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Welcome to MBA6140 Professor: E. K. Valentin What Is Marketing? MBA 6140 Is it sales? Is it advertising? What is the essence of marketing? 5/24/2017 W1 2 MBA 6140 What Is Marketing Management? Essentially, marketing – or more accurately, marketing management – entails selecting customers to be served, communicating with them, and catering to their needs and preferences to realize the marketer’s objectives. Marketing techniques and ideas can be applied in diverse situations. We will concentrate on commercial applications. Other applications include fund drives, politics, and marketing yourself to a prospective employer 5/24/2017 W1 3 MBA 6140 Marketing & Management Levels Corporate (Long time horizon; great uncertainty; manage uncertainty; select corporate portfolio of businesses) Division/Business Functional Level of Marketing: Brands, product lines, stores, etc. 5/24/2017 W1 4 Marketing Management and the Marketing Mix MBA 6140 Marketing Mix (4Ps) Place Product Customer Solutions Convenience Price Promotion Communication Customer Cost 5/24/2017 W1 5 Models and Strategic Insight MBA 6140 The Marketing Mix Model is one of many models, including theories and conceptual frameworks, that will be introduced in this class. In effect, models are lenses through which we see the world. Additionally, they direct inquiry – i.e., they suggest what to look for. Indeed, “[C]ompetition is not just product versus product, company versus company . . . It is mind-set versus mindset, managerial frame versus managerial frame.” - Gary Hamel and C. K. Prahalad “Managerial frames” are the mental models that guide executive. 5/24/2017 W1 6 MBA 6140 Marketing as a Field of Study Abstract: Few hard facts; mostly ideas, heuristics, and hypotheses backed to varying degrees by empirical evidence. Eclectic: Marketers aren’t too proud to steal ideas. Dynamic: The world of marketing changes continually; hence, yesterday’s success formulas may be today’s prescriptions for disaster. Contextual: Situational factors – e.g., type of product and product life cycle (PLC) stage – often determine whether a particular marketing strategy succeeds or fails. Consequently, there are few, if any, pat answers to marketing questions or enduring solutions to marketing problems. Further, the study of marketing is less about memorizing facts than it is about critical thinking, gaining perspective, and continuous problem solving. 5/24/2017 W1 7 MBA 6140 Business Philosophy & Marketing The product concept – Make what you want to make; ignore what customers want to buy. Make a better mousetrap, even if customers don’t want it. The production concept – Low cost is the key to success; reduce cost via efficiency, scale economies, etc. It worked for Henry Ford, at least for awhile. The selling concept – Focus on the needs of the seller, rather than the needs of the customer. Good marketers can sell anything. The marketing concept: • The customer is king! • Find needs, then fill them. 5/24/2017 W1 8 MBA 6140 Pitfalls of the Marketing Concept Should businesses always let marketing research be their guide? Unfortunately, marketing research has some serious limitations. Some renditions of the MC assert that pleasing all customers is the key to success. Companies that delight their customers realize profits and thwart competitors “automatically.” Such thinking seems dangerously naive. Pleasing customers may not please society. The “societal MC” directs businesses to seek profits by serving needs of customers in a socially responsible way. 5/24/2017 W1 9 Market Orientation: The “New and Improved” MC MBA 6140 Market-oriented organizations are customer oriented and understand that customers buy benefits, not products – ¼” holes, not ¼” drills. Being market and customer oriented is not inconsistent with being technologically innovative (which may entail inside-out marketing and leading customers). Market/Customer Orientation Checklist: •Are we easy to do business with? •Do we keep our promises? •Do we meet the standards we set? 5/24/2017 W1 •Are we responsive? •Do we work together? 10 Strong market orientation Higher Earnings & Shareholder Value Results of a Strong Market Orientation: A Virtuous Cycle Poor understanding of Customers & Competitors Consequences of a Weak Market Orientation: A Vicious Cycle Current Marketing Themes MBA 6140 In the firm, marketers should be customer advocates. Profitable enterprise requires a strong market orientation: Superior understanding of customers Superior understanding of competitors Integrated marketing effort throughout focused on • delivering superior customer value profitably • attracting and retaining profitable customers, not all customers • employee satisfaction; disgruntled employees create disgruntled customers Creating shareholder value hinges on creating customer value, which is facilitated by a market orientation. 5/24/2017 W1 13 More Marketing Themes MBA 6140 Employees are hired to serve external or internal customers. Customers < Employees < . . . < Employees Pleasing (external) customers efficiently is essential to a business' long-term prosperity. Marketing executives are well-advised to proceed as if (external) customers sought "the biggest bang for the buck," given their varied needs and preferences. Often, it is better to distribute marketing functions widely throughout an organization rather than assign them to a single department – the marketing department. Marketing is too big a job for marketing departments alone; it requires concerted organizational effort. 5/24/2017 W1 14 Who’s Correct? MBA 6140 Treacy & Wiersema: Creating shareholder wealth is not the purpose of the business. It is the reward for creating customer value. Ries & Trout: The true nature of marketing is not serving the customer – it is outwitting, outflanking and outfighting your competitors In truth: Shareholder value hinges on customer value to varying degrees – much more so in highly competitive markets than in others. Marketing success does not necessarily imply customers are satisfied or treated fairly. 5/24/2017 W1 15 Please stay for a few more minutes if you have questions about the class format, expectations, grading, online resources, etc.