Chapter 1 Marketing Overview 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 is about satisfying customer needs and wants for those who can afford it Marketing entails exchange the trade of things of value between the buyer and the seller so that each is better off as a result Marketing requires product price place and promotion Marketing Plan specifies the marketing activities for a specific period of time Exchange the trade of things of value between the buyer and the seller Marketing Mix or Four Ps product price place and promotion Product creates value Price captures value Place delivers the value proposition Promotion communicates the value proposition Goods items that one can physically touch Services intangible customer benefits Ideas also can be marketed such as opinions programs and philosophies Business to Consumer Marketing B2C process by which businesses sell to consumers Business to Business marketing B2B process by which businesses sell to businesses Consumer to Consumer marketing C2C process by which consumers sell to consumers Employment Marketing involves undertaking marketing research to understand what potential employees are seeking as well as what they think about the firm developing a value proposition and an employment brand image communicating that brand image to potential employees and then fulfilling the brand promise by ensuring the employee experience matches that which was advertised Eras of Marketing Production Orientated Era Sales Orientated Era Market Orientated Era Value Based Marketing Era Value reflects the relationship of benefits to costs or what you get for what you give Value Co creation customers can act as collaborators to create the product or service Transactional Orientation regards the buyer seller relationship as a series of individual transactions so anything that happened before or after any transaction is of little importance Relational Orientation is based on the philosophy that buyers and sellers should develop a long term relationship Customer Relationship Management CRM a business philosophy and set of strategies programs and systems that focus on identifying and building loyalty among the firm s most valued customers Supply Chain Group of firms that make and deliver a given set of goods and services Entrepreneurs people who organize operate and assume the risk of a new business venture Importance of Marketing Marketing can be entrepreneurial Marketing enriches society Marketing is pervasive across the supply chain Chapter 2 Developing Marketing Strategies and a Marketing Plan Market strategy means by which a marketing goal is ad to be achieved identifies 1 A firm s target markets 2 A related marketing mix four Ps and 3 The bases on which the firm plans to build a sustainable competitive advantage Marketing tactics detailed day to day operational decisions essential to the overall success of marketing strategies Sustainable competitive advantage an advantage over the competition that is not easily copied and thus can be maintained over a long period of time Customer excellence achieved when a firm develops value based strategies for retaining loyal customers and provides outstanding customer service Operational excellence achieved through efficient operations excellent supply chain management strong relationships with their suppliers and excellent human resources management productive employees Product excellence occurs by providing products with high perceived value and effective branding and positioning Locational Excellence having a good physical location Marketing Plan a written document composed of an analysis of the current marketing situation opportunities and threats for the firm marketing objectives and strategy specified in terms of the four Ps action programs and projected income Planning phase define the mission and or vision of the business Implementation phase identify and evaluate different opportunities by engaging in a process known as segmentation targeting positioning Control phase entails evaluating the performance of the marketing strategy using marketing metrics and taking any necessary corrective actions Mission statement a broad description of a firm s objectives and the scope of activities it plans to undertake Situation analysis using a SWOT analysis that assesses both the internal environment with regard to its strengths and weaknesses and the external environment in terms of its opportunities and threats STP segmentation targeting positioning dividing the marketplace into subgroups or segments determining which of those segment it should pursue or target and finally decides how it should position its products and services to best meet the needs of those chosen targets Market segment group of consumers who respond similarly to a firm s marketing efforts Market segmentation the process of dividing the market into groups of customers with different needs wants or characteristics who therefore might appreciate products or services geared especially for them Target marketing targeting evaluating each segment s attractiveness and deciding which to pursue Market positioning involves the process of defining the marketing mix variables so that target customers have a clear distinctive desirable understanding of what the product does Metric a measuring system that quantifies a trend dynamic or characteristic Strategic business unit product line division of the firm that can be managed and operated somewhat independently from other divisions and may have a different mission or objective Market share percentage of a market accounted for by a specific entity and is used to establish the product s strength in a particular market Relative market share provides managers with a product s relative strength compared to that of the largest firm in the industry Market growth rate annual rate of growth of the specific market in which the product competes Market penetration strategy employs the existing marketing mix and focuses the firm s efforts on existing customers Market development strategy employs the existing marketing offering to reach new market segments Product development strategy offers a new product or service to a firm s current target market Diversification strategy introduces a new product or service to a market segment that currently is not