Introduction to Marketing Mrs. Wonder August 21-27, 2018

What is marketing? ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably’ ‘The right product, in the right place, at the right time, and at the right price’ The American Marketing Association definition: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

For an exchange to occur….. 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 reject the exchange offer. Each party believes it is appropriate or desirable to deal with the other party

What is Marketed? Places Properties Organizations Information Ideas Goods Services Events Experiences Persons Places Properties Organizations Information Ideas

Key Customer Markets Consumer markets Business markets International Markets/Global markets Nonprofit/Government markets

Evolution of Marketing Production Era Sales Era Marketing Concept Era Societal Era

1. Production Orientation Focuses on internal capabilities of firm. “ Field of Dreams” strategy “If we build it, they will come” Best used when competition is weak demand exceeds supply generic products competing solely on price Problem is that they don’t understand wants/needs of marketplace.

2. Sales Orientation People will buy more goods/services if aggressive sales techniques are used. High sales will result in high profits. Used with unsought products life insurance encyclopedias Problem is that they don’t understand wants/needs of marketplace. I can sell everything, if I know how to sell it

3. Marketing Orientation Marketing concept The social and economic justification for an organization’s existence is the satisfaction of customer wants and needs, while meeting organizational objectives. To put it a simpler way the Marketing concept is: The idea that a business should strive to satisfy customers’ needs and wants while generating a profit for the business.

3. Marketing Orientation . . . Focusing on customer wants so the organization can distinguish its products from competitors’ . Integrating all the organization’s activities, including promotion, to satisfy these wants. Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly.

3. Marketing Orientation . . . Requires: Top management leadership A customer focus Competitor intelligence strengths weaknesses Interfunctional coordination to meet customer wants/needs and deliver superior values.

4. Societal Marketing Orientation Organization exists not only to satisfy customer wants/needs and to meet organizational objectives, but also to preserve and enhance individuals’ and society’s long-term best interests. Extends marketing concept to serve one more customer - society as a whole.

Differences between Sales & Marketing Orientations Production/Sales Focus Organization’s needs Producing/Selling goods/services Everybody Profit through max. sales volume Intensive promotion Marketing Focus Customer’s needs Satisfying customer wants/needs Specific groups of people (target market) Profit through customer satisfaction Coordinated mktg. activities (The 4 P’s)

Marketing Philosophies Orientation Key Ideas Production Focus on efficiency of internal operations – if we make it, they will buy it Sales Focus on aggressive sales techniques and believe that high sales result in high profits Marketing Focus on satisfying customer needs and wants while meeting objectives - if they will buy it, we will make it Societal Focus on satisfying customer needs and wants while enhancing individual and societal well-being. I.e.-mfg using recyclables

Relationship Marketing Forging long-term partnerships with customers and contributing to their success. In customer relationship management, companies benefit from: repeat sales/referrals that lead to increases in sales, market share and profits, and decreased costs - it’s less expensive to serve existing customers than attract new ones. CUSTOMER RELATIONSHIP MANAGEMENT = CRM

3. Relationship Marketing. . . Customers benefit from: stable relationships with suppliers (especially in business-to-business) greater value and satisfaction discounts, (frequent flyer programs, loyalty program, etc.)

3. Relationship Marketing . . . Successful relationship marketers have: customer-oriented personnel effective training programs employees with authority to make decisions and solve problems teamwork

Marketing Mix and the Customer Four Ps Product Price Place Promotion Four Cs Customer solution Customer cost Convenience Communication

Core Concepts Needs, wants, and demands Target markets, positioning, segmentation Offerings and brands Value and satisfaction Marketing channels Supply chain Competition Marketing environment Marketing planning

Implications of marketing Who are our existing / potential customers? What are their current / future needs? How can we satisfy these needs? Can we offer a product/ service that the customer would value? Can we communicate with our customers? Can we deliver a competitive product of service? Why should customers buy from us?

Successful marketing requires Profitable Offensive (rather than defensive) Integrated Strategic (is future orientated) Effective (gets results)

Marketing management process Analysis/Audit - where are we now? Objectives - where do we want to be? Strategies - which way is best? Tactics - how do we get there? Implementation - Getting there Control - Ensuring arrival

CONTROLLABLE FACTORS AFFECTING MARKETING DECISIONS The Four P’s -the “arrow” Price Promotion Place Product

UNCONTROLLABLE FACTORS AFFECTING MARKETING DECISIONS Social Natural Economic Technologic Political and Legal Competitive External Environmental Factors Helps identify market opportunities

Marketing Environment All the actors and forces influencing the company’s ability to transact business effectively with it’s target market

Market Environment Includes: Microenvironment - forces close to the company that affect its ability to serve its customers. Macroenvironment - larger societal forces that affect the whole microenvironment

Demographic Economic Cultural Company Natural Political Technological Public Suppliers Competitors Customers Natural Political Intermediaries Technological

The Company’s Microenvironment Company’s Internal Environment- functional areas such as top management, finance, and manufacturing, etc. Suppliers - provide the resources needed to produce goods and services. Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers.

Customers - five types of markets that purchase a company’s goods and services. Competitors - those who serve a target market with similar products and services. Public - any group that perceives itself having an interest in a company’s ability to achieve its objectives.

The Company’s Macroenvironment Demographic - monitors population in terms of age, sex, race, occupation, location and other statistics. Economic - factors that affect consumer buying power and patterns. Natural - natural resources needed as inputs by marketers or that are affected by marketing activities.

PEST analysis Political factors Economic factors Socio-cultural factors Technological factors

Political/legal Monopolies legislation Environmental protection laws Taxation policy Employment laws Government policy Legislation

Economic Factors Inflation Employment Disposable income Business cycles Energy availability and cost

Sociocultural factors Demographics Distribution of income Social mobility Lifestyle changes Consumerism Levels of education

Technological New discoveries and innovations Speed of technology transfer Rates of obsolescence Internet Information technology

Technological - forces that create new product and market opportunities. Political - laws, agencies and groups that influence or limit marketing actions. Cultural - forces that affect a society’s basic values, perceptions, preferences, and behaviors

ADDED Value through Economic utilities Utility is the usefulness of a product or service. There are 5 types: 1. Form Utility -- Making or Producing Things (example: how is wheat changed into a more useful product?) 2. Place Utility – Usefulness increased because of location (example: oranges from Florida) 3. Time Utility – Making a product available at right time of year or convenient time of day (example: seasonality) 4. Possession Utility – the ability to aid customers in purchasing goods (example -- store has a credit card) 5. Information Utility – usefulness added to the product through communication (example – packaging, labels, displays, signs)

6 Elements of a Marketing Plan I. Executive Summary II. Situation Analysis A. SWOT Analysis B. Environmental Scan (PEST and Market Analysis- Micro/Macro/Customers/Competitors/Industry) III. Objectives (make them single-minded and S.M.A.R.T. goals) A. Company’s Mission B. Marketing Objectives (ex: What market share do you want to achieve?) C. Financial Objectives IV. Marketing Strategies A. Positioning and Points of Difference (quality, non-gmo, creative, patented) B. Marketing Mix (the 4 P’s – Product, Price, Promotion, Place) V. Implementation A. Organization B. Activities and Responsibilities C. Timetables VI. Evaluation and Controls A. Performance Standards & Measurements (Mktg & Fin. Obj./Mix strategies including sales forecasts) B. Corrective Actions

SWOT analysis Strengths (internal) Weaknesses (internal) Opportunities (external) Threats (external)

Market Analysis (Environmental Scan) For your Analysis you will consider 3 things: Customers, Competitors, & Industry Structure I. Customers Analysis Segmentation Motivation Unmet Needs

Market Analysis II. Competitor Analysis Who are our competitors (Rivals)? What advantages do they have? What are their goals? What are their strategies? What are their organizational structures? What are their strengths and weaknesses?

Market Analysis III. Structural Analysis Industrial analysis Actual and potential size of the industry Growth of the industry Cost structure of the industry Distribution structure of the industry Changes in the industry

7 Functions of Marketing – the scope of marketing 1. Channel Management 2. Marketing Information Management 3. Market Planning 4. Pricing 5. Product/Service Management 6. Promotion 7. Selling

7 Functions of Marketing Channel Management Channel Management, or distribution, is the process of deciding how to get goods into customer’s hands. Example: Coca-Cola determines which distribution method they will use to get goods to places like Publix, QuikTrip, AMC Theaters etc.

7 Functions of Marketing Marketing Information Management Gathering, recording, analyzing and disseminating information to aid in making marketing decisions. Example: Amazon uses a variety of MGM to analyze consumers buying habits or spending, for example, did you know that Walmart has ultimate customer information data stored on its customers.

7 Functions of Marketing Market Planning Understanding the concepts and strategies used to develop and target specific marketing strategies to a specific audience. Example: Forever 21 utilizes both in- store and online marketing strategies to encourage a certain age group of women to buy products. Their marketing campaigns are targeted to this customer demographic.

7 Functions of Marketing Pricing Pricing decisions dictate how much to charge for goods and services in order to make a profit. Example: Foot Locker is launching the new Air Jordan 5 Retro this month, they purchase the goods from a distributor for 105 dollars, and decide to sell for 190 dollars at the store. They are therefore making 85 dollars in gross profit.

7 Functions of Marketing Product/Service Management Product/Service Management is obtaining, maintaining, and improving a product or a product mix in response to market opportunities. Example: For the last 30 years, EA Sports has released a Madden Football game. Each release contains multiple updates and upgrades to the game to improve user interface, and has allowed for it to become the most popular sports video game of all time.

7 Functions of Marketing Promotion Is the effort to inform, persuade, or remind current and potential customers about a business’s products or services. Forms: TV ads, Print Ads, Internet Ads, Radio Ads, Coupons, Rebates Example: American Eagle regularly sends out coupon codes to AE Rewards members to incentivize them to buy their clothing

7 Functions of Marketing Selling Selling provides customers with the goods and services they want. Example: One of the best examples of selling is Ebay. Ebay was created so that ANYONE with an email address and a product could sell something globally by setting a price and allowing the market to dictate its market value. For over 25 years people across the world have used Ebay to sell products to each other or from business to business. National account managers sell brands into major retail stores.