability to shape own brand relationship.

Generation Z 1997-2016

pop. 80 million. Kids, tween, teen market, spend between $43-143B and influence family spending. Digital natives

Economic envrionment

Economic factors affect consumer purchasing and spending patterns

• Changes in consumer spending —> back to basics sensibility

• Looking for greater value —> value marketing

Natural environment

Physical environment and natural resources needed as inputs by marketers or affected by marketing activities

Trends:

• Shortages of raw materials

• Increased pollution

• Increased government intervention

Technological Environment

New technologies create new markets and opportunities.

• Digital Technology create new opportunities in market

• Radio-frequency identification (RFID) is technology to track products through various points in the distribution channel.

• Government agencies investigate and ban potentially unsafe products.

Political Environment

Forces that influence or limit various organizations and individuals in a society

• Laws, government agencies, and pressure groups

Public policy is developed to guide commerce

• Laws and regulations that limit business for the good of society as a whole

• Competition, fair trade, environmental protection, product safety, truth in advertising, consumer privacy, packaging and labeling.

Major U.S. Legislation Affecting Marketing

• Legislation regulating business is intended to protect

  • Companies from each other —> prevent unfair competition

  • Consumers from unfair business practices —> so products, advertising, protection of consumer data is fair.

  • The interests of society against unrestrained business behavior

Responding to the Marketing Environment

Reactive firms passively accept the marketing environment and do not try to change it

• Simply react and adapt to it

Proactive firms develop strategies to change the environment

• They take aggressive actions to affect the publics and forces in their marketing environment.

• Shape new product/industries

• Amazon online marketplace