Chapter 1 Welcome to the World of Marketing Create and Deliver Value Marketing is the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partners and society at large AMA Association Value The benefits a customer receives from buying a good or service Marketing An organizational function and a set of processes for creating communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders Stakeholders Buyers sellers or investors in a company community residents and even citizens of the nations where goods and services are made or sold in other words any person or organization that has a stake in the outcome Consumer The ultimate user of a good or service Marketing concept A management orientation that focuses on identifying and satisfying consumer needs to ensure the organization s long term profitability Need The recognition of any difference between a consumer s actual state and some ideal or desired state Can be physical or psychological Want The desire to satisfy needs in specific ways that are culturally and socially influenced Benefit The outcome sought by a customer that motivates buying behavior that satisfies a need or want Demand Customers desires for products coupled with the resources needed to obtain them Market All the customers and potential customers who share a common need that can be satisfied by a specific product who have the resources to exchange for it who are willing to make the exchange and who have the authority to make the exchange Marketplace Any location or medium used to conduct an exchange Virtual Goods Digital products consumers buy for use in online contexts The usefulness or benefit consumers receive from a product Utility Form utility the benefit marketing provides by transforming raw materials into finished products Place utility benefit marketing provides by making products available where customers want them A dress manufacturer combines silk thread and zippers to create a bridesmaid s gown The most sophisticated evening gown sewn in New York s garment district is of little use to a bridesmaid in Kansas City if it isn t shipped to her in time Some women rent their wedding gowns instead of buying them and wearing them only once they hope Time utility benefit marketing provides by storing products until they are needed Possession utility the benefit marketing provides by allowing the consumer to own use and enjoy the product The bridal store provides access to a range of styles colors that would not be available to a woman outfitting a bridal party on her own Exchange The process by which some transfer of value occurs between a buyer and a seller A tangible good service idea or some combination of these that satisfies consumer or business customer Product needs through the exchange process a bundle of attributes including features functions benefits and uses The Production Era focuses on the most efficient production distribution of products The Model T story A management philosophy that emphasizes the most efficient ways to produce and distribute The Sales Era During the Great Depression in the 1930s when money was scarce for most people firms shifted their focus from a product orientation to moving their goods in any way they could A managerial view of marketing as a sales function or a way to move products out of warehouses Production Orientation products Selling Orientation to reduce inventory The Relationship Era Marketers did research to understand the needs of different consumers assisted in tailoring products to the needs of these various groups and did an even better job of designing marketing messages than in the days of the selling orientation Consumer Orientation Total Quality Management TQM empowering employees to be an active part of continuous quality improvement A business approach that prioritizes the satisfaction of customers needs and wants A management philosophy that focuses on satisfying customers through Instapreneur businessperson who only produces a product when it is ordered manufacture on demand just in time 1 Chapter 1 Welcome to the World of Marketing Create and Deliver Value The Triple Bottom Line Orientation A business orientation that looks at financial profits the community in which the organization operates and creating sustainable business practices 1 The financial bottom line Financial profits to stakeholders 2 The social bottom line Contributing to the communities in which the company operates 3 The environmental bottom line Creating sustainable business practices that minimize damage to the environment or that even improve it Customer Relationship Management A systematic tracking of consumers preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individual s unique wants and needs CRM allows firms to talk to individual customers and to adjust elements of their marketing programs in light of how each customer reacts Attention Economy A company s success is measured by its share of mind rather than share of market where companies make money when they attract eyeballs rather than just dollars Social marketing concept A management philosophy that marketers must satisfy customers needs in ways that also benefit society and also deliver profit to the firm Sustainability A product design focus that seeks to create products that meet present consumer needs without compromising the ability of future generations to meet their needs Cradle to cradle this term describes the ideal condition where a product is made from natural materials and is fully reusable recyclable or biodegradable so the net depletion of resources a company needs to make it is zero Green marketing A marketing strategy that supports environmental stewardship thus creating a differential benefit in the minds of consumer Return On Investment ROI The direct financial impact of a firm s expenditure of a resource such as time or money Popular culture The music movies sports books celebrities and other forms of entertainment consumed by the mass market Myths Stories containing symbolic elements that express the shared emotions and ideals of a culture Consumer goods The goods individual consumes purchase for personal or family use Services Intangible products that are exchanged directly between the producer and the consumer Business