Definition of Marketing - The activity and process for creating, communicating, delivering and exchanging offerings that have value for customers and society at large. In simple words, marketing means looking at the business through the customer’s eyes. Moreover, marketing entails processes that focus on delivering value and benefits to customers, not just selling goods and services but also ideas. Example: The customers' perception of value didn't align with Apples estimated value of the Thunderbolt. After Apple received complaints about the $49 selling price of its Thunderbolt cable, the company reduced the price to $39. Apple hoped to spark sales by better marketing the optical data transfer cable. The organization’s existence focuses on customer satisfaction. (Ex. Car Dealerships) - Focusing on the customer’s wants and needs. (Expressed/Unexpressed) - Tailoring your company to meet the customer’s needs. - Satisfying customer’s wants and needs for long-term profitability. The Marketing Concept The four P's (Marketing Mix) The Marketing Mix is an organizing framework that helps a business determine how to display its product or service in the market that will mutually benefit both the customers and producer. The four P’s are product, price, promotion and placement. Product: The tangible and intangible value of the company and the product that it is offering (i.e. warranty, after-sale service, company image) Price: What the consumers must give up to obtain the product. It is a tool used by marketers to sell their product. May vary based on needs of the consumers Promotion: A tool used to persuade and educate customers about the benefits of the product and the company. Includes advertising, public relations, sales promoting and personal selling. Place: Where the customer can purchase the product and how the finished product is distributed to that customer. Products can be sold through retailers, online stores, catalogs, or directly from the manufacturer. An example of the four P's in relation to a hotel marketing plan would be as follows: Place: Use of travel agents and online booking sites (e.g. hotels.com and expedia.com) Product: Basic accommodation, good customer service, reliability, cleanliness, what differentiates us from competition. Key terms * (customer) value: Relationship between perceived benefits (value) of the product and the perceived costs. Could also be described as helping a customer save money, time or provide enjoyment. Example: for a business owner, buying a new computer could add value by increasing efficiency which will save them time and money. * exchange: Act of giving one thing of value and receiving another thing of value in return (also can be described as give/get) Example: give cash and get a product or service * value proposition: A promise to the customer that a particular product or service will be of value or add more value than other similar options. ** Example: Commercials that convince the consumer that their product is more valuable and a better option than competitors. ** Example: Brand name products are more valuable than generic products. * value chain: The steps that a business goes through in order to create a product or service that maximizes value while minimizing costs. ** Example: UPS maximizes value by investing in a better IT department, GPS systems etc. which improved efficiency and therefore minimized costs because they no longer needed as many trucks, drivers etc. * customer relationship management (CRM):is a system for managing a company's interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support. ex Facebook local adds target local consumers * (customer) satisfaction: A measure of how products and services supplied by a company meet or surpass customer expectation ex Nordstrom's return policy surpasses customer expecations by not having a return policy* production orientation: A philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace. * product orientation: A philosophy that focuses on the variation, design, quality, and features of a firm's product. * sales orientation
- -Belief that people will buy more goods and services if aggressive sales techniques are used and that high sales results in high profits. (pg 5) -Firm implementation of the selling concept. -Marketing means selling things and collecting money. (Pg 5) -Problem: Lack of understanding of needs and wants of market place. (pg 5) -Even if your product is great, no one is going to buy it despite the marketing efforts. * marketing orientation * Assumes that a sale does not depend on aggressive sales force but rather on a costumers decision to purchase a product. *** Pros: **** Focus on customers wants and needs **** Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly. *** Firm implementation of the marketing concept. *** Examining information from a total business perspective (i.e. Customers point of view.) *** Seeking to provide value Customer Satisfaction: Customer satisfaction has several components and factors; mainly comprised of the customer's perception of value. Production Orientation: Production orientation maintains an internal standard of development Product Orientation: Product orientation is a concept that focuses on internal resources and capabilities that promises value to the customers, otherwise known as value proposition. Sales Orientation: A business strategy that companies use to focus more on making a sale rather than customer satisfaction. Market Orientation: Sales approach that focuses on using consumer knowledge to understand why consumers prefer your product over the competition.