Lecture
Outline
Getting to Know Marco Sorani of SSB Technologies. The profile focuses on MARCO SORANI. After being partially paralyzed, Sorani saw an unmet need—website accessibility for the disabled—and filled it.
I. WHAT IS MARKETING?
LEARNING GOAL 1
Define marketing and explain how the marketing concept drives both for-profit and nonprofit organizations.
A. Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of goods and services to facilitate exchanges that satisfy individual and organizational objectives.
1. Selling and advertising are only part of marketing.
2. What marketers do depends on what needs to be done to fill customers’ needs.
B. The Evolution of marketing.
1. The Production Era.
a. Until the early 1900s, the general philosophy was “produce as much as you can because there is a limitless market.”
b. The goals of business centered on production.
c. The greatest marketing need was for distribution and storage.
2. The Selling Era.
a. By the 1920s, the business philosophy turned to an emphasis on selling and advertising to sell existing products.
3. The Marketing Era.
a. A baby boom after WWII created a tremendous demand for goods and services.
i. Competition for the consumer’s dollar was fierce.
ii. Businesses recognized the need to be responsive to consumers if they wanted to get their business.
b. The marketing concept emerged in the 1950s.
c. The MARKETING CONCEPT is a three part business philosophy:
i. A customer orientation: Find out what consumers want and provide it.
ii. A service orientation: Make sure everyone in the organization has the same objective–customer satisfaction.
iii. A profit orientation: Focus on those goods and services that will earn the most profit.
d. During the 1980s, business began to apply the marketing concept more aggressively.
4. The Customer relationship era.
a. Customer relationship management (CRM) is the process of learning as much as possible about customers, and doing everything you can to satisfy them–or even
exceed their expectations–with goods and services over time.
b. The goal is to enhance customer satisfaction and stimulate long-term customer loyalty.
C. NONPROFIT ORGANIZATIONS PROSPER FROM MARKETING.
1. Marketing is a crucial part of almost all organizations, profit and nonprofit.
2. Charities, churches, politicians, states, and many other organizations all use marketing.
II. THE MARKETING MIX.
LEARNING GOAL 2
List and describe the four Ps of marketing.
A. Pleasing customers has become a priority.
1. Four factors of marketing:
a. Product.
b. Price.
c. Place.
d. Promotion.
2. Controllable parts of the marketing process involve:
a. Designing a want-satisfying PRODUCT.
b. Setting a PRICE for the product.
c. Placing the product in a PLACE where people will buy it.
d. PROMOTING the product.
3. These four factors have become known as the MARKETING MIX, the ingredients that go into a marketing program: product, price, place, and promotion.
B. To present an overview of the marketing process, the text takes a hypothetical product (a cereal called Fiberrific) through THE MARKETING PROCESS.
C. DESIGNING A PRODUCT TO MEET NEEDS.
1. Next, develop a product to fill that need.
2. A PRODUCT is any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eye of consumers, such as the brand.
3. CONCEPT TESTING involves developing an accurate description of your product and asking people whether or not the concept (the idea of the cereal) appeals to them.
4. PROTOTYPES are samples of the product that you take to consumer to test their reactions.
5. TEST MARKETING is the process of testing products among potential users.
6. The marketer can produce the service or turn production over to another manufacturer.
7. OUTSOURCING is the allocation of production and other functions to outside firms.
8. Next, you have to DESIGN A PACKAGE and think of a BRAND NAME for the product.
9. A BRAND NAME is a word, letter, or group of words or letters that differentiates one seller’s goods and services from those of competitors.
D. SETTING AN APPROPRIATE PRICE.
1. The price depends on a number of factors, such as the price of competing products.
2. You also have to consider the costs of producing, distributing, and promoting the product.
E. GETTING THE PRODUCT TO THE RIGHT PLACE.
1. Once the product is manufactured, you have to choose how to get it to the consumer.
2. You may want to sell your product through INTERMEDIARIES, organizations that specialize in distributing goods from producer to customer, or MARKETING MIDDLEMEN.
F. DEVELOPING AN EFFECTIVE PROMOTIONAL STRATEGY.
1. PROMOTION consists of all the techniques sellers use to motivate people to buy products or services.
2. RELATIONSHIP BUILDING WITH CUSTOMERS includes responding to any suggestions they may make to improve the product or the marketing of the product.
3. Marketing is an ONGOING PROCESS–companies must continually adapt to changes in the market.
III. PROVIDING MARKETERS WITH INFORMATION.
LEARNING GOAL 3
Describe the marketing research process, and explain how marketers use environmental scanning to learn about the changing marketing environment.
A. MARKETING RESEARCH is the analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions.
1. One goal is to determine exactly what consumers want and need, now and in the future.
2. Businesses need information to compete effectively, and marketing research is the activity that gathers that information.
3. In addition to customers, marketers should pay attention to the views of employees, shareholders, consumer advocates, and other stakeholders.
B. THE MARKETING RESEARCH PROCESS.
1. STEP 1. Defining the problem and determining the present situation.
2. STEP 2. Collecting data.
a. Research can be quite expensive, so SOME TRADE-OFF must be made between information needed and the cost.
b. Less expensive is SECONDARY DATA, information that has already been published previously by others and published in journals and books or made available online.
c. Often secondary data don’t provide all the necessary information, so marketers must do their own research.
d. PRIMARY DATA are data that you gather yourself (not from secondary sources such as books and magazines.)
i. Telephone surveys, online surveys, mail surveys, and personal interviews are the most common methods of gathering survey information.
ii. A FOCUS GROUP is of a small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its product, or other given issues.
e. Marketers can now gather both secondary and primary data online.
3. STEP 3. Analyzing the research data
a. The data collected must be turned into useful information.
b. Careful, honest interpretation of the data can help the company meet marketing challenges.
4. STEP 4. Choosing the best solution and implement it.
a. Researchers present alternative strategies and make recommendations as to which strategy may be best.
b. This involves following up on the actions taken to see if results were as expected.
c. Company websites have vastly improved the marketing research process.
d. Keeping customer information in a database lets the company design tailored products and promotions.
5. Consumers are demanding more ethical behavior from companies.
C. THE MARKETING ENVIRONMENT.
1. ENVIRONMENTAL SCANNING is the process of identifying the factors that can affect marketing success.
2. GLOBAL FACTORS include the growth of the Internet and the globalization of marketing.
3. TECHNOLOGICAL FACTORS include the Internet, the growth of consumer databases, flexible manufacturing, and mass customization.
4. SOCIOCULTURAL FACTORS include population growth and changing demographics, such as the aging population and the preferences of various ethnic groups.
5. COMPETITIVE FACTORS.
a. Brick-and-mortar companies must adjust to new competition from the Internet.
b. They have to adjust to competitors, who can deliver products quickly or provide excellent service.
6. ECONOMIC FACTORS. Marketers must pay close attention to the economic environment in the U.S. and globally.
D. TWO DIFFERENT MARKETS: CONSUMER AND BUSINESS-TO-BUSINESS (B2B).
1. Marketers must know as much as possible about the market they wish to serve.
2. THERE ARE TWO MAJOR MARKETS:
a. The CONSUMER MARKET consists of all the individuals or households that want goods and services for personal consumption or use.
b. The BUSINESS-TO-BUSINESS (B2B) MARKET consists of all the individuals and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others.
3. The buyer’s reason for buying and the end use of the product determine whether it is considered a consumer product or a B2B product.
IV. THE CONSUMER MARKET
A. Consumer groups differ greatly in age, education level, income, and taste.
1. Marketers must first decide which group to serve and then develop products and services specially tailored to their needs (as Campbell Soup Company does.)
2. MARKET SEGMENTATION is the process of dividing the total market into groups whose members have similar characteristics.
3. TARGET MARKETING is marketing directly toward those groups (market segments) an organization decides it can serve profitably.
B. SEGMENTING THE CONSUMER MARKET.
LEARNING GOAL 4
Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior.
1. GEOGRAPHIC SEGMENTATION is dividing the market by geographic area.
2. DEMOGRAPHIC SEGMENTATION is dividing the market by age, income, and education level.
3. PSYCHOGRAPHIC SEGMENTATION is dividing the market using the group’s values, attitudes, and interests.
4. BENEFIT SEGMENTATION is dividing the market by determining which benefits of the product to talk about.
5. VOLUME, or usage SEGMENTATION is dividing the market by usage (volume of use.)
6. The best segmentation strategy is to use all the variables to come up with a consumer profile that’s sizable, reachable, and profitable.
C. REACHING SMALLER MARKET SEGMENTS.
1. NICHE MARKETING is the process of finding small, but profitable market segments and designing custom-made products for them.
2. ONE-TO-ONE MARKETING means developing a unique mix of goods and services for each individual customer.
3. This is easier to do in B2B markets, but is becoming possible in consumer markets as well.
D. MOVING TOWARD RELATIONSHIP MARKETING.
1. MASS MARKETING means developing products and promotions to please large groups of people.
a. The mass marketer tries to sell products to as many people as possible.
b. That means using mass media, such as TV, radio, and newspapers.
2. RELATIONSHIP MARKETING is a marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements.
a. RELATIONSHIP MARKETING moves away from mass production toward CUSTOM-MADE GOODS.
b. The latest in TECHNOLOGY enables sellers to work with buyers to determine their individual wants and needs and to develop goods and services specifically designed for those individuals.
c. One-way messages in mass media give way to a personal dialogue among participants.
d. Relationship marketing is more concerned with retaining old customers than creating new ones.
E. FORMING COMMUNITIES OF BUYERS.
1. A database can be established so that every contact with consumers results in more information about them.
2. Over time, the seller knows more and more about consumers and can custom design products to meet their specific needs.
3. Many companies are using interactive websites to form communities of buyers.
F. THE CONSUMER DECISION-MAKING PROCESS.
1. Studying consumer behavior centers on studying the CONSUMER PURCHASE DECISION PROCESS:
a. Problem recognition.
b. Information search.
c. Evaluate alternatives.
d. Make purchase decision.
e. Postpurchase evaluation.
2. Consumer behavior researchers also study the various influences that impact consumer behavior.
a. MARKETING MIX VARIABLES (the four Ps).
b. PSYCHOLOGICAL INFLUENCES such as perception and attitudes.
c. SITUATIONAL INFLUENCES such as the type of purchase and physical surroundings.
d. SOCIOCULTURAL INFLUENCES such as reference groups and culture.
3. Consumer behavior is also influenced by other factors:
a. LEARNING involves changes in an individual’s behavior resulting from previous experiences and information.
b. A REFERENCE GROUP is the group that an individual uses as a reference point in formation of his or her beliefs, attitudes, values, or behavior.
c. CULTURE is the set of values, attitudes, and ways of doing things that are transmitted from one generation to another in a given society.
d. SUBCULTURE is the set of values, attitudes, and ways of doing things that results from belonging to a certain group with which one closely identifies.
e. COGNITIVE DISSONANCE is the type of psychological conflict that can occur after a purchase—such as doubts about whether they got the best product at the best price.
V. THE BUSINESS-TO-BUSINESS MARKET.
LEARNING GOAL 5
List ways in which the business-to-business market differs from the consumer market.
A. Marketers of goods and services to manufacturers, institutions, commercial operations, and the government are called B2B MARKETERS.
B. Several factors make BUSINESS-TO-BUSINESS MARKETING DIFFERENT.
1. NUMBER: There are relatively FEW CUSTOMERS compared to the consumer market.
2. SIZE: Though few in number, industrial customers are relatively VERY LARGE.
3. GEOGRAPHICALLY CONCENTRATED: B2B markets tend to be CONCENTRATED in certain areas of the country.
4. RATIONAL: Business buyers are generally MORE RATIONAL in their purchase decisions.
5. DIRECT: B2B sales tend to be DIRECT.
6. PERSONAL SELLING: There is much more emphasis in personal selling than in the consumer market.
VI. UPDATING THE MARKETING CONCEPT.
LEARNING GOAL 6
Show how the marketing concept has been adapted to fit today’s modern markets.
A. In the 21st century marketers have to readjust their strategies to meet the needs of modern consumers.
B. FROM PROVIDING CUSTOMER SATISFACTION TO EXCEEDING EXPECTATIONS.
1. Marketing’s goal in the past was to provide customer satisfaction.
2. Today the goal of some sigma quality firms is to exceed customer expectations by providing goods and services that exactly meet their requirements.
3. Most organizations have yet to meet, much less exceed, customer expectations.
4. Firms must also please their INTERNAL CUSTOMERS—employees.
C. BENCHMARKING AND UNITING ORGANIZATIONS.