Review of Material for Test 1 Marketing 305 Joyce Claterbos Spring 2014 Chapter 1 What is Marketing Creating Customer Value Benefits o Tangible features and benefits Costs o Service benefits o Personal value o Image Value o Monetary costs o Time o Energy o Psychological costs Marketing should result in an exchange Necessary Conditions for Exchange o At least two parties o Something of value o Communication and delivery o Freedom to accept or reject o Desire to deal with other party American Marketing Association AMA Marketing is the activity set of institutions and processes for creating capturing communicating delivering and exchanging offerings that have value for customers clients partners and society at large Satisfying Needs Wants and Demands A need is a basic human requirement for survival that product Value Driven Organizations A need becomes a want when it is directed to a specific product that might satisfy the need A want becomes a demand when the want for a specific product is backed by an bility to pay for Gather and share information within the organization Measure customer perceptions and balance benefits against costs Develop relationships with customers not transactions Communicate and connect with customers Customer Relationship Management CRM Using strategies programs and systems to identify and build loyalty among the most valued The feeling that a product met or exceeded the customer s expectations o We delivered the benefits sought and those benefits exceeded the sacrifices made by Prediction of the profit attributed to entire future relationship with a customer and valuable customers Customer Satisfaction the customer Customer Lifetime Value CLV The 4 Ps of Marketing Product Creating Value o Goods o Services o Ideas Price Capturing Value o Price is everything a buyer gives up money time energy in exchange for the product o The key to determining prices is to figure out how much customers are willing to give up and assess whether a profit can be made at that point Place Delivering the Value Proposition o Place or supply chain management describes all activities necessary to get the product to the right customer when the customer wants it o Showrooming Promotion Communicating Value o Communication by a marketer that informs persuades and reminds potential buyers about a product or service to influence their opinions or elicit a response Criticisms of Marketing Causes unneeded purchases Exaggerates product benefits Invades privacy Wastes money Discriminates against those with less money Contributes to environmental waste Some products do not need marketing Economic Benefits of Marketing Marketing makes buying easy for customers Marketing creates new and improved products at lower prices The functions of marketing add value to a product When a product becomes popular the number of merchants selling the product will increase this increases competition which reduces the price Competition also makes manufacturers improve products to better satisfy customer wants and needs Marketing Enriches Society Adds value to products 5 utilities Increases competition Helps lower product prices Developing newer and better products Provides employment opportunities Has the ability to convey messages that change social behavior in a positive way o Example Anti smoking advertising Developing Marketing Strategies and a Marketing Plan Business Plan Marketing Plan Business Plan o What is your business about o Encompasses more than marketing o Includes the vision Marketing Plan o A map for achieving yearly goals Marketing Strategy A good marketing strategy identifies o A firm s target market s o A related marketing mix their 4 P s o Measures of performance Customer Value o Customer excellence o Occupational excellence o Product excellence o Locational excellence Developing a Marketing Plan o The ability to track success through individual tactic performance measures o An understanding of the time and budget needed to execute the Marketing Plan o The bases upon which the firm plans to build a sustainable competitive advantage Strengths and Weaknesses Look inside for Sustainable Competitive Advantage Planning Implementation Control Step 1 Business Mission o The firm s mission and vision and assess the firm s current situation o How it plans to implement its mission and vision o Evaluate its performance using appropriate metrics What business are we in now and what do we intend to be in the future o Describes the direction an organization will pursue within its chosen environment and guides the allocation of resources and effort What are our competencies our abilities our strengths Step 2 Conduct a Situation Analysis Using SWOT Strengths of the company Weaknesses of the company Opportunities in the external environment Threats in the external environment Step 3 Identifying and Evaluating Opportunities Using STP Segmentation toward them Targeting Positioning services o Dividing market into those groups of customers with different needs wants or characteristics who therefor might appreciate products or services geared especially o Going after certain groups on the basis of the firm s perceived ability to satisfy the needs of those groups better than competitors and profitability o Using marketing mix to communicate a clear distinctive and desirable understanding of what the product or service does or represents relative to competing products or Step 4 Implement Marketing Mix and Allocate Resources Product Value Creation Place Value Delivery Price Value Capture Promotion Value Communication Step 5 Evaluate Performance and Make Adjustments Control Phase Where are we now o Compare results to objectives Where do we want to be o Make necessary adjustments Marketing Ethics Most Customers Employees and Suppliers Expect Safe and effective products Honestly represent the products No misleading or confusing claims Reasonable or fair prices Equitable and fair treatment Ethics and Marketing viewpoints Growth of Consumerism business practices Marketers are expected to behave in a morally acceptable manner All exchanges are based on trust and the desire to trade with the other party Ethical behavior is mandatory to establish trust If marketers and customers don t agree on what is ethical behavior there will be distrust Marketers and customers must come to a mutual understanding of their respective ethical Definition The organized actions of groups of consumers seeking to increase their influence on