BUAD 307—MARKETING FUNDAMENTALS MARKETING OVERVIEW

Perner 2 BUAD 307 OVERVIEW AND STRATEGY

Perner 3 BUAD 307 OVERVIEW AND STRATEGY Learning Objectives Understanding –The scope and basic objectives of the marketing function –Customer value –Relationship marketing

Perner 4 BUAD 307 OVERVIEW AND STRATEGY 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 5 BUAD 307 OVERVIEW AND STRATEGY MARKETING ACTIVITYPROCESSESINSTITUTIONS CREATIONCOMMUNICATIONDELIVERYEXCHANGE OFFERINGS VALUE CUSTOMERS CLIENTS PARTNERS SOCIETY

Perner 6 BUAD 307 OVERVIEW AND STRATEGY 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)

Perner 7 BUAD 307 OVERVIEW AND STRATEGY 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 8 BUAD 307 OVERVIEW AND STRATEGY Value Benefits—examples –Convenience In delivery In usage –Reliability –Durability –Performance –Style/aesthetics –Prestige –Service component Costs—examples –Money –Time –Risk

Perner 9 BUAD 307 OVERVIEW AND STRATEGY 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 Note that a high price product may be a good value to the customer even if a high price is paid if the perceived benefits received are higher

Perner 10 BUAD 307 OVERVIEW AND STRATEGY 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 11 BUAD 307 OVERVIEW AND STRATEGY Example of Customer Value: Tivo

Perner 12 BUAD 307 OVERVIEW AND STRATEGY Customer Value: Ziploc Bags

Perner 13 BUAD 307 OVERVIEW AND STRATEGY Customer Value: iPad

Perner 14 BUAD 307 OVERVIEW AND STRATEGY Customer Value: Shellac

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Perner 17 BUAD 307 OVERVIEW AND STRATEGY Customer Value: Soda Vending

Perner 18 BUAD 307 OVERVIEW AND STRATEGY Customer Value: Starbucks

Perner 19 BUAD 307 OVERVIEW AND STRATEGY 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 20 BUAD 307 OVERVIEW AND STRATEGY 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