ervie Ov w of Mar keting Concept s
Paul Mazur American Investment Banker
Marketing is the delivery of a standard of living. Because its purpose is to create a customer, the business has two only two basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are cost.
Peter Drucker American business philosopher and author
http://faculty-staff.ou.edu/K/Jack.J.Kasulis-1/marketing_channels.htm
Wh at Is M ark eting ?
Marketing is the societal process of exchanging tangible and intangible entities of value with others to meet individual or organizational objectives.
- Kasulis and Pinochet
Marketing is 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.
- American Marketing Association
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The role of marketing is to facilitate exchanges. Its essence is to create greater contentment and satisfaction by recognizing the preference structures of both parties and crafting the basis for exchanges. Marketings value to society is that it creates more efficient and effective interaction between and among individuals and organizations.
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Almo st A ny th in g c an b e Mark ete d
Goods Services Experiences Events Persons Places Properties Organizations Information Ideas
Marketing is about satisfying needs and wants by addressing problems that people encounter and facilitating exchanges to address the problems
Core Co nce pts o f M ark eti ng
Exchange Confidence
Marketing Mix Value Marketing Orientations Market Segmentation, Targeting, Positioning
Con ditio ns fo r a n E xchan ge
There are at least two parties Each party has something that might be of value to the other party Each party is capable of communication and delivery Each party is free to accept or reject the offer Each party believes it is appropriate or desirable to deal with the other party
Philip Kotler Marketing Management Prentice Hall (2003)
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Ne eds, Wa nts, D ema nds, a nd Benefits
Needs describe basic human requirements
such as food, air, water, clothing, and shelter. Wants are discretionary and learned during a persons life, such as recreation, education, and entertainment. Demands are needs and wants for specific products backed by an ability to pay. Benefits are outcomes sought by a customer that motivates buying behavior.
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Confid ence
The lack of doubt concerning the value one is going to receive from a transaction Risk and uncertainty are discomforting to buyers Buyer develops expectations based on: Past experiences with former or comparable purchases Brand images conveyed through the execution of marketing efforts
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Mar keti ng s Tools: The Marketi ng Mi x
Product
Customer Solutions
Price
Assignment of Value
Tools that Are Used Together to Create a Desired Response Among a Set of Defined Customers
Place
Availability of Product
Promotion
Activities to Inform & Persuade
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Examples of Product Offerings
Products are solutions to customer problems
Tangible good Intangible service Cause Place Person Event Organization Toothpaste, CD player, automobile Janitorial service, medical treatment, repair and maintenance services Birth control, environmentalism, hunger elimination Grand Canyon, Guggenheim Museum, Antarctica Political candidate, entertainer, Nobel Prize candidate Peace Rally, Boston Marathon, Alumni Reunion Parents and Teachers Association, Mothers Against Drunk Driving, American Cancer Society 10
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Pric e
What is relinquished to acquire a problem solution 1. Money paid or credit extended 2. Physical effort and time spent in the buying process, including search for information 3. Stress associated with the buying experience 4. Risk of a buying error in terms of functional, social, and psychological uncertainty
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Major Elements of the Promotion Mix
Promotions are communications that seek to inform and persuade Advertising Non-personal communication from an identified sponsor using mass media Sales Promotion Public Relations forums Personal Selling Short-term incentives to encourage sales during a specific time period Influencing the perceptions of external publics through the news or other public Direct interaction between the buyer and seller about the product offering
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Dist ributio n C han nel S erv ic e
Gap s
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1. Information - Gathering distributing & information between exchange partners 2. Spatial Convenience - Providing accessibility to a problem solution 3. Time Convenience - Minimizing the wait for a problem solution 4. Variety - Offering breadth of assortment 5. Lot Size - Dividing larger shipment quantities to match buyer needs 6. Facilitating Services - Providing add-on services such as credit, delivery, installation, etc.
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Mark eting C hann el F unc tio ns
The collection of intermediaries used to make a product offering available when and where it is needed and wanted
Information Collection and dissemination of data about potential and current exchange partners, competitors, and others in the relevant environment Promotion Development and dissemination of informative and persuasive communications about the product offer
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Mark eting C hann el F unc tio ns
(cont)
Negotiation The process of bargaining to consummate the transfer of possession and/or ownership Ordering Communication from the buyer to the seller about intentions to buy Financing Acquisition and allocation of funds required to finance marketing activities
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Mark eting C hann el F unc tio ns
(cont)
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Risk Taking The assumption of risks connected with carrying out channel functions. Physical Possession The successive storage and movement of physical products throughout the supply chain Payment Exchange of resources to acquire the product offering Title Transfer of ownership
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The F our Ps The F our Cs Marketing Mix
Product Customer Solution Price Customer Cost Place ConvenPromotion ience Communication
Valu e
Value is a ratio between what benefits the customer receives and what is given in return.
Customers estimate which offer will deliver the
most value. They then form an expectation of value and act upon it. Customer delivered value = total customer value minus total customer cost.
Dete rmina nts o f C us to me r Deliv ere d Va lu e
Image value Personal value Services value Product value Monetary cost Time cost
Energy cost
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Total customer value Customer delivered value Total customer cost
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Psychic cost
Ma rket O rie nta tio ns
Supply side concerns all of the factors necessary in bringing product to market Production
Manufacturing and distribution effectiveness Relentless focus on cost cutting Innovativeness for high performance and quality
Cost
Product
Mark et Orie nta tion s (c ont)
Demand side expanding the customer base either in the total market, for market share, or among core customers Selling
Aggressive promotion and selling Responding to customer needs and wants Building long-term interaction between the buyer and selle...