An Overview of Marketing 01 30 2012 LO 1 What is Marketing AMA definition o 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 Desired outcome of marketing is and exchange people giving up something in order to receive something they would rather have i e give up money in exchange for a good or service or barter LO 2 Marketing Management Philosophies 4 competing philosophies strongly influence an organizations marketing processes production sales market societal marketing Production Orientation o Production orientation is a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace o Examples furniture industry Apple Sales Orientation o Sales orientation is based on the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits o Example after Toyota recall offering 0 financing increased cash back free maintenance packages and other incentives to get customers back and leasing Market Orientation o Marketing concept is a simple and intuitively appealing philosophy that articulates a market orientation States that social and economic justification for an organizations existence is the satisfaction of customer wants and needs while meeting its organizations objectives o Consistently deliver a unique experience that your competitors cannot match and that satisfies the intentions and preferences of your target buyers o Market oriented firms that adopt and implement the marketing concept they assume that a sale does not depend on an aggressive sales force but rather on a customer s decision to purchase a product o Examples L L Bean Overstock com Amazon Zappos QVC Societal Marketing Orientation o Societal marketing orientation extends marketing concept by acknowledging that some products that customers want may not really be in their best interests or the best interests of society as a whole o Conserve resources cause less damage to the environment o Helps firms differentiate themselves LO 3 Differences between Sales and Market orientations The Organizations Focus o Customer Value the relationship between benefits and the sacrifices necessary to obtain those benefits Customers value goods and services that are of the quality they expect and that are sold at prices they are willing to pay Marketers interested in customer value offer products that perform earn trust avoid unrealistic pricing give the buyer facts offer organization wide commitment in service and after sales support and co creation o Customer satisfaction the customer s evaluation of a good or service in terms of whether that good or service has met their needs and expectations o Building relationships companies can expand market share in 3 ways attracting new customers increasing business with existing customers retaining current customers Relationship marketing a strategy that focuses on keeping and improving relationship with current customers o Customer oriented personnel the role of training empowerment delegation to give employee s more authority to solve customer problems on the spot Teamwork entails collaborative efforts of people to accomplish common objectives The Firm s Business services o Sales oriented firm defines its business in terms of goods and o Market oriented firm defines its business in terms of the benefits its customers seek Those to Whom the Product is Directed o Sales oriented organization targets its products at everybody or the average customer o Market oriented organization aims at specific groups of people o Populations characterized by diversity average is usually just a mid point in characteristics The Firm s Primary Goal o Sales oriented organization seeks to achieve profitability through sales volume and tries to convince potential customers to buy even if the seller knows that the customer and product are mismatched o Market oriented organizations is to make a profit by creating customer value providing customer satisfaction and building long term relationships with customers Tools the Organization uses to Achieve its Goals o Sales oriented organizations seek to generate sales volume through intensive promotional activities mainly personal selling and advertising o Market oriented organizations recognize that promotion decisions is only one of the four marketing mix product place promotion pricing LO 4 Why Study Marketing Marketing plays an important role in society Marketing is important to businesses Marketing offers outstanding career opportunities Marketing in everyday life Strategic Planning for Competitive Advantage LO1 The Nature of Strategic Planning Strategic planning the managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities o Addresses 2 questions What is the organizations main activity at a particular time How will it reach its goals What is a market plan o Planning the process of anticipating future events and determining strategies to achieve organizational objectives in o Marketing planning designing activities relating to marketing objectives and the changing marketing the future environment o Marketing plan a written document that acts as a guidebook of marketing activities for the marketing manager Why write a marketing plan o Provide a basis by which actual and expected performance can be compared o Allows you to examine the marketing environment in conjunction with the inner workings of the business o Allows the marketing manager to enter the marketplace with an awareness of possibilities and problems Marketing plan elements o Written o Defining the business mission performing a situation analysis defining objectives delineating a target market establishing components of the marketing mix o Budgets implementation timetables required marketing research efforts elements of advanced strategic planning Writing the marketing plan o Managers must weight any information against its accuracy and their own judgment when making a marketing decision o Should be viewed as a series of sequential planning steps o Unique to the firm for which it is created LO2 Defining the Business Mission The foundation of any marketing plan is the firm s mission Mission statement answers the question what business are we statement in o Based on a
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