BUSI 406: Marketing Lecture 1 Outline of Last Lecture N/AOutline of Current Lecture I. This Lecture:A. Definition of MarketingB. Marketers’ and Marketing’s GoalC. Customer Satisfaction/ Consumer orientationD. Importance of MarketingCurrent LectureBasic Business Concepts:3 C’s Customers SWOT Strengths 4 P’s ProductCompetitors Weaknesses PriceCompany Opportunities PromotionThreats PlaceCourse Objectives:o Key marketing conceptso The role of marketing in society and the firmo Factors that influence marketing decision makingo Learning the “language of marketing”What is Marketing, really?- First and foremost: Marketing is more than just selling!- New Definition of Marketing- Marketing is 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- Book Definition- the performance of activities that seek to accomplish an organization’s objectives by anticipating customer or client need and directing a flow or need-satisfying goods and services from producer to customer or clientConsumers’ Needs, Wants and DemandsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Where should marketing start?Good marketers do not sell products. Instead, they identify the needs, wants and demands of customers and work to satisfy them—then surpass just satisfying. Needs: “States of felt depression” which don’t change even if how we choose to meetthem does- ex. hunger, thirst, shelter How do we influence needs?- ex. Snickers. Snickers is a great example, because while chocolate is clearly a want, the company as marketed it as a solution to a need. How?“Hungry? Grab a Snickers.” Hunger is a need, and by posing the question and associating it with something specific, consumers see the value is using this product to satisfy a need.  Wants: Needs shaped by experiences and personality which are similar to our preferences among the ways which we satisfy our needs Demands: Wants backed by purchasing powerMarketings’ Goalto provide goods and services that exceed customer expectations and create customer satisfaction, and to be rewarded financially for doing soHow to reach this goal?  By creating value for the customers by satisfying their needs and wants Marketers want customers to demand their products!b. Real World Example:  Coca-Cola mission: to be within an arm’s reach in all thirst-occasions Coca-Cola as a company is very successful. They are all over world. Why? Because they have created value for their customers by satisfying a need—thirst—and then exceeding expectationsWhy is Customer Satisfaction Important?1. Satisfied customers are loyal—i.e. they will keep buying over the course of a lifetime sometimesa. Customers migrate to competitors at a rate of 5%2. Satisfied Customers refer company to othersa. Customers tell an average of 3 others about their good experiences3. Satisfied Customers are less price sensitive—i.e. they will be willing to pay moreBottomline: Making customers satisfied is critical is retaining them. Why is not satisfying bad?1. Dissatisfied customers stop buying a. Dissatisfied customers migrate at a rate of 40%2. Dissatisfied customers often DON’T complain to the firm a. 96% never report why they are dissatisfied—companies can’t fix a problem they can’t identify!3. Dissatisfied customers DO complain to others a. tell on average 11 others about their problemsLosing a CustomerExamples that illustrate the consequences of losing one customer:- Let’s Say…o Honda does not sell 15 vehicles. If each vehicle is $20,000, then the company just lost $300,000.o McDonalds loses what would have been a 25 year customer. If each visit would have been $10 spent at 30 visits per year over the course of 25 years, then the company just lost $7,500.o Gap loses what would have been a 20 year customer. If that customer would have spent $500 per year over the course of 20 years, then the company just lost $10,000.Bottomline: Every customer really does count.Marketing MythOf the following two quotes, one is correct and one is not. 1. If a [person]…makes a better mousetrap…the world will beat a path to [his or her] door.”- Ralph Waldo Emerson FALSE2. Our goal is not just to satisfy our customers. Our goal is to delight them.”- Japanese automaker TRUEImportance of Marketing To the Average Joe, one must notice what you guys, the sores you chose and the radio / tv shows are all enjoyed are all created by marketing. IT’S IMPORTANT FOR EVERYONE:  Marketing is a part of your life (resume, job interviews, getting your ideas across in job, etc.) You (as a consumer) pay for the marketing activities – so understand what is going on. MARKETING IS IMPORTANT TO YOUR JOB: Career opportunities – marketing jobs is often a good route to the top (See Appendix C in Bill’s book) Knowing about marketing will help you interact with the marketing people Marketing belongs in all organizations, non-profit as well as for profit or institutions, politicians, etc. (many of the same techniques are used) MARKETING AFFECTS ECONOMIC GROWTH: Marketing affects the economy – if marketing is done well, consumers will be offered that meet needs/wants of consumers. Marketing gives consumers a choice, and marketing (through research and development (ideas)) allow consumers to purchase better products (as defined by these consumers). Marketing is a process centered around the consumer. Must understand consumer’s needs, wants and demands Goal is to exceed customer expectations and create customer satisfaction If we don’t satisfy our customers, the financial impact is HUGE. Everyone “does”