Transcript Marketing Overview

BUAD 307—MARKETING FUNDAMENTALS
MARKETING OVERVIEW
Learning Objectives
• Identifying
– The scope and basic objectives of
the marketing function
– Customer value
– Benefits of and opportunities for
relationship marketing
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Usage and Reach of Marketing
• Who markets?
• Who buys?
– Businesses
– Government
units
– Non-profit
organizations
– Cause related
organizations
• What is
marketed?
– Goods
– Services
– Ideas
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– Ultimate consumers
– Organizational
buyers
• For internal use
• For resale
(wholesalers,
retailers)
• Manufacturers
(components)
• Customer
benefits?
– Utility
• Consumption
• Convenience
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2007 American Marketing Association
(AMA) Definition
Marketing: “The (1) activity, (2)
set of institutions, and (3)
processes for (4) creating, (5)
capturing, (6) communicating, (7)
delivering, (8) and exchanging (9)
offerings that have (10) value for
(11) customers, (12) clients, (13)
partners, and (14) society at
large.” (Numbering added.)
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ACTIVITY
INSTITUTIONS
PROCESSES
MARKETING
CREATION
COMMUNICATION
DELIVERY
EXCHANGE
CUSTOMERS
OFFERINGS
VALUE
CLIENTS
PARTNERS
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SOCIETY
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Marketing As an Exchange
• Each side receives something more valuable than
what it gave up  “win-win” deal
• Part of the value may be assurance of continued
quality over time (value of the brand)
• In principle, money does not have to be exchanged.
For goods and services, this is usually the most
convenient way of trade. For ideas, there may be no
monetary exchange as such.
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Value
BENEFITS RECEIVED
VALUE 
COST
• Benefits—perceived by
the customer (may not be
objectively accurate)
– Convenience
• In delivery
• In usage
–
–
–
–
–
–
• Costs—examples
– Money
– Time
– Risk
Reliability
Durability
Performance
Style/aesthetics
Prestige
Service component
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Creating, Communicating, and Capturing
Customer Value
AVAILABILITY
DELIVERY:
DISTRIBUTION,
EXECUTION OF
SERVICES
OFFERINGS:
PRODUCTS,
SERVICES, AND
IDEAS
CREATION:
RESEARCH,
DESIGN,
MANUFACTURING
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UTILITY
EASE OF USE
CONVENIENCE
COMMUNICATION
VALUE:
EXCHAGE
CUSTOMER
BENEFITS
SECURITY
CAPTURE
EFFECTIVENESS
SELLER
PLEASURE
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MONEY,
BEHAVIOR
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Creating Customer Value
PERCEIVED
NEEDS OF
OTHERS
INSTINCTS
BELIEFS
ABOUT WHAT
IS “RIGHT”
CUSTOMER
DESIRES
MARKET
RESEARCH,
ANALYSIS, AND
DEVELOPMENT
COSTS OF
OFFERINGS
(NEGATIVE)
BELIEFS
ABOUT THE
WORLD
BELIEFS
ABOUT
OFFERINGS
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SELLER
OFFERINGS
Exact model is NOT
needed for exam!
MARKETING OVERVIEW
CUSTOMER
VALUE
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Customer Value: AFLAC Insurance
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Customer Value, Part I
• Value is the ratio of the benefits
received (usually goods or services)
to what is given up (usually money)
• For a transaction to take place, the
benefits received must usually be
greater than the sacrifice for both
parties—usually
– The customer values the goods and
services received more than the money
spent
– The seller values the money received
more than the goods or services given
up (i.e., it is worthwhile to produce these
in order to get this payment)
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Customer Value, Part II
• A low priced product may not
represent value to a customer if the
benefits received are perceived to be
low, too.
• Different customer segments will
have different value perceptions and
desires
• A product which is adapted to the
needs of a particular segment can be
very valuable to that segment even if
the overall “quality” is not seen as
superior by most other consumers
• Cost may be in terms of money or
other sacrifice
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Tools to Provide Customer Value (4Ps)
• Product (both the tangible item and associated
services)
• Price (different segments of customers will pay
different amounts depending on their product needs
and preferences)
• Place (distribution—making the product available
where it is convenient to the customer)
• Promotion (advertising, sales promotion, publicity,
selling, special events)
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Examples of Customer Value to Different
Customers
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Customer Value: iPhone 6
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Customer Value: Sally Hansen Nail
Polish
Cost
Reduction
Choice
Durability
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Convenience
Performance
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Risk reduction
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Value: Nordstrom’s
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Value: Walmart
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Value Engineering
• Increasing offering value by
– Decreasing cost
– Improving
•
•
•
•
•
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Durability
Performance
Reliability
Convenience
Aesthetics
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No box  lower
cost, less waste,
less bulk,
less hassle
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Customer Value: Soda Vending
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Customer Value: Netflix
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Customer Value: Starbucks
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Value: Recap
• A low quality, low price
product represents poor
value for many customers
• A very high benefit
product at a high price
can represent value for
some segments
• Customer segments differ
in what they find valuable
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Relationship Marketing
• Selling (selling existing
products with whatever
methods are necessary) vs.
marketing orientation (serving
customer needs whether in
current or new forms)
• Maintaining a relationship with
the customer over time rather
than just focusing on
immediate sales
– Anticipating customer needs
– Providing solutions
– Investing in products and services
optimized for the customer
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