MAR3023 FALL 2015 1 CHAPTER 01 LECTURE SEGMENT 1 WHAT IS MARKETING Definition The process of creating promoting distributing and pricing goods services and ideas to facilitate satisfying exchange Foundation to every business Marketing is the answer to the question of why you buy the product If you nail positioning and targeting the rest falls into place Philip Kotler What makes this a good product Starbucks example o Product benefit tastes good o Experience ambiance o Service Setting great service o Place It s everywhere o Price The right money is not always the low price Quality Exclusivity Maximize profit for the firm Product Development is a core marketing function o Firms don t get far without good products to sell o There would be no firms without marketing MAR3023 FALL 2015 2 o First goal of marketing is to identify unmet consumer needs and develop products to Good Products fill those needs Identify the price that maximizes revenue Getting product to where you can buy it o Channels Distribution Logistics o Place o Explains how marketing economics and finance are related GREAT MARKETERS o Develop PRODUCTS people want o PRICE them at a level that maximizes profits o DISTRIBUTE PLACE them to where consumers are CHAPTER 01 LECTURE SEGMENT 2 WHY IS MARKETING MISUNDERSTOOD People understand marketing only though the lens of what they can see everyday o Advertisements o People think what they see We need advertising and branding because o Time Reality Imitation MAR3023 FALL 2015 3 Overtime the market reacts with competitor products that have similar Now the dominant firm has to convince customers its product is superior Beer example OML is better than Bud light but Bud Light brand is better benefits o It s powerful than OML o It works Consumers don t buy unfamiliar products o Even if the unfamiliar one is objectively better Marketing definition 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 Kotler SUMMARY CHAPTER 01 LECTURE 1 SEGMENT 1 2 Primary goal of marketing Develop good PRODUCTS that consumers want and need o They also have to be priced appropriately and delivered to where consumers are If firms market correctly they don t need to advertise much Over time competitors force firms to promote their products in order to differentiate them from close competitors Firms need 4 P s well in order to drive profits and everything else o Great Product o Priced o Place o Promoted for profit Distributed to where consumers are in a way that gets customers to believe in their quality The aim of marketing is to know and understand customers so well the product or service fits them and sells itself Peter Drucker CHAPTER 02 LECTURE SEGMENT 1 THE POWER OF BRANDING HISTORY OF MARKETING The power of branding o Which should cost more Example Quaker oats vs Great Value brand MAR3023 FALL 2015 4 o Which is better Consumer Reports rate all of the products you saw as objectively the same as or better than the branded products History of Marketing Simple Trade Era Pre 1860s o Products made by hand grown or traded in small quantities o Lasted up until the industrial revolution Production Era Pre 1920s o You can buy any color Model T as long as it s black o Inward focus o Technical development produce products as quick and efficient o Sellers market demand exceeded supply Sales Era 1920s o Sell what we make o Changing their minds still exists today o Focus on Aggressive promotion vacuum cleaners example throw dirt on persons carpet use vacuum to show how good it is Short term profit maximization Marketing Era 1940s 1990s 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 o Focus on Customer is key Delight Make what we sell Relationship Marketing Era 1990s 2010 o The focus on long term relationships and customer retention A 5 increase in customer retention yields up to 95 improvement in NPV delivered by customers Repeat customers generate over twice as much revenue as a new customer Engaged customers generate 1 7 times more revenue than normal customers Relationship Marketing Today o Loyalty Programs o Make it financially difficult for you to go to their competitors o Societal Marketing Era 1960s Present o Green Marketing o Focus on MAR3023 FALL 2015 5 Adds society best interest to the mix Corporate social responsibility Firm now serves three entities Clues to a Market Orientation how do we know if a firm is marketing oriented Customer Centric Marketing o Collaborative relationships based on customers individual needs and concerns Relationship Marketing o Long term mutually satisfying buyer seller relationships Customer Relationship Management o Using information about customers to develop and sustain desirable customer relationships Green Marketing o Meaningful long term relationships while maintaining supporting and enhancing the natural environment o Serve stock holders customers society as a whole CHAPTER 02 LECTURE SEGMENT 2 MARKETING STRATEGY The Four P s Marketing Mix PRODUCT Most important o Not just a product also a service an idea a concept PLACE Make products available in places and quantities desired o Shrink costs Inventory transportation storage Inform individuals or groups about the organization and its PROMOTION products services o Advertising public relations personal relations personal selling PRICE Decisions and actions associated with establishing pricing objectives and policies o Determining product prices and profit o Determines the value of the exchange Value Difference between what you have to pay and what you re getting in Popular Macro Marketing Strategies Creating o Value return o Relationships Example Chick fil A Segmenting Markets o Soda in bottle vs soda in can MAR3023 FALL 2015 6 o Coke vs Tab soda men vs women soda o Segment markets to target customers with different needs Capture bigger part of market drives profit o Lock you into their brand Identifying Opportunities o Market Opportunity where circumstance and timing meet to create strategic windows o Core competencies things a firm does well Competitive advantage opportunities core competency McDonalds consistency and location Through process of strategic planning a firm establishes an organizational mission and goals corporate strategy
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