BUSI 406 PRINCIPLES OF MARKETING: MARKETING’S VALUE TO CONSUMERS, FIRMS, AND SOCIETY CHAPTER 1Today’s AgendaLet’s ReviewToday’s GoalsWhat is Marketing About? The Bicycle Example…Firms Should…Production vs. MarketingWhat is Marketing?All Economies Need Macro Marketing SystemsCentral Markets Help ExchangeOnline Market ExampleHow Decisions are Made in an Economic System (see The Economist January 2012: SOEs and State Capital)Over Time, Marketing’s Role Has ChangedWhat is the Purpose of Business and How Does the Marketing Concept contribute to that purpose?How do firms create Customer Satisfaction? (see also http://www.edisonawards.com/winners2014.php https://www.yahoo.com/tech/the-best-designed-products-of-2014-as-chosen-by-design-90557934209.html )Putting It All TogetherThe Marketing Concept, Social Responsibility & Marketing EthicsDidow: Social Responsibility and Beyond Sustainability --- Sustainability 2.0 -- Being Green is Not Good EnoughToday’s Take-AwaysFor Next Class…BUSI 406PRINCIPLES OF MARKETING:MARKETING’S VALUE TO CONSUMERS, FIRMS, AND SOCIETYCHAPTER 1Today’s AgendaAny questions about the syllabus or the class?Let’s ReviewDiscuss Chapter 1Let’s ReviewWhat is marketing?Must understand consumer’s needs, wants, demandsExceeding customer expectations and maximizing Customer SatisfactionWhy is it important?Impact of losing customersToday’s GoalsWhat is “Marketing” & why it is importantMicro-marketing vs. macro-marketingMarketing and economic developmentMarketing concept – Customer value & satisfactionWhat is Marketing About? The Bicycle Example…All Those All Those Bicycles!Bicycles! More than Selling or More than Selling or AdvertisingAdvertisingFirms Should…Analyze NeedsAnalyze NeedsAnalyze NeedsAnalyze NeedsPredict WantsPredict WantsPredict WantsPredict WantsEstimate DemandEstimate DemandEstimate DemandEstimate DemandPredict WhenPredict WhenPredict WhenPredict WhenDetermine WhereDetermine WhereDetermine WhereDetermine WhereEstimate PriceEstimate PriceEstimate PriceEstimate PriceDecide PromotionDecide PromotionDecide PromotionDecide PromotionEstimate CompetitionEstimate CompetitionEstimate CompetitionEstimate CompetitionProvide ServiceProvide ServiceProduction vs. MarketingCreates Customer SatisfactionCreates Customer SatisfactionMarketingMakes sure right goods & services are producedProduction• Making Goods• Performing ServicesWhat is Marketing? andMacro ViewMacro View•Social process•Matches supply with demandMicro ViewMicro View•Set of activities•Performed by individual organizationsAll Economies Need Macro Marketing SystemsA Central MarketPure Subsistence EconomyMarketing involves exchange!No exchange, no marketing.Central Markets Help ExchangeTen exchanges required without central marketPotsBasketsKnivesShovelsHatsOnly five exchanges are required when a middleman (intermediary) is used.CentralMarketMiddlemanOnline Market Example“Founded in September 1995, eBay is The World's Online Marketplace for the sale of goods and servicesby a diverse community of individuals and businesses. Today, the eBay community includes tens of millions of registered members from around the world. People spend more time on eBay than any other online site, making it the most popular shopping destination on the Internet.” Our Mission “eBay's mission is to provide a global trading platform where practically anyone can trade practically anything.”How Decisions are Made in an Economic System (see The Economist January 2012: SOEs and State Capital) ORCommandEconomyCommandEconomy•Government officials decide•May work well if:•Simple economy•Little Variety•Adverse ConditionsMarket-Directed EconomyMarket-Directed Economy•Adjusts itself•Price is value measure•Freedom of choice•Government’s role limitedOver Time, Marketing’s Role Has ChangedSell SurplusSell SurplusFocus:Simple Trade EraSimple Trade EraIncrease SupplyIncrease SupplySell SurplusSell SurplusSimple Trade EraSimple Trade EraFocus:Production EraProduction EraFocus:Increase SupplyIncrease SupplyBeat CompetitionBeat CompetitionProduction EraProduction EraFocus:Sales EraSales EraFocus:Sales EraSales EraBeat CompetitionBeat CompetitionCoordinate and ControlCoordinate and ControlFocus:Marketing Department EraMarketing Department EraFocus:Marketing Department EraMarketing Department EraCoordinate and ControlCoordinate and ControlMarketing Company EraMarketing Company EraLong-RunCustomer SatisfactionLong-RunCustomer SatisfactionFocus:Focus:What is the Purpose of Business and How Does the Marketing Concept contribute to that purpose?Profit (or another measure of long-term success) asan objectiveTotal company effortCustomer satisfactionThe MarketingConceptHow do firms create Customer Satisfaction?(see also http://www.edisonawards.com/winners2014.php https://www.yahoo.com/tech/the-best-designed-products-of-2014-as-chosen-by-design-90557934209.html )Putting It All TogetherTotal Company Effort to Satisfy CustomersTotal Company Effort to Satisfy CustomersTotal Company Effort to Satisfy CustomersTotal Company Effort to Satisfy CustomersBuild Profitable Customer RelationshipsBuild Profitable Customer RelationshipsAttractCustomersAttractCustomersOffer Superior Customer ValueOffer Superior Customer ValueSatisfyCustomersSatisfyCustomersRetain CustomersRetain CustomersIncrease Sales to CustomersIncrease Sales to CustomersThe Marketing Concept, Social Responsibility & Marketing EthicsSocial ResponsibilitySocial ResponsibilityShould All Consumer Needs Be Satisfied?Should All Consumer Needs Be Satisfied?What if Profits Suffer?What if Profits Suffer?Micro - Micro - MacroMacroDilemmaDilemmaThe Marketing Concept Guides EthicsThe Marketing Concept Guides EthicsGroup Needs Individual NeedsDo All Marketers Act Responsibly?Do All Marketers Act Responsibly?Didow: Social Responsibility and Beyond Sustainability --- Sustainability 2.0 -- Being Green is Not Good EnoughFirst Generation Sustainability Objectives:•Neutral•Zero impact•RenewableSecond Generation Sustainability Objectives:•Positive impact•Recycle up the value chainToday’s Take-AwaysMarketing is important to economic growth. Marketing bridges the gap between producers and consumers.Satisfying & delighting customers as well as creating value is critical for marketing success.The power of marketing is significant – for good or for bad…For Next Class…Read Chapter