Welcome to the World of Marketing Creating and Delivering Value

Chapter Objectives who are marketers? Explain marketing where they work, marketing’s role in the firm Explain marketing

Chapter Objectives Marketing’s value range of services & goods to everyone involved in the marketing process range of services & goods

Understand value Re: customers, producers, and society Chapter Objectives Understand value Re: customers, producers, and society marketing planning

evolution of the marketing concept Chapter Objectives marketing mix tools Product/price/promotion & Place (distribution) evolution of the marketing concept

CHAPTER CONCEPTS

Welcome to a Branded World “Brand You” You are a product You have “market value” as a person

Welcome to a Branded World “Brand You” You “position” yourself for a job Don’t “sell yourself short” You package & promote yourself

Who & Where of Marketing Marketers: Are real people who make choices that affect themselves, their companies, & millions of consumers

Who & Where of Marketing Marketers: Work cross-functionally within the firm Enjoy exciting, diverse careers

The Value of Marketing An organizational function Definition of marketing (AMA, 2004) An organizational function and a set of processes for creating, communicating, and delivering value to customers

The Value of Marketing benefit the organization and its stakeholders Definition of marketing (AMA, 2004) and manages customer relationships in ways that benefit the organization and its stakeholders

Marketing = Meeting Needs stakeholders Buyers, sellers, investors, community residents, citizens

Marketing = Meeting Needs Marketing concept Identifying consumer needs & providing products that satisfy those needs

Marketing = Meeting Needs The modern marketplace a mall, mail-order catalog, a TV shopping network, an eBay auction, or an e-commerce Web site

Marketing =Creating Utility Utility: the sum of the benefits we receive from using a product/service Form utility Place utility Time utility Possession utility

Marketing Is about Exchange Relationships An exchange occurs when something is obtained for something else in return, like cash for goods or services Buyer receives product that satisfies need Seller receives something of equivalent value

The Evolution of Marketing The Production Era The Selling Era The Consumer Era The New Era

The Production Era Focus = most efficient ways to make and distribute products, like Henry Ford’s Model T & Ivory soap Marketing plays an insignificant role

The Selling Era Focus = one-time sales of goods rather than repeat business Marketing = a sales function

The Consumer Era Focus = satisfying customers’ needs and wants Marketing = more important Total Quality Management (TQM) widely followed in marketing community

The New Era: Profits & Ethics Focus = building long-term bonds with customers. Marketing uses customer relationship management (CRM) to track consumers’ preferences tailor value proposition to each individual

The New Era: Focusing on Social Benefits Social marketing concept: satisfy customers’ needs and also benefit society Sustainability: meeting present needs and ensuring future generations can meet their needs

The New Era: Focusing on Accountability Measuring how much value is created by marketing activities ROI (Return on Investment) direct financial impact of firm’s expenditure of resources such as time or money

What Can Be Marketed? From serious goods and services to fun things mirror changes in popular culture Marketing messages may communicate myths of a culture

What Can Be Marketed? Product: any good, service, or idea Consumer goods/services Business-to-business goods/services Not-for-profit marketing Idea, place, and people marketing

The Marketing of Value Value: the benefits a customer receives from buying a good or service

The Marketing of Value Marketing communicates the value proposition: a marketplace offering that fairly and accurately sums up the value that the customer will realize if he/she purchases product/service

Value from the Customer’s Perspective The ratio of costs to benefits Value proposition includes: whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself

Value : Seller’s Perspective takes many forms: Making a profitable exchange Earning prestige among rivals Taking pride in doing what a company does well Nonprofits: motivating, educating, or delighting the public

Calculating the Value of a Customer Single transactions don’t provide companies with value they desire Lifetime value of a customer: How much profit a company expects from ONE customer’s purchases now and in the future WalMart: LTV = $250,000

Providing Value to Stakeholders Competitive advantage: ability of a firm to outperform the competition by providing customers with a benefit the competition cannot provide

Adding Value through the Value Chain a series of activities involved in designing, producing, marketing, delivering, and supporting any product

Adding Value through the Value Chain a series of activities: Inbound logistics Operations Outbound logistics Marketing final product Service

Consumer-Generated Value: From Audience to Community Everyday people generating value instead of just buying it People functioning in marketing roles: creating ads, providing input into new products, or serving as retailers

Value: Society’s Perspective How marketing transactions add or subtract value from society Stressing ethics/social responsibility is good business in long run

The Dark Side of Marketing * Marketers Illegal activities such as “bait and switch” Products that encourage antisocial behavior

The Dark Side of Marketing *Consumers Terrorism Addictive consumption Exploited people Illegal activities Shrinkage Anticonsumption

Marketing as a Process Marketing planning: Analyzing the marketing environment Developing a marketing plan Deciding on a market segment Choosing the marketing mix – product, price, promotion, place

THE END

Keeping It Real: Fast-Forward to Decision Time at Qode Meet Rick Szatkowski of NeoMedia Technologies Qode links your cell phone to the Web when you enter a keyword or click a SmartCode. Example: A code on a movie poster plays a trailer for the movie

Chapter case study Ron Jon’s Surf Shop See handout

Ron Jon Surf Shop, Inc. How to advertise Ron Jon’s at airports? Option 1: rental car advertising Option 2: wall-mounted backlit photographs (dioramas) Option 3: escalator “gateways”

How It Worked Out at Ron Jon Surf Shop Bill choose option 2: wall-mounted backlit photographs (dioramas) Opened a small store in the Orlando Airport adjacent to the very busy food court Surf and sales are up at Ron Jon!