Transcript Intro - University of Northern Iowa

Marketing Management
MKTG 6170
The class has a website where
everything is kept:
www.business.uni.edu/clayson/mm
Fundamentals
http://www.youtube.com/watch?v=KkBvzS_fJ2g&feature=player_embedded#
Marketing
CUSTOMER-DRIVEN
http://www.youtube.com/watch?v=l4seWLW2KhQ&feature=player_embedded
Marketing is the only business function that is external:
Marketing is universal:
Marketing is universal:
Promotion is only a part of marketing…
Advertising is only a part of promotion…
The average person sees….
350 to 2,500 ads per day
Marketing is universal:
Promotion is only a part of marketing…
Advertising is only a part of promotion…
There are 54 jobs in sales for every job in advertising!
Marketing can look very complicated
and sometimes almost incomprehensible, but is it?
http://www.youtube.com/watch?v=hxRqKgjD3vY&feature=related
https://www.youtube.com/watch?v=M-HrTC8QCbM
On the other hand, marketing can look very simple,
but is it?
Marketing is a combination of:
Science
Rene Descartes
(1596 – 1650)
Isaac Newton
(1643-1727
Experience
Giambattista Vico
(1668 – 1744)
Henry Ford
(1863 – 1947)
Psychology
Sigmund Freud
(1856 – 1939)
B. F. Skinner
(1904 – 1990)
Perception: and Brain Function
Perception: and Biology
http://www.123opticalillusions.com/pages/Spinning_Dancer.php
Promotion and Propaganda
Politics
Both external
An American president is arguably the most
marketed product in the world!
Hagiology
hagiology (ˌhæɡɪˈɒlədʒɪ)n, pl gies1. (Theology) literature concerned with the lives and legends of saints
2. (Theology)a. a biography of a saint
b. a collection of such biographies
3. (Theology) an authoritative canon of saints
4. (Theology) a history of sacred writings
hagiologic ˌhagioˈlogical adj ˌhagiˈologist nCollins English Dictionary –
Complete and Unabridged © HarperCollins Publishers 1991, 1994, 1998,
2000, 2003
Politics
and internal!
and Art
Some basic background
Logic and Research
What is an Opinion?
It is basically a Belief
A belief has three forms:
1. Descriptive
Jane is pretty.
X=Y
2. Evaluative
X = Y and Y = value, therefore
X = value
Jane is pretty, therefore I like Jane.
This is called a “halo effect.” Being attractive is good,
Jane is attractive, therefore Jane is good.
A belief has three forms:
1. Descriptive
Jane is pretty.
X=Y
2. Evaluative
X = Y and Y = value, therefore
X = value
Jane is pretty, therefore I like Jane.
3. Normative
X = Y and Y = norm, therefore
X = norm
Jane would make a good wife, but a poor mother.
Logic and Research
What is an Opinion?
It is basically a Belief,
or
Guess.
Logic and Research
Are all opinions equal?
Yes! In that everyone can have them.
No!
In that every opinion has to be based on
something.
Some person’s opinion about the stock market are more
valuable than others!!
Opinions about solutions are not equal.
Logic and Research
What is a Hypothesis?
An opinion that can be tested.
A hypothesis can be logically and statistically tested….
Logic and Research
What is a Statistic?
1. Mathematical method of
calculating probability
2. Characteristic of a sample
A statistic is a characteristic of
a group.
It tells you nothing about an individual…
except for a probability.
That probability allows for decisions
to be made that are better than chance.
Statistic: Education majors have the lowest standardized scores
(ACT, Iowa Basic, etc.) of any majors on campus.
Statistic: Education majors have the lowest standardized scores
(ACT, Iowa Basic, etc.) of any majors on campus.
An education major says, “That can’t be true. Both my friend
and I had the highest ACT scores in my high school and we are
both education majors. I am highly offended by your slur.”
What is wrong with this logic?
In the United States:
Blacks are imprisoned at 5X the rate of whites
A Washington-based think tank found
In Iowa:
Blacks are imprisoned at 13X times the rate of whites
Does this mean that Iowa's criminal justice system is racist?
Nevada has over twice as many whites per 100,000 in jail than does
Iowa.
Does this mean the Nevada justice system is biased against whites?
Or does it imply that the white population of Nevada is not the same
as the white population of Iowa in relationship to committing crimes
deemed important by the state?
Logic and Research
What is a research findings?
Logic and Research
What is a research findings?
Results of controlled
research procedures.
Logic and Research
What is a fact?
Reality is a fact, but…
what is reality?
Poverty rate of children:
Married parents
Divorced Mother
Never Married Mother
9%
32%
54%
What are these statements?
Income of average working women:
Income of husband & wife working:
$32,200
$76,000
Income of single mother in NYC
who is working:
$22,000
Median income of women in NYC is $33,000!
“The single best thing a person can do
to fight poverty is
to get marred!”
What is this statement?
“Having a child without a husband is a one way
ticket to poverty!”
What is this statement?
“Having a child without a husband is a one way
ticket to poverty!”
What is this statement?
But…
What about politics and art?
Would you always want to make this statement?
http://www.gallup.com/poll/124922/Presidential-Approval-Center.aspx
Marketing
Definition of Marketing
Marketing (AMA): “The process of planning and executing
the conception, pricing, promotion, and distribution of ideas,
goods, and services to create exchanges that satisfy
individual and organizational objectives.”
Two approaches:
1. Value
and
2. Exchange
Value Definition:
Marketing is an organizational function
and
A set of processes for:
Creating
Communicating
Delivering
Value
To customers
Exchange Definition:
Marketing is the processes of:
Creating
exchanges
that satisfy
individual and organizational
objectives.
Exchange Definition:
Marketing is:
Arranging a
Buyer… Seller
for a
Seller… Buyer
The conception, pricing, promotion, and distribution
These are called the 4-Ps
or
the Marketing Mix
The conception, pricing, promotion, and distribution
The 4-Ps or the Marketing Mix (mnemonic)
1. Product
2. Promotion
3. Price
4. Place (distribution)
All of these need to be
redefined in terms
of the two approaches!
But first, let’s define some terms common
to all approaches.
Value:
Definition: The benefits a customer receives
from obtaining a product (good, service, information)
Value:
Definition: The benefits a customer receives
from obtaining a product (good, service, information)
Need:
Definition: The difference between an exchanger’s
actual state and some ideal state
Desired State
Need
Actual State
Want:
Definition: The desire to satisfy needs in
a specific way
Demand:
Definition: Wants backed with resources
Satisfaction:
Definition: Benefits = Expectations
“Satisfaction is not symmetrical.”
Delight:
Definition: Benefits > Expectations
So in the value approach:
1. Product:
That which gives value
2. Price
3. Promotion
4. Place
1. Product:
2. Price
Value (benefits – costs)
3. Promotion
4. Place
1. Product:
2. Price
3. Promotion
The communication of value
4. Place
1. Product:
2. Price
3. Promotion
4. Place
The distribution of value, or increasing
value by distribution
Exchange Approach
Exchange Approach
1. Product:
That which is transacted
2. Price
3. Promotion
4. Place
Exchange
1. Product:
2. Price
The value of a transaction
3. Promotion
4. Place
Exchange
1. Product:
2. Price
3. Promotion
The communication process of
a transaction
4. Place
Exchange
1. Product:
2. Price
3. Promotion
4. Place
The actual transaction
You wake up in a corn field….
“Marketing is arranging a buyer for a
seller.”
This means:
1. Marketing is the process of creating satisfying
exchanges.
“Marketing is arranging a buyer for a seller.”
This means:
1. Marketing is the process of creating satisfying
exchanges.
2. Wealth is created through free exchanges.
We both have something that was more valuable
to us than what we had before.
We are “wealthier.”
Marketing Concept:
“All marketing strategies should be based on
known consumer needs and/or wants.”
Note the word: KNOWN
This is very important, so
let’s repeat it!
Marketing Concept:
“All marketing strategies should be based on
known consumer needs and/or wants.”
Note the words:
STRATEGIES, KNOWN, NEEDS, WANTS
Extension:
“All firms and companies have the same product…
that is, a customer.”
Implications…………..
Without producing a customer….
nothing else produced is relevant.
“There is only one valid definition of business
purpose: to create a customer.”
Peter Drucker
“Everybody is paid by the customer. Pay raises,
bonuses, job promotions, and worker benefits
are paid by the customer.”
Jeffrey Fox
“Inside an organization there are only cost centers.
The only profit center is a customer whose check
has not bounced.”
Peter Drucker
Without producing a customer….
nothing else produced is relevant.
Products only have one function…
to produce a customer.
Why does John Deere produce tractors?
If farmers decided they wanted to pull their
grandchildren around in little wagons instead
of buying tractors, what should John Deere do?
Without producing a customer….
nothing else produced is relevant.
Promotion only has one function…
to produce a customer.
Ad firms love to show off their awards…
Ads that do not produce customers
may be entertaining, but
Promotion is not entertainment…
Plop…Plop… Fizz…. Fizz
http://www.youtube.com/watch?v=ErgdUhZteqw&feature=player_embedded
Without producing a customer….
nothing else produced is relevant.
Price
has only one function…
to produce a customer.
Without producing a customer….
nothing else produced is relevant.
Place
has only one function…
to produce a customer.
“Customers fire employees every day for many
reasons.”
“Every single job in a company must directly or
indirectly help to get and keep a customer.”
Jeffrey Fox
Employees have only one function…
to produce a customer.
“Jobs that don’t get and keep customers are
temporary, unnecessary, or should be
outsourced.”
Jeffrey Fox
Without producing a customer….
nothing else produced is relevant.
Historical Development
Historical Development
Based Mostly on Supply & Demand
Historical Development
1. Barter (Until about 1850;
industrial revolution)
Historical Development
1. Barter (Until about 1850; industrial revolution)
2. Production Era (Demand exceeds Supply)
Historical Development
1. Barter (Until about 1850; industrial revolution)
2. Production Era (Demand exceeds Supply)
3. Sales Era
(Demand = Supply;
Until about 1945-1960)
Historical Development
1. Barter (Until about 1850; industrial revolution)
2. Production Era (Demand exceeds Supply)
3. Sales Era (Demand = Supply; Until about 1945-1960
4. Marketing Orientation
a. Marketing Department Era (Supply > Demand)
b. Marketing Concept Era
c. Relationship Era
In summary
“Marketing is the only external
business function.”
“Marketing is arranging a buyer for a
seller.”
“Marketing is creating an exchange.”
You will make a living
by marketing only if:
You create an exchange…
And you can add value
to that exchange!
All Business is Service!
“People become rich when they
make other people happy.
They become very wealthy
when they make a lot of
people happy.”
Benjamin Stein