Chapter 1 Introduction to Marketing Get information back from consumers how to fulfill consumer s needs Why study marketing Important to business Important to society Good career opportunities Marketing affects you every day We are all consumers What is marketing The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return THE MARKETING PROCESS 1 Understand the marketplace and customer needs and wants How Marketing Research Focus groups Depth interviews Observational research Test markets Columbus is a test market Microcosm of the nation Local tastes seen as generalizable Consumers have jobs and money to spend Lots of young consumers Advertising is affordable Media market is contained Goal of Marketing Research Needs States of deprivation Physical food clothing warmth safety Social belonging and affection Individual knowledge and self expression Wants Form that needs take as they are shaped by culture and individual personality Demands Wants backed by buying power Market Offerings Some combo of products services information or experiences offered t a market to satisfy a need or want Beware of Marketing Myopia Focusing only on existing wants and losing sight of underlying consumer needs People don t buy a drill because they want a drill they want the hole that the drill can make Example Blockbuster 2 Design a customer driven marketing strategy 3 Construct an integrated marketing program that delivers superior value How do we do this Marketing Management the art and science of choosing target markets and building profitable relationships with them First select WHO they want to serve Market segmentation divide market into segments of customers Target Marketing selecting which markets it will go after Then decide HOW it will differentiate and position itself in the marketplace Choosing a Value Proposition the set of benefits or values or values it promises to deliver to its customers so satisfy their needs Marketing Management Orientations 5 Concepts alternative that companies use Concept Idea that customers will Organization should The PRODUCTION Concept The PRODUCT Concept The SELLING Concept The MARKETING Concept Favor products that are available and highly affordable Favor products offering the most quality performance and features Not buy enough of the firm s product unless the firm undertakes a large scale selling and promotional effort Want their needs and wants satisfied The SOCIETAL MARKETING Concept Be better off if marketing is focused on fulfilling long term wants rather than short term Focus on improving production and distribution efficiency Devote energy to making continuous product improvements Focus on selling what the company makes Focus on achieving organizational goals depending on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors Make marketing decisions by considering customers wants the company s requirements consumer s long term interests and society s long term interest Use the Marketing Mix set of marketing tools the firm uses to implement its marketing strategy to develop an Integrated Marketing Communications Program IMC Marketing mix tools are THE FOUR P s OF MARKETING Product Price Place Promotion STP Segmenting targeting positioning Create product that satisfies a need in the market How much How will it be available Distribution Communicate with target market to persuade them of its merits 4 Build profitable relationships and create customer delight Customer Relationship Management The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction Customer Perceived Value The customer s evaluation of the difference between all the benefits and all the costs of marketing offer relative to those of competing offers Customer Satisfaction The extent to which a product s perceived performance matches a buyer s expectations Aspire to DELIGHT your customers not just to satisfy them Customer Satisfaction and Delight Expectancy Disconfirmation Model CS CP CE CP Customer Perceptions of Actual Quality Experience CE Customer Expectations of Quality Experience Dissatisfaction Satisfaction Delight CP CE CP CE CP CE Don t over promise and under deliver Should you under promise and over deliver Maybe to an extent Customer managed Relationships Marketing relationships in which customers empowered by today s new digital technologies interact with companies and each other to shape their relationships with brands Customer generated Marketing Brand exchanges created by consumers themselves both invited and uninvited by which consumers are playing an increasing role in shaping their own brand experiences and those of other consumers Partner Relationship Management Working closely with partners in other company departments and outside the company to jointly bring greater value to customers Customer Lifetime Value the value of the entire stream of purchases a customer makes over a lifetime of patronage Share of Customer The portion of the customer s purchasing that a company gets in its product categories Customer Equity The total combined customer lifetime values of all of the company s customers Ultimate Goal of customer relationship management produce high customer equity
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