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EXAM 1- What is Marketing? o Product development to satisfy unmet consumer needsWhat makes Coke a good product and why do so many people buy it? It’s benefits! It tastes good, has caffeine.First goal of marketing is to identify unmet consumer needsSo if it is a good product, how much would you pay? How much do you want a coke? Great marketers will develop products that people want/need, price them at level that maximizes profit, and distribute them to consumersTruly great products don’t even need marketing, brand likes asics,Costco and Rolls Royce do little, if anyo Short-term marketing versus Long-term marketing.o The Power of Branding/MarketingTime – as time goes by and a company like Apple makes tons of money, imitation appears. The dominant firm has to convince customers its product is superior.Powerful – people will pay much more for brands they “trust” even if they are the exact same product (Publix brands are often from the same plants as others), consumers won’t buy unfamiliar products even if they are objectively bettero Dr. Brady’s approved definition of Marketing – “Marketing is the process by which companies determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development.” –Phil Kotlero TAKE AWAYS:1. The primary goal of marketing is to develop good PRODUCTS that people want and need, they also have to be priced appropriately and delivered to where consumers are2. If firms do marketing correctly, they won’t need to advertise much- Marketing’s core strategieso Creation Value – reward cards, value menu, babysitting Relationship – establish long term mutually satisfying buyer-seller relationships Cumulative – Corporate Social Responsibility- Customer Value TypologyEfficiency – self-oriented, intrinsic benefitsStatus – self-oriented, extrinsic benefitsAesthetics – other-oriented, intrinsic benefitsEthics – other oriented, extrinsic benefitsExample: Chick Fil A gives, but they also sell their delicious producto Segmenting Markets Gender Age Race Education Income Early adopterso Identifying opportunities- Know the history of Marketingo Simple Trade Era (Pre-1860s) – made by hand and grown, traded in small quantities, lasted up until Industrial revolutiono Production Era (Pre-1920s) – firms produced what they could make, Henry Fords statement (“You can have a model-T in any color as long as its black”), inward focus, technical development; Sellers market where demand exceeded supplyo Sales Era (1920s) – firms pushed products using aggressive sales tactics, people were changing their minds on what they wanted, they sold what they made and focused on short term profit maximizationo Marketing Era (1940s-1990s) – the “great awakening” where customers became central focus, began with development of marketing departments in early part of era, “customer is key”Created a 5% increase in customer retention yields up to a 95% improvement in NPV delivered by customersRepeat customers generate over twice as much revenue as newTODAY: Can be seen as “perks” cards, rewards miles, points for hotel stayo Societal Era (1960s-present) – “green marketing”, adds society’s best interest to mix, corporate social responsibility, firm serves three entities- Stakeholders – who are they? Constituents who have a “stake” or claim in some aspect of a company’s products, operations, markets, industry and outcomesBP’s affected stakeholders weren’t always important, often times its people who surround the situation not shareholders or customers- 4 P’s/The Marketing mixo Product – goods, services, ideasThings like Ford’s MyKey (parents control more things)o Place/Distribution – make products available in quantities desired, minimize costs (inventory, transportation, storage)o Promotion – inform individuals or groups about the organization; includes advertising, PR, personal sales, promotions, street teams, viral marketingo Price – decisions and actions associated with establishing pricing objectives and policies; determines value of exchange- Game changers – product, pricing, distributionApple products, Kindle – they combined many different technologies into oneRedbox – caused blockbuster to close because it innovated movie rentals- Misconceptions of Marketingo Marketing vs. Advertising – if marketers hit their mark with the product, price and distribution, there’s little need to advertise (places like asics, Costco, Rolls Royce)o Holistic view—most people view marketing as promotion, when actually it is complex, strategic, quantitative, multi-faceted- Time as related to Marketingo As time goes by and a company like Apple or McDonalds makes hundredsof millions of dollars, competitors arise. This means firms must figure out ways to create distinctions between their brands and others – the dominant firm has to convince customers its product is superior- Power of branding and advertisingo Brand bias—you think something is objectively better just because it is popular (ie. Google, Coke, Nike), but in reality many products are actually lesser in relation to others (Bing is statistically better than Google, but Google’s branding is much better)Social responsibility – the belief that a company needs to be held responsible for its actions socially, ethically and environmentally- Market Orientationo Customer Centric—developing collaborative relationships with customersbased on focusing on their individual needs and concernso Relationship—establish long term mutually satisfying, buyer-seller relationshipso Customer Relationship—using information about customers to develop and sustain desirable customer relationshipso Green—creating meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment- Promotiono Dr. Peloza’s presentation Central Route—consumers focus on the product message in the ad, interpret them, form beliefs about product attributes and integrate them to form brand attitudes Peripheral Route—the consumer doesn’t focus on the product message in an ad but on other stimuli such as celebrities or music;these things being present is what changes the beliefs about a brand/product- Marketing Orientationo Competitor orientation—analyzes competitor information in terms of activity, successes, losses,


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FSU MAR 3023 - EXAM 1

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