Download What is Marketing

What
is
Marketing?
You TRADE your catering abilities
FOR [in exchange]
your house to be painted.
Exchange
[also referred to as bartering]
A person fixes your driveway.
IN EXCHANGE
You chop his firewood.
Exchanges Take Place Every
Day
Getting a haircut
Purchasing a
pair of shoes
Visiting the dentist
Having surgery
Taking a cruise
Buying a dress
Buying a hamburger
Getting a massage
MARKETING
“The process of planning and
executing the conception, pricing,
promotion, and distribution of ideas,
goods, and services to create
exchanges that satisfy individual and
organizational objectives.”
[American Marketing Association]
It is a process.
It involves . . .
planning
pricing
promoting
distribution
Marketing is the connecting link
or bridge between the
producer and the consumer
TO
PRODUCER
CONSUMER
Marketing Is All Around Us
What is Marketed? . .
Durable goods
Nondurable goods
Desks
Telephone
Houses
Services
Banking
Travel agencies
Bridal consultants
Organizations
NCAA
Labor unions
Art museums
continued
Food items
Office Supplies
Light Bulbs
People
Ideas
“Pitch in!”
“Buckle up for safety.”
“Fight birth defects.”
Rock stars
Athletes
Movie stars
Places
“Take your vacation in Jamaica.”
“Locate your plant in Laurinburg, NC.”
“Honeymoon in Hawaii.”
What is Marketed?
Durable goods
Services
Organizations
Non-durable goods
People
Ideas
Places
Marketing Concept
A philosophy about the way in which
business should be conducted
To succeed in business,
management must base
their decisions on
the needs and desires
of consumers
GIVE CONSUMERS WHAT THEY WANT.
Elements of the Marketing Concept
1 Customer orientation
2 Company commitment
3 Company goals
Element 1: Customer Orientation
American businesspeople recognize several factors
about production and consumption. For Example:
1. They can product more that consumers demand.
2. Consumers are better educated, have more leisure time, are
more mobile, and are able to shop around more than before.
3. Consequently, businesses must compete to get people to buy
their products or services.
4. Their problem is not how to produce more items but, rather
how to produce items that people want and how to sell them
more effectively.
Element 1: Customer Orientation . . .
continued
They have found that it is just plain, good business to base their
decision-making on customer needs and wants.
1. Much better to determine what customers want and offer that
than to develop or manufacture an item and then try to sell it to
someone.
2. According to an executive from General Foods: “Instead of trying
to market what is easiest for us to make, we must find out much
more about what the consumer is willing to buy. In other words,
we must apply our creativeness more intelligently to people and
their needs, rather than to products.
Element 2: Company Commitment
An organization that applies the marketing concept must
focus all of its efforts on satisfying customer needs.
1. Requires coordination of all marketing activities:
a. With each other, and
b. With all other business functions. [accounting,
production, management, and administration.]
2. Enables the organization to improve its effectiveness
in providing customer satisfaction, resulting in all
business activities’ achieving company goals by
satisfying the consumer.
Element 2: Company Commitment. . .
continued
General Electric is credited with recognizing the existence and
and importance of the marketing concept in its 1952 annual report.
1. Marketing concept must become a part of the entire organization.
2. “The concept introduces the marketing person at the beginning
rather than at the end of the production cycle and uses marketing
in each phase of the business. Thus, Marketing, through its
research, will establish what the customer wants in a given
product, what price he is willing to pay, and where and when it will
be wanted. Marketing will have authority in product planning,
distribution, and servicing the product.”
Element 3: Company Goals
When a company commits itself to consumer satisfaction and uses its
resources for that purpose, the third element of the marketing
concept, achievement of goals, should occur. A company should
achieve its goals by giving customers what they want.
1.
Primary goal of most businesses is to make a profit. Businesses should be
able to achieve that goal by giving customers quality products or services
at fair and reasonable prices.
2. Goals of not-for-profit organizations are different. [Goals could be
developing a cure for a disease; increase view audience; decrease
number of forest fires.]
Element 3: Company Goals . . .
continued
C. Companies exist by achieving their long-term goals – not by
making quick sales, offerings, or changes that do not satisfy
customer needs and wants.
D. If a business or organization does a good job of satisfying
customer needs, customers will be loyal and have favorable
attitudes towards the business. Repeat business will result.
Why is Marketing Important?
Increased production capacity [Because we live in an economy of
abundance, producers are able to provide more goods and services than consumers
demand. The results of marketing have yielded new developments in technology,
automation, and mass production techniques. Our production of goods and services
continues to grow each year.]
Increased buying power of consumers [As a nation, we have little
difficulty in producing what we want or as much as we want. Over half of the
families living in our country have an annual income of $25,000 or more. Most
Americans have little trouble in buying the things that they need or want.]
Need for coordinating production & consumption [Our problem is how
to market effectively all of the things that we produce.
1/4 to 1/3 of all workers are in marketing jobs [Of the more than 108
million people who make up our country's labor force, between ¼ to 1/3 are
employed in marketing fields.]
1. Retailing
3. Transportation
2. Wholesaling
4. Communications
Why is Marketing Important?. .
continued
Majority of businesses in the US are marketing-type
businesses [Examples: Banks, Insurance companies, Restaurants, Real
estate firms, Supermarkets, Department stores, Specialty stores, Advertising
agencies, Wholesale firms, Trucking companies, etc.]
$.50 - $.60 out of every sales dollars goes to cover the costs
of marketing [The cost of marketing includes marketing activities such as:
research, advertising, transportation, storage, etc. Consumers are paying for
the convenience of having the right goods, at the right time, in the right place,
at a reasonable price. We are not talking about profit. We can never assume
that goods and services would cost less without these vital marketing
activities. To meet the needs and wants of consumers, we must continuously
market goods and services.]
Without Marketing
 Increased personal contact with businesses [Consumers would need to make
personal contact with businesses to learn about products because goods, services, and
ideas would not be promoted.]
 Less variety in products [Businesses would reduce the variety of products from
which consumers could choose.]
 Fewer product improvements [Fewer improvements would be made in existing
products.]
 Fewer products developed [Fewer new products would be developed.]
 Increased stock shortages or overages [Businesses would suffer from
shortages or overages in stock.]
RAISES THE STANDARD OF
LIVING:
“Standard of living” refers to the way people live—usually it’s
determined by the quantity & quality of the goods and services that
people own and use.
The marketing system in the United States has given us one of the
highest standards of living in the world. In our country, most people are
well fed and well clothes, have enough money, and have many worksaving devices to make life easier.
We enjoy this standard of living largely because producers try to
outdo each other in their efforts to serve us.
ADDS UTILITY TO
GOODS/SERVICES:
Marketing adds value, or utility , to goods and services by enabling
consumers to obtain goods and services at the right time and in the right
place.
By analyzing consumer needs and wants, marketers are able to help
producers make the goods and services that are wanted by consumers.
Marketers are always trying to find ways of making products more
useful to the people why buy them.
a. Adding new features
b. Servicing products after they are purchased
c. Guaranteeing products against defects
MAKES BUYING CONVENIENT:
Marketing constantly tries to make buying as easy as
possible for consumers.
Examples:
Mail-order services
Delivery services
Telephone-order services
Drive-in facilities
Electronic video shopping Internet services
MAINTAINS REASONABLE
PRICES:
a. marketers compete with each other in pricing their
goods and services.
b. They must work hard to keep their prices down, so that
they are competitive.
c. One way in which they keep prices down is by looking
for new ways of keeping their own costs down.
d. The results in consumers’ receiving quality products
at fair prices.
IMPROVES QUALITY OF LIFE:
marketers have improved our quality of life by encouraging the
development of safer, better goods and services.
a. Flame-resistant infant wear
b. Childproof bottles
c. Caplets rather than capsules
They have increased the public’s awareness of social and economic
issues.
a. Need for environmental controls
b. Prevention of drug, alcohol and child abuse
c. Alleviation of world hunger
They’ve encouraged us to be safer drivers, to look for missing
children, and to contribute to a variety of causes which could improve our
existence.
PROVIDES A VARIETY OF GOODS
AND SERVICES:
Businesses offer a variety of models, styles, colors, and
sizes from which to choose because they must compete to
attract as many customers as possible. For example: Jeans—
variety of styles, colors, sizes, brands, etc.
Marketing also offers consumers choices among goods
and services. Give Examples:
INCREASES PRODUCTION:
Marketing determines what consumers want and
informs them about items, their availability, and their uses.
By providing items that consumers want, businesses
encourage consumers to buy.
When goods and services are purchased, more goods and
services need to be produced or provided to replace those which
have been sold.
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Raises the standard of living
Adds utility to goods & services
Makes buying convenient
Maintains reasonable prices
Improves the quality of life
Provides a variety of goods & services
Increases production