Lecture 1

• Marketing involves the art and science of satisfying customers

Marketing Defined

• Functions and processes are designed to create, communicate, and deliver value to the customer
• Creating value means managing customer relationships to benefit the organization and its stakeholders
• It starts with excellent products

Activities Associated with Marketing

• Communicating information about goods and services to prospective buyers
• Making products available when and where customers want them
• Pricing of merchandise and services
• Providing after-sales services and follow-up

Utility

• Utility refers to the want-satisfying power of a good or service
• Consumers seek the satisfaction of needs
• Marketing and production create utility
• A great product needs to be available to provide utility

The Five Eras of Marketing

• Production Era: prior to 1920s, the attitude was “a good product will sell itself”
• Sales Era: prior to 1950s, creative advertising and selling will overcome consumer resistance and persuade them to buy
• Marketing Era: since the 1950s, find a need and fill it
• Relationship Era: since the 1990s, long-term relationships with customers and partners lead to success
• Social Era: since 2000s, connecting to consumers via internet and social media sites

The Production Era

• Stressed efficiency to create a quality product
• Business success was defined in terms of production success from the Civil War through the 1920s
• Mass production led to lower consumer costs
• The Ford Model A, heavy metal industry, and mass production made this era prosperous
• The Great Depression of 1931 changed this era

The Sales Era

• Production techniques became more sophisticated in the early 1950s
• Personal selling and advertising were required to persuade customers to buy
• Aggressive sales tactics were used
• The emphasis focused on effective sales forces to sell higher-end products

The Marketing Era

• Began in the 1950s
• A shift occurred from a seller's market to a buyer's market
• Strong buyer's market (CHOICES) created the need for consumer orientation i.e. advertising
• This sparked the creation of marketing and advertising
• All levels of an organization focus on assessing consumer needs

The Relationship Era

• The Relationship Era has always been in place throughout history
• Long-term, value-added relationships develop over time with customers and suppliers
• Strategic alliances and partnerships benefit everyone in the demand cycle of manufacturers, components suppliers, and retailers

The Social Era

• Began in 2000
• The fastest-growing era
• Consumers can educate themselves instantaneously
• Product research and price comparisons can happen immediately
• Characterized by Internet accessibility and the creation of social media sites
• A boom in social networking allows companies to connect easily with consumers

Marketing Myopia

• Marketing myopia is business laziness
• It occurs when management fails to recognize the scope of the business and focuses on the product instead of the customer
• Inability to innovate can result in the failure of companies

Overcoming Marketing Myopia

• Overcoming marketing myopia involves developing broader, marketing-oriented business ideas dedicated to customer needs
• A hunger must be maintained, or it leads to competitive setbacks

Examples of Companies Avoiding Marketing Myopia

• Audi: Progress through technology
• ClubMed: Where Happiness Means the World
• Mastercard: There are some things money can't buy, for everything else, there's Mastercard
• Allegra: Have it All
• Goodyear: The best tires in the world have Goodyear written all over them
• UPS: We love logistics

Not-for-Profit Marketing

• Non-profit organizations operate in both the public and private sectors
• They adopt marketing strategies to meet service objectives
• They communicate messages through advertisements relating to their goals
• Non-profits form alliances with for-profit firms to promote each other's causes which gives the non-profit credibility and strong support
• The focus is to generate revenue to support the organization's cause and not the bottom line
• They market tangible goods and services but with the focus to support the cause
• Market to multiple audiences
• Often possess some degree of monopoly power in a given geographic region

Non-Traditional Marketing

• Person marketing- the effort to cultivate target market interest in a person with celebrity endorsements
• Place marketing- the effort to attract people and organizations to a geographic area using tourism
• Cause marketing- social issues, causes, or ideas used for marketing
• Event marketing- sponsorships of sports, cultural, and charitable activities to target markets to increase brand recognition
• Organization marketing- focus on the company's prowess that intends to persuade the public to accept goals, receive services, and to contribute

Transaction-Based Marketing

• Buyer and seller exchanges occur with limited and non ongoing communications
• Marketers realize that consumers are becoming more sophisticated, and "face-time" is necessary

Relationship Marketing

• Opens the door for a competitive edge, ability to move customers to loyal followers, and create loyal customers
• Starts with determining what customers needs and wants before developing high quality products

Using Social Media Marketing

• Mobile marketing uses messages transmitted via wireless technology
• Interactive marketing allows 2-way communication, where the customer controls the scope of marketing

The Benefits of Buzz Marketing

• Uses word of mouth to bridge the gap between a company and its products
• Facebook dominates as a word-of-mouth advertising avenue
• Alphabet owns Google, who spans wide industries

Developing Partnerships and Stategic Alliances

• Combines resources and capital to create competitive advantages in a new market
• Extends business-to-business relationships to suppliers, distributors, and partners
• Forms of alliances included product development and vertical alliances with owned companies
• Non-profit organizations often use for profit businesses because they are better equipped to raise funds

The Eight Universal Marketing Functions

• Buying involves ensuring products are available to meet customer needs
• Selling involves advertising and sales
• Standardization and Grading ensures that products meet quality controls
• Financing involves providing credit
• Transporting involves moving from point of production to location
• Storing involves warehousing until needed for sale
• Risk Taking involves dealing with the uncertainty about future purchase decisions
• Securing Marketing Information involves collecting information about marketing conditions

Ethics in Marketing

• Ethics refers to moral standards of behavior expected in society
• Social responsibility refers to the policies and procedures, and actions that focus on the betterment of society as a main focus

Sustainable Products

• Minimal impact on the environment
• Socially responsible efforts produce benefits
• Improved customer relationships
• Increased employee loyalty
• Marketplace success
• Improved financial performance