Introduction to Marketing Objectives n To develop an appreciation for the historical perspective of how markets have evolved n To appreciate both views of the evolution of marketing. n To introduce marketing as an exchange process n To understand the societal implications of marketing n To comprehend marketing as an organizational process n To introduce the fundamentals of marketing strategy Objectives Spontaneous Economic Combustion n Labor Specialization n Consumption Satiation The Evolution of Marketing Production Era Sales Era Marketing Era Relationship Orientation: Dominant time period: The Evolution of Marketing Production Era n Business philosophy focusing on manufacturing efficiency; demand exceeds supply = sellers market n Prior to the 1920s Orientation: Dominant time period: Sales Era n Business philosophy focusing on selling existing products; supply exceeds demand = buyers market n Prior to the 1950s The Evolution of Marketing Orientation: Dominant time period: Marketing Era n Business philosophy focusing on consumer wants and needs; any supply/demand situation n Last half of 20th century The Evolution of Marketing Orientation: Dominant time period: Relationship Marketing Era n Business philosophy focusing on reinforcing the customer-oriented focus of the marketing era n Last decade of 20th century The Evolution of Marketing AMA Definition of Marketing n Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that will satisfy individual and organizational objectives Broader Definition of Marketing The definition of marketing includes the non- profit sector of society (homeless shelter) Broader Definition of Marketing Hal Riney and Partners Oakland Museum Broader Definition of Marketing The definition of marketing includes the non- profit sector of society (U.S. Army) Broader Definition of Marketing The Martin Agency Drug Free America Broader Definition of Marketing The definition of marketing includes the non- profit sector of society (societal cause) Broader Definition of Marketing The definition of marketing includes the non- profit sector of society (forest protection) Exchange Process Process by which one or more parties give something of value to each other to satisfy perceived needs Exchanges Learning Environment TuitionTuition Promised Action VotesVotes Exchanges FeeFee ConsultingConsulting Products/servicesProducts/services MoneyMoney Exchanges Producer Wholesaler Retailer Consumer Activities of Marketing Activities of Marketing ExchangeExchange n Buying - seeking and evaluating alternatives n Selling - promotion of alternatives to consumers Activities of Marketing Activities of Marketing LogisticalLogistical n Transporting - movement of goods and services n Storing - holding of goods and services Activities of Marketing Activities of Marketing FacilitatingFacilitating n Financing - facilitating exchange n Risk-taking - holding title n Providing information - understanding markets (consumer and industrial) n Standardizing and grading - sorting by size and quality The Marketing Concept n Customer orientation n Coordinated effort by all departments of the firm to satisfy customers n Emphasis on long term profit Strategic Marketing Concept Corporate mission is to seek n Sustainable competitive advantage n Meet customer needs Societal Marketing Concept n Adoption of Marketing Concept n Considering the needs of society as a whole n Environment n Health n Safety Marketing Myopia n Short sightedness by business firms causing management to define their business too narrowly Marketing Myopia Examples Myopic Description: n Railroad company n Electricity company n Television network Broad Description: n Transportation company n Power company n Entertainment provider The Marketing Mix Variables Product Distribution PromotionPrice TargetMarket The Marketing Mix Variables Target Market Group(s) of potential customers toward which a firm directs its marketing mix(es) The Marketing Mix Variables Product Strategy n Identifying consumer needs and wants n New product development n Designing the product n Branding n Packaging The Marketing Mix Variables Distribution Strategy n Physical distribution n Channel management The Marketing Mix Variables Pricing Strategy n Pricing objectives n Price determination n Pricing policies The Marketing Mix Variables Promotion Strategy n Advertising n Personal selling n Sales promotion n POP, sponsorships, PR The Marketing Environment n n Microenvironment n n Objectives and resources n Macroenvironment n Competitive environment n Legal/political environment n Socio-cultural environment n Economic environment n Technological environment Environmental Scanning n Identification of important trends n Analysis of impact on the firm Separations Between Producers and Consumers Separations naturally exist between producers and consumers, buyers and sellers, and any other parties who enter into exchanges n Producers and consumers are generally separated by space or geography Separations Between Producers and Consumers Spatial Separation Functions Of Advertising Hal Riney and Partners Henry Weinhard n Producers and consumers want to produce and consume at different times. Sales of skis generally occur during the winter but producers want to manufacture them all year Separations Between Producers and Consumers Temporal Separation n Producers may lack information about the whereabouts of consumers and consumers may lack information about the producers offerings Separations Between Producers and Consumers Perceptual Separation n There is a separation between producers and consumers in reference to title. Producers pass (exchange) title of product/services for title to the money the consumer holds Separations Between Producers and Consumers Ownership Separation n There is a separation between producers and consumers because producers value the costs and prices of their products while consumers value the utility of the product Separations Between Producers and Consumers Values Separation Four Types of Utility UtilityUtility n Transformation of raw materials and/or labor into a finished good and/or service that the consumer desires Four Types of Utility Form Utility Four Types of Utility Form Utility The Martin Agency Ping n Transformation of raw materials and/or labor into a finished good and/or service that the consumer desires Four Types of Utility Form Utility Four Types of Utility UtilityUtility n Availability of a good and/or service where the consumer wants or needs it Four Types of Utility Place Utility n Availability of a good and/or service where the consumer wants or needs it Four Types of Utility Place Utility n Availability of a good and/or service where the consumer wants or needs it Four Types of Utility Place Utility Four Types of Utility UtilityUtility n Transferring title of a good and/or service from producer to consumer Four Types of Utility Ownership Utility Four Types of Utility UtilityUtility n Availability of a good and/or service when consumer wants/needs it Four Types of Utility Time Utility n Availability of a good and/or service when consumer wants/needs it Four Types of Utility Time Utility Separations/Functions/Utility Separations/Functions/Utility For More Information Log In to