“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” – AMA Association Value: The benefits a customer receives from buying a good or service. Marketing: An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Stakeholders: Buyers, sellers, or investors in a many, community residents, and even citizens of the nations where goods and services are made or sold-?in other words, any person or organization that has a “stake” in the outcome. Consumer: The ultimate user of a good or service. Marketing concept: A management orientation that focuses on identifying and satisfying consumer needs to ensure the organization’s long-term profitability. Need: The recognition of any difference between a consumer’s actual state and some ideal or desired state. Can be physical or psychological) Want: The desire to satisfy needs in specific ways that are culturally and socially influenced. Benefit: The outcome sought by a customer that motivates buying behavior-?that satisfies a need or want. Demand: Customers’ desires for products coupled with the resources needed to obtain them. Market: All the customers and potential customers who share a common need that can be satisfied by a specific product, who have the resources to exchange for it, who are willing to make the exchange, and who have the authority to make the exchange. Marketplace: Any location or medium used to conduct an exchange.
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Virtual Goods: Digital products consumers buy for use in online contexts. Utility: The usefulness or benefit consumers receive from a product. ; Form utility: the benefit marketing provides by transforming raw materials into finished products A dress manufacturer combines silk, thread, and zippers to create a bridesmaid’s gown. ; Place utility: benefit marketing provides by making products available where customers want them The most sophisticated evening gown sewn in New Work’s garment district is of little use too bridesmaid in Kansas City if it isn’t shipped to her in time. Time utility: benefit marketing provides by storing products until they are needed. Some women rent their wedding gowns instead of buying them and wearing them only once (they hope! ). ; Possession utility: the benefit marketing provides by allowing the consumer to own, use, and enjoy the product. The bridal store provides access to a range of styles & colors that would not be available to a woman outfitting a bridal party on her own Exchange: The process by which some transfer of value occurs between a buyer and a seller.
Product: A tangible good, service, idea, or some combination of these that satisfies consumer or business customer needs through the exchange process; a undue of attributes including features, functions, benefits, and uses. The Production Era: focuses on the most efficient production & distribution of products (The Model T story) Production Orientation: A management philosophy that emphasizes the most efficient ways to produce and distribute products. The Sales Era: During the Great Depression in the asses, when money was scarce for most people, firms shifted their focus from a product orientation to moving their goods in any way they could.
Selling Orientation: A managerial view of marketing as a sales function, or a way to move reduces out of warehouses to reduce inventory. The Relationship Era: Marketers did research to understand the needs of different consumers, assisted in tailoring products to the needs of these various groups, and did an even better Job of designing marketing messages than in the days of the selling orientation. Consumer Orientation: A business approach that prioritize the satisfaction of customers’ needs and wants.
Total Quality Management (TTS): A management philosophy that focuses on satisfying customers through empowering employees to be an active part of mutinous quality improvement Instantaneous: businessperson who only produces a product when it is ordered (manufacture on demand/]just-in-time) The Triple Bottom Line Orientation: A business orientation that looks at financial profits, the community in which the organization operates, and creating sustainable business practices. 1 . The financial bottom line: Financial profits to stakeholders 2.
The social bottom line: Contributing to the communities in which the company operates 3. The environmental bottom line: Creating sustainable business practices that minimize mage to the environment or that even improve it Customer Relationship Management: A systematic tracking of consumers’ preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individual’s unique wants and needs. CRM allows firms to talk to individual customers and to adjust elements of their marketing programs in light of how each customer reacts.
Attention Economy: A company’s success is measured by its share of mind rather than share of market, where companies make money when they attract eyeballs rather than Just dollars. Social marketing concept: A management philosophy that marketers must satisfy customers’ needs in ways that also benefit society and also deliver profit to the firm. Sustainability: A product design focus that seeks to create products that meet present consumer needs without compromising the ability of future generations to meet their needs.
Cradle to cradle: this term describes the ideal condition where a product is made from natural materials and is fully reusable, recyclable, or biodegradable so the net depletion of resources a company needs to make it is zero. Green marketing: A marketing strategy that supports environmental tidewaters thus creating a differential benefit in the minds of consumer. Return On Investment (ROI): The direct financial impact of a firm’s expenditure of a resource such as time or money.
Popular culture: The music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market. Myths: Stories containing symbolic elements that express the shared emotions and ideals of a culture. Consumer goods: The goods individual consumes purchase for personal or family use Services: Intangible products that are exchanged directly between the reducer and the consumer Business-to-business marketing: The marketing of foods and services from one organization to another.
Industrial goods: Goods individuals or organizations buy for further process or for their own use when they do business. Commerce: The buying or selling of goods and services electronically, usually over the Internet. Shrinkage: Losses experienced by retailers due to shoplifting, employee theft, and damage to merchandise. Anticoagulation: The deliberate defacement of products. Non-for-profit organizations: Organizations with charitable, educational, community ND other public service goals that buy goods and services to support their functions and to attract and serve their members.
The value of Marketing and the Marketing Value Value Proposition: A marketplace offering that fairly and accurately sums up the value that will be realized if the good or service is purchased. Breastfeeds: Events companies host to thank customers for their loyalty Lifetime value of a customer: The potential profit a single customer’s purchase of a firm’s products generates over the customer’s lifetime Distinctive competency: A superior capability of a firm in comparison to its direct competitors.
Coca-Cola’s success in global markets due to distribution and marketing communications) Differential benefit: Properties of products that set them apart from competitors’ products by providing unique customer benefits. (Apple futuristic deigns and superior graphics) *Effective product benefits must be both different from the competition and things customers want Value Chain: A series of activities involved in designing, producing, marketing, delivering, and supporting any product. Each link in the chain has the potential to either add or remove value from the product the customer eventually buys. Inbound logistics: Bringing in materials to make the product ; Operations: Converting the materials into the final product ; Outbound logistics: Shipping out the final product ; Marketing: Promoting and selling the final product ; Service: Meeting the customer’s needs by providing any additional support required Marketing scorecards: Feedback vehicles that report (often in quantified terms) how the company or brand is actually doing in achieving various goals Metrics: Measurements or “scorecards” marketers use to identify the effectiveness of different strategies or tactics.
Nonprofessionals: Consumers who contribute ideas to online forums for the fun and challenge rather than to receive a paycheck, so their motivation is to gain psychic income rather than financial income. Consumer- generated content: Everyday people functioning in marketing roles, such as participating in creating advertisements, providing input to new product development, or serving as wholesalers or retailers.
Social Networking: Online platforms that allow a user to represent him- or herself via a profile on a Web site and provide and receive links to other members of the network to share input about moon interests. Web 2. 0: The new generation of the World Wide Web that incorporates social networking and user interactivity Physical URL: New APS that enable user-generated clouds of content to form around products; barded scans allow the user to upload content or see what others have already uploaded. Folksong: A classification system that relies on users rather than pre-established systems to sort contents.
Wisdom of crowds: Under the right circumstances, groups are smarter than the smartest people in them, meaning that large numbers of consumers can predict successful products. Open source model: A practice used in the software industry in which companies share their software codes with one another to assist in the development of a better product. Marketing plan: A document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy.
Mass market: All possible customers in a market, regardless of the differences in their specific needs and wants. Market segment: A distinct group of customers within a larger market who are similar to one another in mom way and whose needs differ from other customers in the larger market. Target market: The market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts. Market position: The way in which the target market perceives the product in comparison to competitors’ brands.
Marketing mix: A combination of the product itself, the price of the product, the place where it is made available, and the activities that introduce it to consumers that creates a desired response among a set of predefined consumers. Four As Product, price, promotion, and place. Product: The physical good that has features that attracts consumers Price: The assignment of value, or the amount the consumer must exchange to receive the offering. Promotion: The coordination of a marketer’s communication efforts to influence attitudes or behavior.
Place: The availability of the product to the customer at the desired time and location. Chapter 1 Objectives Understand who marketers are, where they work, and marketing’s role in a firm. Marketers come from many different backgrounds and work in a variety of locations, from consumer goods companies to nonprofit organizations to financial institutions o advertising and public relations agencies. Marketing’s role in a firm depends on the organization. Some firms are very marketing-oriented, whereas others do not focus on marketing. However, marketing is increasingly being integrated with other business functions.
Therefore, no matter what firm marketers work in, their decisions affect and are affected by the firm’s other operations. Marketers must work together with other executives. Explain what marketing is and how it provides value to everyone involved in the marketing process. 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. Therefore, marketing is all about delivering value to stakeholders, that is, to everyone who is affected by a transaction.
Organizations that seek to ensure their long-term profitability by identifying and satisfying customers’ needs and wants have adopted the marketing concept. Marketing is also about exchanges or the transfer of value between a buyer and a seller. Explain the evolution of the marketing concept. Early in the twentieth century, firms followed a production orientation in which they focused on the most efficient ways to produce and distribute products. Beginning in the asses, some firms adopted a selling orientation that encouraged salespeople to aggressively sell products to customers.
In the asses, organizations adopted a consumer orientation that focused on customer satisfaction. This led to the development of the marketing concept. Today, many firms are moving toward a triple bottom line orientation that includes not only a commitment to quality and value, but also a concern for both economic and social profit. Understand the range of services and goods that organizations market. Any good, service, or idea that can be marketed is a product, even though what is being sold may not take a physical form.
Consumer goods are the tangible products that consumers purchase for personal or family use. Services are intangible products that we pay for and use but never own. Business-to- business goods and services are sold to businesses and other organizations for further processing or for use in their business operations. Not-for-profit organizations, ideas, places, and people can also be marketed. Understand value room the perspectives of customers, producers, and society. Value is the benefits a customer receives from buying a good or service.
Marketing communicates these benefits as the value proposition to the customer. For customers, the value proposition includes the whole bundle of benefits the product promises to deliver, not Just the benefits of the product itself. Sellers determine value by assessing whether their transactions are profitable, whether they are providing value to stakeholders by creating a competitive advantage, and whether they are providing value through the value chain. Customers generate value when they turn into advertising directors, retailers, and new product development consultants, often through social networking.
Society receives value from marketing activities when producers and consumers engage in ethical, profitable, and environmentally friendly exchange relationships. Explain the basics of marketing planning and the marketing mix tools managers use in the marketing process. The strategic process of marketing planning begins with an assessment of factors within the organization and in the external environment that could help or hinder the development and marketing of products. On the basis of this analysis, marketers set objectives and develop strategies.
Many firms use a target marketing strategy in which they divide the overall market into segments and then target the most attractive one. Then they design the marketing mix to gain a competitive position in the target market. The marketing mix includes product, price, place, and promotion. The product is what satisfies customer needs. The price is the assigned value or amount to be exchanged for the product. The place or channel of distribution gets the product to the customer. Promotion is the organization’s efforts to persuade customers to buy the product.