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Transcript
WHAT IS MARKETING? Marketing 360 Brian Gillespie What the Class Thinks Marketing is… Selling stuff Informing the public Influencing the public Entice buyers to use their good Attracting the attention of customers Portraying value of a product to an audience Process of moving products and services from producer to consumer Division of a company Researching and developing products Pros and Cons In a small group compare pros and cons of marketing On a sheet of paper or computer, make two columns, one pro column and one con column Add up the number of pro and con statements Pros and Cons Positives: Makes me aware of useful products/services Makes purchasing more convenient Increases company sales Social marketing Negatives Social comparison Irresponsible use of company money Creates consumer needs Encourages risky behavior and health/social problems Key Terms Stakeholders Anybody who has a “stake” in outcome of the product or service Seller, buyer, investor, community, or place where product made Customer Potential purchaser of a good or service Consumer Ultimate end user of a good or service Needs Difference between actual and desired state (Hunger) Wants Desire to satisfy needs in a certain way (Smokehouse Almonds) Key Terms Benefit The outcome customer desires; meets a need or a want Exchange Transferring value from buyer to seller Demand Desire for product/service + resources to pay for it Market Collection of people who have a need for a product/service, and are willing and able to spend the resources necessary to obtain it Marketplace Any location or medium (e.g., internet) used to conduct an exchange Key Terms Utility/Value Sum of benefits we receive from a product Can be symbolic (prestige) Types of Utility Form (Convert raw materials into product – almonds + salt) Place (Make product available when customers want them - vending machine) Time (storing product until customer needs it – vending machine) Possession (benefit from owning, using, enjoying product) Value Proposition Marketplace offering that fairly and accurately sums up value realized if customer buys product or service What is Marketing? American Marketing Association Definition: Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. Marketing is identifying needs, developing a product/service to meet that need, and making people aware of the product/service Hierarchy of Needs What level of the pyramid is being addressed? What level of the pyramid is being addressed? What level of the pyramid is being addressed? What level of the pyramid is being addressed? What level of the pyramid is being addressed? What Can Be Marketed? Products Services People Places Business-to-Business Not-for-profit Causes Market Orientations Production era Sales era Consumer (Market) era New era orientation Production Era Key Elements When demand > supply (seller’s market) Focus is on efficient production/distribution Marketing plays an insignificant role A good product will sell itself You buy what we make i.e. hand drill, soap, straight razor Sales Era Key Elements When supply > demand (buyer’s market) Assumed customers resist buying non-essentials Focus is on moving product via hard sales tactics Marketing seen as a sales function We will sell you what we think you need electric 3/8th inch hand drill, Prell, disposable razor Consumer (Market) Era Key Elements After WW II, production of consumer products resumed Strong buyer’s market created need for consumer orientation Idea Captured by the “Marketing Concept” Purpose of organization is achieving long-term success of organization by creating customer value (meeting customer’s needs) Thus, must gather data, understand and meet needs. Advantage: can build products consumers will more quickly adopt. Also stressed Total Quality Management Continual improvement/input from employees Using focus groups, split of market into many sub-markets different cordless hand drills, PertPlus 2-in-1, blue & pinks plastic razors New Era Key Elements Build long-term relationships with customers Customer relationship management (track needs, tailor value proposition to unique needs) Social Marketing Concept (benefit society, firm) Sustainability Designing products so that we meet present needs without compromising ability of future generations to meet theirs Accountability (what is return on investment in marketing activities?) We don’t sell products, we sell solutions and benefits The ability to make holes, we sell the satisfaction, pride and selfconfidence that is created by drilling holes we sell glamour, we sell confidence and grooming Value Value (from Customer’s Perspective) Sum of benefits we receive from a product Value (from Seller’s Perspective) Profits…but also, prestige, pride, making community happy Lifetime value of a customer How much is this customer worth to us in the long-term? Long-term thinking develop relationships with customers Value (to Stakeholders) Created when company has competitive advantage over rivals Distinctive competency (company’s superior capability) Differential benefit (unique benefit of product) Value (to Society) What is the impact of product/service on society? The Marketing Mix Product Strategies (what will we produce and for whom?) Place Strategies (where will we deliver product/service?) Marketing Mix Price Strategies (what will we charge?) Promotion Strategies (how will we inform and encourage customers to buy our product?) Why Study Marketing? Plays an Important Role in Society Promotes efficient transfer of desired products to meet needs Can be used to promote worthwhile social causes Fundamental to the Success of Businesses Great Career Opportunities Assessing needs, designing products, pricing product, promoting products, distribution strategies, servicing customer Roughly 25-33% of people perform marketing related activities Marketing Affects You Everyday Become a wiser consumer The Dark Side of Marketing Illegal practices like “bait and switch” Societal health problems Diabetes, heart disease, cancer, alcoholism, domestic violence Psychological Costs Many ads encourage us to feel bad about ourselves Financial Burdens Consumer debt Environmental degradation and resource depletion