Download mar 6815 marketing management - Florida Gulf Coast University

MAR 6815
MARKETING MANAGEMENT
HUDSON ROGERS
FLORIDA GULF COAST UNIV.
Value of Marketing

Form Utility – Physical Product (a production function
with help from marketing)
Task Utility – Service Performance
 Time Utility – available when needed
 Place Utility – Available where needed
 Possession Utility – right to consume
 Accounts for about 50% of goods sold
 Affects every aspect of life in developed
countries
 Firm’s interface with the public
 Brings resources to the firm
 Applies to all organizations!

Core Concepts of Marketing
Need – basic human requirement. Marketing
cannot create needs
 Want – need directed at a specific object
 Demand – want backed by willingness and ability
to pay
 Market – collection of potential buyers
(customers) with similar needs who are willing
and able to exchange something of value with
sellers (industry) of a given product

Stages of Economic Development
Marketing occurs only where society developed
beyond the self-supporting stage.
 Pre- Industrial
 Primary Manufacturing
 Consumer Markets (Non-durable & Semi-Durable)
 Capital Equipment and Durables
 Exporting Manufactured Products
 Services
 As economies change and advance so does
marketing

Evolution of Marketing
 Production Era
 Product Concept
 Selling Concept
 Marketing Concept
 Societal Marketing Concept
Controllable and Uncontrollable
Elements of Marketing
 Controllable Elements – those that are
under the direct influence (control) of the
marketer
 4 P’s (Product, Price, Place, Promotion)
 The 4 Ps also called the Marketing Mix – it’s
really a mix of 4 separate mixes (Product
Mix, Price Mix, Place Mix, Promotion Mix)
Uncontrollable Elements
Uncontrollable Elements are those things that are
not directly under the control of the marketer.
 What are the uncontrollable elements that
marketers face?
 Marketers must cope with the seven Social
Institutions - P.E.L.F.R.E.C
 These change and affect the way in which the 4
P’s can be used.

Seven Social Institutions
Political – means of determining power
 Economic – means of gathering and sharing resources
 Legal – method by which laws/rules are passed and

implemented
Family – unity of procreation
 Religious – system of beliefs adhered to in the society
 Education – Means whereby the knowledge and values

passed on from generation to generation

Culture – way of life of a people. Involves both concrete
and abstract elements.
Marketing and the New Economy
Marketing constantly changes in response to
changes in the environment
 Recent changes involve

• Deregulation
• Digital Communication

These changes give rise to new forms of
businesses and products
• Cell phones
• E-Commerce/E-Business
• Hybrid Brick & Mortar + Point and Click
Marketing Paradigm
 Old Paradigm – Mass Marketing
 New Paradigm – One-to-One or Customized
Marketing (read McKenna – “Marketing is Everything”)
Building Customer Satisfaction ,
Value & Retention
What is Value?
 Value – benefit derived from a product
 Value - from customer’s perspective it is the
difference between benefits and costs (+ive/-ive)
 View two types of value:

• Value in use – benefits from consumption
• Value in Exchange – giving product to get something in
return

Is there a difference between the two?
Satisfaction
 Satisfaction – what is it?
 Satisfaction – feeling of pleasure or
disappointment derived from using a
product and having it perform (not
perform) as expected
 What are the factors involved in
satisfaction?
Satisfaction (Continued)
Perceived Expectation – benefits expected based
upon information and perceptions.
 Performance
 Performance >/= Expectations – satisfaction
 Performance </= Expectations - dissatisfaction
 Firms do not seek to maximize satisfaction – it
would be too expensive
 How much satisfaction should the firm provide? –
As much as you are willing to pay for.

Measuring Satisfaction
Ask the customer (when should you ask the
customer – before or after product usage)? How
should you reconcile the two.
 Ask before to get expectations data
 Ask after usage to get at performance data
 Derive performance by viewing the difference
between performance and expectations.
 You can also use a global measure by asking –
“How satisfied are you with the product?”
However this measure not thought to be very
reliable.

Value Chain
Firms are really customer satisfying entities –
Value Chair (Porter 1985)
 Nine Value Creating Activities:
 1. Inbound Logistics -- [First 5 are Primary Activities]
 2. Operations
 3.Outbound Logistics
 4. Marketing and Sales
 5. Service
 6. Procurement -- [Next four are support Activities]
 7. Technology Development
 8. Human Resource Management
 9. Infrastructure of the Firm

Value Chain (Cont’d)
 Success depends upon how well the firm
does these activities. Porter suggest
focusing on CORE BUSINESS PROCESSES:
•
•
•
•
•
New Product Development
Inventory Management
Getting and Keeping Customers
Customer Service,
Marketing Activities.
Getting and Keeping Customers
Which activity is easier? Why?
 Which is more expensive? Why?
 What is the cost of a lost customer?

•
•
•
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Annual sales per customer ($6,000)
Average number of years (5 yrs)
Profit Margin (.10)
Customer lifetime value to the firm ($3,000) compared
with the cost of getting a new customer.
Total Quality Management
TQM requires continuous improvement of the
firm’s processes, products, and services.
 New products always introduced to satisfy
customer current needs --- market what
customers want not what the firm has to sell.
 TQM – key to value creation and customer
satisfaction and is an essential element of
marketing. McKenna notes that within the firm
every thing we do creates a perception of the firm
and its ability to satisfy the customer --- hence he
asserts that marketing is everyone’s business.
