Chapter 1 An Overview of Marketing 1 Marketing Has 2 Facets 2 Marketing Management Philosophies a It is a philosophy an attitude a perspective or a management orientation that stresses customer b Marketing is an organization function and a set of processes used to implement this philosophy satisfaction AMA focus i Marketing 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 c Marketing Entails processes that focus on delivering value and benefits to customers not just selling goods services and or ideas Class Focus i Marketing sells benefits not products d Exchange A desired outcome of marketing people give up something in order to receive something they would rather have i Must be at least 2 parties ii Each party has something that might be of value to the other party iii Each party is capable of communication delivery iv Each party is free to accept or reject the exchange offer v Each party believes it is appropriate or desirable to deal with the other party a Production Orientation Focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace i Field of Dreams Orientation If you build it they will come ii Management assesses its resources asks the following questions 1 What can we do best What can our engineers design What is easy to produce iii Does not consider whether the goods and services that the firm produces meet the needs given our equipment of the marketplace b Sales Orientation Based on the idea that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profit i Sales to the buyer are emphasized intermediaries are encouraged to push manufacturer s products more aggressively How can we sell more aggressively ii Marketing means selling things collecting money iii Sales oriented marketing firms lack understanding of market needs consumer demand iv Despite the quality of sales force does not convince people to buy what is neither wanted c Market Orientation Satisfies customers wants and needs while meeting objectives aka the nor needed marketing concept i What a business thinks it produces is not of primary importance to its success instead what the customer thinks they are buying or the perceived value of a product defines the business ii Follows the Marketing Concept What do customer s want need 1 Focuses on customer wants needs to distinguish products from competitor s 2 Integrating all the organization s activities such as production and aggressive 3 Achieving long term goals for the organization by satisfying customer wants and offerings selling to satisfy customer wants needs legally responsibly iii Attempts to develop of a thorough understanding of your customers your competition your distinctive capabilities that enable your company to execute plans on the basis of this customer understanding and delivering the desired experience using and integrating all the resources of a firm iv Market Oriented They assume that a sale does not depend on an aggressive sales force but rather on a customer s decision to purchase a product 1 To Achieve a Market Orientation Obtain information about customers competitors and markets examine the information from a total business perspective determine how to deliver superior customer value and implement actions to provide value to customers d Social Marketing Orientation Satisfying customer needs and wants while enhancing or preserving individuals and societies long term wellbeing i What do customers want need and how can we benefit society ii This orientation extends the 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 1 Examples Less toxic products more durable products and products with reusable or recyclable materials 3 Differences between Sales Market Orientations a The Organization s Focus Sales oriented firms tend to be inward looking focusing on selling what the organization makes rather than making what the market wants On the other hand many successful firms derive their competitive advantage from an external market oriented focus Market oriented companies put customers at the center of their business in ways most companies do not i Customer Value The relationship between customer benefits and the sacrifice necessary to obtain those benefits price 1 Producing goods services that are of the quality customers expect and at a WTP ii Marketers who are interested in customer value 1 Offer products that perform 2 Earn trust Having a stable base of loyal customers 3 Avoid unrealistic pricing 4 Give the buyer facts 5 Offer organization wide commitment in service after sales support 6 Co Creation W Customers Some products allow customers to help create their own experience iii Customer Satisfaction Customer s evaluation of a good or service in terms of whether that good or service has met their needs expectations iv Building Relationships Relationship Marketing Focuses on keeping improving relationships with customers customers by 1 Attract new customers increase business w existing customers retain current a Customer Oriented Personnel Every employee represents the firm in the eyes of the customer b Effective Employee Training Programs c Empowerment Giving employees more authority to solve customer problems on the spot employees are more likely to work hard d Teamwork Emphasizing cooperation over competition while helping a customer b The Firm s Business Divided between the sales orientation the market orientation i Sales oriented firms define its business mission in terms of goods and services while a market oriented firm defines its business in terms of the benefits its customers seek ii Knowing a firm s business can ensure customer focus encourage innovation and creativity stimulate an awareness of changes in customer preferences c Those to Whom the Product is Directed Sales oriented firms target its products at everyone or the average customer while market oriented firms target specific groups of people i But average rarely exists populations are characterized by diversity d Why Should We Study Marketing i Important To Society Business Great Career Opportunities Chapter 2 Strategic Planning for Competitive Advantage 1 The Nature of Strategic Planning a Strategic Planning The managerial
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