Transcript What is Marketing? - Washington State University

WHAT IS MARKETING?
Marketing 360
Brian Gillespie
What the Class Thinks
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Marketing is…
 Selling
stuff
 Informing the public
 Influencing the public
 Entice buyers to use their good
 Attracting the attention of customers
 Portraying value of a product to an audience
 Process of moving products and services from producer
to consumer
 Division of a company
 Researching and developing products
Pros and Cons
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In a small group compare pros and cons of
marketing
On a sheet of paper or computer, make two
columns, one pro column and one con column
Add up the number of pro and con statements
Pros and Cons
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Positives:
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Makes me aware of useful products/services
Makes purchasing more convenient
Increases company sales
Social marketing
Negatives
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Social comparison
Irresponsible use of company money
Creates consumer needs
Encourages risky behavior and health/social problems
Key Terms
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Stakeholders
 Anybody who has a “stake” in outcome of the product or service
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Seller, buyer, investor, community, or place where product made
Customer
 Potential purchaser of a good or service
Consumer
 Ultimate end user of a good or service
Needs
 Difference between actual and desired state (Hunger)
Wants
 Desire to satisfy needs in a certain way (Smokehouse Almonds)
Key Terms
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Benefit
 The outcome customer desires; meets a need or a want
Exchange
 Transferring value from buyer to seller
Demand
 Desire for product/service + resources to pay for it
Market
 Collection of people who have a need for a product/service, and are
willing and able to spend the resources necessary to obtain it
Marketplace
 Any location or medium (e.g., internet) used to conduct an exchange
Key Terms
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Utility/Value
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Sum of benefits we receive from a product
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Can be symbolic (prestige)
Types of Utility
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Form (Convert raw materials into product – almonds + salt)
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Place (Make product available when customers want them - vending
machine)
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Time (storing product until customer needs it – vending machine)
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Possession (benefit from owning, using, enjoying product)
Value Proposition
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Marketplace offering that fairly and accurately sums up value realized if
customer buys product or service
What is Marketing?
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American Marketing Association Definition:
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Marketing is 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.
Marketing is identifying needs, developing a
product/service to meet that need, and making
people aware of the product/service
Hierarchy of Needs
What level of the pyramid is being
addressed?
What level of the pyramid is being
addressed?
What level of the pyramid is being
addressed?
What level of the pyramid is being
addressed?
What level of the pyramid is being
addressed?
What Can Be Marketed?
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Products
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Services
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People
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Places
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Business-to-Business
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Not-for-profit
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Causes
Market Orientations
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Production era
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Sales era
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Consumer (Market) era
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New era orientation
Production Era
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Key Elements
 When demand > supply (seller’s market)
 Focus is on efficient production/distribution
 Marketing plays an insignificant role
 A good product will sell itself
You buy what we make
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i.e. hand drill, soap, straight razor
Sales Era
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Key Elements
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When supply > demand (buyer’s market)
Assumed customers resist buying non-essentials
Focus is on moving product via hard sales tactics
Marketing seen as a sales function
We will sell you what we think you need
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electric 3/8th inch hand drill, Prell, disposable razor
Consumer (Market) Era
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Key Elements
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After WW II, production of consumer products resumed
Strong buyer’s market created need for consumer orientation
Idea Captured by the “Marketing Concept”
 Purpose of organization is achieving long-term success of
organization by creating customer value (meeting customer’s needs)
Thus, must gather data, understand and meet needs.
Advantage: can build products consumers will more quickly adopt.
Also stressed Total Quality Management
 Continual improvement/input from employees
Using focus groups, split of market into many sub-markets
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different cordless hand drills, PertPlus 2-in-1, blue & pinks plastic razors
New Era
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Key Elements
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Build long-term relationships with customers
Customer relationship management (track needs, tailor value proposition
to unique needs)
Social Marketing Concept (benefit society, firm)
Sustainability
 Designing products so that we meet present needs without
compromising ability of future generations to meet theirs
Accountability (what is return on investment in marketing activities?)
We don’t sell products, we sell solutions and benefits
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The ability to make holes, we sell the satisfaction, pride and selfconfidence that is created by drilling holes
we sell glamour, we sell confidence and grooming
Value
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Value (from Customer’s Perspective)
 Sum of benefits we receive from a product
Value (from Seller’s Perspective)
 Profits…but also, prestige, pride, making community happy
 Lifetime value of a customer
 How much is this customer worth to us in the long-term?
 Long-term thinking  develop relationships with customers
Value (to Stakeholders)
 Created when company has competitive advantage over rivals
 Distinctive competency (company’s superior capability)
 Differential benefit (unique benefit of product)
Value (to Society)
 What is the impact of product/service on society?
The Marketing Mix
Product Strategies
(what will we produce
and for whom?)
Place Strategies
(where will we deliver
product/service?)
Marketing Mix
Price Strategies
(what will we charge?)
Promotion Strategies
(how will we inform and encourage
customers to buy our product?)
Why Study Marketing?
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Plays an Important Role in Society
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Promotes efficient transfer of desired products to meet needs
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Can be used to promote worthwhile social causes
Fundamental to the Success of Businesses
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Great Career Opportunities
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Assessing needs, designing products, pricing product, promoting
products, distribution strategies, servicing customer
Roughly 25-33% of people perform marketing related activities
Marketing Affects You Everyday
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Become a wiser consumer
The Dark Side of Marketing
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Illegal practices like “bait and switch”
Societal health problems
 Diabetes, heart disease, cancer, alcoholism, domestic violence
Psychological Costs
 Many ads encourage us to feel bad about ourselves
Financial Burdens
 Consumer debt
Environmental degradation and resource depletion