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. Places3. Ideas4. Organizations5. Events6. 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 customers2. 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 bookstore4. Something to exchangeo Both bookstore and consumer has gained and lost something in the transaction - General marketing model1. Marketing research: trying to determine opportunities 2. Customer needs3. 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 needso Sometimes consumers don’t know what they want or need - Step two: Meeting consumer needs with new products o Focus on what customer benefit iso 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 factors1. Product: good, service, idea 2. Price: what is exchanged for product3. Promotion: means of communication4. 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 needso 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 prospectivebuyers, 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 marketin 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 bycreating 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 orsomething 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