Lessons from Chapter 1

Lessons from Chapter 1

a shift in power to customers caused by increased access to information.
a massive increase in product selection due to line extensions and global sourcing.
greater audience and media fragmentation as customers spend more time with interactive media and less time with traditional media.
changing customer perceptions of value and frugality.
shifting demand patterns for certain product categories, especially those delivered digitally.
increasing concerns over privacy, security, and ethics.
unclear legal jurisdictions, especially in global markets.

Marketing:

is parallel to other business functions such as production, research, management, human resources, and accounting. The goal of marketing is to connect the organization to its customers.
is defined as 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.
has changed in focus over the past 20 years. Today, marketing stresses value and customer relationships.
is linked with our standard of living, not only in terms of enhanced consumption and prosperity, but also in terms of society's well being.

Basic marketing concepts include:

market—a collection of buyers and sellers.
marketplace—a physical location where buyers and sellers meet to conduct transactions.
marketspace—an electronic marketplace not bound by time or space.
metamarket—a cluster of closely related goods and services that centers on a specific consumption activity.
metamediary—a single access point where buyers can locate and contact many different sellers in the metamarket.

exchange—the process of obtaining something of value from someone by offering something in return; this usually involves obtaining products for money. There are five conditions of exchange:
There must be at least two parties to the exchange.
Each party has something of value to the other party.
Each party must be capable of communication and delivery.
Each party must be free to accept or reject the exchange.
Each party believes it is desirable to exchange with the other party.

product—something that can be acquired via exchange to satisfy a need or a want.
utility—the ability of a product to satisfy a customer's needs and wants. The five types of utility provided through marketing exchanges are form utility, time utility, place utility, possession utility, and psychological utility.

Major marketing activities and decisions include:

developing competitive advantages and a strategic focus for the marketing program.
marketing strategy decisions, including decisions related to market segmentation and target marketing, the product, pricing, distribution, and promotion, which will create competitive advantages over rival firms.
implementing and controlling marketing activities.
developing and maintaining long-term customer relationships, including a shift from transactional marketing to relationship marketing.

Some of the challenges involved in developing marketing strategy include:

unending change—customers change, competitors change, and even the marketing organization changes.
the fact that marketing is inherently people-driven.
the lack of rules for choosing appropriate marketing activities.
the basic evolution of marketing and business practice in our society.
the increasing demands of customers.
an overall decline in brand loyalty and an increase in price sensitivity among customers.
increasing customer cynicism about business and marketing activities.
competing in mature markets with increasing commoditization and little real differentiation among product offerings.
increasing expansion into foreign markets by U.S. and foreign firms.
aggressive cost-cutting measures in order to increase competitiveness.