Transcript Consumers Rule - Faculty Sites

Welcome to the World of
Marketing
Creating and Delivering
Value
Chapter Objectives
• Understand who marketers are, where they work, and
marketing’s role in the firm
• Explain what marketing is and how it provides value to
everyone involved in the marketing process
• Understand the range of services and goods that are
marketed
• Understand value from the perspectives of customers,
producers, and society
• Explain the basics of marketing planning and the
marketing mix tools used in the marketing process
• Explain the evolution of the marketing concept
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Real People, Real Choices: Decision Time
at Ron Jon Surf Shop, Inc.
• How to advertise Ron Jon’s at airports?
 Option 1: rental car advertising
 Option 2: wall-mounted backlit photographs (dioramas)
 Option 3: escalator “gateways”
Ron Jon Surf Shop
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Welcome to a Branded World
“Brand You”
• You are a product and have
“market value” as a person
• You “position” yourself for a
job
• Don’t “sell yourself short”
• You package & promote
yourself
MONSTER.COM
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The Who & Where of Marketing
• Marketers:
 Are real people who make choices that affect
themselves, their companies, & millions of consumers
(see “Real People, Real Choices”)
 Work cross-functionally within the firm
 Enjoy exciting, diverse careers
CHECK OUT MARKETING
JOB SALARIES!
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The Value of Marketing
• Definition of
marketing (AMA,
2004)
 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
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Marketing is about Meeting Needs
• Meeting the needs of
diverse stakeholders
 Buyers, sellers, investors,
community residents,
citizens
• Marketing concept
 Identifying consumer needs
and providing products that
satisfy those needs
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Discussion
• The marketing concept focuses on the
ability of marketing to satisfy customer
needs
 As a typical college student, how does marketing
satisfy your needs?
 What areas of your life are affected by marketing?
 What areas of your life – if any -- are not affected by
marketing?
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Marketing Is about Meeting Needs
(cont’d)
• The modern marketplace may take the
form of a mall, a mail-order catalog, a TV
shopping network, an eBay auction, or an
e-commerce Web site
SECONDLIFE.COM
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Marketing Is about Creating Utility
• Utility: the sum of the benefits we receive
from using a product/service
 Form utility
 Place utility
 Time utility
 Possession utility
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Marketing Is about Exchange
Relationships
• An exchange occurs when something is
obtained for something else in return, like
cash for goods or services
 Buyer receives product that satisfies need
 Seller receives something of equivalent value
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The Evolution of Marketing
•
•
•
•
The Production Era
The Selling Era
The Consumer Era
The New Era
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The Production Era
• Focus on the most
efficient ways to make
and distribute
products, like Henry
Ford’s Model T &
Ivory soap
• Marketing plays an
insignificant role
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The Selling Era
• Focus on one-time
sales of goods rather
than repeat business
• Marketing viewed as
a sales function
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The Consumer Era
• Focus on satisfying customers’ needs and
wants
• Marketing becomes more important in the
firm
• Total Quality Management (TQM) widely
followed in marketing community
Marriott Video
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The New Era:
Make Money and Act Ethically
• Focus on building long-term bonds with
customers.
• Marketing uses customer relationship
management (CRM) to track consumers’
preferences and tailor the value
proposition to each individual
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The New Era:
Focusing on Social Benefits
• Social marketing concept:
satisfy customers’ needs and
also benefit society
• Sustainability: meeting
present needs and ensuring
that future generations can
meet their needs
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The New Era: Focusing on
Accountability
 * Measuring how much value is created by marketing
activities
• ROI (Return on Investment) is the direct
financial impact of a firm’s expenditure of
resources such as time or money
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Measuring Value
• Scorecard: marketing department’s report card
on how company/brand is actually doing in
achieving various goals
Quarterly Scores 2003
1st Qtr.
2nd Qtr.
3rd Qtr.
C1 Employee responsiveness
60%
65%
68%
C2 Product selection
60%
62%
63%
C3 Service quality
60%
62%
55%
Item Text
Satisfaction with
Table 1.3 (Abridged)
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Discussion
• Not all firms have implemented programs
that follow the marketing concept
 Can you think of firms that still operate with a
production orientation?
 A selling orientation?
 What changes would you recommend for these firms?
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What Can Be Marketed?
• From serious goods and services to fun things
 Goods and services mirror changes in popular culture
 Marketing messages may communicate myths of a culture
• Product: any good, service, or idea




Consumer goods/services
Business-to-business goods/services
Not-for-profit marketing
Idea, place, and people marketing
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The Marketing of Value
• Value: the benefits a customer receives
from buying a good or service
• Marketing communicates the value
proposition: a marketplace offering that
fairly and accurately sums up the value
that the customer will realize if he/she
purchases product/service
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Value from the Customer’s Perspective
• The ratio of costs to benefits
• Value proposition includes the whole
bundle of benefits the firm promises to
deliver, not just the benefits of the product
itself
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Value from the Seller’s Perspective
• Value for the seller takes many forms
 Making a profitable exchange
 Earning prestige among rivals
 Taking pride in doing what a company does well
 Nonprofits: motivating, educating, or delighting the
public
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Calculating the Value of a Customer
• Single transactions don’t provide
companies with the value they desire
• Lifetime value of a customer: How much
profit a company expects from a
customer’s purchases now and in the
future
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Providing Value to Stakeholders
• Competitive advantage:
The ability of a firm to
outperform the competition
by providing customers
with a benefit the
competition cannot provide
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Group Activity
• Break into small groups and write an
outline of your ideas on the following
questions:
 What distinctive competencies does your business
college or university have?
 What differential benefits does it provide for students?
 What is its competitive advantage?
 How could it improve its competitive position?
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Adding Value through
the Value Chain
• Value chain: a series of activities involved
in designing, producing, marketing,
delivering, and supporting any product
 Inbound logistics
 Operations
 Outbound logistics
 Marketing final product
 Service
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Discussion
• Think about a music CD you might buy in
a store. What kind of value does the music
retailer add?
• How about the label that signs the artist?
• The public relations firm that arranges a
tour by the artist to promote the new CD?
• The production company that shoots a
music video to go along with the cut?
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Figure 1.2:
Making & Delivering Value
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Consumer-Generated Value:
From Audience to Community
• Everyday people
generating value
instead of just buying it
 People functioning in
marketing roles: creating
ads, providing input into new
products, or serving as
retailers
YOUTUBE.COM
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Value from Society’s Perspective
• How marketing transactions add or
subtract value from society
• Stressing ethics/social responsibility is
often good business in the long run
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The Dark Side of Marketing
 * Marketers
 Illegal activities such as “bait and switch”
 Products that encourage antisocial behavior
 *Consumers
 Terrorism
 Addictive consumption
 Exploited people
 Illegal activities
 Shrinkage
 Anticonsumption
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Marketing as a Process
• Marketing planning
 Analyzing the marketing
environment
 Developing a marketing plan
 Deciding on a market
segment
 Choosing the marketing mix -product, price, promotion, and
place
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Group Activity
• An old friend has been making and selling
vitamin-fortified smoothies to friends for some
time.
• He wants to open a shop in a small college
town, but he wonders if he’ll have enough
customers to keep the business going.
 What can you tell him about product, price, promotion, and place
(distribution) strategies that will help him get his business off the
ground?
 Break up into small groups to come up with ideas
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Group Activity
• Imagine one of your friends says to you,
“Marketing’s not important. It’s just dumb
advertising.” Another friend says,
“Marketing doesn’t really affect people’s
lives in any way.”
 As a role-playing exercise, present your arguments
against these statements to your class.
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How it worked out at
Ron Jon Surf Shop
• Bill choose option 2: wall-mounted backlit
photographs (dioramas)
 Opened a small store in the Orlando Airport adjacent
to the very busy food court
 Surf and sales are up at Ron Jon!
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Keeping it Real: Fast Forward to
Decision Time at Qode
• Meet Rick Szatkowski of NeoMedia
Technologies
• Qode links your cell phone to the Web
when you enter a keyword or click a
SmartCode.
• Example: A code on a movie poster plays
a trailer for the movie
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