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Definition
• Marketing An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
• Analyzing customer needs.
• Obtaining the information necessary for design and production that match buyer expectations.
• Satisfying customer preferences.
• Creating and maintaining relationships with customers and suppliers. |
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| The performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producers to customer or client. |
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| A social process that directs an economy's flow of goods and services from producers and consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. |
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AMA Committee Definition of Marketing: |
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| Marketing is the process of planning and executing conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. |
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What is "good" for some producers and consumers maay not be good for society as a whole.
Examples: Some consumers want handguns, but they can be dangerous; terrain vehicles can cause injuries; soft drink bottles cause litter |
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As a company produces larger numbers of a particular product, the cost for each of these products goes down.
- Facilitated by mass production
- Facilitated by mass distribution
- Not always possible (ex: in labor intensive services) |
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Eight Universal Functions of Marketing |
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Definition
1. Buying
2. Selling
3. Transporting
4. Storing
5. Standardizing & Grading
6. Financing
7. Risk Taking
8. Securing Marketing Information |
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| Ensuring product offerings are available in sufficient quantities to meet customer demands. |
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| Using advertising, personal selling, and sales promotion to match products to customer needs. |
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| Moving products from their point of production to locations convenient for purchasers. |
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| Warehousing products until needed for sale. |
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| Ensuring product offerings meet quality and quantity controls of size, weight, and other variables |
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| Providing credit for channel members (wholesalers and retailers) and consumers. |
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| Dealing with uncertainty about future customer purchases. |
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Securing Marketing Infoormation |
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| Collecting information about consumers, competitors, and channel members for use in making marketing decisions. |
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- The want-satisfying power of a good or service. Marketing creates utility through the exchange process.
- The value that comes from satisfying human needs.
Types of utility:
- Form utility
- Time utility
- Place utility
- Ownership utility |
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- Person Marketing: To cultivate the attention and preference of a target market toward a person. (Ex: athletes/celebrities/politicians)
- Place Marketing: To attract visitors to a particular area; improve consumer images of a city, state or a nation; and/or attract a new business. (Ex: Las Vegas, Jamaica)
- Cause Marketing: Identification and marketing of a social issue, cause or idea to select target markets. (Ex: "Click it or ticket"; "Refill, not landfill")
- Event Marketing: Marketing of sporting, cultural and charitable activities to selected target markets. (Ex: Beijing Olympics; Race for the Cure)
- Organization Marketing: Marketing efforts of mutual-benefit, service and government organizations that seek to influence others to accept their goals, receive their services or contribute to them in some way. (Ex: Red Cross: "Together we can save a life"; March of Dimes: "Saving babies, together") |
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Characteristics of not-for-profit marketing |
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Definition
- Not-for-profits sometimes promote their messages through partnerships with commercial firms.
- Example: America’s Second Harvest receiving assistance from food manufacturers and grocery stores.
- Lack of a bottom line
- Often market to multiple publics
- May market both goods and services
- Customer or service user may wield less control over the organization's destiny than customers of profit seeking firms
- Resource contributor may interfere with the marketing program
- Must compete with other organizations for donor dollars
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| The idea that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives. |
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The Marketing Concept - Actions |
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- Focuses on customer wants and needs to distinguish products from competition
- Integrates all of the organization's activities to satisfy customer wants and needs
- Achieves organization's long-term goaals by satisfying customer wants and needs |
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Definition
- Management's failure to recognize the scope of its business.
How to avoid:
- Companies must broadly define organizational goals toward consumer needs
- focus on benefits |
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Examples of Marketing Myopia |
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Transaction-Based vs. Relationship Marketing |
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- Transaction-based: simple exchanges
- Relationship:
--Developing and maintaining of long-term, cost-effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit.
--The lifetime value of a customer; converting new customers to advocates
New Customer > Regular Purchaser > Loyal Supporter > Advocate |
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Four Eras in the History of Marketing
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- Production Era: Prior to 1920's - Business success often defined solely in terms of production victories - "A good product will sell itself."
- Sales Era: Prior to 1950's - Customers resist nonessenntial goods to buy; personal selling and advertising's task is to convince them to buy - "Creative advertising and selling will overcome consumer resistance and convince them to buy."
- Marketing Era: Since 1950's - Shift from seller's to buyer's market; company-wide consumer orientation; objective of achieving long-run success; satisfying consumer needs - "The consumer is King. Find a need and fill it. Global Competition. Consumers..demanding."
- Relationship Era: Began in 1990's - Carried customer orientation even further; focuses on establishing and maintaining relationships with both customers and suppliers; involves long-term, value-added relationships.
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-Prior to 1920's
-Business success often defined solely in terms of production victories
- "A good product will sell itself." |
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- Prior to 1950's
- Customers resist nonessenntial goods to buy
- Personal selling and advertising's task is to convince them to buy
- "Creative advertising and selling will overcome consumer resistance and convince them to buy." |
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- Since 1950's
- Shift from seller's to buyer's market; company-wide consumer orientation
- objective of achieving long-run success
- satisfying consumer needs
- "The consumer is King. Find a need and fill it. Global Competition. Consumers..demanding." |
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Definition
- Began in 1990's
- Carried customer orientation even further
- Focuses on establishing and maintaining relationships with both customers and suppliers
- Involves long-term, value-added relationships. |
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Some critics focus on micro-marketing and others on the whole macro-marketing system:
Examples:
- "Too many ads are annoying"
- "There are too many unnecessary products"
- "Middlemen raise prices but don't add value"
- "Marketing makes people materialistic"
- Many criticisms result from misunderstanding marketing. |
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- Plays an important role in society
- Vital to business survival, profits and growth
- Offers career opportunities
- Affects your life everyday |
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Ethics & Social Responsibility |
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- Ethics: Moral standards of behavior expected in a society
- Social Responsibility: Marketing philosophies, policies, procedures, and actions whose primary objective is to enhance society. Often takes the form of philanthropy. (Committee to Encourage Corporate Philanthropy)
- Doing well by doing good:
- Increased employee loyalty
- Better public image
- Market place success
- Improved financial performance |
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Ethical Questions in Marketing |
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Today's Global Marketplace
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• Growing importance because of international agreements, growth of electronic business, and economic interdependence.
• United States’ size and affluence make it an attractive market for foreign companies.
• United States’ size and affluence make it an attractive market for foreign companies.
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Business philosophy incorporating the marketing concept that emphasizes first determining unmet consumer needs and then designing a system for satisfying them. |
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Converting Needs to Wants |
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Definition
• Effective marketing focuses on the benefits resulting from goods and services.
• Companies must pay attention to what consumers want.
• Example: Demand for cell phones and wireless services.
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Using Interactive Marketing to Build Relationships |
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Definition
• Interactive marketing Buyer–seller communications in which the customer controls the amount and type of information received from a marketer.
• Repeat customers are a source of buzz marketing.
• Effective relationship marketing often relies heavily on information technologies.
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Definition
• Relationship marketing also applies to business-to-business
relationships with suppliers, distributors, and other partners.
• Strategic alliances Partnerships in which two or more companies combine resources and capital to create competitive advantages in a new market.
• Not-for-profits often raise awareness and funds through strategic partnerships.
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Costs and Functions of Marketing (cont..) |
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• Marketing costs are typically 40 to 60 percent of total product costs.
• Marketing performs eight universal functions:
• Exchange functions—buying and selling
• Physical distribution functions—transporting and storing
• Facilitating functions—standardizing and grading, financing, risk
taking, and securing marketing information
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