Chapter 1: Developing Customer Relationships and ValueWhat Marketing is NOTFraud/misconception“tends to overheat” -> “hottest product on the market”marketing is about understanding consumers needspromotion is not marketing, that is awarenessWhat is Marketing?The process of planning and executing the conception, and pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectivesMarketing focuses on discovering and satisfying consumers needsThe process of establishing & maintain mutually beneficial exchange relationships with customers and other stakeholders. Thus, marketing is responsible for customer value creationMarketing doesn’t stand aloneCVC means marketing performs 3 business functionsProduct development managementCustomer relations managementSupply chain managementThe Organization – Wheel SlideMarket orientationAll divisions of company are focused on company value creationMarketing works with all aspects of the companyManagement defines the company’s goals (outside purple)Responsible for developing relationships with customers and suppliers (manufacturing department)Does not work in a vaccum. Activities are shaped by environmental forces (arrow economic)Works closely with departments/people to deliver customer satisfying products (green marketing department)Elements Influencing MarketingEconomic environment – hybrid automobilesInterest rates, gas pricesPolitical environment – alcohol advertisingTariffs, taxes, lawsCompetitive Environment – dick’s in btown# of competitors in the segment effects price, quantity, servicesocial/cultural environment – dunkan diet crazetrends, religion, ethnic backgroundtechnical environmentinternet, TV, radio, etc^^^MARKETERS MAKE DECISIONS BASED ON THESE FACTORS^^^Basics of Marketing4 P’s of marketing, controllable elements of the marketing mixpriceassignment of valueplaceavailability of productpromotionactivities to inform consumersproductservice, idea, place, personA General Marketing Model – NEED TO KNOWMarketing researchTrying to determine opportunities-> customer needs-> the offering (product, price, place, promotion)4p’s – levels used to be successful-> Retain Existing Customerscheaper to keep-> Attract New Customers5x more expensive-> financial outcomessales, market share, profit, stock price, cash flowMarketingProduct OrientationManufacturing is king“you can have any color you want as long as it is black”focus is on making products not selling productsSelling ConceptSelling existing products“sell off this inventory no matter what it takes!”focus is on the movement of productsadvantage: generates profits for the firm by moving products and servicesMarket OrientationFulfilling existing & emerging customer needs“we will research what customers want before developing a solution”Marketing Conceptcustomer focused, listening, and acting on customer needs; striving to build long-term relationshipsfocus is on building long-term customer relationshipsadvantage: generates profits for the firm by creating these long term relationshipsAnything Can Be MarketedServicesPlaceIdeaOrganizationEventPersonFact94% of all new product launches fail each yearsthings marketer’s must think aboutconsumers needs and wantsbuilding value for consumersdeveloping relationships with consumerspromoting products that benefit consumersMarketing’s Two TasksDiscovering consumers needs leads to new concepts4 p’s = marketing mixcontrollableinformation about needs = market researchpotential consumers = target marketSatisfying Consumer NeedsMarketers satisfy consumers needs by identifying the target markets they can best serviceTarget marketOne of more specific groups or potential consumers toward which an organization directs its marketing program9/4 Chapter 4what is consumer behavior?The process involved when individuals or groups select, purchase, use, and dispose of goods services, ideas, or experiences, to satisfy needs and desiresIts what marketers live forConsumers purchase decision process – need to knowThe stages a buyer passes through in making choices about which products and services to buyProblem recognitionPerceiving a needInformation searchSeeking valueAlternative evaluationAssessing valuePurchase decisionBuying valuePost purchase behaviorNot always linearValue in consumption or useDepends on the complexity of the purchaseThe decision making processStep 1 – problem recognition: perceiving a needConsumer sees a difference between her current state of affairs and some desired state of affairsMarketing can activate a consumers decision process by showing the shortcomings of competing or currently owned productsStep 2 – information search: seeking valueA consumer searches for appropriate information to make a reasonable decisionMemoryFrequently purchased productsInternal searchTV commercialsMKT- dominated sourceshigh involvement & risk involved & external searchFriends’ recommendationsPersonal sourceshigh involvement & risk involved & external searchBrochures, trade showsPublic sourceshigh involvement & risk involved & external searchInvolvement and decision makingextended problem solvingautomobiles, housing, collegeuse all 5 stages of decision making modellimited problem solvingclothing, dinner, cosmeticsrely on friendsroutine decision makingsoda, candy, milklow priced itemsStep 3: Alternative Evaluation: Assessing ValueRepresents both the objective attributes of a brand, and the subjective attributes used to compare different products and brandspossible carsevaluative criteriapricegas mileageroominesscolor & designcriteria are often mentioned in advertisementsthe decision making processevaluation of alternative purchase choicesevoked setbrands actually considered during a choice processallows them to compare products and make decisions based on needs and wantshelps marketers to understand their competitorsbrand loyaltyevaluative criteriadimensions usedconsideration setgroup of brands that are consideredheuristicsmental shortcuts to simplify decisionbrand-loyaltyrepeated purchasing based on a conscious decision to continue buying a specific brandStep 4 Purchase Decision: Buying ValueTwo decisions must be madePurchase intentionBrand loyaltyheuristicCountry of originHeuristicPurchase decisionWhat to buyTerms of sale, past experiences, etc.When to buySales, rebates, shopping experience, etc.Psychological influences of hierarchy of