Marketing Study of exchange academic def learning about marketing from the perspectives of the business and the customer functional def facilitation of exchange long def the process of planning and executing the conception pricing promotion and distribution of ideas goods and services to create exchanges that satisfy the individual and organizational objectives Given exchange definition what are the requirements that define the scope of marketing Communication Marketing s first task Discovering consumer needs The marketing concept Before you provide an offering you have to determine where there are unmet needs Make what s desired Marketing s second task Satisfying consumer needs with the marketing mix 4 P s 4 P s The marketing mix set of decisions marketing managers need to make This mix is designed for each target group 1 Product play place at McD s 2 Price values meals and happy meals 3 Promotion ads with kids 4 Place put in places with lots of young parents Original marketing philosophy Revolved around the product If we build it they will come Known as product orientation philosophy Best for situations where demand exceeds supply Based on idea product will sell itself through either a low price or high quality Sales orientation philosophy Sell what is made Internally driven just like the previous product orientation philosophy This introduced the concept of communication ONE WAY communication to the customer Just sell the damn product Marketing orientation philosophy Characterized by Requires information about the market potential customers trends competitors be collected prior to making decisions that involve the selling process Depends on two way relationship with customer Characterized by customer focus coordinated marketing effort all departments in the firm share in the effort to satisfy customer needs and long term success Relationship marketing concept Why Emphasizes the creation and maintenance of long term relationships with all participants customers suppliers retailers in the exchange process Why The cost of attracting new customers is much greater than the cost of keeping customers Service after the sale must be a consideration Customers tend to stick with products due to this when there is not a large price difference amount alternatives 4 types of benefits you get from products 1 Functional ceiling fan hammer car pen 2 Social social media cell phones bars restaurants dandriff shampoo deodorant 3 Personal mountain climbing exercise education college 4 Experiential vacation football games Truman concerts massages amusement parks Soap functional and social 4 Types of costs 1 Monetary 2 Temporal 3 Psychological 4 Behavioral Monetary Costs Tuition and book fees What you pay Temporal Costs Time spent in class and studying The time you spend Psychological costs Stress studying for exams The toll is takes on your mental state Behavioral Costs Expending energy walking to class or getting sick from lectures Porter s Five Forces Model Decides in which industries we want to compete Industry profitability depends on industry competitiveness availability of substitute products potential entrants threat of new comp supplier power buyer power Industry Competitiveness Intensity of current competitors Low intensity high profitability industry has low intensity when few firms competing Ex commercial aircraft Availability of substitutes few of no subs higher profitability ex of few no subs gasoline electric may be the only sub Ex of many subs fresh veggies canned frozen vitamins soft drinks Gatorade bottled water Threat of Potential Entrants High barriers to entry high profitability High barriers to entry exist when high capital requirements economies of scale are present high product differentiation network externalities Ex of network barrier word processing software Supplier and buyer power Low bargaining power of suppliers buyers higher profitability Low bargaining power when 1 High of suppliers 2 Low info they don t know eachother s bids Low supplier power ex CDs airplanes not many bought each year Low buyer power ex medical services we have no info about docs hospitals pricing until after we leave the ER Sustainable Competitive Advantage An advantage over competition that can be maintained consistently over time Market development Change market but not product Product development Change product not market Intensive Growth Strategies Ansoff s Product Market Expansion Grid Strategic Planning Developing a strategy to ensure long term survival and growth Process of developing and maintaining a strategic fit between the organization s goals and capabilities and its changing marketing opportunities 1 Develop a company mission 2 Objectives and goals 3 Choose organizational strategies 4 Develop a portfolio plan A firm s success depends on It s ability to adapt to the changes occurring outside the firm Environmental analysis Called monitoring or scanning ongoing process of identifying external forces analyzing them and predicting their potential impact Demographics Characteristics of a population ethnicity income gender Economic trends Business cycles is an example periods of prosperous growth or decline Substitute competition A threat that often comes under the radar of monitoring Often preceded by a change in consumer taste related to sociocultural trends low carb trend Substitute product One from a different product category that can be substituted or used instead of another product Technology Needs to be monitored and analyzed This can also be used for developments The discovery of trans fat started a whole trend against it Marketing objectives specific measurable attainable Market segmentation Process of dividing the market up into different groups of potential customers who share a common characteristic that differentiates them from another group Ex foot locket and lady foot locker Segment must be large enough to to generate enough demand to be profitable Positioning A product s image in relation to competing products Based on the differential advantage or unique selling proposition Ex it could be the healthiest burger shop compared to others Differential advantageSomething special about a product that gives it a better position Target market Selected group of customers intended target of a particular marketing mix Product Both physical products as well as services Marketing research Process of defining a marketing problem or opportunity systematically collecting and analyzing