Chapter 12.1-12.3.5

12.1 What is Marketing?

• Marketing involves discovering unmet customer needs.
• It includes several tasks such as:
  • Researching the potential market
  • Producing a good or service to satisfy targeted customers
  • Promoting, pricing, and distributing that product or service
• The four Ps of marketing are product, price, place, and promotion.
• Marketing refers to the management process through which goods and services move from concept to the customer.
• Tasks include:
  • Identification
  • Selection
  • Development of a product
  • Determination of its price
  • Selection of a distribution channel to reach the customer's place
  • Development and implementation of a promotional strategy
• Successful organizations focus on building customer relationships throughout the entire marketing process.
• An exchange process occurs when two or more parties benefit from trading something of value like goods, services, or cash.
• Marketing facilitates the identification of customer desires and their desire for a particular brand.

How Marketing Creates Utility

• Marketing affects many parts of an organization as well as its customers.
• Utility is the ability of a good or service to satisfy customer needs and wants
• A company’s production function creates form utility by converting new materials, component parts, and other inputs into finished goods and services
• Marketing creates three types of utility: time utility, place utility, and ownership utility.
• Place utility is created by making a product available in a location convenient for customers.
• Ownership utility is an organized transfer of goods and services from the seller to the buyer; examples of ownership utility include:
  • Credit cards
  • Electronic payment processing systems for purchases
  • Low- or no-interest loans for purchases
• Companies may be able to create all three forms of utility.
• Understanding why consumers value products and services helps marketers create more effective campaigns.
• Harley-Davidson announced a 10-year plan for introducing 100 new models to attract new riders.

12.2 Evolution of the Marketing Concept

• Marketing has always been a part of business, from early village traders to large 21st-century organizations.
• Marketing activities have evolved through the five eras:
  • production era
  • sales era
  • marketing era
  • relationship era
  • social era
• For decades, organizations of the production era stressed their efficiency in producing quality products; a philosophy summed up with the remark "A good product will sell itself."
• The focus on production continued into the 20th century, then gave way to the sales era.
• In the sales era, businesses assumed consumers would buy products as a result of energetic sales efforts.
• Organizations didn't fully recognize the importance of their customers until the marketing era of the 1950s.
• Organizations then began to adopt a consumer orientation.
• Focus has grown stronger recently, leading to the relationship era in the 1990s.
• In the relationship era, companies focus on customer satisfaction and building long-term business relationships.
• The social era continues to grow, thanks to the Internet and social media sites (Instagram, Twitter, and LinkedIn) because companies routinely use mobile apps, social media, and the web as a way of marketing.

Emergence of the Marketing Concept

• The marketing concept refers to a company-wide customer focus with the goal of achieving long-term success.
• The basic idea of the marketing concept is that marketplace success begins with the customer.
• A firm should analyze customer needs and then work backward to offer products that fulfill those needs

Not-for-Profit Marketing

• The marketing concept is applied to the not-for-profit sector and to other non-traditional areas like religious organizations and political campaigns.
• Every continent receives benefits from ~20 million not-for-profit organizations operating around the world, where Canada has more than 160,000.
• Those 160,000 not-for-profit organization in Canada employ over 2 million workers.
• ~12.5 million Canadians volunteer their time, energy, and skills with charities and not-for-profit organizations.
• The United States has 1.9 million organizations, employing 12.9 million, and Canada leads the world in contributions to its gross domestic product by not-for-profit organizations.
• The largest not-for-profit organization in the world is the Red Cross/Red Crescent.
• Not-for-profits range from Habitat for Humanity to the Alberta Society for the Prevention of Cruelty to Animals.
• These organizations benefit by applying strategies and concepts used by profit-seeking firms that help reach audiences, as well as attract and secure appropriate markets.
• Marketing strategies are important for not-for-profit organizations, because they compete with for-profit businesses for dollars from individuals, foundations, and corporations to accomplish their goals and missions.
• In some cases, not-for-profit organizations form a partnership with a for-profit company to promote the firm’s message or to distribute its goods and services. This partnership usually benefits both organizations.
• CIBC is the title sponsor for the Canadian Breast Cancer Foundation.
• Not-for-profit organizations operate in the public and private sectors
• Private groups include government units and agencies that receive tax funding.
• A municipal swimming pool receives funding from the local municipal government and may be operated by volunteers.
• The private not-for-profit sector comprises many different types of organizations, including the Canadian Olympic Committee and the Canadian Medical Association.
• Private not-for-profits generate surplus revenue, but their goals are not about earning profits.
• If they earn funds beyond their expenses, they invest the excess in their organizational missions.
• Celebrities are visible in their campaigns for not-for-profit organizations, both their own organizations and those of others.
• Avon and the Avon Foundation have contributed over US$1 billion over the years to help women take greater control of their health and safety.
• Actress Reese Witherspoon is the Avon global ambassador and honorary chairperson of the Avon Foundation for Women.
• Witherspoon helped present a $500,000 grant to the Fund for Global Women's Leadership.
• The grant was intended to help the worldwide movement to end violence against women.

Understanding Consumers

Customers Demand More

• Companies identify customers’ stated and unstated wants and needs amidst intense competition.
• Amazon listens to customers' needs by continuously testing new solutions.
• The company interacts with buyers through multiple channels, including the web, social media, mobile apps, and even Alexa, its virtual assistant.
• Customers demand more interactive experiences, thus omni-channel interactions have become more crucial.
• Customer loyalty means listening and adapting.
• Amazon has done so with Amazon Prime, Amazon Fresh (grocery delivery), Amazon Web Services, Amazon Prime Video, Amazon Echo, drone patents, and the introduction of Amazon Go (a store with no checkout required).
• Also, Amazon acquired the Whole Foods Market retail chain, which brought an entire category of new products to the digital ordering and delivery convenience of Amazon customers.
• During the COVID-19 pandemic, Whole Foods' online sales tripled.
• Founder and former CEO Jeff Bezos stated “We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards."

Meeting Needs

• The best marketers meet consumer needs but also anticipate them, and create a link in the consumer’s mind between the new need and the fulfillment of that need by their products and services.
• Example, Berkshire Hathaway-owned NetJets offers fractional (or shared) jet ownership to give executives affordable luxury and flexibility.