Marketing Chp 1

• Marketing involves business practices for planning and presenting an organization's products or services to build effective consumer relationships.
• The marketing mix consists of the 4 P's.
• Good marketing is not random.

Providing Value

• Involves building and maintaining a loyal customer base.
• Requires making a product that satisfies a variety of consumer demands.
• Consumer positioning is important for establishing value and protecting the brand.

Core Aspects of Marketing

• Occurs across settings and helps create value.
• Satisfies customer needs and wants through exchanges.
• Requires decisions related to the 4Ps (Product, Price, Place, Promotion) and can be done by individuals and organizations.

Satisfying Customer Needs & Wants

• A need is a basic necessity, while a want is how to fulfill that need, referred to as a market segment.
• Target markets are the customer segments a firm is interested in selling to.

Marketing Exchange

• The exchange can occur between any 2 parties.
• It's not simply a buyer and seller exchanging money for a good or service.
• Exchanges can also involve information for convenience.

Marketing Mix Decisions (The 4 P's)

• Product (creating value): includes product/service, brand, size, quality, features, packaging, warranty
• Price (transacting value): includes list price, discounts, allowances, costs, payment period, credit terms.
• Place (delivering value): includes marketing channels, distribution intensity, and locations such as online retailers, supply chains, and logistics.
• Promotion (communicating value): includes advertising, sales promotion, personal selling, public relations, direct marketing, and electronic media.

Marketing Mix: Product (Creating Value)

• Includes goods, services, and ideas.
• All watches tell time, but some brands, like Rolex, are marketed as status symbols

Promotion of Ideas

• Creates value by including thoughts, opinions, philosophies, and intellectual concepts that can be marketed.

Consumer Behavior: Bottled Water

• Bottled water is more expensive than tap water, with consumers paying 120 to 7500 times as much per gallon.
• Convenience, perceived safety (less minerals, luxury/cool feeling) drive the high cost.
• People often prefer tap water in blind taste tests with no prior opinions.

Marketing Mix: Price (Transacting Value)

• Price encompasses everything the buyer gives up in exchange for a product, including money, time, and energy.

Marketing Mix: Place (Delivering Value)

• Includes all activities necessary to get a product to the right customer at the right time.
• Supply chain management examines these activities.
• The marketing mix considers where to find a product in the store.

Place (Marketing Channels Distribution Strategy)

• Focuses on how a company gets the product to the customer when and where they want it.

Marketing Mix: Promotion (Communicating Value)

• Includes communication activities to inform, persuade, and remind potential buyers.
• Promotion informs, persuades, and reminds potential buyers about a product or service.

Individuals & Organizations in Marketing

• Marketing can be performed by both individuals and organizations.
• B2B (Business to Business): Wholesaling, such as Dell Canada to Best Buy Canada.
• B2C (Business to Consumer): Retailing, such as Best Buy Canada to consumers.
• C2C (Consumer to Consumer): Transactions via swap meets, eBay, yard sales, etc., where consumers sell to each other.

Impact of Marketing

• Marketing impacts many stakeholders.
• Includes both profit and non-profit entities.
• Has an impact on developing economies and entire industries.

Orientations of Marketing

• Product Orientation: Focus on developing and distributing innovative products with little concern for customer needs, e.g., Ford Model T.
• Sales Orientation: Views marketing as a selling function, focusing more on selling products than understanding consumer wants.
• Market Orientation: Focuses on understanding what consumers want and need before designing or selling products.
• Value-based Orientation: Firms focus on the triple bottom line: people (consumer needs & wants), profits (long-term profitable relationships), and planet (social & environmental responsibility).

Becoming Value-Driven

• Requires firms to share information.
• Must balance benefits and costs.
• Build relationships with customers.
• Use technology to connect with customers.

Sharing Information

• Firms like Zara collect purchase information and research customer trends to forecast sales and coordinate deliveries.
• Some firms use sophisticated IT for customer tracking and supply chain functions
• A focus on the supply chain can result in growth in store availability, and quick product movement

Building Customer Relationships - CLV (Customer Lifetime Value)

• Takes a long-term view of customer relationships.
• Uses data to assist in maintaining such relationships, called CRM (Customer Relationship Management). Embraces social media to better connect with customers

Connecting With Customers Using Social Media

• Embraces social media for better connection with customers
• Most North American companies use social media for marketing.
• Consumers are driving brand and store interactions via social media

Balancing Benefits with Costs

• Emphasis on understanding and focusing on key benefits.
• Firms should eliminate costs of fewer strategic benefits

Marketing's Importance

• Expands global presence and can be entrepreneurial.
• Enriches society and makes life easier.
• Is persuasive across the supply chain.
• Enables goods to be available from multiple countries, so companies understand customer needs in different regions and segments

Persuasive Across Channels

• Every step involves creating value for customers and the end user.
• All members focus on what the end user/customer values

Marketing Enriches Society

• Canadian companies with a strong social orientation show consumers they can be trusted.

Marketing Can Be Entrepreneurial

• Marketing is important to success, especially for new ventures.

Test your knowledge of basic marketing principles. Questions cover the marketing mix, customer needs vs. wants, value creation and marketing orientations. Understand core marketing concepts.