Chapter 1 Create and Deliver Value Welcome to Brand You o Value Benefits a customer receives from buying a good or service The Who and Where of Marketing o Come from many backgrounds o Real people who make choices that affect themselves their companies and very often thousands or even millions of consumers o Marketing s Role in the Firm Working Cross Functionally Orientation of marketing varies a lot Trend towards integrating marketing with other business functions management and accounting o Careers in Marketing Deals with Advertising Brand Management Business to Business Marketing Direct Response Marketing Supply Channel Management International Marketing Marketing Models and Systems Analysis Marketing Research New Product Planning Retail Management and Sales and Sales Management Value of Marketing o Marketing Organizational function and set of processes for creating communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders o FOMBELLE S DESCRIPTION Facilitating a satisfying exchange between two parties o Meeting Needs Exchange of Goods and service information and ideas political parties religious groups research nonprofits business concepts for venture capitalists Stakeholders Buyers sellers or investors in a company community residents and even citizens of the nation where goods and services are made or sold Satisfying everyone in the process communities need to be behind the company whether or not they are actual customers Consumer Ultimate use of a good or service o Individuals organizations company government charities Inspires confidence Products sold to satisfy both consumers and marketers needs Sellers need to make a profit stay in business and sell high quality products Marketing concept Management orientation that focuses on identifying and satisfying consumer needs to ensure the organization s long term profitability Organizational philosophy dedicated to understanding and fulfilling consumer needs through the creation of value Value Customer Relationships Customer Loyalty Need Recognition of any difference between a consumer s actual state and some ideal or desired state o Difference is big enough Motivation o Relate to physical functions or to psychological ones Want Desire to satisfy needs in specific ways that are culturally and socially influenced Benefit Outcome sought by a customer that motivates buying behavior satisfies a need or want o Marketers must produce products with benefits Demand Customer s desires for products coupled with the resources needed to obtain them Market All the customers and potential customers who chare a common need that can be satisfied by a specific product who have the resources to exchange it who are willing to make the exchange and who have the authority to make the exchange Marketplace Any location or medium used to conduct an o Creating Utility exchange Utility Usefulness or benefit consumers receive from a problem 1 FORM Utility Benefit by transforming raw materials into finished products customers want them needed 2 PLACE Utility Benefit by making products available where 3 TIME Utility Benefit by storing products until they are 4 POSSESSION Utility Benefit by allowing the consumer to own use and enjoy the product o Exchange Relationships Exchange Process by which some transfer of value occurs between a buyer and a seller Idea that people give up something to get something they would rather have Necessary conditions for exchange Something of value At least 2 parties Communication and delivery Freedom to accept or reject Desire to deal with other party Ex Music Piracy Record companies change too much but lose billions of dollars year Most exchanges occur as a monetary transaction with currency When Marketing Began Evolution of a Concept p 12 o Before 1950s Means of making production more efficient o Production Era What can we make or do best Ex Model T Ford Organization that focuses on the most efficient production and distribution of products Production orientation Management philosophy that emphasizes the most efficient ways to produce and distribute products Consumers have to take whatever is available Former Soviet Union Centralized government set production quotas and consumers had no choice Views market as a homogeneous group that will be satisfied with the basic functions of a product Marketing played an insignificant role o Sales Era How can we sell more aggressively Great Depression money was scarce and priority was moving goods in any ways possible Selling orientation Managerial view of marketing as a sales function or a way to move products out of warehouses to reduce inventory WWII US increase industrial capacity Hard sell Sales people aggressively pus their wares When product availability exceeds demand in a buyers market Gave marketing a bad image More successful at making one time sales rather than at building repeat business Unsought goods Products that people don t tend to buy without some prodding Ex cemetery plots o Relationship Era What do customers what and need and how can we benefit society Consumer orientation Management philosophy that focuses on ways to satisfy customers needs and wants Special services that consumers don t mind paying a little extra for Out do competition Marketing s importance elevated in the firm Inflation in the 1970s and recession in the 1980s Decrease in companies profits Quality improvement concentration Total Quality Management TQM Management philosophy early 1990s that involves all employees from the assembly line onward in continuous product quality improvement Rapid improvements in manufacturing processes forward thinking firms gain edge by manufacturing on demand production after orders Pioneered by Japanese just in time model Instapreneur Business person who produces a product when it is ordered o Triple Bottom Line Orientation Looks at financial profits social community in which the organization operates and creating environmentally sustainable business practices Long term bonds with customers Customer Relationship Management CRM Systematically tracking consumers preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individual s wants and needs Easier to implement with the internet allows firms to personalize its messages and products to better meet the needs of each individual customer Internet has created a paradigm shift for