Chapter 1 Strategic Marketing What is marketing o The process of creating distributing promoting and pricing goods services and ideas to facilitate satisfying exchange relationships with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment o American Marketing Association definition The activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partners and society at large o Marketing focuses on customers the purchasers of organizations products the focal point of all marketing activities Thought Question What branch of the social sciences does marketing come from Exchange is o The provision or transfer of goods services or ideas in return for something of value o Marketing Requires o Two or more parties with unsatisfied needs o Desire and ability to satisfy the needs o A way for the parties to communicate o Something to exchange Goal is o Satisfaction of both parties o Customer expects to gain a reward greater than the cost incurred during the transaction The marketer expects to gain something of value in return generally the cost o Organizations focus marketing efforts on a specific group of customers known as a target market a specific group of customers on whom an organization focuses its marketing efforts Example They may try to target a group like Hispanics such as Procter and Gamble skateboarders such as vans or anyone such as Nike and Reebok o There is only one boss and whether a person shines shoes for a living or heads up the biggest corporation in the world the boss remains the same The customer is the person who pays everyone s salary and who decides whether a business is going to succeed or fail Sam Walton Unfortunately o Written Reflection Exercise Describe a bad marketing experience you had recently e g what happened how did you feel what did you do and what did the firm do if anything Components of Strategic Marketing o o Marketing Mix Four marketing activities product pricing distribution and promotionthat a firm can control to meet the needs of customers within its target market This is built around the customer and a marketing manager strives to match the needs of customers in the targeting market by using the correct mix o Products Goods sunglasses services airline or ideas marriage counseling Research customers and find their needs and wants Also involves adapting its product A marketer must be able to develop new products modify existing ones and eliminate those that no longer satisfy o Price The value that is exchanged for a product Does price have to be money Time and effort count as well There are restrictions to the changes that can be made such as how much the product can change due to government regulations or other limitations ect o Place distribution Making products available at the right time and place Example subway making itself available in malls Walmart other countries ect o Promotion Activities to inform individuals or groups about the organization and its products Examples Internet T V commercials ect Alcohol with invisible cops Summary o Are these marketing Running a political campaign Selling used cars Religion Marketing Creates Value o Value a customer s subjective assessment of benefits relative a costs in determining the worth of a product o Customers benefits includes anything the buyer receives in an exchange Customers costs anything the buyer must give up to obtain the benefits the product provides o There is a tradeoff between the value offered and the maximizing profits form a transaction o Marketing mix is used to enhance value Used to create an image of prestige cheapness ect Marketing Builds Relationships with Customers and Other Stakeholders o o o Marketing builds stakeholders relationships between stakeholders and customers Individuals and organizations engage in marketing to facilitate changes Exchange The provision or transfer of goods services or ideas in return for something of value o Exchange conditions Two or more individuals groups or organizations must participate and must possess something of value that the other parties desire Exchange should provide a benefit or satisfaction to both parties Each party must have confidence in the promise of something of value Parties must meet expectations o Customer dissatisfied with the relationship often searched for alternative organizations or products o Stakeholders Constituents who have a stake or claim in some aspect of a company s products operations markets industry and outcomes This includes customers employees investors and shareholders suppliers governments communities and many others o Stakeholder favorable relations is crucial for long term growth of an organization and its products Marketing Occurs in a Dynamic Environment o Marketing environment The competitive economic political legal and regulatory technological and sociocultural forces that surround the customer and affect the marketing mix o Can perceive how they perceive certain products Can create threats to marketers new opportunities for new products and new methods of reaching customers o Ways marketing can affect the marketer s ability to facilitate value driven changes Influence customers by affecting their lifestyles standards of living and preferences and need for products Determine whether and how a marketing manager can perform certain marketing activities Environmental forces may affect a marketing manager s decisions and actions by influencing buyers reactions to the firm s marketing mix Example McDonald s responded to unhealthy accusations for children by adding apple slices to happy meal o Marketers have control over the marketing mix but not over the environment Example When gas prices increase things such as bikes carpooling train ect are used The Marketing Concept o A management philosophy that an organization should try to provide products that satisfy customers needs through a coordinated set of activities that also allows the organization to achieve its goals o Customer satisfaction is a major focus of the marketing concept Starts and ends with the customer o Organization must determine what buyers want and is this to develop satisfying products o Focuses on customer analysis competitor analysis and integration of the firm s resources to provide customers value and satisfaction generating long term profits o Must also change and adapt current products to