Marketing: The process of creating, promoting, distributing, and pricing goods, services and ideas to facilitate satisfying exchange. Makes advertising and selling unnecessary. - The process by which companies determine what products or services may be of interest to consumers, and the strategies to use in sales, communications, and business development.- Product development is a core marketing function – firms need good products to sell in order to meet unmet consumer needs. Marketers identify unmet consumer needs and then develop products that fill those needs.How marketing is related to advertising and selling:1. They let consumers know that they need a product.2. Makes that need specific to their product. Recapture market share from companies that have stolen our ideas.Marketing power example: Stock prices of Apple vs. Dell.Core strategies:• Creating value and relationships• Segmenting markets Ex: Different diet cokes marketed at specific genders based on color and appearance of product.• Identifying opportunitiesPure/short-term marketing: the business function that develops the products that people want to buy because they know they need them and because they can afford them and because they can find them.- Pure marketing employs the four P’s in ways that benefit the consumer. The foundation of every business.- If firms perform pure marketing correctly, they don’t need to advertise much.Impure/long-term marketing refers to the competition created when someone develops a new product. If firms fail to objectively distinguish their products from competitors, then impure marketing becomes very important. Example of this is Old Milwaukee Light. The quality is better than Bud Light, but Bid Light advertises more. OML is good at pure marketing (product development), but bad at impure marketing (convincing consumers of the quality of their product). Competition necessitates marketing.Consumer reports rate generic brands as being just as good as marketed brands, as in Publix cola vs. CocaCola.The History of MarketingI. Simple trade era (pre 1860s) a. Products were made by hand, grown, or traded in small quantities. Most people lived on farms, so they traded what they had.b. People were not picky about what they got.II. Production era (pre 1920s) a. Made things in factories – outsourcing. Why individually produce everything in small areas and quanitites? Go to big city hubs and manufacturing was born.b. Getting as much product out the door as possible as quickly as possible. “As long as it’s black.” Why butcher my own chicken when I can buy yours.i. Inward focus.ii. Technical development.III. Sales era (1920s) – Great Depressiona. No one was buying anything because everyone was broke after the Depression. Many people went out of business. Factories were suffering – need to hire a sales force to convince people to buy what they had and make people think they needed something.b. Budgeting what they had. Risk averse because they weren’t sure about tomorrow.IV. Marketing era (1940s – 1990s)a. People regained consumer confidence.b. Focus on what we can sell to consumers that they don’t really want to buy – not on what they can make. Make what we can sell, not sell what we can make.c. Make what they can sell, not just what they have. Focused on consumer needs and what they wanted. Customer is key, focused on their satisfaction. d. Introduces market research – the process of going out and figuring out what people want.e. Market orientation:i. Competitor orientation – Must focus on what your competition is doing and how it is affecting customer perception of your product.ii. Inter-functional orientation – How well is an organization set up to produce the outcomes that consumers want.iii. Customer orientation – What does the customer want?• Stakeholder: Constituents that have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry and outcomes. Not just focused on customers. Ex: BP’s customers are people who buy their product, and also who live on the coast and are impacted by their actions.• Customer centric marketing: Developing collaborative relationships with customers based on focusing on their individual needs and concerns.• Relationship marketing: Establishing long-term mutually satisfying buyer-seller relationships.• Customer relationship management: Using information about customers to develop and sustain desirable customer relationships.• Green marketing: Creating meaningful, long-term relationships with customers while maintaining, supporting, and enhancing the natural environment.V. Relationship marketing era (1990s – 2010): Focus on long-term relationships and customer retention.a. A 5% increase in customer retention yields up to a 95% improvement in NVP delivers by customers. Repeat customer generate over twice asmuch revenue as new customers. Engaged customers generate 1.7 times more revenue than normal customers.b. Due to these statistics, firms focus on customer satisfaction and involvement. Keeping your customers will make you more money.c. Some strategies used are things like reward cards. Ex: SkymilesVI. Societal marketing era (1960s – present): “green marketing”a. Focuses on society’s best interest and corporate social responsibility. Ex: Ban on large sodas in New York because soda makes people fat.b. Firm now serves three entities – the customer, stockholder, and society.The eras are getting very short as the years go on.The Four P’s/Marketing Mix1. Product: Goods, services, and ideas. Identify unmet consumer needs and develop a product to fit those needs. Most jobs include services, not much of actual manufacturing.- 90%+ of Florida goods are outsourced.2. Place: Distribution. Making the product readily available to the consumer. Ex: Walmart dominates distribution channel, therefore, they can charge low prices because firms don’t want to lose their business.- Minimize costs – managing inventory, finding out best ways of transportation, and storage.3. Price: Decisions and actions associated with establishing pricing objectives and policies. Determining product prices and the value of the exchange.- Biggest impact on sales. Most immediate indicator of quality (cheaper price is correlated to cheaper quality). Price creates value and relationships.4.
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