Mar3023 Exam 1 Study Guide What is marketing The process of creating promoting distributing and pricing goods services and ideas to facilitate satisfying exchange Coke is a great example of marketing o People buy it because it taste good has caffeine o Think of marketing in terms of great products Marketing is the development of great products Dr Brady s approved def of marketing Marketing is also product development to satisfy unmet consumer needs Product development is a core marketing function o Firms don t go very far without good products to sell The first goal of marketing is to identify unmet consumer needs and then develop products that will fill those needs FOUR P s Product Price Place and Promotion o Pricing you want to price at a point that maximizes profit o Distribution core marketing function Ex coke is everywhere distribution is about getting your product to where consumers are o Products he mentioned during lecture iPhone great product that changed telecommunications industry your company will have a great stock when you produce a great product o spanx redbox put blockbuster out of business o if you do product pricing and distribution well you don t really need to advertise Products that do not advertise Rolls Royce Costco Asics Most people associate marketing only with advertising this is wrong Another Side of Marketing Time reality over time competitor products come in and start to outsell the original product iPhone and Samsung galaxy Time overtime the market reacts to eventually give people more options o Then you have to use promotion to convince the consumer that your product is better Big Advertisers Most decorated light beer in the US Old Milwaukee Light Bud light has won 0 awards even Bud light coca cola Kirkland vs Bayer coke vs pepsi though it outsells many other products Water Advertising and Branding are very powerful but only when the products are NOT objectively distinguishable when you can t tell the difference between products coke and pepsi and not objectively distinguishable Consumers don t buy unfamiliar brands it is comforting to know what you re going to get BRADY S FAVORITE DEFINITION by Phil Cotler Process by which companies determine which products or services may be of interest to customers and the strategies to use in sales communities and business development Primary Goals of Marketing 1 Develop great products 2 3 Over time competitors react you have to promote a product once it s not objectively If firms do marketing correctly they don t need to advertise much apple distinguishable In reality firms need to perform all marketing functions in order to drive profits Product pricing distribution and promotion 4 Module 1 Lecture 3 Marketing is about the development of great products Overtime competitors react and come out with other products Coke 0 Pepsi Maxx Marketers are really good at convincing customers This creates a need for promotion o some companies put the same exact products in the generic brand boxes Brands and Marketing are powerful pre 1860s Simple trade era o Products were handmade and grown o Traded in small quantities o Lasted until the industrial revolution Production era pre 1920s o as long as its black o Inward focus companies focuses on what they could sell to create demand not what the customers wants o Technical development Condition sellers market demand exceeded supply Question what happened The great depression Sales Era 1920s o changing their minds no one had so demand dried up o Focus on selling what we make to get rid of everything that had o Aggressive promotion vacuum cleaners o Short term profit maximization o Had to use aggressive tactics because people weren t buying The Marketing Era 1940s 1950s orientation o Companies started thinking about what the customer actually wanted customer o The great awakening where customers became the central focus of the organization o Began with the development of marketing departments 1940 1960 and then transferred to the rest of the firm 1960 1990 o Focus on Customer is the key delight Make what we sell Marketing Orientation Market orientation competitor orientation Inter functional orientation Customer orientation Clues to a Marketing Orientation 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 Stakeholders Constituents who have a stake or claim in some aspect of a company s products operations markets industry and outcomes Stakeholders are at the center of market orientation Relationship Marketing era 1990s 2010 Focus on long term relationships and customer retention o Getting customers but keeping them by forming relationships o Getting customers to believe in your brand o A 5 inc in customer retention yields up to a 95 improvement in NPV delivered by customers o Repeat customers generate over twice as much revenue as new customers o Engaged customers generate 1 7 times more revenue than normal customers Relationship marketing strategies credit cards skymiles rewards cards Societal Marketing Era 1960s present 3rd stakeholder society green marketing recyclable products energy efficiency o Ben and Jerrys Disney and Target Focus on o Adds society s best interest to the mix o Corporate social responsibility o Firm now serves three entities o Good for society as a whole 4 P s Marketing Mix Product place price promotion Products are goods services and ideas not just physical most are intangible Distribution getting products to where people are and minimizing costs inventory transportation and storage Promotion informing advertising public relations personal selling guerilla marketing viral marketing Pricing decisions and actions associated with establishing pricing objectives and policies o Determining product prices o Determines that value of the exchange He mentions Fords MyKey a key that parents can control Marketing s Core Strategies Creation o Value o Relationships Segmenting markets Identifying opportunities Value Taco Bell was 1st to come out with value menus o Value is not just savings it is hoping to get a lot and give up
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