BUAD 307—MARKETING FUNDAMENTALS MARKETING OVERVIEW

Perner 2 BUAD 307 MARKETING OVERVIEW

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Perner 4 BUAD 307 MARKETING OVERVIEW Learning Objectives Identifying –The scope and basic objectives of the marketing function –Customer value –Relationship marketing

Perner 5 BUAD 307 MARKETING OVERVIEW 2007 American Marketing Association (AMA) Definition Marketing: “The (1) activity, (2) set of institutions, and (3) processes for (4) creating, (5) capturing, (6) communicating, (7) delivering, (8) and exchanging (9) offerings that have (10) value for (11) customers, (12) clients, (13) partners, and (14) society at large.” (Numbering added.) Definition not needed for the exam!

Perner 6 BUAD 307 MARKETING OVERVIEW MARKETING ACTIVITYPROCESSESINSTITUTIONS CREATIONCOMMUNICATIONDELIVERYEXCHANGE OFFERINGS VALUE CUSTOMERS CLIENTS PARTNERS SOCIETY

Perner 7 BUAD 307 MARKETING OVERVIEW Marketing As an Exchange Each side receives something more valuable than what it gave up  “win-win” deal Part of the value may be assurance of continued quality over time (value of the brand) In principle, money does not have to be exchanged. For goods and services, this is usually the most convenient way of trade. For ideas, there may be no monetary exchange as such.

Perner 8 BUAD 307 MARKETING OVERVIEW Usage and Reach of Marketing Who markets? –Businesses –Government units –Non-profit organizations –Cause related organizations What is marketed? –Goods –Services –Ideas Who buys? –Ultimate consumers –Organizational buyers For internal use For resale (wholesalers, retailers) Manufacturers (components) Customer benefits? –Utility Consumption Convenience

Perner 9 BUAD 307 MARKETING OVERVIEW Value Benefits— perceived by the customer (may not be objectively accurate) –Convenience In delivery In usage –Reliability –Durability –Performance –Style/aesthetics –Prestige –Service component Costs—examples –Money –Time –Risk

Perner 10 BUAD 307 MARKETING OVERVIEW CUSTOMER DESIRES INSTINCTS BELIEFS THE PRODUCT BELIEFS ABOUT THE WORLD PERCEIVED NEEDS OF OTHERS SELLER OFFERINGS COSTS OF OFFERINGS (NEGATIVE) CUSTOMER VALUE BELIEFS ABOUT WHAT IS “RIGHT”

Perner 11 BUAD 307 MARKETING OVERVIEW Customer Value, Part I Value is the ratio of the benefits received (usually goods or services) to what is given up (usually money) For a transaction to take place, the benefits received must usually be greater than the sacrifice for both parties—usually –The customer values the goods and services received more than the money spent –The seller values the money received more than the goods or services given up (i.e., it is worthwhile to produce these in order to get this payment)

Perner 12 BUAD 307 MARKETING OVERVIEW Customer Value, Part II A low priced product may not represent value to a customer if the benefits received are perceived to be low, too. Different customer segments will have different value perceptions A product which is adapted to the needs of a particular segment can be very valuable to that segment even if the overall “quality” is not seen as superior by most other consumers Cost may be in terms of money or other sacrifice

Perner 13 BUAD 307 MARKETING OVERVIEW Tools to Provide Customer Value Product (both the tangible item and associated services) Price (different segments of customers will pay different amounts depending on their product needs and preferences) Place (distribution—making the product available where it is convenient to the customer) Promotion (advertising, sales promotion, publicity, selling, special events)

Perner 14 BUAD 307 MARKETING OVERVIEW Example of Customer Value: Tivo

Perner 15 BUAD 307 MARKETING OVERVIEW Customer Value: Ziploc Bags

Perner 16 BUAD 307 MARKETING OVERVIEW Customer Value: iPhone 6

Perner 17 BUAD 307 MARKETING OVERVIEW Value: Nordstrom’s

Perner 18 BUAD 307 MARKETING OVERVIEW Value: Walmart

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Perner 20 BUAD 307 MARKETING OVERVIEW Customer Value: Soda Vending

Perner 21 BUAD 307 MARKETING OVERVIEW Customer Value: Starbucks

Perner 22 BUAD 307 MARKETING OVERVIEW Value: Implications A low quality, low price product represents poor value for many customers A very high benefit product at a high price can represent value for some segments Customer segments differ in what they find valuable

Perner 23 BUAD 307 MARKETING OVERVIEW Relationship Marketing Selling (selling existing products with whatever methods are necessary) vs. marketing orientation (serving customer needs whether in current or new forms) Maintaining a relationship with the customer over time rather than just focusing on immediate sales –Anticipating customer needs –Providing solutions –Investing in products and services optimized for the customer