AG

MKTG Chapter 1

Definition of Marketing

  • 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.

  • Two facets:

    • A philosophy/attitude/perspective/management orientation focused on customer satisfaction.

    • An organizational function and set of processes to implement this philosophy.

Marketing Philosophies

  • Production orientation

  • Sales orientation

  • Market orientation

  • Societal marketing orientation

Production Orientation

  • Focus: build a high-quality product; optimize production efficiency and lower costs.

  • View customers as valuing price over other factors.

  • Key goal: competitive pricing through efficiency.

Companies with Production Orientation

  • Ford Motor Company

  • Popeye's

  • McDonald’s

Sales Orientation

  • Belief: aggressive sales techniques increase purchases and profits.

  • Problem: limited understanding of marketplace needs/wants.

  • Approach: persuade customers to buy, via advertising and sales efforts; less emphasis on meeting needs.

Companies with Sales Orientation

  • State Farm

  • Pfizer (pharmaceuticals)

  • Chevrolet

  • Ashley Furniture

Societal Marketing Orientation

  • Idea: organization exists to satisfy wants/needs while also preserving or enhancing individuals’ and society’s long-term interests.

  • Stakeholders: customers, employees, shareholders, suppliers, community.

  • Aim: create long-term value and consider social/environmental impact.

Companies with Societal Orientation

  • Ben & Jerry’s

  • Patagonia

  • Tom’s of Maine

  • IKEA

Market Orientation

  • Marketing concept: satisfying customer wants/needs while achieving organizational objectives.

  • Components:

    • Focus on customer wants/needs to distinguish offerings from competitors.

    • Integrate all organizational activities (including production) to satisfy customer wants.

    • Achieve long-term goals by satisfying wants/needs legally and responsibly.

Companies that Use Market Orientation

  • Nike

  • Procter & Gamble (P&G)

Differences Between Sales and Market Orientations

  • Five characteristics to compare:

    1. The organization’s focus

    2. The firm’s business

    3. Those to whom the product is directed

    4. The firm’s primary goal

    5. The tools used to achieve the organization’s goals

Customer Value

  • Customer value = relationship between benefits and the sacrifice required to obtain those benefits.

  • Customers want quality they expect and prices they’re willing to pay.

  • Elements of Value: Functional, Emotional, Life-Changing, Social Impact

Customer Satisfaction and Relationship Marketing

  • Customer satisfaction: evaluation of a good/service against needs and expectations.

  • Relationship marketing: strategy to keep/improve relationships with current customers.

  • Keys to successful relationship marketing:

    • Customer-oriented personnel

    • Effective training programs

    • Employees with authority to solve problems

    • Teamwork

Customer-Oriented Personnel

  • For relationship-building, attitudes/actions must be customer-oriented.

  • A culture that supports people is essential.

The Firm’s Business

  • Answer the question: What is this firm’s business? in terms of customer-benefit rather than goods/services offered.

  • Advantages:

    • Keeps focus on customers; avoids internal product-only bias.

    • Encourages innovation/creativity to satisfy wants.

    • Aware of changes in customer desires to stay relevant.

Mission and Core Values

  • Companies shape their mission around core values (examples):

    • Patagonia

    • American Express

    • IKEA

Customer Relationship Management (CRM)

  • CRM: company-wide strategy to optimize profitability, revenue, and customer satisfaction by focusing on well-defined customer groups.

  • How it's achieved:

    • Organize around customer segments

    • Track customer interactions with the company

    • Foster customer-satisfying behaviors

    • Link all processes from customers to suppliers

  • CRM platforms (examples): HubSpot, Salesforce, Oracle

Big Data

  • Big Data: discovery, interpretation, and communication of meaningful patterns in data.

  • Characteristics: large size, speed, and complexity; traditional methods struggle.

  • Uses in business analytics:

    • Uncover patterns, trends, correlations

    • Personalization and targeted marketing

    • Supply chain optimization

On-Demand Marketing

  • On-demand marketing: delivering relevant experiences across physical and virtual environments throughout the consumer’s decision and buying process.

  • Requirements for success:

    • High-quality experiences across all touch points (sales, service, product use, marketing)

    • 24/7 relevant and responsive services based on customer needs