CHAPTER 1: Marketing: The Art and Science of Satisfying Customers 2 BASIC OPERATING FUNCTIONS OF EVERY ORGANIZATION 1. Production of a good, service, organization, person, or idea 2. Marketing of the good, service, organization, person or idea

Utility want satisfying power of a good or service

4 TYPES OF UTILITY 1. FORM created by production convert raw materials into finished goods & services Ex. Metal Shelves, Ford Explorer

Utility (Cont.) 2. TIME created by marketing availability of goods & services when consumers want to buy them Ex.: Dominos 30 minute guarantee Federal Express

Utility (Cont.) 3. PLACE 4. OWNERSHIP created by marketing availability of goods & services where consumers want to buy them Ex.: vending machines, Taco Bell Express 4. OWNERSHIP transfer title time of purchase Ex.: retail outlets (in exchange for $ or credit card payment)

WHAT IS MARKETING? American Marketing Assoc. (1985) "process of planning & executing the conception, pricing, promotion, & distribution of ideas, goods, & services to create exchanges that will satisfy individual & organizational objectives"

Marketing does not begin at the end of the loading dock Marketing does not begin at the end of the loading dock! Marketing should be involved from the conception of the product to the ultimate user.

4 Eras in Marketing 1. PRODUCTION ERA: "A good product will sell itself" Prior to 1920's production oriented: make product and then sell it (Henry Ford)

2. SALES ERA: "Creative advertising & selling will overcome customer resistance & convince them to buy” between 1925 & early 1950's selling was main focus of marketing

Emergence of the Marketing Concept 3. MARKETING ERA: "The consumer is king! Find a need & fill it!” early 1950's to early 1990’s Emergence of the Marketing Concept *CONSUMER ORIENTATION Seller’s Market vs. Buyer’s Market

RELATIONSHIP MARKETING ERA long-term, value added relationships developed over time with customers and suppliers 1990-Today Strategic Alliances Ex. UPS

5. The Social Era: NOW Connect with consumers via Internet and social media.

AVOIDING MARKETING MYOPIA Management failure to recognize scope of its business EX. Amtrak AT&T chart on pg 13 gives good examples of focusing on benefits

5 Types of Nontraditional Marketing 1. Person Marketing to cultivate attention, interest, & preference of a target market toward a person Ex.: pro athletes 2. Place Marketing attract visitors to a particular area Ex.: “Wake Up to Missouri” or Pumpkin License Plate

3. Cause Marketing Ex.: "Save the Whales" literacy Milk identification & marketing of a social issue, cause, or idea to selected target markets Ex.: "Save the Whales" literacy Milk

5. Organizational Marketing 4. Event Marketing mkt of sporting, cultural, & charitable activities to selected target markets Ex. Visa & Olympics or TWA Dome 5. Organizational Marketing seek to influence others to accept the goods of, receive the services of, or contribute in some way to an organization - Ex.: “Be All that You Can Be” Ex: “An Army of One”

ELEMENTS OF A MARKETING STRATEGY 1. THE TARGET MARKET who firm will direct marketing efforts toward Ex. Baby-boomers, children, women Ex.: Stouffers Lean Cuisine 2. THE MARKETING MIX VARIABLES (4P’s) Once target market is chosen, how these variables are "mixed" determines success of marketing.

Marketing Mix A. PRODUCT: package design, branding, trademarks, warranties, product life cycles & new product development B. PRICING: one of most difficult marketing decisions

C. DISTRIBUTION: ensures that product arrives in right place, in right quantity at the right time D. PROMOTION: communications link between sellers & buyers Ex.: advertising, sales people, sales promotions

3. THE MARKETING ENVIRONMENT The marketing environment is important because it provides a framework for all marketing activity. 5 Forces 1. COMPETITION 2. POLITICAL-LEGAL 3. ECONOMIC 4. TECHNOLOGICAL 5. SOCIAL-CULTURAL

Strategic Alliances: partnership that creates competitive advantages ex. Delta and Disney UPS and Bradfield’s Pepsi and Apple’s iTunes Marketing Costs creating time, place & ownership utility costs $ most estimate that marketing costs are 40 - 60% of overall product cost

Internet and Marketing It was the future and is now the present!

ETHICS AND SOCIAL RESPONSIBILITY Most business people are ethical but there are a few rotten ones. Ex. ADM, Enron, Worldcom