Chapter 1 09 15 2015 Marketing is Misunderstood What is Marketing Why is marketing misunderstood Segment 1 What is Marketing A marketers view of marketing is o The aim of marketing is to know and understand customers so well the product or service fits them and sells itself Peter Drucker o If you nail positioning and targeting the rest falls if you aim your product at the right group of into place Philip Kotler cusomters and that product speaks to what they want and need the rest is easy Brady s View of Marketing o Marketing is the answer to the questions of why you buy a product o Marketing is the foundation of every business o 4 P s Product Price Place Distribution Promotion tells consumers they need them None of those things would happen without And nothing else would exist without marketing marketing Goals of Marketing The first goal of marketing is to identify unmet consumer needs and then develop products that fill those needs needs o Product development to satisfy unmet consumer o Ex Henry Ford saw a need so he made the first car So marketers identify unmet consumer needs and then develop products that fill those needs o This explains the role of marketing research o Think about the iPhone Kindle and Wii vs Advertising and Sales Many people think this is what marketing is but it s not Sleezy salesmen aren t needed if marketing is done right Advertising is needed when marketing is not done well 2 Advertising and selling are parts of marketing but referring to marketing in this way misses the true essence How is marketing related to advertising and sales 2 primary purposes o To let consumers know that they need a product easy to do If the product is good this should be relatively How hard was it for Henry Ford Very easy o To let consumers know they need our product This is where advertising and sales are particularly good Learn about Marketing Products are aimed at certain groups of people and speak to wants and needs What makes Starbucks a good product o Product Benefits Taste o Product Benefits Caffeine 3 o Product Benefits Great Service in a great setting o Place it s everywhere o Price The right is not always the low Quality Exclusivity Maximizes profit for the firm o So It s a Good Product Product Development is a core marketing function o Firms don t get very far without good products to sell o This warrants repeating There would be no firms without marketing Good Products o The first goal of marketing is to identify unmet consumer needs and then develop products that fill those needs o Identifying the price that maximizes revenue is also part of marketing Explains how marketing economics and finance are related o Getting Coke to where you can buy it is also part of marketing 4 Channels Distribution Logistics M W R C Distribution is a huge part of what marketing does Great Marketers o 1 Develop products that people want or need o 2 Price them at a level that maximizes profits o 3 Distribute them to where consumers are Great Marketing o game changer products iPod kindle Ipad Spanx o Game changer pricing distribution Red box resulting in blockbuster closing Great Marketing Advertising o If marketers hit their mark with the product price and distribution there s little need to advertise Examples of companies that do little if any advertising 5 Asics four rivers Krispy Kreme Marketing Results Apple v Dell o Apple stock price over the past 10 years gone up o Dell stock price over 5 years has declined Segment 2 Why is marketing misunderstood Misperceptions of Marketing o People understand marketing only through the lens of what they can see everyday like advertisements o Iceberg example the tip of the iceberg is what most people think of marketing promotion but below the tip is what marketing actually is COMPLEX Strategic Quantitative Multi faceted 6 and much more So what s wrong o The problem originates from marketers themselves No not serious marketers who work on products and positioning at corporations Marketing must invent complete products and drive them to commanding positions in defensible market segments o I m talking about folks who call themselves marketers but in fact are enterprising opportunists hawking the latest fad or hyping their own brand of sensationalist BS And by definition fads are born they re hyped and then they die Marketers who create trendy overhyped fads are the people who give marketing a bad name Ruining the art of marketing by selling things that people don t want to buy o Real marketing is how Apple Cisco and Texas Instruments make great products and position them to be leaders in ridiculously crowded and hypercompetitive global markets Real marketing is what Bill Davidow calls the Strategic Principle in his seminal book Marketing High Technology Marketing must invent complete products and drive them to commanding positions in defensible market segments Strategic part beneath the waves The other side of marketing 7 o So what about the visible side of marketing Why is There are many slides 38 50 of examples be it needed and so prominent aware of them know the companies and examples 1 Time Reality so as time goes by and a company like Apple makes hundreds of millions of dollars from products like the iPhone and iPad what happens Going to have people who imitate these companies and products b c other companies imitate success and then companies need advertising Over time the market reacts with competitor products that have similar benefits Chevy offered color choices Now the dominant firm has to convince customers its product is superior 2 Advertising branding Are VERY powerful aspirin vs Bayer no difference between the two but because of branding choose aspirin would you buy OK soda instead of Coke No because you don t believe in the other brand b c believe in Coke because of branding 8 3 Advertising branding It works really well So what s going on here Consumers don t buy unfamiliar products Even if the unfamiliar one is objectively better Know what you re going to get whether you actually like it or not Good 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 Take Aways 1 The primary goal of marketing is to develop good PRODUCTS that consumers want and need They also have to be priced appropriately and delivered to where consumers are 2 If firms do marketing correctly they don
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