DO NOW ASSIGNMENT

1. DO NOW ASSIGNMENT • DO NOW ACTIVITIES do until class lesson begins directly on line and go to the print option and print for class credit follow on line directions. • Today finish chapter and review for test tomorrow

2. Marketing Management Philosophies There are four marketing management philosophies • Production • Sales • Market • Societal marketing LO2

3. Production Orientation Field of Dreams orientation “If you build it, they will come.” Doesn’t consider if what is produced meets market needs Can you think of a company today that uses this form of marketing concept very successfully? Apple-iPod 3M’s Post-it-Notes LO2

4. Sales Orientation Marketing = Selling Things/Collecting Money Disregards market needs and consumer demand. Often find that, despite the quality of their sales force, they cannot convince people to buy goods or services that are neither wanted nor needed. Toyota recalled millions of vehicles due to acceleration problems and then the company to bring customers back used aggressive sales incentives to lure people back, low Apr, lease amts Free Service packages Dot com business LO2

5. Market Orientation Focusing on customer wants and needs to distinguish products from competitors’ offerings Integrating all the organization’s activities to satisfy these wants Achieving the organization’s long-term goals by satisfying customer wants and needs legally and responsibly Deliver superior customer value LO2

6. HOW to Achieve a Marketing Orientation Obtain information about customers, competitors, and markets Examine the information from a total business perspective Determine how to deliver superior customer value Implement actions to provide value to customers Examples: LL Bean, Overstock.com, Zappos.com, Amazon,com, QVC are the top5 US retailers for customers service Voted among the best in customer service Apple, Four Season’s Hotel and Resorts LO2

7. Societal Marketing Orientation An organization exists not only to satisfy customer wants but also to preserve or enhance individuals’ and society’s long-term best interests. • For example: • Less toxic products • More durable products • Products with reusable or recyclable • materials- Coca-cola, Microsoft LO2

8. Questions That Help Determine Marketing Philosophy Orientation Focus Production What can we make or do best? How can we sell more aggressively? Sales Marketing What do customerswant and need? Societal What do customers want/need, and how can we benefit society? LO2

9. The Four Marketing Management Philosophies Sales Market Societal Production Orientation Focus is on… internal capabilities of the firm aggressive sales techniques and belief that high sales result in high profits satisfying customer needs and wants while meeting objectives satisfying customer needs and wants while enhancing individual and societal well-being Satisfy customers-not what management thinks should be produced or sold LO2

10. Differences between Sales and Market Orientations Market is • Focusing on customer wants and needs Discuss the differences between sales and market orientations Sales Disregards market needs and consumer demand. LO3

11. Comparing the Sales and Market Orientations Compare through 5 characteristics: • Organization’s focus • Firm’s business • Those to whom the product is directed • Firm’s primary goal • Tools the organization uses to achieve its goals LO3

12. The Organization’s Focus Sales Orientation Inward looking What the firm makes Market Orientation Outward looking What the market wants LO3

13. Customer Value The relationship between benefits and the sacrifice necessary to obtain those benefits. • California based mattress company ES Kluft incorporates luxurious fibers such as cashmere and silk into its mattresses to entice customers to buy it for $33,000 • Barnes & Noble upscale bookstore adding more value to its book offerings than its competitors LO3

14. LO3 Sales vs. Market Orientations Firm’s Business that is delivered Primary Profit Goal? For Whom? Organization’s Focus Tools to Achieve Sales Orientation Inward- Company Selling goods and services Everybody Maximum sales volume Primarily promotion Customer satisfaction Market Orientation Outward- customer Coordinated use of all marketing activities Customer Satisfaction Specific groups of people

15. Value-Driven Marketing Value? Formula a customer’s subjective (influenced by personal feelings, tastes, or opinions) assessment of the product benefits relative to costs in determining the worth of a product. Value Customer Benefits Customer Costs = –

16. Value • Benefits—examples • Convenience • In delivery • In usage • Reliability • Durability • Performance • Style/aesthetics • Prestige • Service component • Costs—examples • Money • Time • Risk

17. Customer Value • 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 • Note that a high price product may be a good value to the customer even if a high price is paid if the perceived benefits received are higher

18. Value: Implications • 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

19. Steps Toward Value Orientation • Information sharing within the firm • Balance of cost and benefits (for the target segment—different balances for different types of customers) • Relationships with customers (as opposed to “one shot” transactions) which marketing management philosophy is one shot