Mark 300 1st Edition Lecture 1Outline of Current Lecture I. Marketing Introduction II. Value III. The Marketing Mix a. Product b. Price c. Placed. Promotion IV. Corporate Orientations a. Productionb. Sales V. Market Orientation a. Market Concept VI. Ford VII. Importance of Marketing Current LectureMarketing the activity set of institutions and processes for creating capturing, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large Marketing is an organization function and a set of processes for creating, capturing, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders Marketing is also defined as Anticipating and determining needs/ wants of consumers and satisfying those needs through use of the 4P’s (product, price, promotion, place) to create long-term exchange of value Marketing is about satisfying customer needs and wants Marketing entails an exchange: trade of things of value between buyer and seller so that each is better off as a result Marketing requires Product, price, place and promotion Value Value is equal to the ratio of what is given up for what is obtained Both parties must feel that they are getting value in order for an exchange to take place These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.The Marketing mix is what creates value The Marketing Mix involves product, price, promotion, and place Product: Creating value - Through a variety ofofferings, includinggoods, services, and ideas- Products are built to satisfy customer needs - Goods are items that you can physically touch - Services are intangible customer benefits that are produced by people or machines and cannot be separated form the producer - Ideas include concepts opinions and philosophiesPrice: Capturing Value - Price includes everything that a buyer gives up (includes money, time energy) in exchange for the product - Not limited to only money - Has to be an amount which both the customer is willing to pay and the seller is willing toreceive (seller makes a profit) Place: Delivering the value proposition - Place or supply change management - Deals with Marketing channel management: set of approaches and techniques that firmsemploy to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores and other firms involved in the transaction into a seamless value chain in which merchandise is produced and distributed in the right quantities to the right locations at the right time minimizing costs and satisfying service levels of customers - All the activities associated with getting the product to the ideal customer when the customer wants it Promotion: Communicating value proposition- Communication thatinforms, persuades,and remindspotential buyersabout a product orservice- Used to influence the opinions of customers or elicit a response B2C (business to consumer marketing): the process by which businesses sell to consumers. B2B (business to business marketing): The process by which businesses sell to other businesses C2C (consumer to consumer): consumers sell to other consumers (ebay) Production oriented area: turn of 20th century, Believed that a good product would sell itself Corporate Orientations Production-Oriented Area- Production oriented area: turn of 20th century, Believed that a good product would sell itself - Not much concerned with the needs of individual customers - Focus on the internal capability and on technology - The key question they address is: What does the firm do best? - Use this question to resolve which projects the firm should produce and devote more time/money towards Sales-Oriented Era: 1920-1950- Had capacity to produce more than what customers wanted so depended on heavy doses of adversigin and personal selling - Focus on aggressive sales techniques - Key question: how can we sell more of what we have Market Orientation: After WWII- Customer was king - Focus on what customer wanted - is the approach of focusing on identifying and meeting the stated or unstated needs or wants of the customer - Key question: What does the customer want? - Value based marketing orientation: Purpose of satisfying customers wants and needs while also meeting organizational objectives Value Based Marketing Era: - Most firms today are market oriented - In order to compete successfully firms have to give their customers greater value than their competitors - Value co creation: customers act as collaborators with a manufacturer or retailer to create a product Market concept: is the idea that firms should understand the needs of their customers and thenmake decisions to satisfy those needs, better than their competitors.- “Make what you sell rather than selling what you make” Ford - In 2006, Ford saw a decline in market share most likely due to the reliance on productionof SUV’s and not realizing that the consumers did not want SUV’s but rather wanted fuel efficient vehicles - CEO of Ford regretted the ideology of the company which was, “If you build it, they will buy it”- He committed to manufacturing cars that were demanded by the consumers and he even said, “We’re going to figure out what people want before they know it” - Ford saw a revolutionary break through as it became the 2010 car and truck of the year and also became on the only big 3 auto producer in the US to not declare bankruptcy - Ford also won KBB Best car styling award and many other recognitions - All this was due to Ford looking for innovating technology and applying the Market Orientation approach How do marketing firms become more value driven? 1. Share information about their customers and competitors across own organization and even with other firms a. Share the information and integrate it across departments 2. Strive to balance their customers’ benefits and costs a. Use available customer data to find opportunities to satisfy their customers need better and keep costs down and develop loyalties 3. Concentrate on building relationships with customers a. Relational orientation: building long term relationship with customers b. Focus on life time profitability of relationship c. Customer relationship management (CRM): philosophy and set of programs strategies and systems