MAR3023 9/8/12 2:31 PM Basic Marketing • What is marketing? – “the process of creating, promoting, distributing and pricing goods, services and ideas to facilitate satisfying exchange Pure form of marketing • It is what it is supposed to be • Coke: what makes it a good product? o It tastes good o Caffeine (benefit) o Good product • Pure marketing is great products o Great products also have great distribution networks. Example: you are hardly ever far from a coca- cola o Walmart has power in distribution networks because walmart buys in bulk • Pure marketing is the foundation of every business o Product o Price o Distribution • Good products that sell well and priced to maximize profits • Wall Street is actually betting on marketing Product development is a core marketing function • There would be no firms without marketing • Great firms have great products • First goal of marketing is to identify unmet consumer needs and then develop products that fit those needs • Consumers needed the product o Where to find, how much it cost and let them know what it is – short term phenomenon; all you have to provide • You must identify the price that maximizes revenue Marketing and finance • Finance wouldn’t exist without marketing Accounting and marketing • Count money that doesn’t exist • Is also wouldn’t exist without marketing o The LESSON: it all starts with marketingImpure form of marketing • Necessary component to every business • Other companies create substitutes of your product o Now you must cut price o And increase promotion – you must convince people that your product is better o Is very powerful § Example: Bud Light best selling beer but isn’t the best beer ever, won know awards, promotion makes it sell o Objective quality is often different from perception • Pure marketing happens only in the short term Advertisement • has to occur when your product is not clearly better than your competitors • You must convince people to believe in your brand • Advertising and selling are parts of marketing o Two primary purposes § 1. To let consumers know they need the product § 2. Let consumers know they need our product • is powerful – makes you believe in brand rather than better product • Social statements: tied to brands aw well • Branding is powerful • Consumers do not buy unfamiliar products Pure Marketing • Is about developing products they want and need, priced appropriately and delivered to where consumers are • If firms perform pure marketing correctly, they don’t need to advertise • If firms fail to objectively distinguish their products then impure marketing becomes very important 9/05/2012 Marketing • Is about developing a product that people want/need, pricing them at a level that maximizes profits and getting them to consumers• Given time, competitors imitate great ideas • If you have a successful product, companies will imitate what you do • Creates a need to convince and remind customers that our product is different/better • Marketers are really good at making you think our products are superior Consumer report • Rates all of the products you saw (on powerpoint) as objectively the same as or better than the branded products • Marketers make you believe a brand is good – power of branding • Brands and marketing is powerful History of marketing • Simple Trade Era (pre-1860’s) o Products were made by hand, grown and traded • Production era (pre 1920’s) o “As long as its black” o Inward focus (produce as many products as fast as they can) o Tech development o Demand way exceeded supply o People never had access to as many products before so they were continually buying • Sales era (1920’s – great depression) o “Changing their minds” o Selling what we make o Aggressive promotion o Short term profit maximization • Marketing era (1940-1990) o Great awakening where customers became central focus of the organization o Began with development of marketing departments (40’s-60’s) and then transferred to the rest of the firm (60’s-90’s) o Customer is key • Market orientation o Beware of the competitors orientationo Inter-functional orientation – organization is set up well, communication is efficient o Customers orientation is the focus • Relationship marketing era (1990-2010) o Long-term relationships and customer retention o 5% increase in customer retention yields 95% more profit o Repeat customers generate over twice as much revenue as new customers o Whole firms need to relearn this • Societal marketing era (60’s – present) o Green marketing o Society best interest to the mix o Firms serve 3 entities § Customers § Stockholders § Society as a whole Stakeholders: constituents who have a “stake” or claim • After the BP catastrophe – now defined as anyone who is affected by their firm Customer centric marketing: developing collaborative relationship with customers based on focusing on their individual needs and concerns Relationship marketing: established long-term mutually satisfying buyer sell relationship Four P’s / Marketing Mix (3 p’s and a D) • Product • Price • Promotion • Place (distribution) Products • Goods • Services • Ideas United States – we don’t make goods anymore (especially in NW Florida) • GDP of US: 20% comes from Physical goods • GDP of FL: less than 10% comes from physical goods • Our economy is based on service providers• People make a lot of money on ideas: especially in the technology area Distribution – very powerful • Make products available in quantities desired • Minimize costs o Inventory o Transportation o Storage Promotion • Advertising • Public relations • Personal selling • Guerilla marketing: street teams – pay people to represent their products • Viral marketing • Promotions Pricing • Decisions and actions associated with established pricing objectives and policies • Determining product prices • Determine value of exchange Macro-Marketing strategies • Creating value and relationships • Segmenting markets • Identifying opportunities • Value menus Creating value (examples) • Small banks o Serve coffee o Extended hours o Babysit • Value menus o First was at Taco Bell o Now everyone
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