Chapter 1

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CHAPTER 1: Marketing: The
Art and Science of Satisfying
Customers
2 BASIC OPERATING FUNCTIONS OF
EVERY ORGANIZATION
1. Production of a good, service,
organization, person, or idea
2. Marketing of the good, service,
organization, person or idea
Utility
• want satisfying power of a good or service
4 TYPES OF UTILITY
1. FORM
– created by production
– convert raw materials into finished
goods & services
Ex. Metal Shelves
Utility (Cont.)
2. TIME
– created by marketing
– availability of goods & services when
consumers want to buy them
Ex.: Dominos 30 minute guarantee
Federal Express
Utility (Cont.)
3. PLACE
– created by marketing
– availability of goods & services where
consumers want to buy them
• Ex.: vending machines, Taco Bell
Express
4. OWNERSHIP
– created by marketing
– transfer title time of purchase
• Ex.: retail outlets (in exchange for $ or credit card payment)
WHAT IS MARKETING?
• American Marketing Assoc. (1985)
– "process of planning & executing the
conception, pricing, promotion, & distribution
of ideas, goods, & services to create exchanges
that will satisfy individual & organizational
objectives"
•Marketing does not begin at the
end of the loading dock!
Marketing should be involved
from the conception of the
product to the ultimate user.
4 Eras in Marketing
1. PRODUCTION ERA:
– "A good product will sell itself"
– Prior to 1920's
– production oriented: make product and then
sell it (Henry Ford)
2. SALES ERA:
– "Creative advertising & selling will overcome
customer resistance & convince them to buy”
– between 1925 & early 1950's
– selling was main focus of marketing
3. MARKETING ERA:
– "The consumer is king! Find a need & fill it!”
– early 1950's to early 1990’s
• Emergence of the Marketing Concept
– *CONSUMER ORIENTATION
4. RELATIONSHIP MARKETING
–
–
long-term, value added relationships
developed over time with customers and
suppliers
Strategic Alliances
•
Ex. UPS
What era do you think is next??
AVOIDING MARKETING
MYOPIA
• Management failure to recognize scope of
its business
– EX. Amtrak
– AT&T and TCI
• chart on pg 15 gives good examples of
focusing on benefits
5 Types of Nontraditional
Marketing
1. Person Marketing
– to cultivate attention, interest, & preference of
a target market toward a person
Ex.: pro athletes
2. Place Marketing
– attract visitors to a particular area
– Ex.: “Wake Up to Missouri” or Pumpkin
License Plate
3. Cause Marketing
– identification & marketing of a social issue,
cause, or idea to selected target markets
Ex.: "Save the Whales"
literacy
Milk
4. Event Marketing
– mkt of sporting, cultural, & charitable activities to
selected target markets
• Ex. Visa & Olympics or TWA Dome
5. Organizational Marketing
– seek to influence others to accept the goods of, receive
the services of, or contribute in some way to an
organization
- Ex.: “Be All that You Can Be”
– Ex: “An Army of One”
http://www.dtic.mil/armylink/news/Jan2001/r20010110
armyadcampaignrel.html
ELEMENTS OF A
MARKETING STRATEGY
1. THE TARGET MARKET
– who firm will direct marketing efforts toward
• Ex. Baby-boomers, children, women
• Ex.: Stouffers Lean Cuisine
2. THE MARKETING MIX VARIABLES (4P’s)
– Once target market is chosen, how these variables are
"mixed" determines success of marketing.
Marketing Mix
A. PRODUCT: activities involved in
developing right product involves: package
design, branding, trademarks, warranties,
product life cycles & new product
development
B. PRICING: one of most difficult marketing
decisions
C. DISTRIBUTION: ensures that product
arrives in right place, in right quantity at the
right time
D. PROMOTION: communications link
between sellers & buyers
Ex.: advertising, sales people, sales
promotions
3. THE MARKETING ENVIRONMENT
– The marketing environment is important
because it provides a framework for all
marketing activity.
– 5 Forces
1. COMPETITION
2. POLITICAL-LEGAL
3. ECONOMIC
4. TECHNOLOGICAL
5. SOCIAL-CULTURAL
• Strategic Alliances: partnership that
creates competitive advantages
ex. Delta and Disney
UPS and Bradfield’s
• Marketing Costs
– creating time, place & ownership utility costs $
– most estimate that marketing costs are 40 - 60%
of overall product cost
Internet and Marketing
• It was the future and is now the present!
ETHICS AND SOCIAL
RESPONSIBILITY
• Most business people are ethical but there
are a few rotten ones.
Ex. ADM
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