MK1 9 4 2013 What is Marketing Marketing the activity set of institutions and processes for creating capturing communicating delivering and exchanging offerings that have value for customers clients partners and society at large Marketing plan specifies the marketing activities for a specific period of time Marketing is about Satisfying Customer Needs and Wants Marketers can t serve everyone they need to narrow their market to people with an interest in the product and an ability to buy it Marketing entails and exchange Marketing is about an exchange the trade of things of value between the buyer and the seller so that each is better off as a result Sellers provide products or services then communicate and facilitate the delivery of their offering to consumers o Buyers complete the exchange by giving money and information to the seller Marketing Requires Product Price Place and Promotion Decisions Marketing Mix 4 Ps marketing divided into these four interrelated decisions and consequent actions o Product price place and promotion Product Creating Value o Fundamental purpose of marketing is to create value by developing a variety of offerings including goods services and ideas to satisfy customer needs o Goods items that you can physically touch o Services intangible customer benefits that are produced by people or machines and cannot be separated from the producer o Ideas concepts opinions and philosophies Price Capturing Value o Price doesn t have to be monetary o Price is everything the buyer gives up money time energy in exchange for the product o Key is figuring out how much customers are willing to pay so that they are satisfied with the purchase and the seller achieves a reasonable profit Place Delivering the Value Proposition o All the activities necessary to get the product to the right customer when the customer wants it o Retailing and marketing channel management o Marketing channel management supply chain management the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers manufacturers warehouses stores and other firms involved in the transaction into a seamless value chain in which merchandise is produced and distributed in the right quantities to the right locations and at the right time while minimizing systemwide costs and satisfying the service levels required by the customers Promotion Communicating the Value Proposition o Communication by a marketer that informs persuades and reminds potential buyers about a product or service to influence their opinions and elicit a response o Can enhance a product s or service s value Marketing can be performed by both individuals and organizations B2C business to consumer marketing the process by which businesses sell to consumers B2B business to business marketing the process of selling merchandise or services from one business to another C2C consumer to consumer marketing the process when consumers sell to other consumers eBay Marketing Impacts Various Stakeholders Marketing impacts several stakeholders supply chain society at large Marketing helps create value Production oriented era o Turn of 20th century believed that good product would sell itself o Concerned with product innovation Sales oriented era o 1920 1950 o Often times manufacturers had capacity to produce more than customers wanted o Became sales oriented personal selling and advertising Market oriented era o Suburban families that could make choices o Manufacturers and retailers focused on what consumers wanted and needed before they designed made or attempted to sell their products and services Value Based marketing era o Transcended a production or selling orientation and attempt to discover and satisfy their customers needs and wants o Would have to give customer greater value than competitors did o Value the relationship of benefits to costs o Value cocreation customers can act as collaborators to create the product or service How do marketing firms become more value driven Sharing information various departments Balancing Benefits with costs o Share information about customers and competitors and integrate it across the firm s o Measure the benefits that customers perceive against the cost of their offerings o Use available customer data to find opportunities to better satisfy their customers needs keep costs down and develop long term loyalties Building relationships with customers o Relational orientation think about customers in terms of relationships rather than transactions Think about lifetime profitability of the relationship not how much money is made during each transaction o Customer relationship management CRM a business philosophy and set of strategies programs and systems that focus on identifying and building loyalty among the firms most valued customers Systematically collect information about their customers needs and then use that information to target their best customers with the products services and special promotions that appear most important to them Connection with Customers using social media and mobile media Marketers steadily embracing social and mobile media to allow them to connect better with their customers and thereby serve their needs more effectively of US companies use social media tools for marketing purposes However only 10 of population uses Facebook Online travel agencies 46 of online hotel bookings Why is Marketing Important Marketing crosses all areas of a firm or organization Marketing Expands Firms Global Presence Products are made all around the world and are available all around the world Marketing is pervasive across marketing channel members Supply chain marketing channel a group of firms that make and deliver a given set of goods and services Effectively managing supply chain relationships has impact on a firm s ability to satisfy the consumer which results in increased profitability for all parties Marketing Enriches Society Many companies are developing greener products making healthier food options and safer products and improving their supply chains to reduce carbon footprint This can develop trust with consumers Marketing can be entrepreneurial Marketing is center of the successes of new ventures initiated by entrepreneurs people who organize operate and assume the risk of a business venture o Launch ventures that aim to satisfy unfilled needs