BUSML 3250 Exam One 01 28 2014 Best Customers v Average Customers Total Rewards Basis for freebies Best Customers 30 who spend 100 500 a visit 80 of revenue almost 100 of profit Former Harvard professor test track refine MARKETING DEFINITIONS Common to all definitions 1 Satisfying Buyers 2 Exchange Process Attempts to anticipate sometimes to change always to satisfy buyer demands through exchanges to achieve our own objectives harder to make the customer want what you have than to make what the customer already wants supply what is demanded harder to have a supply where you need to create a demand Simple Identifying understanding and satisfying buyer demands through exchanges satisfaction isn t always enough American Marketing Association AMA an organizational function and a set of processes for creating communicating capturing and delivering value to customers and managing customers and managing customer relationships in ways that benefit the organization that is trying to make money and its stakeholders Product Price Promotion Place recognized 1 Identify 2 Understand 3 Satisfy Marketing Marketing occurs whether it is understood approved of or formally OUR DEFINITION if there is voluntary exchange marketing is taking place Willing buyers and sellers marketing is taking place Not limited to monetary exchanges and to for profit organizations Satisfied v Very Satisfied 3 kinds of customers 80 20 Principle 80 of the revenue comes from only 20 of customers Key to profitability is repeat customers Discovering Marketing Marketing has always been done now it is recognized and refined Organizations can no longer ignore customers concerns Mainly not for profit organizations o Hospitals o Universities o Museums Voluntary exchange Marketing Questions a business needs to ask Is marketing done well o Repeat customers o Satisfaction surveys Does marketing matter o MAYBE extent of competition o Competition good or bad Depends which side it is working on Facilitating and Expediting Exchanges Facilitating making it happen Expediting increasing its speed Middlemen intermediaries o Bring buyers and sellers together o Much of marketing is done by middlemen o Make products available When Where How Individual Customers want them o Avoided for larger customers hotels Most common channel of distribution for consumer goods o M W R C Manufacturer Wholesaler Retailer Consumer middleman middleman Middlemen are used when profitable for the manufacturer Middlemen are avoided when profitable for the manufacturer Marketing Form Utility indirectly affected by marketing Manufacturing Time Utility when Place Utility where Possession Utility how Happens before and after manufacturing o Planning design branding retailing Evolution of Organizational Orientations 4 Orientations 1 Production Orientation does NOT favor the customer excess demand stress on making products producer priorities Monopolies Not individual customer sensitive Ex Post Office Markets better to businesses because of COMPETITION to UPS and FedEx 2 Product Orientation does NOT favor the customer excess demand Offer highest quality as expert producer sees it Professionals professors performers Ex Doctors Marketing Myopia short sighted danger wishful thinking that there is an unlimited demand mistake of focusing on a product s form instead of benefits buyers seek Ex Blockbuster Supply tends to grow faster than demand Organizations discover marketing o Misunderstand and think Promotion Advertisement 3 Selling Orientation ads and selling Promoting the product is crucial push prospects to buy with strong We must sell what we make Common but bad Ex Hospitals Advertising the same way expecting different results bad marketing strategy 4 Marketing Orientation Customer Satisfaction Focus Opposite of selling orientation we must make what we can sell Cater to the customer o Perfect customer satisfaction Customer retention no promotion necessary Marketing is Everybody s Responsibility Start with the CEO Accountants manage money better better prices satisfy customers hire people who believe in customer service Top Management o Sets direction and tone corporate culture o Future decisions Marketing Management o Plans 4 P s Price Promotion Product Place Lower Level Management and Their Staff o Most impact on customers o Good employee Good customer Satisfied employees better represent the organization and lead to satisfied customers Internal Marketing Think of employees as customers Work hard play hard culture Ex Southwest Airlines Increasing Importance of Marketing Since 1980 Options make it harder to please customers Mass market dead fragmented markets Slow economic growth High level of affluence people already have so much Deregulation o Transportation o Communication o Health care o Financial services o Less rules more competition Smarter competitors More experience training in the practice of marketing Customers are smarter and more demanding Controllables v Uncontrollables Controllables 4 Ps Uncontrollables facts economy demographics environment Create opportunities Threats Protection Must anticipate the reaction and adapt Important Large Influential Forces require active changes INSTEAD of adjustments Ex politics Internal Environment of an Organization Can t always tell a company s environment right away Top Management Determines Overall goals Line s of business Role and importance of marketing Growth Risk Ex Procter and Gamble marketing role model Marketing Management Determines o 4 Ps o Target market s o Own goals o Own structure o Works within top management s framework Importance of Marketing Tell Tales 1 How much are you willing to spend on marketing research 2 How much of the 4 Ps are actually decided upon by someone who specializes in marketing 3 4 Organizations with top management marketing majors BUSML 3250 Exam One 01 28 2014 Demographics population characteristics Age Sex Education Income Marital status Essential to know demographic trends and projections Demographics are constantly changing and uncontrollable Demographics has available and predictable information Ex McDonalds o Key demographic group is ages 6 16 o Predict how many of these people there will be in 2018 in the US The people who will be 6 16 in 2018 are 2 12 now Senior Boom healthier and wealthier Three Kinds of Seniors o Go go o Go slow o No go o Depends on health education income not just age o Market is big and attractive Between 2000 2020 the people age 50 will increase 76
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