MKT 301: Marketing Principles, Chapter 1 Notes
MKT 301: Marketing Principles, Chapter 1 Notes MKT 301: Marketing Principles (Goebel, Thomas B)
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This 12 page Class Notes was uploaded by Brittany on Sunday February 14, 2016. The Class Notes belongs to MKT 301: Marketing Principles (Goebel, Thomas B) at Fort Hays State University taught by Goebel, Thomas B in Fall 2016. Since its upload, it has received 97 views. For similar materials see Marketing Principles in Marketing at Fort Hays State University.
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Date Created: 02/14/16
Chapter 1 The Art and Science of Satisfying Customers What is marketing? Marketing is a process Utility: Want-satisfying power of a good or service 4 kinds of utility: 1. Form 2. Time 3. Place 4. Ownership 1. Form Utility Created when a company converts raw materials and components into finished goods and services. Ex: Canon can combine glass, plastics, metals, circuit boards, and other components to create cameras and TV’s. Organizational function responsibility: Production 2. Time Utility Time Utility is the availability of goods and services when consumers want them. Organizational Function Responsibility: Marketing 3. Place Utility Place Utility is the availability of goods and services at convenient locations. Ex: ATM’s Organizational Function Responsibility: Marketing 4. Ownership (Possession) Ability to transfer title to goods or services from marketer to buyer Ex: Signing up for a trip or buying a TV Organizational Function Responsibility: Marketing How does an Organization create a customer? 3 Step Approach: 1. Identify needs in the marketplace 2. Find out which needs the organization can profitably serve 3. Developing goods and services to convert potential buyers into customers Marketing Specialists are responsible for most activities necessary to create the customers the organization wants. Activities: Identifying customer needs Designing products that meet those needs Communicating information about those goods and services to prospective buyers Making the items available at times and places that meet customers’ needs Pricing merchandise and services to reflect costs, competition, and customers’ ability to buy. Providing the necessary service and follow-up to ensure customer satisfaction after the purchase. A Definition of Marketing Marketing: Is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have values for customers, clients, and society at large. Marketing Variables: Product Price Promotion Distribution 5 Eras in the History of Marketing The Essence of Marketing includes managing customer relationships and the exchange process Exchange Process: Activity in which two or more parties give something of value to each other to satisfy perceived needs. Ex: Money for goods or services 5 Eras: 1. Production Era 2. Sales Era 3. Marketing Era 4. Relationship Era 5. Social Era 1. The Production Era (Before 1925) Production Orientation: Business philosophy stressing efficiency in producing a quality product, with the attitude toward marketing that “A good product will sell itself.” Business success was defined in terms of production success th This Era reached its peak in the early part of the 20 century More than 80% of new products would fail Because the product must fit a consumers need Otherwise even the best engineered/High quality product would not make it. 2. The Sales Era (1950’s) Firms attempted to match their output to the potential number of customers who would want it. Increased emphasis on effective sales forces to find customers for their output. Sales Orientation: Assume that customers will resist purchasing nonessential goods and services and that the task of personal selling and advertising is to persuade them to buy. 3. The Marketing Era This era shifted focus from sales to satisfying customer needs Marketing Concept: A shift from a sellers’ market to a buyers’ market Companywide consumer orientation with the objective of achieving long-run success Helps understand customer’s experiences, buying habits, and needs. Seller’s Market: A market in which there are more buyers for fewer goods and services Buyer’s Market: A market in which there are more goods and services than people willing to buy them Consumer Orientation: Business philosophy incorporating the marketing concept that emphasizes first determining unmet consumer needs and then designing a system for satisfying them. 4. The Relationship Era (1990’s) Organizations focus on establishing and maintaining relationships with both customers and suppliers. Relationship Marketing: Development and maintenance of long-term, cost effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit. 5. The Social Era Usage of the web and social networking sites to market goods and services Marketing Myopia Management’s failure to recognize the scope of its business A product oriented focus, rather than a customer oriented focus will endanger future growth. Marketing in Not-For-Profit Organizations Some non-for-profit organizations will form partnerships with business firms to promote the organizations cause of message This benefits both organizations by getting the word of the non-for-profit organization out there to the public, and by making the supporting firm look desirable because they stand for a good cause. Characteristics of Not-For-Profit Organizations Most obvious distinction between not-for-profit organizations and for-profit firms is; Financial Bottom Line: Reference to overall company profitability For Profit: Generate revenue for themselves, employees, shareholders, ect Not-for-profit: Generate revenue to support their cause Organizations (for profit) market to their customers to sell goods and services, while not-for-profit organizations market to the entire public to spread word of their cause for the greater good. Non-Traditional Marketing Broad marketing past its traditional boundaries 5 Types: 1. Person 2. Place 3. Cause 4. Event 5. Organization 1. Person Marketing Marketing efforts designed to cultivate the attention and preference of a target market toward a person (Ex: Celebrity/Political candidate) Celebrity Endorsements: Well known athletes, entertainers, and experts or authority figures promote products 2. Place Marketing Marketing efforts to attract people and organizations to a particular geographic area Ex: Tourist Attractions 3. Cause Marketing Identification and marketing of a social issue, cause, or idea to selected target markets Ex: Childhood obesity, environment protection, child-abuse prevention & preventing drunk driving. This type of marketing can help build relationships with customers 92% of consumers had a positive image of companies that support social causes 4/5 respondents said they’d change brands to support the company supporting a cause 4. Event Marketing Marketing of sporting, cultural, and charitable activities to selected target markets Firms can also boost their image by linking themselves and their products to the events Ex: Olympics, World Cup, ect 5. Organization Marketing Marketing by mutual-benefit organizations, service organizations, and government organizations intended to persuade others to accept their goals, receive their services, or contribute to them in some way. From Transaction based marketing to Relationship Marketing Transaction-based marketing: Buyer and seller exchanges characterized by limited communications and little or no ongoing relationships between the parties. Traditional View of marketing Being replaced with a long-term approach that emphasizes building relationship with one consumer at a time Relationship Marketing: Development, growth, and maintenance of long term, cost effective exchange relationships with individual customers, suppliers, employees, and other parties for mutual benefit. Loyalty Ladder: Converting Customers to advocates, where they will buy and recommend the businesses products to others ADVOCATE LOYAL SUPPORTER REGULAR PURCHASER NEW CUSTOMER Converting New Customers to Advocates Mobile Marketing: Marketing messages transmitted via wireless technology Very popular method Interactive Marketing: Buyer-seller communications in which the customer controls the amount and type of information received from a marketer through channels such as the internet, and virtual reality kiosks. Power is in the hands of the customers Provides immediate access to key product information when the consumer wants it Social Marketing: Use of online social media as a communications channel for marketing messages Top online activity (used most) Fun Fact: The cost of maintaining existing customers is far below the cost of finding new ones Returning customers are profitable because they spread the word of the company around Developing partnerships and strategic Alliances Strategic Alliances Partnerships in which two or more companies combine resources and capital to create competitive advantages in new market Ex: Nike and Under Armor pay college football teams to wear their gear for advertising Costs and Functions of Marketing Functions of Marketing: 1. Buying Ensuring that product offerings are available in sufficient quantities to meet customer demands. 2. Selling Using advertising, personal selling, and sales promotion to match products to customer needs 3. Transporting Moving products from their point of production to locations convenient for purchases 4. Storing Warehousing products until their needed for sale 5. Standardizing and grading (Facilitating Function) Ensuring that product offerings meet quality and quantity controls of size, weight, and other variables. 6. Financing: Providing credit for channel members (wholesalers & retailers), and consumers. 7. Risk Taking: Dealing with uncertainty about future customer prices 8. Securing Marketing Information (Facilitating Function) Collecting Information about consumers, competitors, and channel members for use in marketing decisions. Wholesalers: Intermediaries that operate between producers and resellers Exchange Functions: Buying and Selling Buying: Why Consumers buy certain goods and services Selling: Advertising, personal selling and sales promotion. Ethics and Social Responsibility: Doing well by doing good Ethics: · Moral standards of behavior expected by a society Social Responsibility: · Marketing philosophies, policies, procedures, and actions that have the enhancement of society’s welfare as a primary objective o Ex: Walmart is trying to reduce the use of energy in its stores · Social Responsibility comes in the form of philanthropy, making gifts of money or time to humanitarian causes. Sustainable products: · Products that can be produced, used, and disposed of with minimal impact on the environment.
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