What to most people when they think of marketing?-ads, commercials, brands, selling. Has a NEGATIVE connotationMarketing is…-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.Marketing is the study of…-exchange. It’s bread.An exchange needs:-2 or more partiesWhat is marketing NOT-it’s not business. Marketing can be people or political ideas. Terrorism was marketing, they got a desired reaction.How old is marketing-it’s relatively new (businesses can cow make more than they can sell. Need to persuade).Marketing’s first task:-discovering consumer needs.When was the birth of “marketing”-1950s. What should you do before producing something:-see if there’s a sufficient need. It’s easier to sell something ppl want (swim downstream). -ex: selling spigetti in mexico. Nobody wants it. You can passion but not a marketing concept. It will fail b/c there’s no need.Marketing’s second task:-satisfying consumer needs. -it’s done by creating an offering (which is in the 4ps)Flow chart thing:-1. Discover consumer needs, 2. Satisfy consumer needs and find the right combo of product price promotion place, 3. Goods services, ideas 4. Potential consumers: the market 5. Info about needs 6. Back to discover needs. (a full circle effect)Importance of place/examples-restaurants for them to be close. People won’t drive a long distance for taco bell. -poor only buys desani water if its from a vending machineimportance of price-it can inhibit purchasing.-can also make the sale (fast food dollar menu)-it’s important at a place like walmartimportance of promotion-consumer needs to know about product. Ex: not much difference between soft drinks and mayo-Ex: ipod > zune b/c it’s defined by the market, not necessarily reality.-it’s been proven that ppl can’t tell the difference between orange juices.Importance of product-it’s the most important. It precedes the others.What is the most brand loyal product?-mayoThere are four benefits:-functional, social, personal, experientialfunctional-(this class) learn about marketing, get course credit.-car is functional, paper towels, pencil, microwaveSocial-(this class) meet friends, business partner, ect.-phone, facebook, beer, a tie, clothes, gamesPersonal-feel good about yourself-makeup, exercise, volunteering, massage, tanning, grad collegeexperiential-have fun, enjoy learning-traveling, movies, amusement parks, music, sport events, Truman the tigerwhat has all four benefits?-educationFour costs:-monetary, temporal, psychological, behavioralmonetary-tuition, book feestemporal-time spent in class/studying-ex: going to a restaurant, assembling something, online shopping vs stores, pets, pickup vs pizza delivery, house paintingpsychological-stress studying for exams and listening to instructor-scary movie, kardashians, buying a car or housebehavior-expending energy walking to class or getting sick from lecture halls-walking to sportsGreat way to find new needs:-add experiential without adding cost.Value equationValue = all benefits/ all costsMarketing strategy-managers monitoring environment. See trends and changes that are happeningAnalyzing the marketing environment-$40 billion diet industry-increased consumption of health and diet products-businesses responding to the demand in a variety of ways-sara lee (white bread) is threatened by health movement. They started making it with whole grainsThere are three levels of a marketing environment analysis-consumers (center), immediate environment, macroenvironmentImmediate environment-competition, company, corporate partnersmacroenvironmental factors-culture, political/legal, economic, technology, social trends, demographics-social trends can be changes of taste (ex: fitness)-econ ex: folgers sells less b/c ppl make coffee at houses less. Energy drinks are substitutes and ppl want lattes/starbucksThree phases of a strategic marketing plan-1. Mission 2. Environmental analysis (SWOT) 3. Segmentation targeting positionStep one (defining mission/vision)-Madd mission: To stop drunk driving, support victims of the crime and prevent underage drinkingMission answers two Qs:-in which industries/businesses should we operate?-what is our sustainable competitive advantage?Porter’s five forces model-it says should we be in this industry with this product. -is the industry profitable. You look at two things in the 5 forces model:-corporate strategy (which industries to compete in)-what Industry profitability depends on Industry profitability is dependent on…-industry competitiveness, availability of substitute products, potential entrants (Threat of new competition), supplier power, buyer powerIndustry competitiveness-low intensity of current competitors = higher profitability-industry has low intensity when there are few firms competing-ex: commercial aircraft.-if ppl leave industry, it’s more profitable. If ppl enter, it’s less profitable.Availability of substitutes-customers can choose different product as a substitute-few or no substitutes = higher profitability.-ex no subs: gasoline, proprietary drugs-ex many subs: fresh vegetables (frozen, vitamins ect), technological products (from past or future technologies)-technology ex: HDTV subs- old TV, Blu Ray, or the “conceptual sub” of ppl waiting for next technology (3D )Substitutes are…-outside product category.-subs for coffee: tea, energy drinks-sub for beer: liquor, wine-no subs: electricity, toilet paperThreat of potential entrants-high barriers to entry = higher profitability-barriers to entry make it hard for ppl to get in industry-harder to get in industry = more profitabilityhigh barriers to entry exist when…-high capital requirements-economies of scale are present-high product differentiation-network externalities (technological or learning curve)High product differentiation-ex: wrist watches. There are a lot of watches b/c differentiation: sports, fashion ect.Network externalities-a cell phone plan where you talk to ppl on the network for free (w/ more ppl it’s more valuable.Learning curve-VHS and sony. A lot of ppl learned 1 product. It’s hard for others to enter the industry. Ppl don’t want to relearn.More Barrier notes/advice-enter an industry and create a barrier to entry.-no barrier-internet companies-amazon lost $ for 5 yrs, then had learning curve barrier set.Supplier