MAR 3023 What is marketing The aim of marketing is to know and understand customers so well the product or service fits them and sells itself Peter Drucker Stock prices go up don t waste money on advertising make more products with the money Products would not be dominate products without advertising Coke Nike Bud Light Branding is very powerful objective Great Products drive the stock market advertises for itself People pay to advertise for you stickers bumper stickers shirts hats Marketing long term stock effects Finance Short term stock effects Marketing Why you buy a product the foundation of every business nothing happens until you sell something to someone marketing is a revenue item it is how you make money not how you spend it You need to spend money to make it Product benefits Great service Great taste Great setting Place Starbucks is everywhere Price right is not always low Great marketers develop products want and need St Marks Lighthouse Bradely s country store Quality exclusivity Maximizes profit for the firm Product development is a core marketing function Product price place There would be no firms without marketing Tesla did what henry ford did product was so good they can upcharge for different colors Mcdonalds game changer processes fast food not quality products fast and consistent Carvana distribution car vending machiene no dealer Fees or overhead If marketers hit their marl with the product price and distribution there s little need to advertise Companies who do little advertising Ascics four rivers krispey kreme trader joes tesla Costco zara Netflix siracha lululemon rolls royce Advertising donuts dunkin nike Advertising and selling get pushed to the back burner if theyre quality products don t need to spend money on advertising Marketing is the foundation of every business all starts w marketing Marketing is where revenue comes from Why is marketing misunderstood iceburg on top promotion what we see Underneath complex strategic quantitative multi faceted below the waves Visable side of marketing time and reality powerful and works Mimicking companies change name but produce nearly identical products LaCroix is having trouble due to mimicry and pepsi and coke have deeper products Bubly and Aha Sara Blakely mimicked herself and sold lower quality products for cheaper prices Product pricing and distribution basis of marketing and good products doesn t need advertising Buy poor quality products with 100 markups to feel good about ourselves because of a brand name symbol Overtime mimicry happens and results in companies taking up advertising and branding to compete Advertising and branding Very powerful Nike Aheiser Busch and Coca Cola Store brand costo Kirkland generic corn whats the difference nothing it s a formula Coke pepsi and publix cola blind taste test 15 got it right Power of brand makes people pay over twice the cost social situations make it harder Old Milwaukee light its better but not in a margin that would make someone buy it over bud light Socially says things about us that we don t want said keystone light is the cheaper version of coorslight Hamms best tasting and 50 of the cost of budlight Budlight 22 out of 30 for best taste and its 1 selling beer because of branding Coca cola spends 4 billion dollars on advertising a year Anheuser Busch spends 1 53 billion on advertising and it makes a bad product be the most sold because it says something about a person without saying words Consistency is why it works Consumers don t buy unfamiliar products even if the unfamiliar one is objectively better Big Mac here is same as Beijing familiarity Marketing is about developing great products that people want need pricing them at a level that maximizes profits and getting them to consumers Coke Zero Men don t like the word diet Men weren t buying diet coke and tab so they created coke zero Pepsi Max and Dr Pepper TEN Dr Pepper Zero Sugar are the mimicry products Just must be good enough to not know the difference right off the bat and that s why branding works social thing Wine and Coffee most powerful average American spends 1 000 on coffee a year History of Marketing Simple trade era pree 1860s Made by hand products and traded in small quantities until the industrial revolution Production Era pre 1920s You can buy any color Model T Inward focus Technical development Seller s Market demand exceeded supply Sales Era 1920s 1930s Great depression Sell what we make Changing their minds sell what we make aggressive promotion short term profit maximization Just trying to stay alive and in business The marketing era 1940s 1990s The great awakening where consumers became the central focus of the organization wwII began w the development of marketing departments 1940s 1960s and then transferred to the rest of the firm 1960 1990 customer is the key delight make what we sell mars made m and ms to ship overseas in the heat for soilders to eat without melting Customer satisfaction was formed marketing was born Customer centric marketing Relationship marketing Customer relationship management Green marketing Relationship marketing era 1990s 2010 The focus is on the long term relationships and customer retention A 5 increase in customer retention yields up to a 95 improvement in NPV delivered by customers Repeat customers generate over time Rewards programs are buying you as a customer overtime Maximizes profits and provides a penalty for not going with the product overtime Buying loyalty only works for services Societal Marketing Era 1960s present Green marketing Adds society best interest to mix Corporate social responsibility Firm now serves three entities Module 2 Understanding customers harvesting data Segmentation and Positioning Most important part of marketing Market segmentation targeting everyday examples segmentation basis How is a firm supposed to make sense of a huge market Americans consume 90 000 bottles of water every hour 205 million barrels of beer were sold in the U S there are 31 gallons in a barrel More than 10 000 Coca Cola soft drinks are consumed per second the market is massive companies make revenue from being a part of the tiniest percent Market Segmentation is the process of dividing up a market into smaller groups called segments the groups are designed to have similar wants and needs the idea is that the firm can use their marketing mix four p s to tailor products for the different groups Targeting firms then develop new products
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