Transcript Day 1 Deck – Thurs, Jan 2

MTKG 325
Principles of Marketing
 Karen Porter
 Syllabus
 Who am I?
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Information Sheets
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Name
Major
Where you work
Any marketing-related job experience
Career goals
Something unique about yourself/what
you like to do in Missoula/where you’re
from
Marketing Careers
 Marketers:
– May have a wide variety of job
titles
– Work cross-functionally within
the firm
– Work in a wide variety of types
of organizations
– See Table 1.1, p. 7-8
– Marketing Mgr Median $100K
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Get the
scoop
on marketing
salaries!
Visit the
Occupational
Outlook
Handbook!
Marketing Career Opportunities
 Advertising
– Agencies (1 person – intl)
– In-house (Aramark – childcare)
– Media
 Brand Management
– Karen: Lottery / Childcare
 B2B Marketing
– Karen: Consulting
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Marketing Career Opps
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Supply Channel Management (ex: TLC)
Direct Response Marketing
International Marketing
Marketing Models / Systems Analysis
Marketing Research
New Product Development (ex: TLC)
Retail Management (ex: store & ecom)
Marketing Career Opps
 Services Marketing (ex: childcare, edu)
 Sales & Sales Management (ex: TLC)
 MISSING FROM TEXT:
– Website Development and Online Marketing
– Social Media Management
– Mobile Marketing
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The Value of Marketing
 What is marketing?
– The activity, institutions, and functions/ processes
for
• Creating, communicating, and delivering value to
customers
• Managing customer relationships to benefit the firm
(organization) and its stakeholders (customers,
clients, partners, society).
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Marketing Meets Needs
 Marketing meets the needs of diverse
stakeholders
– Stakeholders are buyers, sellers, investors,
community residents, citizens
 Marketing concept
– First identify customer needs
– Then provide products that satisfy those
needs
– While making a profit/remaining in business
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Marketing Is about Creating Utility
 Utility:
The sum of the benefits a customer
receives from using a product/service
– Form utility – What comprises the product or service
– Place utility – Where that product is delivered
(and is it accessible?)
– Time utility – When is it available? (ex: rental cars)
– Possession utility – Give consumers choices to own
or experience the product or service
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Marketing Is about
Exchange Relationships
 Exchange - the heart of every marketing act
 An exchange occurs when something is
obtained for something else in return
– Nonprofits: motivating, educating, or delighting the
public
 Value is in the eye of the beholder
– Discuss: shoes / cars
 Marketers must create an attractive value
proposition - WIIFM
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The Evolution of Marketing
 The Production Era
– Production orientation
 The Sales Era
– Selling orientation
 The Relationship Era
– Consumer orientation
– Total quality management
 The Triple Bottom Line Era
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The Evolution of Marketing:
The Production Era
 Dominated by production orientation:
 Marketing played insignificant role
 A management philosophy that emphasizes
the most efficient ways to produce and
distribute products
 Demand exceeded supply
– Marketing played an insignificant role
 Examples of products created under a
production orientation:
– Henry Ford’s Model T and Ivory soap
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The Evolution of Marketing:
The Selling Era
 When product availability exceeds
demand, businesses may focus on a
one-time sale of goods rather than
repeat business
– Great Depression
– After WWII
 Dominated by selling orientation:
– Managerial view of marketing as a sales
function, or a way to move products out of
warehouses to reduce inventory (hard sell /
“buyer beware”)
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The Evolution of Marketing:
The Relationship Era
70s - Inflation / 80s Recession
Shifting focus to a customer
orientation/marketing concept:
– A management philosophy that emphasizes
satisfying customers’ needs and wants
 Marketing becomes more important in the firm
 Total Quality Management (TQM) is widely
followed in the marketing community
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The Evolution of Marketing:
The Triple Bottom Line Era
 Focuses on building long-term bonds with
customers: CRM
 Seeks to maximize the financial, social, and
environmental bottom lines (profit, people, planet)
– Make Money and a Contribution = Corporate Social
Responsibility (CSR) – company supports social causes
– Sustainability: Creating products that meet present needs
and ensuring that future generations can have their needs
met
 Greater focus on accountability-marketing metrics
– 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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What Can Be Marketed?
 From “serious” goods/services to fun things
 Product: any good, service, or idea
– Consumer goods/services
• Chia pets, Ben & Jerry, NFL, soup, dental care
– Business-to-business goods/services
• Consulting, software, medical equipment, etc.
– Not-for-profit marketing
• United Way, Race for the Cure, etc.
– Idea, place, and people marketing
• Meth – Not Even Once, Taylor Swift, Travel MT
 YOU!
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The Marketing of Value
 Value:
– The benefits a customer receives from buying
a good or service
– JM: relative to price paid + non-monetary
costs
 Marketing communicates the value
proposition:
– A [statement] 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
 Customer perspective:
– Value is the ratio of costs (price) to benefits
(utilities)
– Value proposition includes the whole bundle
of benefits the firm promises to deliver, not
just the benefits of the product itself
• Brand image is a critical component
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Building LONG-TERM Value Through
Customer RELATIONSHIPS
 Customers are now regarded as
partners rather than victims
 It is more expensive to attract new
customers than to retain current ones
 Calculating the lifetime value of a
customer allows a firm to decide which
customers are “worth keeping” vs.
which should be “fired”
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The Value of a Customer to the Firm:
A CRM Perspective
 “Customer Relationship Marketing”
– Transaction vs. relationship focus
– Lifetime value of a customer
– Cheaper to retain current customers than
attract new ones
– 80/20 rule: Not all customers are created
equal
– Company may sacrifice short-term gains for
life-time value
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More on CRM
• “Permission-based” marketing: opt-in
• Individualized offers
• Database used for
• Tiering
• Tailoring
• Also: cross-sell; up-sell; bundle
More in Ch. 4, Ch. 7, Ch. 12
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Providing Value Through
Competitive Advantage
 Creating a competitive advantage
requires:
– Identification of a distinctive competency:
The ability of a firm to outperform the
competition by providing customers with a
benefit the competition cannot provide
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Consumer-Generated Value:
Facilitated by Web 2.0
 “User-generated content”
– Everyday people functioning in marketing
roles such as:
• Creating ads
• Providing input into new product development
• Serving as retailers
– Social networking is growing explosively
• Wisdom of crowds
– Open source business models
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Value from Society’s Perspective
 Marketing transactions and company
activities influence the world and add or
subtract value from society
 Stressing ethical or socially responsible
decisions is often good business in the
long run
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The Dark Side of Marketing
 Marketing is often criticized
 Illegal practices do occur
 Some marketing activities have
detrimental effects on society
 The dark side of consumer behavior:
– Terrorism, addictive consumption,
exploitation, illegal activities, shrinkage,
anticonsumption
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Marketing as a Process
 Marketing planning (thinking
carefully and strategically about the
big picture)
– 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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The Marketing Mix
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Karen’s Marketing Mix
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Marketer’s Strategic Toolbox:
The Marketing Mix (4 Ps)
 Product
 Place
 Price:
– Value = Benefits (functional + symbolic)/Price ($ + Non-monetary)
 Promotion (Marketing Communications)
– advertising,
– public relations,
– personal selling,
– sales promotion
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4Ps Mandatories
 Each P must align with target market
needs & expectations
 Each P must align with the other P’s
– Consistency
– Synergy
– Examples:
• Godiva vs. Hershey
• Bud vs. __?
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