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Chapter 1Marketing: the process of creating, distributing, promoting, and pricing goods, services, and idea to facilitate satisfying exchange relationships with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment Customers: the purchasers of organizations’ products, the focal point of all marketing elementsTarget Market: the group of customers on which marketing efforts are focusedMarketing Mix: four marketing elements- product, distribution, promotion, and pricing- that a firm can control to meet the needs of customers within its target marketProduct: a good, service, or ideaProduct Variable• Researching customer’s needs and wants and designing a product that satisfies them• Good: physical thing you can toucho Car, iPod, battery• Service: an application of human and mechanical efforts of people or objects to provide intangible benefits to customerso Air travel, dry cleaning, hair cutting• Ideas: concepts, philosophies, images, and issueso Marriage counseling, political party, school• Marketers must always develop new products, modify existing ones, and eliminate those that no longer satisfy enough buyersDistribution Variable• Products must be available at the right time and through convenient distribution methods• Marketing managers make products available in quantities desired to as many target market customers as possible• Companies can now make products available throughout the world thanks to the internetPromotion Variable• Activities used to inform individuals or groups through increased public awareness about the organization and its products• Educates about product features or urge people to take a particular stance on a political or social issue• Sustain interest in established products that have been availablePrice Variable• Decisions and actions associated with establishing pricing objectives and policies and determining product prices• Often used as a competitive tool and can lead to price wars• High prices can establish a product with an image of high quality and significant statusThere are limits as to how much managers can alter these marketing mix variables due to:• Economic conditions, competitive structure, or government regulations• Making changes in tangible goods is expensive• Promotional campaigns and methods used cannot be rewritten or changed overnightExchanges: the provision or transfer of goods, services, or ideas in return for something of valueFor an exchange to occur, four conditions must exist:• Two or more individuals or groups must participate and each possess something of value that the other party desires• The exchange should provide a benefit or satisfaction to both parties in the transaction• Each party must have confidence in the promise of the “something of value” held by the other• The parties to the exchange must meet expectations to build trustMarketing activities can occur without an exchange taking place, such as an ad on TVShould attempt to create and maintain a satisfying exchange to keep customers coming backStakeholders: include those constituents who have a “stake,” or claim, in some aspect of a company’s products, operations, markets, industry, and outcomes• Include employees, customers, investors, and shareholders... etc.Marketing Environment: includes competitive, economic, political, legal and regulatory, technological, and sociocultural forces that surrounds the customer and affect the marketing mixAffect a marketer’s ability to facilitate exchanges by:• Influence customers by affecting their lifestyles, standards of living, and preferences and needs for products• Marketing environment forces help determine whether and how a marketing manager can perform certain marketing activities• Environmental forces may affect a marketing manager’s decisions and actions by influencing buyers’ reactions to the firm’s marketing mix• Forces are closely interrelated and change quickly and dramaticallyMarketing Concept: am organization should try to provide products that satisfy customers’ needs through coordinated set of activities that also allows the organization to achieve its goals• Determine what customers want and develop satisfying products at profit• High levels of customer satisfaction lead to higher shareholder value and better employees and managers• Management philosophy that guides organization’s overall activities and affects all organizational activitiesProduction Orientation: (Second half of 19th Century) advances in mass production, technology, transportation, and new ways to use labor allowed for a high amount of products to enter the marketSales Orientation: (mid 1920s – early 1950s) businesses started to “sell” products since strong demand subsided, giving marketing a false nameMarket Orientation: (early 1950s – Present) first determined what customers wanted and then produced the products customers desired• Requires intelligent decisions based on present and future customer needs Implementing the Marketing Concept• Establish an information system to discover customer’s real needs and then use the information to create satisfying products• Coordinate all its activities, even in other departments Fundamental goal of every marketing strategy: the full profit potential of each customer relationship, attained by:• Acquiring new customers• Enhancing the profitability of existing customers• Extending the duration of customer relationshipsRelationship marketing: establishing long-term, mutually satisfying buyer-seller relationships• Customer builds trust in company, creating dependency Customer-centric marketing: developing collaborative relationships with customers based on an individual’s needs and concerns, more personable customer experienceCustomer Relationship Management (CRM): uses information about customers to crate marketing strategies that develop and sustain desirable customer relationships• Build customer loyalty, which increases customer value• Rewards programs and incentives/coupons for loyal customersValue: a customer’s subjective assessment of benefits relative to costs in determining the worth of a product, important element in customer relationships and applying marketing conceptCustomer value = customer benefits – customer costsDevelop a concept of value through their perception of product quality and financial sacrifice Customer benefits:


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FSU MAR 3023 - Chapter 1

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