Marketing Overview - Chapter 1

Chapter 1: Overview of Marketing

• Marketing is a set of business practices designed to plan for and present an organization's products or services in ways that build effective customer relationships.
• Marketing helps create value.
• Marketing occurs in many settings, can be performed by both individuals and organizations
• Marketing is about satisfying customer needs and wants.
• Marketing entails an exchange.
• Marketing requires decisions about product, price, place, and promotion.

Providing Value

• Build and maintain a loyal customer base.
• Make a product that satisfies a variety of customer demands.
• Consumer positioning is important.
• Good marketing can establish value.
• Leveraging influencers to help promote a brand is critical.

Core Aspects of Marketing

• Marketing occurs in many settings.
• Marketing can be performed by both individuals and organizations.
• Marketing helps create value.
• Marketing is about satisfying customer needs and wants.
• Marketing entails an exchange.
• Marketing requires product, price, place, and promotion decisions.

Satisfying Customer Needs & Wants

• Need: basic necessities
• Want: how to fulfill that need
• Marketers identify who will buy their products.

Target Markets

• Customer segment to whom the firm is interested in selling its products and services.

Entails a Marketing Exchange

• The exchange can occur between any two parties.
• Not simply a buyer and seller exchanging money for a good or service
• Can be an exchange of information for convenience.

Marketing Entails an Exchange (Diagram)

• Goods/Services Producers (Sellers)
• Communications & Delivery
• Money & Information
• Customers/Consumers (Buyers)

Test Your Knowledge (Question 1)

• The correct answer is C: Marketers assess the effectiveness of their advertising. This is not part of a marketing exchange.

Marketing Mix Decisions

• Product/Service (brand, size, quality, features, packaging, warranty) - Creates Value
• Price (list price, discounts, allowances, costs, payment period, credit terms) - Transacts Value
• Promotion (advertising, sales promotion, personal selling, public relations, direct marketing, digital media) - Communicates Value
• Place (marketing channels, distribution intensity, locations retailers, online, supply chain logistics) - Delivers Value
• Target Market

Product: Creating Value

• Goods
• Services
• Ideas (thoughts, opinions, philosophies, and intellectual concepts)

Promotion of Ideas Creates Value

• Ideas include thoughts, opinions, philosophies, and intellectual concepts that can also be marketed.
• Marketing creates value by promoting ideas (such as bicycle safety).

Price: Transacting Value

• Price is everything the buyer gives up in exchange for the product. (energy, time, money)

Place: Delivering Value

• All activities necessary to get the product to the right customer when that customer wants it.
• Supply chain management examines place activities.

Place: Marketing Channels Distribution Strategy

• How does a company get the product to the right customer when and where they want it?

Promotion: Communicating Value

• The communication activities of marketing
• Used to inform, persuade, and remind potential buyers.
• Used to influence potential buyers' opinions or elicit a response.

Test Your Knowledge (Question 2)

• The correct answer is D: Communication; this is not the definition of promotion and how it works.

Marketing Enriches Society

• Canadian companies recognize that a strong social orientation is in both their and their customers' best interests. It shows the consumer that the firm can be trusted with their business.

Marketing can be entrepreneurial

• Marketing is equally important to the success of small ventures, especially new ones. Examples are given (Dani Reiss and Tonia Jahshan).

Marketing Impacts Many Stakeholders

• Both profit and non-profit entities.
• Developing economies.
• Entire industries.

The Four Orientations of Marketing

• Product Orientation (turn of the century)
• Sales Orientation (1920s)
• Market Orientation (1950s)
• Value-based Orientation (1990s)

Product Orientation

• Product-oriented companies focus on developing and distributing innovative products with little concern about whether the products best satisfy customers' needs.

Sales Orientation

• View marketing as a selling function where companies try to sell as many of their products as possible rather than focus on making products consumers really want.

Market Orientation

• Market-oriented companies start out by focusing on what consumers want and need before they design, make, or attempt to sell their products and services.

Value-Based Orientation

• To compete successfully, firms focus on the triple bottom line: People (consumer needs & wants), Profits (long-term profitable relationships), Planet (social and environmental responsibility).

Test Your Knowledge (Question 3)

• The correct answer is A: Share information, balance benefits and costs, and build customer relationships to become value-driven.

How do firms become more value driven?

• Sharing information.
• Balancing benefits with costs.
• Building customer relationships.
• Connecting with customers via social media.

Sharing Information

• Why is sharing and coordinating information such a critical success factor for any firm?
• Examples of information gathering
• Example of a company who shares and coordinates information (Zara).

Balancing Benefits with Costs

• Understand key benefits.
• Focus on key benefits.
• Eliminate cost of less strategic benefits.
• Example of a company that balances benefits with costs (IKEA).

Building Customer Relationships

• Take a long-term view of customer relationships.
• Use data to assist in maintaining the relationship.

Connect with Customers Using Social Media

• Embraces social media to connect better with customers.
• 91% of North American Companies now use social media for marketing purposes.
• Users are driving the way brands & stores are interacting with social media.

Why is marketing important?

• Expands global presence.
• Enriches society
• Makes life easier.
• Pervasive across organization.
• Pervasive across the supply chain
• Can be entrepreneurial.

Marketing Expands Firms' Global Presence

• Goods are available to consumers from many countries from the far reaches of the globe.
• Must understand customer needs & wants.
• Segment-by-segment, region-by-region.

Marketing is Pervasive Across Channel Members

• Each step in the supply chain involves marketing.
• All members in the chain must ultimately focus on creating value for their customer and the end user consumer.

Test Your Knowledge (Question 4)

• The correct answer is D: Customer service representative is NOT part of a supply chain.