Exam 1 Review Dr. Mike Brady Mar 3023-01 • What Marketing is and what it isn’t o What is marketing? “The process of creating, promoting, distributing, and pricing goods, services, and ideas to facilitate satisfying exchanges.” ***Not a good definition in Brady’s point of view. If you remember, people who put this as the answer on Exam 1 got it wrong, but then received credit because so many people missed it. The best answer to the question of what is marketing is: It’s 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. 4 P’s: Product, Price, Place (Distibution), Promotion (tells consumers they need them) None of those things would happen without marketing. And nothing else would exist without marketing. o Product development to satisfy unmet consumer needs The first goal of marketing is to identify unmet consumer needs and then develop products that fill those needs. Ex. Henry Ford saw a need, so he made the first car So marketers identify unmet consumer needs and then develop products that fill those needs. This explains the role of marketing research Think about the iPhone, Kindle, and Wii o vs. Advertising and Sales Many people think this is what marketing is, but it’s not. Sleezy salesmen aren’t needed if marketing is done right Advertising is needed when marketing is not done well To say that marketing is advertising or selling is like saying that US is Disney and McDonald’s or FSU is football and Bobby Bowden. Advertising and selling are parts of marketing but referring to marketing in this way misses the true essence How is marketing related to advertising and sales? 2 primary purposes: A. To let consumers know that they need a product -If the product is good, this should be relatively easy to do *How hard was it for Henry Ford? Very easy! B. To let consumers know they need our product -This is where A and S are particularly good • Marketing’s core strategies o Creating value: Value: what you get for the price you pay; it’s good value if you pay a little for a lot. Ex. Albertson’s savings card, McDonald’s value menu, small banks serve Starbucks’ coffee and offer free babysitting while there, Sheraton Five Points in L.A. has rooms available 24/7 o Creating relationships: Establishing long term mutually satisfying, buyer seller relationships. Ex. Disney• Sells movies, theme parks, cruises, live events, TV, radio. • They develop a relationship with their brand (Ex. Folding towels like animals/figures in the rooms, setting kids’ toys up in a magical way when they leave the room Ex. Charmin • Sells toilet paper • Set up Charmin restrooms in NYC, mobile restrooms at events (clear demand for these). Results: Sales increased by 20% Ex. Chick-fil’-A • Sells fast-food • Trained employees to say “my pleasure”, bring umbrellas to customers if raining, pull chairs out for ladies, bus tables, offer to refill drinks o Segmenting Markets Each segment has similar wants and needs; the marketing mix is used to tailor products for different groups Ex. Coke has a product aimed at every segment in the market: Diet Coke, Diet Coke with Lime, Cherry Diet Coke, etc. Ex. iPhone now has a competitor, Droid, so it will soon need to segment the market to stay on top Ex. In an effort to compete with Walmart and Dell, Best Buy made an effort to separate “angel” and “devil” customers. To separate the two, store clerks are given training to identify desirable/angel customers. Ex. Hotels have different lines for every segment in the market: Marriot owns Ritz-Carlton, Courtyard, Fairfield Inn Hilton owns: Doubletree, Hampton Inn, Embassy Suites Each hotel name caters to a different type of customer o Identifying opportunities Identify a need and develop a product that first that need exactly Market opportunities Where circumstance and timing meet to create strategic windows Ex. Ebay Ex. Recession & Walmart: Expands their market share during recession because people are pinching pennies Ex. Recession & FSU: People are going back to school (larger applicant pool), more people staying in state, private schools are struggling, FSU listed as #4 for best value public school Ex. Starbucks was an opportunity for McDonald’snow has McCafe because of a large profit margin Core competencies Things a firm does well Competitive advantage=opportunity +competency What is Starbucks’ core competency? -Taste? No, McD’s has best tasting according to Consumer Reports -Made coffee a social drink -Want Starbucks to be the consumer’s “third place” (after home and work) What is Walmart’s core competency? -Distribution and power in the distribution channelallows them to offer products at lower prices What is FSU’s core competency? -Research• Know the history of Marketing o Production Era (Pre-1930s) Firms produced what they could make “As long as it’s black”, inward focus, technical development, didn’t ask what consumers wanted, told them what they needed Seller’s market Demand>supply When did supply start to exceed demand? – The Great Depression o Sales Era (1930s) Firms pushed products using aggressive sales tactics Focused on: Selling what we make, short-term profit maximization goal, aggressive promotion – vacuums o Marketing Era (1960s) “Customer driven process” – novel idea Focus on customer orientation, make what we sell, long-term profit maximization, develop customer relationships, brand loyalty Marketing Orientation: • Competitor orientation: Keep an eye on competition • Inter-functional orientation: Maximize processes to get best, most efficient • Customer orientation: Most important o Societal Era (1980s) “Green marketing” Focus on: adding society’s best interest to the mix Firms now serves 3 entitities • 4 P’s 4 levers to get desired results and drive sales o Product Customers’ needs and wants; creating and modifying brand names and packaging; decisions regarding warranty and repair services Goods, services, ideas Best products in 2010: Droid,
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