General Marketing Overview Chapter 1 & 3: Marketing Process, Societal Implications, Customer Satisfaction and Value.

General Marketing Overview Chapter 1 & 3: Marketing Process, Societal

Implications, Customer Satisfaction and Value

What is marketing?

• ??????? What are your thoughts?• “Create long term and mutually

beneficial exchange relationships between an entity and the publics (individuals & organizations) in which it interacts”

• Create, sustain, maintain or add VALUE!

What is Marketing?

American Marketing Association Definition:

The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.

Evolving Views of Marketing’s Role

Evolving Views of Marketing’s Role

e. The customer as the controlling function and marketing as the integrative function

Customer

Marketing

Production

Hum

an

resources

Finance

The Marketing Process• People: Consumer Behavior,

Segmentation• Strategy: Planning, Competition,

Research• Performance: Satisfaction, profits,

sales, repeat sales, brand awareness, brand recognition, market share, market growth, brand equity

• 4Ps: Product, Price, Place, Promotion

Customer is KING!!The 4 Ps of Marketing

• Product – good, service or idea that offers a bundle of tangible and intangible attributes to satisfy the consumer

• Promotion – the communication of all other Ps

• Price – what the product is exchanged for

• Place – all aspects of getting products to the consumer in the right location at the right time.

What can you “market”?

• Products, Services• Experiences,

Events• People• Places, Properties• Organizations• Information, Ideas

• Categories of markets:– Consumer– Business– Global– Government &

Nonprofit

Elements of Exchange

Desire to Deal With Other PartyDesire to Deal

With Other Party

Freedom to Accept or Reject

Freedom to Accept or Reject

Something of Value

Something of Value

Ability to Communicate

Offer

Ability to Communicate

Offer

At Least Two Parties

At Least Two Parties

Necessary Conditions

for Exchange

Necessary Conditions

for Exchange

Tonight’s class

• Marketing: where are we? (Tipping Point/60 Minutes)

• Creating Value, Fostering Satisfaction and Loyalty

• Case analysis and presentation (Sorzal)

• Marketing Plan group formation and Project list distribution

Marketing Management Philosophies

PhilosophyPhilosophy Key Ideas

ProductionProduction

SalesSales

MarketMarket

SocietalSocietal

Focus on efficiency of internal operations

Focus on satisfying customer needs and wants

Focus on satisfying customer needs and wants while enhancing individual and societal well-being

Focus on aggressive techniques for overcoming customer resistance

Four Eras in the History of Marketing• Production EraProduction Era

– Prior to 1920s– Production orientation– Business success often defined solely in terms of

production victories

• Sales EraSales Era– Prior to 1950s– Customers resist nonessential goods and services– Personal selling and advertising’s task is to

convince them to buy

• Marketing EraMarketing Era– Since 1950s Marketing Concept Emerges– Shift from seller’s to buyer’s market– Consumer orientation

• Marketing ConceptMarketing Concept– Company–wide consumer orientation– Objective of achieving long–run success

The Marketing Concept • The idea that the social and

economic justification for an organization’s existence is the satisfaction of consumer wants and needs while meeting organizational objectives.– TM & customer needs: Focus to

distinguish from competitors– Integration: Integration of all activities

to satisfy customer wants/needs– Profits: Achieve long term goals by

satisfying customer wants/needs

• Relationship EraRelationship Era– Began in 1990s– Carried customer orientation even further– Focuses on establishing and maintaining

relationships with both customers and suppliers– Involves long–term, value–added relationships

DEBATE:

• Does Marketing CREATE or SATISFY NEEDS?

• Marketing has often been defined in terms of satisfying customers needs and wants. Critics, however, maintain that marketing does much more than that and creates needs and wants that did not exist before. According to these critics, marketers encourage consumers to spend more money than they should on goods and services they really don’t need.

Customer Value

• The ratio of benefits to sacrifice necessary to obtain benefits.– Offer products that perform– Give consumers more than they expect– Avoid unrealistic pricing– Give the buyer facts– Offer organization – wide commitment

in service and after sales support

What is Perceived Customer Value?

Product valueProduct value

Services valueServices value

Personnel valuePersonnel value

Image valueImage value

Totalcustomer

benefit

Totalcustomer

benefit

Monetary costMonetary cost

Time costTime cost

Energy costEnergy cost

Psychic costPsychic cost

Totalcustomer

cost

Totalcustomer

cost

Customerdelivered

value

Customerdelivered

value

Customer Satisfaction

• The feeling that a product has met or exceeded the customers’ expectation– Focus on delighting customers– Provide solutions to consumers’

problems– Measuring satisfaction: complaint and

suggestion systems, surveys, ghost shoppers, lost customer analysis

Satisfied Customers• Are loyal longer• Buy more (new products & upgrades)• Spread favorable word of mouth• Are more brand loyal (less price

sensitive)• Offer feedback• Reduce transaction costs• Is Satisfaction the same as LOYALTY?

“The Mismanagement of Customer Loyalty”

• How does your firm currently treat loyalty? Is it important? Do you currently measure it? How effective it is? What do you think needs to change?

• What companies can be considered “best practices” candidates for generating customer loyalty?

Avoiding Marketing Myopia

• Marketing Myopia is management’s failure to recognize the scope of its business.– To avoid marketing myopia, companies must

broadly define organizational goals toward consumer needs.

Critical Thinking and Creativity

• Challenges presented by today’s complex and technologically sophisticated marketing environment require critical-thinking skills and creativity from marketing professionals

• Critical Thinking refers to the process of determining the authenticity, accuracy, and worth of information, knowledge, claims and arguments

• Creativity helps to develop novel solutions to perceived marketing problems

Where has marketing been criticized?

Social Criticisms of Marketing – the consumer

interest• Causes prices to be higher• Deceptive practices in promotion,

packaging and price• High pressure selling• Shoddy or unsafe products• Poor service to disadvantaged

people

Other Social Criticisms of Marketing

• Impact on society– Materialism– Too few social goods– Cultural pollution– Too much political power

• Impact on other business– Acquisitions, entry barriers