BUS M 300 1nd Edition Lecture 1 Outline of Current Lecture I What is Marketing II How Marketing Discovers and Satisfies Consumer Needs III The Marketing Program How Customer Relationships are Built IV How Marketing Became so Important I What is Marketing Marketing activity for creating and delivering offerings that benefit the organization its stakeholders and society Market people with both the desire and ability to buy a specific offering Anything can be marketed 1 Services 2 Places 3 Ideas 4 Organizations 5 Events 6 People Fraud and promotion are NOT marketing Exchange the trade of things of value between a buyer and a seller so that each is better off Marketing seeks two things 1 Discover needs and wants of prospective customers 2 Satisfy them For marketing to occur 1 Two or more parties with unsatisfied needs o Bookstore selling People magazine and a consumer s desire to read about celebrities 2 Desire and ability to satisfy these needs o Consumer has the money bookstore has desire to sell and has magazine in stock 3 A way for the parties to communicate o Bookstore sends sample in mail consumer sees magazine in bookstore 4 Something to exchange o Both bookstore and consumer has gained and lost something in the transaction General marketing model 1 Marketing research trying to determine opportunities 2 Customer needs 3 The offering product place price promotion used as levers for success 4 Retaining customers cheaper to keep 5 Attract new customers 5 times more expensive 6 Financial outcomes sales market share profit stock price cash flow II How Marketing Discovers and Satisfies Consumer Needs Step one Discovering consumer needs o Sometimes consumers don t know what they want or need Step two Meeting consumer needs with new products o Focus on what customer benefit is o Learn from the past Showstoppers factors that might doom the product Need occurs when a person feels deprived of basic necessities Want a need that is shaped by a person s knowledge culture and personality Target market one or more specific groups of potential consumers toward which an organization directs its marketing program Marketing mix factors 1 Product good service idea 2 Price what is exchanged for product 3 Promotion means of communication 4 Place getting product to consumer Marketing mix controllable factors that the marketing manager can use to solve a marketing problem Controllable factors under control of the marketing department in an organization Customer value proposition a cluster of benefits that an organization promises customers to satisfy their needs o Example Walmart and their slogan Every day low prices Environmental forces uncontrollable social economic technological competitive and regulatory forces that affect the result of a marketing decision III The Marketing Program How Customer Relationships are Built Customer value buyer s benefits including quality convenience on time delivery and before and after sale price at a specific price Meaningful customer relationships are made by creating connections with customers through careful coordination of the product its price the way its promoted and how its placed Relationship marketing linking the organization to tis individual customers employees suppliers and other partners for their mutual long term benefit Marketing program plan that integrates the marketing mix to produce a good service or idea to prospective buyers David Windorski creator of post it flag pens market was officer workers post it flag highlighter market was college students IV How Marketing Became so Important Production era early years 1920 s goods were scarce buyers accepted almost any goods that were available Sales era 1920 s 1960 s manufactures found they could produce more goods than buyers could consume competition grew Marketing concept era idea that organization should strive to satisfy the needs of consumers while also trying to achieve the organization s goals Customer relationship era firms seek continuously to satisfy the high expectations of customers Marketing responsible for customer value creation Marketing performs three business functions 1 Product development management PDM design and implantation of new products or services and the management of existing products 2 Customer relationship management CRM process of identifying prospective buyers understanding them developing favorable long term perceptions of organization 3 Supply chain management CSM the selection and management of suppliers the distribution channel and channel pricing Product orientation marketing products not selling them gets product to market in most cost effective manner possible Selling concept movement of products generates profits for the fimr by moving products and services Market orientation focusing organizational efforts to collect and use information about customer needs to create customer value generates profits for the firm by creating long term relationships with customers Customer experience internal response that customers have to all aspects of an organization and its offering Direct contacts are customer s contacts with the seller through buying using and obtaining service Indirect contacts are unplanned touches with the company through word of mouth comments form other customers reviewers and new reports Social responsibility idea that individuals and organizations are accountable to a larger society Societal marketing concept view that organizations should satisfy the needs of consumers in a way that also provides for society s well being Goods are physical object Services are intangible items like an airline trip or art museums Ideas are thoughts about concepts or actions Product good service or idea consisting of a bundle of tangible and imaginable attributes that satisfy consumer s needs and is received in exchange for money or something else of value Ideas are most marketed by nonprofit organizations or the government Ultimate consumers people who use the products and services purchased for a household Organizational buyers manufactures wholesalers retailers and government agencies that buy products and services for their own use or for resale Groups that benefit from effective marketing 1 Consumers who buy 2 Organizations that sell 3 Society as a whole o Enhances competition o Improves quality of products and services o Lowers prices Utility benefits or customer value received by users of the product Four different types of utilities 1 Form utility