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 & servicesEx. Metal Shelves

Utility (Cont.)

2. TIME

– created by marketing– availability of goods & services when

consumers want to buy themEx.: 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/r20010110armyadcampaignrel.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